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MAdAiLab

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lex_glue_scotus

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329 U.S. 29 67 S.Ct. 1 91 L.Ed. 22 CHAMPLIN REFINING COv.UNITED STATES et al. No. 21. Argued Oct. 18, 21, 1946. Decided Nov. 18, 1946. Rehearing Denied Dec. 16, 1946. See 329 U.S. 831, 67 S.Ct. 363. Appeal from the District Court of the United States for the Western District of Oklahoma. Messrs.Dan Moody, of Austin, Tex., and Harry O. Glasser, of Enid, Okla., for appellant. Mr. Edward Dumbauld, of Washington, D.C., for appel- [Argument of Counsel from page 30 intentionally omitted] lees. Mr. Justice JACKSON delivered the opinion of the Court. 1 The Interstate Commerce Commission, acting under § 19a of the Interstate Commerce Act,1 ordered the appellant to furnish certain inventories, schedules, maps and charts of its pipe line property.2 Champlin's objections that the Act does not authorize the order, or if it be construed to do so is unconstitutional, were overruled by the Commission and again by the District Court which dismissed the company's suit for an injunction.3 These questions of law are brought here by appeal. Judicial Code, § 238, 28 U.S.C. § 345, 28 U.S.C.A. § 345. 2 Champlin owns and operates a line of six-inch pipe 516 miles in length lying in five states. Originating at Champlin's Enid, Oklahoma refinery, it crosses Kansas, Nebraska, a part of South Dakota, and ends in Iowa. It is used only to convey the company's own refinery products to its own terminal stations at Hutchinson, Kansas; Superior, Nebraska, and Rock Rapids, Iowa, at each of which the line connects with storage facilities from which deliveries are made. 3 The statute, so far as relevant, says that it shall apply 'to common carriers engaged in,' 'transportation of oil or other commodity' by pipe line from one state to another. It provides also, that 'common carrier' includes 'all pipe-line companies.'4 This language on its face would seem to cover the appellant's operation. 4 Champlin contends, however, that the 'transportation' mentioned in the Act does not refer to the carriage of one's own goods. The District Court has found that Champlin is the sole owner of the products transported through its pipe line; it has never transported, offered to transport, or been asked to transport any products belonging to any other company or person; its pipe line does not connect with any other pipe line but only with storage tanks at the three terminal points; there are no facilities for putting any petroleum product into the line other than at the Enid refinery; delivery of the products at the three terminal points is made from Champlin's storage tanks by means of truck racks or railroad tank car racks and is not made directly from the pipe line in any instance; no tariffs stating transportation charges have been filed with the Interstate Commerce Commission or with any State commission or regulatory body. 5 Because of these facts the appellant suggests that the language and holding of this Court concerning the Uncle Sam Oil Company in The Pipe Line Cases, 234 U.S. 548, 34 S.Ct. 956, 58 L.Ed. 1459, approved in Valvoline Oil Company v. United States, 308 U.S. 141, 60 S.Ct. 160, 84 L.Ed. 151, govern this case. The Uncle Sam Company operation is described as 'simply drawing oil from its own wells across a state line to its own refinery, for its own use, and that is all, * * *.' The Pipe Line Cases, 234 U.S. 548, 562, 34 S.Ct. 956, 959, 58 L.Ed. 1459. The Court considered this was not 'transportation' within the meaning of the Act. 6 But we think it would expand the actual holding of that case to apply its conclusion to Champlin. The controlling fact under the statute is transporting commodities from state to state by pipe line. Admittedly Champlin is not a common carrier in the sense of the common law carrier for hire. However, the Act does not stop at this but goes on to say that its use of the term 'common carrier' is to include all pipe line companies—a meaningless addition if it thereby included only what the term without more always had included. While Champlin technically is transporting its own oil, manufacturing processes have been completed; the oil is not being moved for Champlin's own use. These interstate facilities are operated to put its finished products in the market in interstate commerce at the greatest economic advantage. 7 Examination of Champlin's pricing methods supports the view that appellant is engaged in transportation even though the products are still its own when moved. The District Court found that price at the terminal points includes f.o.b. price at the Enid refinery and an additional sum called a differential. The differential is the through railroad freight rate from Enid to the final destination (usually the purchaser's place of business) less the carrying charges from the pipe line terminal to final destination. The District Court found, however, that competitive and other conditions 'sometimes cause departures from the prices arrived at in accordance with the formula above described.' Appellant states that as to some deliveries 'rail rates were used merely as a basis for calculating a delivered price, not as a charge for transportation.' Even so, and even though departures from the calculated differential are substantial and frequent, we think this practice points up a significant distinction from the Uncle Sam case. 8 We hold that Champlin's operation is transportation within the meaning of the Act and that the statute supports the Commission's order to furnish information. 9 Appellant further contends that, as so construed, the Act exceeds the commerce power of Congress and violates the due process clause of the Fifth Amendment because it is argued that this interpretation converts a private pipe line into a public utility and requires a private carrier to become a common carrier. But our conclusion rests on no such basis and affords no such implication. The power of Congress to regulate interstate commerce is not dependent on the technical common carrier status but is quite as extensive over a private carrier. This power his yet been invoked only to the extent of requiring Champlin to furnish certain information as to facilities being used in interstate marketing of its products. The commerce power is adequate to support this requirement whether appellant be considered a private carrier or a common carrier. 10 The contention that the statute as so construed violates the due process clause by imposing upon a private carrier the obligations of a conventional common carrier for hire is too premature and hypothetical to warrant consideration on this record. The appellant in its entire period of operation has never been asked to carry the products of another and may never be. So far, the Commission has made no order which changes the appellant's obligations to any other company or person. If it does, it will be timely to consider concrete requirements and their specific effects on appellant. At present, appellant is asked only to provide information about a subject within the power possessed by Congress and delegated to the Commission, and that cannot be considered a taking of property even if it arouses appellant's premonitions. 11 We hold that the order before us is authorized by statute and that in this respect the statute is within the commerce power and does not offend the Fifth Amendment. 12 Affirmed. 13 Mr. Justice REED, with whom Mr. Justice FRANKFURTER, Mr. Justice DOUGLAS and Mr. Justice BURTON join dissenting. 14 This appeal brings into question the extent to which the Interstate Commerce Act covers pipe lines by virtue of the provisions of § 1 and § 19a.1 Acting under the authority of these sections, the Interstate Commerce Commission called upon the appellant, Champlin Refining Company, for reports deemed appropriate for it to make, if it is a common carrier under the act. The appellant challenged the Commission's order on the ground that it was not covered by the sections. 15 Champlin owns a pipe line for the carriage of oil or other similar commodity from its refinery in Oklahoma to various distributing points in other states. It carries no commodities except its own produced in its own refinery and delivered at the ends of the pipe line into its own storage or holding tanks for sale to its customers. It also is sole owner of the stock of the Cimarron Valley Pipe Line Company, admittedly an intrastate common carrier, that supplies the Champlin refinery with its crude oil. The Commission's orders for valuation reports do not treat Champlin and Cimarron as a unitary operation. The Commission, at this bar, disclaimed expressly any intention to test the subjection of Champlin's distributing pipe line to Commission power by Champlin's ownership of the Cimarron stock. As the Court treats the situation as though Champlin's distributing pipe line, between the refinery and the sale tanks only, were involved, we accept for the purpose of this dissent the Commission's view of the test to be applied to Champlin. 16 Section 1 of the act applies its provisions to 'common carriers engaged in—* * * the transportation of oil' or similar commodities. In The Pipe Line Cases, 234 U.S. 548, 34 S.Ct. 956, 58 L.Ed. 1459, and Valvoline Oil Co. v. United States, 308 U.S. 141, 60 S.Ct. 160, 84 L.Ed. 151, this Court interpreted the term 'common carrier' to include all interstate pipe line companies that are engaged, within the purview of the act, in the transportation of oil. In these cases, pipe line companies that carried only their own oil, although all or a large part of it was purchased from producers prior to its carriage in the pipe lines, were held common carriers within the meaning and purpose of the act, though not common carriers in the technical sense of holding one's self out to carry indiscriminately all oil offered, because the act's evident purpose was to bring within its scope all pipe lines that would carry all oil offered 'if only the offerers would sell' at the carrier's price. In the Valvoline case, this interpretation of the 1906 Act, 34 Stat. 584, was found to have been carried into the act, as amended in 1920, 41 Stat. 474, despite certain changes in language. 308 U.S. at page 145, 60 S.Ct. at page 162, 84 L.Ed. 151. 17 It is to be noted, however, that the Pipe Line and Valvoline cases did not bring within the scope of the Interstate Commerce Act all pipe lines that carried oil interstate. If the companies were common carriers in substance, the act made them so in form. Those pipe lines held covered by the act in The Pipe Line Cases and Valvoline were found common carriers in substance because they purchased and carried all oil offered. The Interstate Commerce Act continually has required such carriers to be engaged in the transportation of oil or other commodities. In The Pipe Line Cases, a company, Uncle Sam Oil Company, though a pipe line carrying oil, was held beyond the act's reach because not engaged in the transportation of oil as a common carrier within the purpose of the act. 18 'When, as in this case, a company is simply drawing oil from its own wells across a state line to its own refinery, for its own use, and that is all, we do not regard it as falling within the description of the act, the transportation being merely an incident to use at the end.' 234 U.S. at page 562, 34 S.Ct. at page 959, 58 L.Ed. 1459. 19 There has been no change bearing on this question in the applicable acts since The Pipe Line Cases. As a matter of statutory construction, we see no reason to change from this Court's long standing interpretation. If Congress desires to undertake regulation of the transportation of an interstate carrier, in substance a private carrier, it understands the method of approach. 49 U.S.C. § 304(a)(3), 49 U.S.C.A § 304(a)(3). There is no pertinent legislative history to support so broad an interpretation of pipe line legislation. The evil sought to be remedied was the mastery of oil through control of the gathering facilities.2 If a line does not carry oil of others, it is not transporting within the contemplation of the act. 20 In the Uncle Sam case it was said that the transportation of oil from well to refinery was 'merely an incident to use at the end.' We see no difference between the use contemplated by the Uncle Sam Company and this company. Each carries its own oil for the same ultimate purpose—to reach the market. 21 Nor can we see any significant distinction from the Uncle Sam case in the practice of Champlin to use frequently the freight rate from Enid to the final destination as a measure of the addition to Enid refinery, f.o.b. price that it will charge at its distributing tanks. This practice is departed from to meet competition. Naturally some transportation cost must be added to the refinery price for deliveries elsewhere. How much it is or how it is calculated does not seem to us to bear upon the question of whether Champlin is a 'common carrier engaged in—* * * the transportation of oil' within the scope of the act. 22 We would have a very different case than the one before us if Congress had provided that all owners of pipe lines carrying oil in interstate commerce should give appropriate information to the Interstate Commerce Commission. This is not what § 19a does. It requires reports only from 'every common carrier subject to the provisions' of the act. When an enterprise is 'subject to the provisions' of the act is defined by § 1(1)(b) and § 1(3). Therefore, it is not § 19a but § 1 that must be construed. The definition of § 1 flows not only into § 19a but also into various other sections. Once an enterprise is found to be included in § 1, the Interstate Commerce Act subjects it to § 19a and other provisions dealing with common carriers 'subject to' the act. Thus, to give several instances, it must provide equal and reasonable transportation to all comers, (§ 1(4—6)); and it must file a schedule of rates (§ 6(1). If, therefore, any doubt is felt about the applicability of some of these requirements, the doubts are properly to be taken into account in determining the scope of § 1. The range of servitudes to which this pipe line is subjected by including it in § 1 bears vitally upon whether such a construction should be given to § 1. 23 For the reasons detailed above, we do not think that Champlin is covered by the act and we would reverse the decree of the District Court. 1 '* * * the commission shall, * * * investigate, ascertain, and report the value of all the property owned or used by every common carrier subject to the provisions of this act. * * * The commission shall make an inventory which shall list the property of every common carrier subject to the provisions of this act in detail, and show the value thereof as hereinafter provided, and shall classify the physical property, as nearly as practicable, in conformity with classification of expenditures for road and equipment, as prescribed by the Interstate Commerce Commission.' 37 Stat. 701, 49 U.S.C. § 19a, 49 U.S.C.A. § 19a. 2 On May 15, 1941, the Interstate Commerce Commission, by letter addressed to the president of the Champlin Refining Company, requested that the company prepare and file with the Commission 'a complete inventory of the pipe line property of the Champlin Refining Company, except land, showing the quantities, units, classes, kinds, and condition thereof.' The Commission enclosed with its letter copies of its Valuation Orders Nos. 26 and 27, with which the inventory was to comply. The Champlin company did not respond to the request in a manner satisfactory to the Commission, and on June 12, 1944, the Commission made the order of which the company here complains. It directed the company to comply with the provisions of Valuation Orders Nos. 26 and 27 within 90 days of the service of the order. 3 In response to the Commission's letter of May 15, 1941, the Champlin company filed with the Commission information and charts which it believed would satisfy the Commission's request. The Commission, however, returned that report to the company, because in it the company had not recognized that it was a statutory common carrier and had not compiled the report from that viewpoint. The company then requested a hearing before the Commission to determine its status. On December 14, 1942, and on reargument, June 12, 1944, the Commission decided that appellant is a common carrier subject to the provisions of the Act. After the Commission had issued its supplementary order of June 12, 1944, appellant petitioned the district court for an injunction against the order. In accordance with §§ 46 and 47 of Title 28 U.S.C., 28 U.S.C.A. §§ 46, 47, the district judge convened a three judge court, which heard the case and dismissed appellant's petition. 4 § 1. '(1) (That) the provisions of this act shall apply to common carriers engaged in—* * * '(b) The transportation of oil or other commodity, * * * by pipe line, * * * from one State * * * to any other State * * *. '(3) (a) The term 'common carrier' as used in this act shall include all pipeline companies; * * * express companies; sleeping-car companies; and all persons, natural or artificial, engaged in such transportation or transmission as aforesaid as common carriers for hire.' 41 Stat. 474, as amended, 48 Stat. 1102, 49 U.S.C. § 1, 49 U.S.C.A. § 1. The last words of § 1(3)(a), 'engaged in such transportation or transmission as aforesaid as common carriers for hire', do 'not affect the generality of the first clause as to pipe line companies.' Valvoline Oil Co. v. United States, 308 U.S. 141, 146, 60 S.Ct. 160, 162, 84 L.Ed. 151. 1 49 U.S.C. § 1, 49 U.S.C.A. § 1: '(1) * * * The provisions of this chapter shall apply to common carriers engaged in— '(b) The transportation of oil or other commodity, except water and except natural or artificial gas, by pipe line, or partly by pipe line and partly by railroad or by water; '(3) (a) The term 'common carrier' as used in this chapter shall include all pipe-line companies; * * * express companies; sleeping-car companies; and all persons, natural or artificial, engaged in such transportation as aforesaid as common carriers for hire. * * *' 49 U.S.C. § 19a, 49 U.S.C.A. § 19a: '* * * The Commission shall * * * investigate, ascertain, and report the value of all the property owned or used by every common carrier subject to the provisions of this chapter. * * * The Commission shall * * * make an inventory which shall list the property of every common carrier subject to the provisions of this chapter in detail, and show the value thereof as hereinafter provided, and shall classify the physical property, as nearly as practicable, in conformity with the classification of expenditures for road and equipment, as prescribed by the Interstate Commission.' 2 234 U.S. at pages 558, 559, 34 S.Ct. at page 958, 58 L.Ed. 1459: 'By the before-mentioned and subordinate lines the Standard Oil Company had made itself master of the only practicable oil transportation between the oil fields east of California and the Atlantic Ocean, and carried much the greater part of the oil between those points.'

78

329 U.S. 1 67 S.Ct. 6 91 L.Ed. 3 HALLIBURTON OIL WELL CEMENTING CO.v.WALKER, et al. No. 24. Argued Oct. 23, 24, 1946. Decided Nov. 18, 1946. Mr.Earl Babcock, of Duncan, Okl. (Harry C. Robb, of Washington, D.C., on the brief), for petitioner. Mr. Harold W. Mattingly, of Los Angeles, Cal., for respondents. Mr. Justice BLACK delivered the opinion of the Court. 1 Cranford P. Walker, owner of Patent No. 2,156,519, and the other respondents, licensees under the patent, brought this suit in a federal district court alleging that petitioner, Halliburton Oil Well Cementing Company, had infringed certain of the claims of the Walker patent. The district court held the claims in issue valid and infringed by Halliburton. The circuit court of appeals affirmed, 9 Cir., 146 F.2d 817, and denied Halliburton's petition for rehearing. 149 F.2d 896. Petitioner's application to this Court for certiorari urged, among other grounds, that the claims held valid failed to make the 'full, clear, concise, and exact' description of the alleged invention required by Rev.Stat. § 4888, 35 U.S.C. § 33, 35 U.S.C.A. § 33,1 as that statute was interpreted by us in General Electric Co. v. Wabash Appliance Corporation, 304 U.S. 364, 58 S.Ct. 899, 82 L.Ed. 1402.2 This statutory requirement of distinctness and certainty in claims is important in patent law. We granted certiorari to consider whether it was correctly applied in this case. 326 U.S. 705, 66 S.Ct. 90.3 2 The patent in suit was sustained as embodying an improvement over a past patent of Lehr and Wyatt (No. 2,047,974) upon an apparatus designed to facilitate the pumping of oil out of wells which do not have sufficient natural pressures to force the oil to gush. An outline of the background and setting of these patents is helpful to an understanding of the problem presented. 3 In order to operate a pump in an oil well most efficiently, cheaply, and with the least waste, the pump must be placed in an appropriate relationship to the fluid surface of the oil. Properly to place the pump in this relationship requires knowledge of the distance from the well top to the fluid surface. At least by the latter 1920's problems of waste and expense in connection with non-gusher oil wells pressed upon the industry. See Railroad Commission of Texas v. Rowan & Nichols Oil Co., 310 U.S. 573, 60 S.Ct. 1021, 84 L.Ed. 1368; Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424. It became apparent that inefficient pumping, one cause of waste, was in some measure attributable to lack of accurate knowledge of distance from well top to fluid surface. Ability to measure this distance in each separate non-gusher oil well became an obvious next step in the solution of this minor aspect of the problem of waste. 4 The surface and internal machinery and the corkscrew conformation of some oil wells make it impractical to measure depth by the familiar method of lowering a rope or cable. In casting about for an alternative method it was quite natural to hit upon the possibility of utilizing a sound-echo-time method. Unknown distances had frequently been ascertained by this method. Given the time elapsing between the injection of a sound into an oil well and the return of its echo from the fluid surface, and assuming the velocity of the sound to be about 1,100 feet per second, as it is in the open air, it would be easy to find the distance. Not only had this sound-echo-time method been long known and generally used to find unknown distances, but in 1898 Batcheller, in Patent No. 602,422, had described an apparatus to find a distance in a tubular space. Obviously an oil well is such a space. He described a device whereby the noise from a gun might be injected into a tube; the returning echoes from obstructions agitated a diaphragm, which in turn moved a stylus. The stylus recorded on a piece of paper a graph or diagram showing the variant movements of the diaphragm caused by its response to all the different echo waves. 5 In the late 1920's the oil industry began to experiment in the use of this same sound-echo-time method for measuring the distance to the fluid surface in deep oil wells. A product of this experimentation was the Lehr and Wyatt patent, upon which the present patent claims to be an improvement. It proposed to measure the distance by measuring the time of travel of the echo of 'an impulse wave' generated by a 'sudden change in pressure.' The apparatus described included a gas cylinder with a quick operating valve by means of which a short blast of gas could be injected into a well. It was stated in the patent that the time elapsing between the release of the gas and the return of the echo of the waves produced by it could be observed in any desired manner. But the patentee's application and drawings noted that the wave impulses could be recorded by use of a microphone which might include an amplifier and an appropriate device to record a picture of the wave impulses. 6 This Lehr and Wyatt patent, it is therefore apparent, simply provided an apparatus composed of old and well-known devices to measure the time required for pressure waves to move to and back from the fluid surface of an oil well. But the assumption that sound and pressure waves would travel in oil wells at open-air velocity of 1,100 feet per second proved to be erroneous. For this reason the timevelocity computation of Lehr and Wyatt for measuring the distance to the fluid surface produced inaccurate results. 7 After conferences with Lehr, Walker undertook to search for a method which would more accurately indicate the sound and pressure wave velocity in each well. Walker was familiar with the structure of oil wells. The oil flow pipe in a well, known as a tubing string, is jointed and where these joints occur there are collars or shoulders. There are also one or more relatively prominent projections on the oil flow pipe known as tubing catchers. In wells where the distance to the tubing catcher is known, Walker observed that the distance to the fluid surface could be measured by a simple time-distance proportion formula.4 For those wells in which the distance to the tubing catcher was unknown, Walker also suggested another idea. The sections of tubing pipe used in a given oil well are generally of equal length. Therefore the shoulders in a given well ordinarily are at equal intervals from each other. But the section length and therefore the interval may vary from well to well. Walker concluded that he could measure the unknown distance to the tubing catcher if he could observe and record the shoulder echo waves. Thus multiplication of the number of shoulders observed by the known length of a pipe section would produce the distance to the tubing catcher. With this distance, he could solve the distance to the fluid surface by the same proportion formula used when the distance to the tubing catcher was a matter of record. The Lehr and Wyatt instrument could record all these echo waves. But the potential usefulness of the echoes from the shoulders and the tubing catcher which their machine recorded had not occurred to Lehr and Wyatt and consequently they had made no effort better to observe and record them. Walker's contribution which he claims to be invention was in effect to add to Lehr and Wyatt's apparatus a well-known device which would make the regularly appearing shoulder echo waves more prominent on the graph and easier to count. 8 The device added was a mechanical acoustical resonator. This was a short pipe which would receive wave impulses at the mouth of the well. Walker's testimony was, and his specifications state, that by making the length of this tubal resonator one-third the length of the tubing joints, the resonator would serve as a tuner, adjusted to the frequency of the shoulder echo waves. It would simultaneously amplify these echo waves and eliminate unwanted echoes from other obstructions thus producing a clearer picture of the shoulder echo waves. His specifications show, attached to the tubal resonator, a coupler, the manipulation of which would adjust the length of the tube to one-third of the interval between shoulders in a particular well. His specifications and drawings also show the physical structure of a complete apparatus, designed to inject pressure impulses into a well, and to receive, note, record and time the impulse waves. 9 The District Court held the claims here in suit valid upon its finding that Walker's 'apparatus differs from and is an improvement over the prior art in the incorporation in such apparatus of a tuned acoustical means which performs the functions of a sound filter * * *.' The circuit court of appeals affirmed this holding, stating that the trial court had found 'that the only part of this patent constituting invention over the prior art is the 'tuned acoustical means which performs the functions of a sound filter." 10 For our purpose in passing upon the sufficiency of the claims against prohibited indefiniteness we can accept without ratifying the findings of the lower court that the addition of '(a) tuned acoustical means' performing the 'functions of a sound filter' brought about a new patentable combination, even though it advanced only a narrow step beyond Lehr and Wyatt's old combination.5 We must, however, determine whether, as petitioner charges, the claims here held valid run afoul of Rev.Stat. § 4888 because they do not describe the invention but use 'conveniently functional language at the exact point of novelty.' General Electric Co. v. Wabash Appliance Corporation supra, 304 U.S. at page 371, 58 S.Ct. at page 903, 82 L.Ed. 1402. 11 Walker, in some of his claims, e.g., claims 2 and 3, does describe the tuned acoustical pipe as an integral part of his invention, showing its structure, its working arrangement in the alleged new combination, and the manner of its connection with the other parts. But no one of the claims on which this judgment rests has even suggested the physical structure of the acoustical resonator.6 No one of these claims describes the physical relation of the Walker addition to the old Lehr and Wyatt machine. No one of these claims describes the manner in which the Walker addition will operate together with the old Lehr and Wyatt machine so as to make the 'new' unitary apparatus perform its designed function. Thus the claims failed adequately to depict the structure, mode, and operation of the parts in combination. 12 A claim typical of all of those held valid only describes the resonator and its relation with the rest of the apparatus as 'means associated with said pressure responsive device for tuning said receiving means to the frequency of echoes from the tubing collars of said tubing section to clearly distinguish the echoes of said couplings from each other.'7 The language of the claim thus describes this most crucial element in the 'new' combination in terms of what it will do rather than in terms of its own physical characteristics or its arrangement in the new combination apparatus. We have held that a claim with such a description of a product is invalid as a violation of Rev.Stat. § 4888. Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245, 256, 257, 48 S.Ct. 474, 478, 479, 72 L.Ed. 868; General Electric Co. v. Wabash Appliance Corporation, supra. We understand that the circuit court of appeals held that the same rigid standards of description required for product claims is not required for a combination patent embodying old elements only. We have a different view. 13 Rev.Stat. § 4888 pointedly provides that 'in the case of a machine, he (the patentee) shall explain the principle thereof, and the best mode in which he has contemplated applying that principle, so as to distinguish it from other inventions; and he shall particularly point out and distinctively claim the part, improvement, or combination which he claims as his invention or discovery.' It has long been held that the word 'machine' includes a combination. Corning et al. v. Burden, 15 How. 252, 267, 14 L.Ed. 683. We are not persuaded that the public and those affected by patents should lose the protection of this statute merely because the patented device is a combination of old elements. 14 Patents on machines which join old and well-known devices with the declared object of achieving new results, or patents which add an old element to improve a preexisting combination, easily lend themselves to abuse. And to prevent extension of a patent's scope beyond what was actually invented, courts have viewed claims to combinations and improvements or additions to them with very close scrutiny. Cf. Lincoln Engineering Co. of Illinois v. Stewart Warner Corporation, 303 U.S. 545, 549—551, 58 S.Ct. 662, 82 L.Ed. 1008. For the same reason, courts have qualified the scope of what is meant by the equivalent of an ingredient of a combination of old elements. Gill v. Wells, 22 Wall. 1, 28, 29, 22 L.Ed. 699. Fuller v. Yentzer, 94 U.S. 288, 297, 298, 24 L.Ed. 103. It is quite consistent with this strict interpretation of patents for machines which combine old elements to require clear description in combination claims. This view, clearly expressed in Gill v. Wells, supra, is that 15 'Where the ingredients are all old the invention * * * consists entirely in the combination, and the requirement of the Patent Act that the invention shall be fully and exactly described applies with as much force to such an invention as to any other class, because if not fulfilled all three of the great ends intended to be accomplished by that requirement would be defeated. * * * (1.) That the Government may know what they have granted and what will become public property when the term of the monopoly expires. (2.) That licensed persons desiring to practice the invention may know, during the term, how to make, construct, and use the invention. (3.) That other inventors may know what part of the field of invention is unoccupied. 16 'Purposes such as these are of great importance in every case, but the fulfillment of them is never more necessary than when such inquiries arise in respect to a patent for a machine which consists of a combination of old ingredients. Patents of that kind are much more numerous than any other, and consequently it is of the greatest importance that the description of the combination, which is the invention, should be full, clear, concise, and exact.' Gill v. Wells, supra, 22 Wall. at pages 25, 26, 22 L.Ed. 699. 17 These principles were again emphasized in Merrill v. Yeomans, 94 U.S. 568, 570, 24 L.Ed. 235, where it was said that '* * * in cases where the invention is a new combination of old devices, he (the patentee) is bound to describe with particularity all these old devices, and then the new mode of combining them, for which he desires a patent.' This view has most recently been reiterated in General Electric Co. v. Wabash Appliance Corporation, supra, 304 U.S. at pages 368, 369, 58 S.Ct. at pages 901, 902, 82 L.Ed. 1402. Cogent reasons would have to be presented to persuade us to depart from this established doctrine. The facts of the case before us, far from undermining our confidence in these earlier pronouncements, reinforce the conclusion that the statutory requirement for a clear description of claims applies to a combination of old devices. 18 This patent and the infringement proceedings brought under it illustrate the hazards of carving out an exception to the sweeping demand Congress made in Rev.Stat. § 4888. Neither in the specification, the drawing, nor in the claims here under consideration, was there any indication that the patentee contemplated any specific structural alternative for the acoustical resonator or for the resonator's relationship to the other parts of the machine. Petitioner was working in a field crowded almost, if not completely, to the point of exhaustion. In 1920, Tucker, in Patent No. 1,451,356, had shown a tuned acoustical resonator in a sound detecting device which measured distances. Lehr and Wyatt had provided for amplification of their waves. Sufficient amplification and exaggeration of all the different waves which Lehr and Wyatt recorded on their machine would have made it easy to distinguish the tubing catcher and regular shoulder waves from all others. For, even without this amplification, the echo waves from tubing collars could by proper magnification have been recorded and accurately counted, had Lehr and Wyatt recognized their importance in computing the velocity. Cf. General Electric Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242, 66 S.Ct. 81. 19 Under these circumstances the broadness, ambiguity, and overhanging threat of the functional claim of Walker become apparent. What he claimed in the court below and what he claims here is that his patent bars anyone from using in an oil well any device heretofore or hereafter invented which combined with the Lehr and Wyatt machine performs the function of clearly and distinctly catching and recording echoes from tubing joints with regularity. Just how many different devices there are of various kinds and characters which would serve to emphasize these echoes, we do not know. The Halliburton device, alleged to infringe, employs an electric filter for this purpose. In this age of technological development there may be many other devices beyond our present information or indeed our imagination which will perform that function and yet fit these claims. And unless frightened from the course of experimentation by broad functional claims like these, inventive genius may evolve many more devices to accomplish the same purpose. See United Carbon Co. et al. v. Binney & Smith Co., 317 U.S. 228, 236, 63 S.Ct. 165, 170, 87 L.Ed. 232; Burr v. Duryee, 1 Wall. 531, 568, 17 L.Ed. 650; O'Reilly et al. v. Morse et al., 15 How. 62, 112, 113, 14 L.Ed. 601. Yet if Walker's blanket claims be valid, no device to clarify echo waves, now known or hereafter invented, whether the device be an actual equivalent of Walker's ingredient or not, could be used in a combination such as this, during the life of Walker's patent. 20 Had Walker accurately described the machine he claims to have invented, he would have had no such broad rights to bar the use of all devices now or hereafter known which could accent waves. For had he accurately described the resonator together with the Lehr and Wyatt apparatus, and sued for infringement, charging the use of something else used in combination to accent the waves, the alleged infringer could have prevailed if the substituted device (1) performed a substantially different function; (2) was not known at the date of Walker's patent as a proper substitute for the resonator; or (3) had been actually invented after the date of the patent. Fuller v. Yentzer, supra, 94 U.S. at pages 296, 297, 24 L.Ed. 1003; Gill v. Wells, supra, 22 Wall. at page 29, 22 L.Ed. 699. Certainly, if we are to be consistent with Rev.Stat. § 4888, a patentee cannot obtain greater coverage by failing to describe his invention than by describing it as the statute commands. 21 It is urged that our conclusion is in conflict with the decision of Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 28 S.Ct. 748, 52 L.Ed. 1122. In that case, however, the claims structurally described the physical and operating relationship of all the crucial parts of the novel combination.8 The court there decided only that there had been an infringement of this adequately described invention. That case is not authority for sustaining the claims before us which fail adequately to describe the alleged invention. 22 Reversed. 23 Mr. Justice FRANKFURTER concurs with the Court's opinion in so far as it finds this claim lacking in the definiteness required by Rev.Stat. § 4888, 35 U.S.C. § 33, 35 U.S.C.A. § 33, but reserves judgment as to considerations that may be peculiar to combination patents in satisfying that requirement. 24 Mr. Justice BURTON dissents. 1 '33. Application for Patent; Description; Specification and Claim. Before any inventor or discoverer shall receive a patent for his invention or discovery he shall make application therefor, in writing, to the Commissioner of Patents, and shall file in the Patent Office a written description of the same, and of the manner and process of making, constructing, compounding, and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art or science to which it appertains, or with which it is most nearly connected, to make, construct, compound, and use the same; and in case of a machine, he shall explain the principle thereof, and the best mode in which he has contemplated applying that principle, so as to distinguish it from other inventions; and he shall particularly point out and distinctly claim the part, improvement, or combination which he claims as his invention or discovery. * * *' 2 Other alleged errors were urged in the application for certiorari and have been argued here, but since we find the question of definiteness of the claim decisive of the controversy, we shall not further advert to the other contentions. 3 This case was previously affirmed by a divided court, 326 U.S. 696, 66 S.Ct. 482, and upon petition for rehearing was restored to the docket for reargument. 327 U.S. 812, 66 S.Ct. 677. 4 The known distance from well top to the tubing catcher is to the unknown distance from well top to the fluid surface as the time an echo requires to travel from the tubing catcher is to the time required for an echo to travel from the fluid surface. Walker's patent emphasizes that his invention solves the velocity of sound waves in wells of various pressures in which sound did not travel at open-air or a uniform speed. Mathematically, of course, his determination of the distance by proportions determines the distance to the fluid surface directly without necessarily considering velocity in feet per second as a factor. 5 See Hailes v. Van Wormer, 20 Wall. 353, 22 L.Ed. 241; Knapp v. Morss, 150 U.S. 221, 227, 228, 14 S.Ct. 81, 83, 84, 37 L.Ed. 1059; Textile Machine Works v. Louis Hirsch Textile Machines, Inc., 302 U.S. 490, 58 S.Ct. 291, 82 L.Ed. 382; Lincoln Engineering Co. of Illinois v. Stewart-Warner Corp., 303 U.S. 545, 549, 550, 58 S.Ct. 662, 664, 665, 82 L.Ed. 1008. 6 Halliburton does not challenge the adequacy of the description of any other features of the 'new combination.' The elements of Walker's apparatus other than the filter are so nearly identical to what Lehr and Wyatt patented that we can speak of these other elements as the 'Lehr and Wyatt machine.' 7 Both parties have used Claim 1 as a typical example for purposes of argument throughout the litigation. Other claims need not be set out. Claim 1 is as follows: 'In an apparatus for determining the location of an obstruction in a well having therein a string of assembling tubing sections inter-connected with each other by coupling collars, means communicating with said well for creating a pressure impulse in said well, echo receiving means including a pressure responsive device exposed to said well for receiving pressure impulses from the well and for measuring the lapse of time between the creation of the impulse and the arrival at said receiving means of the echo from said obstruction, and means associated with said pressure responsive device for tuning said receiving means to the frequency of echoes from the tubing collars of said tubing sections to clearly distinguish the echoes from said couplings from each other.' 8 The typical claim there in suit was as follows: '2. In a paper bag machine, the combination of the rotating cylinder provided with one or more pairs of sidefolding fingers adapted to be moved toward or from each other, a forming plate also provided with side-forming fingers adapted to be moved toward or from each other, means for operating said fingers at definite times during the formative action upon the bag tube, operating means for the forming plate adapted to cause the said plate to oscillate about its rear edge upon the surface of the cylinder during the rotary movement of said cylinder for the purpose of opening and forming the bottom of the bag tube, a finger moving with the forming plate for receiving the upper sheet of the tube and lifting it during the formative action, power devices for returning the forming plate to its original position to receive a new bag tube, and means to move the bag tube with the cylinder.' Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 417, n. 1, 28 S.Ct. 748, 750, 52 L.Ed. 1122.

78

329 U.S. 14 67 S.Ct. 13 91 L.Ed. 12 CLEVELAND et al.v.UNITED STATES (three cases). DARGER v. SAME. JESSOP v. SAME. DOCKSTADER v. SAME. STUBBS v. SAME. PETTY v. SAME. Nos. 12 to 19. Argued Oct. 17, 1946. Decided Nov. 18, 1946. Rehearing Denied Dec. 16, 1946. See 329 U.S. 830, 67 S.Ct. 361. Mr.Claude T. Barnes, of Salt Lake City, Utah, for petitioners. Mr. Robert M. Hitchcock, of Washington, D.C., for respondent. [Argument of Counsel from page 15 intentionally omitted] Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Petitioners are members of a Mormon sect, known as Fundamentalists. They not only believe in polygamy; unlike other Mormons,1 they practice it. Each of petitioners, except Stubbs, has, in addition to his lawful wife, one or more plural wives. Each transported at least one plural wife across state lines2 either for the purpose of cohabiting with her, or for the purpose of aiding another member of the cult in such a project. They were convicted of violating the Mann Act, 36 Stat. 825, 18 U.S.C. § 398, 18 U.S.C.A. § 398, on a trial to the court, a jury having been waived. D.C. 56 F.Supp. 890. The judgments of conviction were affirmed on appeal. 10 Cir., 146 F.2d 730. The cases are here on petitions for certiorari which we granted in view of the asserted conflict between the decision below and Mortensen v. United States, 322 U.S. 369, 64 S.Ct. 1037, 88 L.Ed. 1331. 2 The Act makes an offense the transportation in interstate commerce of 'any woman or girl for the purpose of prostitution or debauchery, or for any other immoral purpose'. The decision turns on the meaning of the latter phrase, 'for any other immoral purpose'. 3 United States v. Bitty, 208 U.S. 393, 28 S.Ct. 396, 52 L.Ed. 543, involved a prosecution under a federal statute making it a crime to import an alien woman 'for the purpose of prostitution, or for any other immoral purpose.' 34 Stat. 898, 899, § 3. The act was construed to cover a case where a man imported an alien woman so that she should live with him as his concubine. Two years later the Mann Act was passed. Because of the similarity of the language used in the two acts the Bitty case became a forceful precedent for the construction of the Mann Act. Thus one who transported a woman in interstate commerce so that she should become his mistress or concubine was held to have transported her for an 'immoral purpose' within the meaning of the Mann Act. Caminetti v. United States, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442, L.R.A. 1917F, 502, Ann.Cas. 1917B, 1168. 4 It is argued that the Caminetti decision gave too wide a sweep to the Act; that the Act was designed to cover only the white slave business and related vices; that it was not designed to cover voluntary actions bereft of sex commercialism; and that in any event it should not be construed to embrace polygamy which is a form of marriage and, unlike prostitution or debauchery or the concubinage involved in the Caminetti case, has as its object parenthood and the creation and maintenance of family life. In support of that interpretation an exhaustive legislative history is submitted which, it is said, gives no indication that the Act was aimed at polygamous practices. 5 While Mortensen v. United States, supra, 322 U.S. at page 377, 64 S.Ct. at page 1041, 88 L.Ed. 1331, rightly indicated that the Act was aimed 'primarily' at the use of interstate commerce for the conduct of the white slave business we find no indication that a profit motive is a sine qua non to its application. Prostitution, to be sure, normally suggests sexual relations for hire.3 But debauchery has no such implied limitation. In common understanding the indulgence which that term suggests may be motivated solely by lust.4 And so we start with words which by their natural import embrace more than commercialized sex. What follows is 'any other immoral urpose'. Under the ejusdem generis rule of construction the general words are confined to the class and may not be used to enlarge it. But we could not give the words a faithful interpretation if we confined them more narrowly than the class of which they are a part. 6 That was the view taken by the Court in the Bitty and Caminetti cases. We do not stop to re-examine the Caminetti case to determine whether the Act was properly applied to the facts there presented. But we adhere to its holding which has been in force for almost 30 years,5 that the Act, while primarily aimed at the use of interstate commerce for the purposes of commercialized sex, is not restricted to that end. 7 We conclude, moreover, that polygamous practices are not excluded from the Act. They have long been outlawed in our society. As stated in Reynolds v. United States, 98 U.S. 145, 164, 25 L.Ed. 244: 'Polygamy has always been odious among the northern and western nations of Europe, and, until the establishment of the Mormon Church, was almost exclusively a feature of the life of Asiatic and of African people. At common law, the second marriage was always void (2 Kent, Com. 79), and from the earliest history of England polygamy has been treated as an offense against society.' As subsequently stated in Mormon Church v. United States, 136 U.S. 1, 49, 10 S.Ct. 792, 805, 34 L.Ed. 481; 'The organization of a community for the spread and practice of polygamy is, in a measure, a return to barbarism. It is contrary to the spirit of Christianity and of the civilization which Christianity has produced in the western world.' And see Davis v. Beason, 133 U.S. 333, 10 S.Ct. 299, 33 L.Ed. 637. Polygamy is a practice with far more pervasive influences in society than the casual, isolated transgressions involved in the Caminetti case. The establishment or maintenance of polygamous households is a notorious example of promiscuity. The permanent advertisement of their existence is an example of the sharp repercussions which they have in the community. We could conclude that Congress excluded these practices from the Act only if it were clear that the Act is confined to commercialized sexual vice. Since we cannot say it is, we see no way by which the present transgressions can be excluded. These polygamous practices have long been branded as immoral in the law. Though they have different ramifications, they are in the same genus as the other immoral practices covered by the Act. 8 The fact that the regulation of marriage is a state matter does not, of course, make the Mann Act an unconstitutional interference by Congress with the police powers of the States. The power of Congress over the instrumentalities of interstate commerce is plenary; it may be used to defeat what are deemed to be immoral practices; and the fact that the means used may have 'the quality of police regulations' is not consequential. Hoke v. United States, 227 U.S. 308, 323, 33 S.Ct. 281, 284, 57 L.Ed. 523, 43 L.R.A.,N.S. 906, Ann.Cas.1913E, 905; see Athanasaw v. United States, 227 U.S. 326, 33 S.Ct. 285, 57 L.Ed. 528, Ann.Cas.1913E, 911; Wilson v. United States, 232 U.S. 563, 34 S.Ct. 347, 58 L.Ed. 728. 9 Petitioners' second line of defense is that the requisite purpose was lacking. It is said that those petitioners who already had plural wives did not transport them in interstate commerce for an immoral purpose. The test laid down in the Mortensen case was whether the transportation was in fact 'the use of interstate commerce as a calculated means for effectuating sexual immorality.' 322 U.S. page 375, 64 S.Ct. page 1041, 88 L.Ed. 1331. There was evidence that this group of petitioners in order to cohabit with their plural wives found it necessary or convenient to transport them in interstate commerce and that the unlawful purpose was the dominant motive. In one case the woman was transported for the purpose of entering into a plural marriage. After a night with this petitioner she refused to continue the plural marriage relationship. But guilt under the Mann Act turns on the purpose which motivates the transportation, not on its accomplishment. Wilson v. United States, supra, 232 U.S. at pages 570, 571, 34 S.Ct. 349, 350, 58 L.Ed. 728. 10 It is also urged that the requisite criminal intent was lacking since petitioners were motivated by a religious belief. That defense claims too much. If upheld, it would place beyond the law any act done under claim of religious sanction. But it has long been held that the fact that polygamy is supported by a religious creed affords no defense in a prosecution for bigamy. Reynolds v. United States, supra. Whether an act is immoral within the meaning of the statute is not to be determined by the accused's concepts of morality. Congress has provided the standard. The offense is complete if the accused intended to perform, and did in fact perform, the act which the statute condemns, viz., the transportation of a woman for the purpose of making her his plural wife or cohabiting with her as such. 11 We have considered the remaining objections raised and find them without merit. 12 Affirmed. 13 Mr. Justice BLACK and Mr. Justice JACKSON think that the cases should be reversed. They are of opinion that affirmance requires extension of the rule announced in the Caminetti case and that the correctness of that rule is so dubious that it should at least be restricted to its particular facts. 14 Mr. Justice RUTLEDGE, concurring. 15 I concur in the result. Differences have been urged in petitioners' behalf between these cases and Caminetti v. United States, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442, L.R.A.1917F, 502, Ann.Cas.1917B, 1168.1 Notwithstanding them, in my opinion it would be impossible rationally to reverse the convictions, at the same time adhering to Caminetti and later decisions perpetuating its ruling.2 16 It is also suggested, though not strongly urged, that Caminetti was wrongly decided and should be overruled. Much may be said for this view. In my opini n that case and subsequent ones following it extended the Mann Act's coverage beyond the congressional intent and purpose, as the dissenting opinion of Mr. Justice McKenna convincingly demonstrated. 242 U.S. at page 496, 37 S.Ct. at page 198.3 Moreover as I also think, this legislation and the problems presented by the cases arising under it are of such a character as does not allow this Court properly to shift to Congress the responsibility for perpetuating the Court's error. 17 Notwithstanding recent tendency, the idea cannot always be accepted that Congress, by remaining silent and taking no affirmative action in repudiation, gives approval to judicial misconstruction of its enactments. See Girouard v. United States, 328 U.S. 61, 66 S.Ct. 826. It is perhaps too late now to deny that, legislatively speaking as in ordinary life, silence in some instances may give consent.4 But it would be going even farther beyond reason and common experience to maintain, as there are signs we may be by way of doing, that in legislation any more than in other affairs silence or nonaction always is acquiescence equivalent to action. 18 There are vast differences between legislating by doing nothing and legislating by positive enactment, both in the processes by which the will of Congress is derived and stated5 and in the clarity and certainty of the expression of its will.6 And there are many reasons, other than to indicate approval of what the courts have done, why Congress may fail to take affirmative action to repudiate their misconstruction of its duly adopted laws. Among them may be the sheer pressure of other and more important business. See Moore v. Cleveland R. Co., 6 Cir., 108 F.2d 656, 660. At times political considerations may work to forbid taking corrective action. And in such cases, as well as others, there may be a strong and proper tendency to trust to the courts to correct their own errors, see Girouard v. United States, supra, 328 U.S. 69, 66 S.Ct. at page 830, as they ought to do when experience has confirmed or demonstrated the errors' existence. 19 The danger of imputing to Congress, as a result of its failure to take positive or affirmative action through normal legislative processes, ideas entertained by the Court concerning Congress' will, is illustrated most dramatically perhaps by the vacillating and contradictory courses pursued in the long line of decisions imputing to 'the silence of Congress' varied effects in commerce clause cases.7 That danger may be and often is equally present in others. More often than not the only safe assumption to make from Congress' inaction is simply that Congress does not intend to act at all. Cf. United States v. American Trucking Ass'n, 310 U.S. 534, 550, 60 S.Ct. 1059, 1067, 84 L.Ed. 1345. At best the contrary view can be only an inference, altogether lacking in the normal evidences f legislative intent and often subject to varying views of that intent.8 In short, although recognizing that by silence Congress at times may be taken to acquiesce and thus approve, we should be very sure that, under all the circumstances of a given situation, it has done so before we so rule and thus at once relieve ourselves from and shift to it the burden of correcting what we have done wrongly. The matter is particular, not general, notwithstanding earlier exceptional treatment and more recent tendency. Just as dubious legislative history is at times much overridden, so also is silence or inaction often mistaken for legislation. 20 I doubt very much that the silence of Congress in respect to these cases, notwithstanding their multiplication and the length of time during which the silence has endured, can be taken to be the equivalent of bills approving them introduced in both houses, referred to and considered by committees, discussed in debates, enacted by majorities in both places, and approved by the executive. I doubt, in other words, that, in view of all the relevant circumstances including the unanticipated consequences of the legislation,9 such majorities could have been mustered in approval of the Caminetti decision at any time since it was rendered. Nor is the contrary conclusion demonstrated by Congress' refusal to take corrective action.10 21 The Caminetti case, however, has not been overruled and has the force of law until a majority of this Court may concur in the view that this should be done and take action to that effect. This not having been done, I acquiesce in the Court's decision. 22 Mr. Justice MURPHY, dissenting. 23 Today another unfortunate chapter is added to the troubled history of the White Slave Traffic Act. It is a chapter written in terms that misapply the statutory language and that disregard the intention of the legislative framers. It results in the imprisonment of individuals whose actions have none of the earmarks of white slavery, whatever else may be said of their conduct. I am accordingly forced to dissent. 24 The statute in so many words refers to transportation of women and girls across state lines 'for the purpose of prostitution or debauchery, or for any other immoral purpose.' The issue here is whether the act of taking polygamous or plural wives across state lines or taking girls across state borders for the purpose of entering into plural marriage, constitutes transportation 'for any other immoral purpose' so as to come within the interdict of the statute. 25 The Court holds, and I agree that under the ejusdem generis rule of statutory construction the phrase 'any other immoral purpose' must be confined to the same class of unlawful sexual immoralities as that to which prostitution and debauchery belong. But I disagree with the conclusion that polygamy is 'in the same genus' § prostitution and debauchery and hence within the phrase 'any other immoral purpose' simply because it has sexual connotations and has 'long been branded as immoral in the law' of this nation. Such reasoning ignores reality and results in an unfair application of the statutory words. 26 It is not my purpose to defend the practice of polygamy or to claim that it is morally the equivalent of monogamy. But it is essential to understand what it is as well as what it is not. Only in that way can we intelligently decide whether it falls within the same genus as prostitution or debauchery. 27 There are four fundamental forms of marriage: (1) monogamy; (2) polygamy, or one man with several wives; (3) polyandry, or one woman with several husbands; and (4) group marriage. The term 'polygamy' covers both polygyny and polyandry. Thus we are dealing here with polygyny, one of the basic forms of marriage. Historically, its use has far exceeded that of any other form. It was quite common among ancient civilizations and was referred to many times by the writers of the Old Testament; even today it is to be found frequently among certain pagan and non-Christian peoples of the world. We must recognize, then, that polygyny, like other forms of marriage, is basically a cultural institution rooted deeply in the religious beliefs and social mores of those societies in which it appears. It is equally true that the briefs and mores of the dominant culture of the contemporary world condemn the practice as immoral and substitute monogamy in its place. To those beliefs and mores I subscribe, but that does not alter the fact that polygyny is a form of marriage built upon a set of social and moral principles. It must be recognized and treated as such. 28 The Court states that polygamy is 'a notorious example of promiscuity.' The important fact, however, is that, despite the differences that may exist between polygamy and monogamy, such differences do not place polygamy in the same category as prostitution or debauchery. When we use those terms we are speaking of acts of an entirely different nature, having no relation whatever to the various forms of marriage. It takes no elaboration here to point out that marriage, even when it occurs in a form of which we disapprove, is not to be compared with prostitution or debauchery or other immoralities of that character. 29 The Court's failure to recognize this vital distinction and its insistence that polygyny is 'in the same genus' as prostitution and debauchery do violence to the anthropological factors involved. Even etymologically, the words 'polygyny' and 'polygamy' are quite distinct from 'prostitution,' 'debauchery' and words of that ilk. There is thus no basis in fact for including polygyny within the phrase 'any other immoral purpose' as used in this statute. 30 One word should be said about the Court's citation of United States v. Bitty, 208 U.S. 393, 28 S.Ct. 396, 52 L.Ed. 543, and the statement that the interpretation of the statute there involved is a forceful precedent for the construction of the White Slave Traffic Act. The thought apparently is that the phrase 'any other immoral purpose' appearing in the White Slave Traffic Act, was derived from the identical phrase used in the statute regulating the immigration of aliens into the United States, the statute which was under consideration in the Bitty case. 34 Stat. 898. That case concerned itself with the portion of the immigration statute forbidding 'the importation into the United States of any alien woman or girl for the purpose of prostitution, or for any other immoral purpose.' Significantly, however, the statute made separate provision for the exclusion of 'polygamists, or persons who admit their belief in the practice of polygamy.' Thus the phrase 'any other immoral purpose,' following the reference to prostitution, certainly did not comprehend polygamy. And if that statute, or the interpretation given it in the Bitty case, is to be any authority here, the conclusion t be drawn is inconsistent with the result reached by the Court today. As a matter of fact, Congress has always referred to polygamy by name when it desired to deal with that subject, as distinguished from immoralities in the nature of prostitution. See, for example, 8 U.S.C. § 364, 8 U.S.C.A. § 364; 18 U.S.C. § 513, 18 U.S.C.A. § 513. 31 The result here reached is but another consequence of this Court's long-continued failure to recognize that the White Slave Traffic Act, as its title indicates, is aimed solely at the diabolical interstate and international trade in white slaves, 'the business of securing white women and girls and of selling them outright, or of exploiting them for immoral purposes.' H.Rep. No. 47, 61st Cong., 2d Sess., p. 11; S.Rep. No. 886, 61st Cong., 2d Sess., p. 11. The Act was suggested and proposed to meet conditions which had arisen in the years preceding 1910 and which had revealed themselves in their ugly details through extensive investigations. The framers of the Act specifically stated that it is not directed at immorality in general; it does not even attempt to regulate the practice of voluntary prostitution, leaving that problem to the various states. Its exclusive concern is with those girls and women who are 'unwillingly forced to practice prostitution' and to engage in other similar immoralities and 'whose lives are lives of involuntary servitude.' Ibid. A reading of the legislative reports and debates makes this narrow purpose so clear as to remove all doubts on the matter. And it is a purpose that has absolutely no relation to the practice of polygamy, however much that practice may have been considered immoral in 1910. 32 Yet this Court in Caminetti v. United States, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442, L.R.A.1917F, 502, Ann.Cas.1917B, 1168, over the vigorous dissent of Justice McKenna in which Chief Justice White and Justice Clarke joined, closed its eyes to the obvious and interpreted the broad words of the statute without regard to the express wishes of Congress. I think the Caminetti case can be factually distinguished from the situation at hand since it did not deal with polygamy. But the principle of the Caminetti case is still with us today, the principle of interpreting and applying the White Slave Traffic Act in disregard of the specific problem with which Congress was concerned. I believe the issue should be met squarely and the Caminetti case overruled. It has been on the books for nearly 30 years and its age does not justify its continued existence. Stare decisis certainly does not require a court to perpetuate a wrong for which it was responsible, especially when no rights have accrued in reliance on the error. Cf. Helvering v. Hallock, 309 U.S. 106, 121, 122, 60 S.Ct. 444, 452, 453, 84 L.Ed. 604, 125 A.L.R. 1368. Otherwise the error is accentuated; and individuals, whatever may be said of their morality, are fined and imprisoned contrary to the wishes of Congress. I shall not be a party to that process. 33 The consequence of prolonging the Caminetti principle is to make the federal courts the arbitrers of the morality of those who cross state lines in the company of women and girls. They must decide what is meant by (242 U.S. 470, 37 S.Ct. 195) 'any other immoral purpose' without regard to the standards plainly set forth by Congress. I do not believe that this falls within the legitimate scope of the judicial function. Nor does it accord the respect to which Congressional pronouncements are entitled. 34 Hence I would reverse the judgments of conviction in these cases. 1 The Church of Jesus Christ of Latter-Day Saints has forbidden plural marriages since 1890. See Toncray v. Budge, 14 Idaho 621, 654, 655, 95 P. 26. 2 Petitioners' activities extended into Arizona, California, Colorado, Idaho, Utah and Wyoming. 3 'Of women: The offering of the body to indiscriminate lewdness for hire (esp. as a practice or institution); whoredom, harlotry.' 8 Oxford English Dictionary 1497. 4 'Vicious indulgence in sensual pleasures.' 3 Oxford English Dictionary 79; 'Excessive indulgence in sensual pleasures of any kind; gluttony; intemperance; sexual immorality; unlawful indulgence of lust.' 3 Century Dict.Rev.Ed. 1477. 5 Blackstock v. United States, 8 Cir., 261 F. 150; Carey v. United States, 8 Cir., 265 F. 515; Elrod v. United States, 6 Cir., 266 F. 55; Burgess v. United States, 54 App.D.C. 71, 294 F. 1002; Corbett v. United States, 9 Cir., 299 F. 27; Hart v. United States, 9 Cir., 11 F.2d 499; Ghadiali v. United States, 9 Cir., 17 F.2d 236; United States v. Reginelli, 3 Cir., 133 F.2d 595; Poindexter v. United States, 8 Cir., 139 F.2d 158; Simon v. United States, 4 Cir., 145 F.2d 345; Qualls v. United States, 5 Cir., 149 F.2d 891; Sipe v. United States, 80 U.S.App.D.C. 194, 150 F.2d 984; United States v. Chaplin, D.C., 54 F.Supp. 682. 1 Counsel has emphasized the religious aspect presented by these cases and has stressed the familial aspect and purpose of so-called 'celestial marriage' in the Mormon conception as distinguishing the relation in fact and in consequence from such as were involved in the Caminetti and other Mann Act cases. The argument from religious motivation has been foreclosed, so far as legislative power is concerned, since Reynolds v. United States, 98 U.S. 145, 25 L.Ed. 244. Apropos of the Mann Act's application, the relationship is not only illegal under state law but also as regular and continuous as that involved in Caminetti, or more so. 2 See e.g., Gebardi v. United States, 287 U.S. 112, 53 S.Ct. 35, 77 L.Ed. 206, 84 A.L.R. 370; United States v. Reginelli, 3 Cir., 133 F.2d 595; Christian v. United States, 8 Cir., 28 F.2d 114, Compare United States v. Beach, 324 U.S. 193, 65 S.Ct. 602, 89 L.Ed. 865; Mortensen v. United States, 322 U.S. 369, 64 S.Ct. 1037, 88 L.Ed. 1331. 3 See also the dissenting opinion of Mr. Justice Murphy herein. The dissenting opinion in the Caminetti case was joined by the Chief Justice and Mr. Justice Clarke. Only five justices adhered to the majority opinion, Mr. Justice McReynolds not participating. Cf. the opinion of Mr. Justice McKenna in Athanasaw v. United States, 227 U.S. 326, 33 S.Ct. 285, 57 L.Ed. 528, Ann.Cas. 1913E, 911. 4 As an original matter, in view of the specific and constitutional procedures required for the enactment of legislation, it would seem hardly justifiable to treat as having legislative effect any action or nonaction not taken in accordance with the prescribed procedures. 5 See note 4. Legislative intent derived from nonaction or 'silence' lacks all the supporting evidences of legislation enacted pursuant to prescribed procedures, including reduction of bills to writing, committee reports, debates, and reduction to final written form, as well as voting records and executive approval. Necessarily also the intent must be derived by a form of negative inference, a process lending itself to much guesswork. 6 See note 5. 7 See Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 424, 66 S.Ct. 1142, 1152; Ribble, State and National Power Over Commerce (1937) c. X; Bikle , The Silence of Congress (1927) 41 Harv.L.Rev. 200; Powell, The Validity of State Legislation under the Webb-Kenyon Law (1917) 2 So.L.Rev. 112. An example of judicial interpretation of the silence of Congress as giving consent to state legislation is Wilson v. McNamee, 102 U.S. 572, 575, 26 L.Ed. 234. 8 Cf. note 5. 9 See opinion of Mr. Justice McKenna, 242 U.S. at page 502, 37 S.Ct. at page 201, 61 L.Ed. 442, L.R.A.1917F, 502. Ann.Cas.1917B, 1168, dissenting in Caminetti v. United States; see also the dissenting opinion in United States v. Beach, 324 U.S. 193, 199, 200, 65 S.Ct. 602, 605, 89 L.Ed. 865. 10 Since the Caminetti decision two bills have been introduced to limit the effect of that case. S. 2438, 73d Cong., 2d Sess.; S. 101, 75th Cong., 1st Sess. Neither was reported out of committee. In such circumstances the failure of Congress to amend the Act raises no presumption as to its intent. Order of Railway Conductors of America v. Swan, 7 Cir., 152 F.2d 325, 329.

01

329 U.S. 40 67 S.Ct. 167 91 L.Ed. 29 UNITED STATESv.ALCEA BAND OF TILLAMOOKS et al. No. 26. Reargued Oct. 25, 1946. Decided Nov. 25, 1946. Mr. Walter J. Cummings, Jr., of Washington, D.C., for petitioner. Mr.Everett Sanders, of Washington, D.C., for respondents. The CHIEF JUSTICE announced the judgment of the Court and delivered an opinion, in which Mr. Justice FRANKFURTER, Mr. Justice DOUGLAS, and Mr. Justice MURPHY joined. 1 Eleven Indian tribes have sued the United States in the Court of Claims under the Act of 1935,1 which gives that court jurisdiction to hear and adjudicate cases involving 'any and all legal and equitable claims arising under or growing out of the original Indian title, claim, or rights in * * * the lands * * * occupied by the Indian tribes and bands described in' certain unratified treaties negotiated with Indian tribes in the Territory of Oregon. 2 Four of the tribes,2 he Tillamooks, Coquilles, Too-too-to-neys and Chetcos, successfully identified themselves as entitled to sue under the Act, proved their original Indian title3 to designated lands, and demonstrated an involuntary and uncompensated taking of such lands. The Court of Claims thereupon held that original Indian title was an interest the taking of which without the consent of the Indian tribes entitled the latter to compensation. In answer to government contentions that original Indian title, in the absence of some form of official 'recognition', could be appropriated without liability upon the part of the sovereign, the Act of 1848,4 establishing the Territory of Oregon, was cited by the Court of Claims as affording any recognition required to support the claim for compensation. The issues decided, not previously passed upon by this Court and being of importance to the administration of Indian affairs, prompted this Court to grant certiorari. The case was argued during the 1945 term and on April 1, 1946, was restored to the docket for reargument before a full bench. 3 The events giving rise to the claims here occurred as part of the opening and development of the Territory of Oregon. After creating a government for that territory by the Act of 1848,5 Congress in 1850 authorized the negotiation of treaties with Indian tribes in the area. Under the latter Act,6 Anson Dart, later succeeded by General Joel Palmer, was appointed Superintendent of Indian Affairs for the Oregon region and was instructed to negotiate treaties for the extinguishment of Indian claims to lands in that district. On August 11, 1855, Palmer and respondent tribes concluded a treaty providing for the cession of Indian lands in return for certain money payments and the creation of a reservation. The treaty was to be operative only upon ratification. It was not submitted to the Senate until February, 1857, and was never ratified. 4 Pending expected ratification, and following recommendations from Palmer, the President on November 9, 1855, created a reservation, subject to future diminution and almost identical with that provided for in the treaty. A large part of this reservation, called the Coast or Siletz Reservation, consisted of lands to which the Tillamook Tribe held original Indian title. Almost immediately the Tillamooks were con ined to that portion of their land within the reservation, and the other three respondent tribes, as well as other tribes, were moved from their original possessions to the reservation. In 1865 an Executive Order reduced the size of the reservation; in 1875 Congress by statute approved the Executive Orders of 1855 and 1865, and in order to open more land for public settlement, removed additional land from the reservation. By an Act of 1894,7 Congress officially accepted and approved the reservation as it then existed, and thenceforward did not take reservation lands without compensation. 5 The claims of respondent tribes are for the wrongful taking which occurred when they were deprived of their original possessions by the Executive Order of November 9, 1855. Even as to the Tillamooks, the Court of Claims found the taking complete as of November 9, 1855, since this tribe was forced to share its former lands with other Indians, and since the reservation was, in any event, only a conditional one, subject to being opened for public settlement at the will of the President. Petitioner disputes neither this finding nor the proof of original Indian title as of 1855. 6 Other than the benefits flowing from the Act of 1894,8 none of the four respondent tribes has received any compensation for the loss of its lands. Until the present jurisdictional act of 1935, these tribes, lacking consent of the United States to be sued, were forbidden access to the courts. They alone of the tribes with whom Dart and Palmer negotiated some twenty-odd treaties between 1850 and 1855 have yet to receive recognition for the loss of lands held by original Indian title.9 7 Until now this Court has had no opportunity or occasion to pass upon the precise issue presented here. In only one act prior to 1935 has Congress authorized judicial determination of the right to recover for a taking of nothing more than original Indian title; and no case under that act,10 passed in 1929, reached this Court.11 In 193012 Congress again authorized adjudication of Indian claims arising out of original Indian title, but expressly directed an award of damages if a taking of lands held by immemorial possession were shown. This act thus eliminated any judicial determination of a right to recover, once original Indian title was established. 8 Prior to 1929, adjudications of Indian claims against the United States were limited to issues arising out of treaties, statutes, or other events and transactions carefully designated by Congress. This Court has always strictly construed such jurisdictional acts and has not offered judicial opinion on the justness of the handling of Indian lands, except in so far as Congress in specific language has permitted its justiciable recognition. 9 The language of the 1935 Act is specific, and its consequences are clear. By this Act Congress neither admitted nor denied liability. The Act removes the impediments of sovereign immunity and lapse of time and provides for judicial determination of the designated claims. No new right or cause of action is created. A merely moral claim is not made a legal one. The cases are to be heard on their merits and decided according to legal principles pertinent o the issues which might be presented under the Act.13 Accordingly the 1935 statute permits judicial determination of the legal and equitable claims growing out of original Indian title. That which was within the power of Congress to withhold from judicial scrutiny has now been submitted to the courts. If, as has many times been said,14 the manner of extinguishing Indian title is usually a political question and presents a non-justiciable issue, Congress has expressly and effectively directed otherwise by seeking in the 1935 Act judicial disposition of claims arising from original Indian title. 'By consenting to be sued, and submitting the decision to judicial action, they have considered it as a purely judicial question, which we are now bound to decide, as between man and man. * * *' United States v. Arredondo, 1832, 6 Pet. 691, 711, 8 L.Ed. 547. 10 It has long been held that by virtue of discovery the title to lands occupied by Indian tribes vested in the sovereign.15 This title was deemed subject to a right of occupancy in favor of Indian tribes, because of their original and previous possession. It is with the content of this right of occupancy, this original Indian title, that we are concerned here. 11 As against any but the sovereign, original Indian title was accorded the protection of complete ownership;16 but it was vulnerable to affirmative action by the sovereign, which possessed exclusive power to extinguish the right of occupancy at will. Termination of the right by sovereign action was complete and left the land free and clear of Indian claims. Third parties could not question the justness or fairness of the methods used to extinguish the right of occupancy.17 Nor could the Indians themselves prevent a taking of tribal lands or forestall a termination of their title. However, it is now for the first time asked whether the Indians have a cause of action for compensation arising out of an involuntary taking of lands held by original Indian title. 12 We cannot but affirm the decision of the Court of Claims. Admitting the undoubted power of Congress to extinguish original Indian title compels no conclusion that compensation need not be paid. In speaking of the original claims of the Indians to their lands, Marshall had this to say: 'It is difficult to comprehend the proposition * * * that the discovery * * * should give the discoverer rights in the country discovered which annulled the pre-existing rights of its ancient possessors. * * * It gave the exclusive right to purchase, but did not found that right on a denial of the right of the possessor to sell. * * * The king purchased their lands, * * * but never coerced a surrender of them.' Worcester v. Georgia, 1832, 6 Pet. 515, 543, 544, 547, 8 L.Ed. 483. In our opinion, taking original Indian title without compensation and without consent does not satisfy the 'high standards for fair dealing' required of the United States in controlling Indian affairs. United States v. Santa Fe R. Co., 1941, 314 U.S. 339, 356, 62 S.Ct. 248, 256, 86 L.Ed. 260. The Indians have more than a merely moral claim for compensation.18 13 A contrary decision would ignore the plain import of traditional methods of extinguishing original Indian title. The early acquisition of Indian lands in the main progressed by a process of negotiation and treaty. The first treaties reveal the striking deference paid to Indian claims, as the analysis in Worcester v. State of Georgia, supra, clearly details. It was usual policy not to coerce the surrender of lands without consent and without compensation.19 The great drive to open Western lands in the 19th Century, however productive of sharp dealing, did not wholly subvert the settled practice of negotiated extinguishment of original Indian title.20 In 1896, this Court noted that '* * * nearly every tribe and band of Indians within the territorial limits of the United States was under some treaty relations with the government.' Marks v. United States, 1896, 161 U.S. 297, 302, 16 S.Ct. 476, 478, 40 L.Ed. 706. Something more than sovereign grace prompted the obvious regard given to original Indian title. 14 Long before the end of the treaty system of Indian government and the advent of legislative control in 1871,21 Congress had evinced its own attitude toward Indian relations. The Ordinance of 1787 declared, 'the utmost good faith shall always be observed toward the Indians; their land and property shall never be taken from them without their consent * * *.' 1 Stat. 50, 52. When in 1848 the territorial government of Oregon was created, § 14 of that Act22 secured to the inhabitants of the new territory all the rights and privileges guaranteed by the Ordinance of 1787. Nor did Congressional regard for Indian lands change in 1871. In providing for the settlement of Dakota Territory, Congress in 1872 directed the extinguishment of the interests of Indians in certain lands and the determination of what 'compensation ought, in justice and equity, to be made to said bands * * * for the extinguishment of whatever title they may have to said lands.' 17 Stat. 281; Buttz v. Northern Pacific Railroad, 1886, 119 U.S. 55, 59, 7 S.Ct. 100, 102, 30 L.Ed. 330. The latest indicia of Congressional regard for Indian claims is the Indian Claims Commission Act, Pub. No. 726, 79th Cong.2d Sess., 25 U.S.C.A. § 70 et seq., 28 U.S.C.A. § 259a, in which not only are claims similar to those of the case at bar to be heard, but 'claims based upon fair and honorable dealings that are not recognized by any existing rule of law or equity' may be submitted to the Commission with right of judicial review. 15 Congressional and executive action consistent with the prevailing idea of non-coercive, compensated extinguishment of Indian title is clear in the facts of the present case. The Act of 1848 declared a policy of extinguishing Indian claims in Oregon only by treaty. The statute of 1850 put in motion the treaty-making machinery. Respondent tribes were among those with whom treaties were negotiated. In many cases, expected ratification did not follow. In the case of respondent tribes alone have no steps been taken to make amends for the taking of Indian lands pending treaty ratification. To determine now that compensation ust be paid is only a fair result. 16 Petitioner would admit liability only if, in addition to clear proof of original Indian title, some act of official 'recognition' were shown. Original Indian title would not attain the status of a compensable interest until some definite act of sovereign acknowledgment followed. Apparently petitioner has seized upon language of the Court of Claims in Duwamish et al. Indians v. United States, 1934, 79 Ct.Cl. 530, and from it has fashioned a fullblown concept of 'recognized Indian title.' The jurisdictional act in that case authorized suits on 'all claims of whatever nature, both legal and equitable.'23 Claims based solely on original Indian title were held to be outside the limits of the act; and unless a treaty or act of Congress recognizing the Indians' title by right of occupancy were shown, recovery could not be had.24 A more specific jurisdictional act was deemed necessary to authorize a suit based upon original Indian title alone. 17 Petitioner reads into the Duwamish case far too much. When the first jurisdictional act specifically allowing suit on original Indian title in language identical with that of the 1935 Act later came before the Court of Claims in Coos Bay, Lower Umpqua and Siuslaw Indian Tribes et tl. v. United States, 1938, 87 Ct.Cl. 143, the court clearly recognized the specific directives of the act and denied recovery solely because original Indian title had not been proved. 'Recognition' appeared to count only as a possible method of proving Indian title itself, not as a requisite in addition to proof of that title. Furthermore, in the case at bar, the unmistakable language of the Court of Claims stands squarely against the significance petitioner would attach to the Duwamish decision: 'The Duwamish case did not hold or intend to hold that an Indian tribe could not recover compensation on the basis of original Indian use and occupancy title as for a taking if the jurisdictional act authorized the bringing of suit and rendition of judgment for compensation on the basis of such original title.' Alcea Band of Tillamooks et al. v. United States, 1945, 59 F.Supp. 934, 965, 103 Ct.Cl. 494, 556. 18 Authority for petitioner's position is not found in Northwestern Bands of Shoshone Indians v. United States, 1945, 324 U.S. 335, 65 S.Ct. 690, 89 L.Ed. 985. The jurisdictional act there limited suits to those claims 'arising under or growing out of the treaty of July 2, 1863 * * *.'25 Suits based upon original Indian title were not authorized, but we thought a claim would properly arise under the treaty if it were based upon a taking of land which the treaty had in any way 'recognized' or acknowledged as belonging to the Indians. The Court thrice noted that claims based upon original Indian title were not involved, and made no attempt to settle controversies brought under other jurisdictional acts authorizing the litigation of claims arising from the taking of original Indian title.26 19 Nor do other cases in this Court lend substance to the dichotomy of 'recognized' and 'unrecognized' Indian title which petitioner urges. Many cases recite the paramount power of Congress to extinguish the Indian right of occupancy by methods the justice of which 'is not open to inquiry in the courts.' United States v. Sante Fe Pacific R. Co., supra, at page 347 of 314 U.S., at page 252 of 62 S.Ct., 86 L.Ed. 260.27 Lacking a jurisdictional act permitting judicial inquiry, such language cannot be questioned where Indians are seeking payment for appropriated lands; but here in the 1935 statute Congress has authorized decision by the courts upon claims arising out of original Indian title. Furthermore, some cases speak of the unlimi ed power of Congress to deal with those Indian lands which are held by what petitioner would call 'recognized' title;28 yet it cannot be doubted that, given the consent of the United States to be sued, recovery may be had for an involuntary, uncompensated taking of 'recognized' title.29 We think the same rule applicable to a taking of original Indian title. 'Whether this tract * * * was properly called a reservation * * * or unceded Indian country, * * * is a matter of little moment * * * the Indians' right of occupancy has always been held to be sacred; something not to be taken from him except by his consent, and then upon such consideration as should be agreed upon.' State of Minnesota v. Hitchcock, 1902, 185 U.S. 373, 388, 389, 22 S.Ct. 650, 656, 46 L.Ed. 954.30 20 Requiring formal acknowledgment of original Indian title as well as proof of that title would nullify the intended consequences of the 1935 Act. The rigors of 'recognition', according to petitioner's view, would appear to require in every case some definite act of the United States guaranteeing undisturbed, exclusive and perpetual occupancy, which, for example, a treaty or statute could provide. Yet it was the very absence of such acknowledgment which gave rise to the present statute. 21 Congress was quite familiar with the precision advisable when drafting statutes giving jurisdiction to the Court of Claims in Indian cases. In 1925 an act authorizing the litigation of any and all claims of certain Indian tribes was passed. In June, 1934, that act was held, for lack of specificity, not to extend to claims based on original title.31 The following year Congress passed the present act, employing the specific language used once before in the act of 1929,32 under which Coos Bay Lower Umpqua and Siuslaw Indian Tribe et al. v. United States, supra, arose. The considered attention given to the many ramifications of Indian affairs in the 1930's33 suggests that Congress well realized the import of the words used in the jurisdictional act of 1935, and that Congress did not expect respondent tribes to be turned out of court either because Congressional power over Indian title was deemed to have no limits or because there was, as was obvious to all, no formal guarantee of perpetual and exclusive possession prior to the taking of respondents' lands in 1855. 22 Respondents have satisfactorily proved their claim of original Indian title and an involuntary taking thereof. They are entitled to compensation under the jurisdictional act of 1935. The power of Congress over Indian affairs may be of a plenary nature; but it is not absolute.34 It does not 'enable the United States to give the tribal lands to others, or to appropriate them to its own purposes, without rendering, or assuming an obligation to render, just compensation for them.' United States v. Creek Nation, 1935, 295 U.S. 103, 110, 55 S.Ct. 681, 684, 79 L.Ed. 1331. 23 In view of the grounds upon which decision rests, it is not necessary to consider the alternate holding of the court below relative to the 1848 act affording sufficient 'recognition' of respondents' Indian title. 24 Affirmed. 25 Mr. Justice JACKSON took no part in the consideration or decision of this case. 26 Mr. Justice BLACK, concurring. 27 Before Congress passed the special Act under which this suit was brought, I think that the Government was under no more legal or equitable obligation to pay these respondents than it was under obligation to pay whatever descendants are left of the numerous other tribes whose lands and homes have been taken from them since the Nation was founded. See Northwestern Bands of Shoshone Indians v. United States, 324 U.S. 335, 354—358, 65 S.Ct. 690, 699—701, 89 L.Ed. 985, concurring opinion. It seems pretty clear to me, however, that Congress in the Act of 1935, 49 Stat. 801, created an obligation on the part of the Government to pay these Indians for all lands to which their ancestors held an 'original Indian title.' This interpretation of the Act is not only consistent with the unusually broad language Cong ess used, but also fits into the pattern of congressional legislation which has become progressively more generous in its treatment of Indians. The capstone of this type of legislation was an Act passed by the last Congress, which established an Indian Claims Commission with sweeping powers to pay old Indian claims growing out of seizure of their lands, among other things. This Commission is given power to make awards, subject to review by the Court of Claims, with and without regard to previous rules of law or equity courts. The Commission is even given a blanket power to make awards upon finding, for example, that the land of Indians was taken by the Government in a way that did not comport with 'fair and honorable dealings.' Pub.L. No. 726, 79th Cong., 2d Sess., § 2(5), 25 U.S.C.A. § 70a(5). Since whatever our action here, these Indians could, I assume, pursue, their claims under this broad recent legislation, and since the language of the Act before us does not preclude a similarly broad interpretation, I see no reason why it should be otherwise interpreted. This leads me to concur in affirmance of the judgment. 28 Mr. Justice REED, with whom Mr. Justice RUTLEDGE and Mr. Justice BURTON join, dissenting. 29 This case presents directly for the first time in this Court the question of whether an Indian band is legally entitled to recover compensation from the United States for the taking by the Government of the aboriginal lands of the Indians when there has been no prior recognition by the United States through treaty or statute of any title or legal or equitable right of the Indians in the land. The Court allows compensation. The importance of the issue persuades us that we should express the reasons for our dissent. It is difficult to foresee the result of this ruling in the consideration of claims by Indian tribes against the United States. We do not know the amount of land so taken. West of the Mississippi it must be large. Even where releases of Indian title have been obtained in return for recognition of Indian rights to smaller areas, charges of unfair dealings may open up to consideration again legal or equitable claims for taking aboriginal lands.1 30 The Court rightly states the effect of the jurisdictional act in these words: 31 'The Act removes the impediments of sovereign immunity and lapse of time and provides for judici l determination of the designated claims. No new right or cause of action is created. A merely moral claim is not made a legal one. (329 U.S. 45, 67 S.Ct. 169.) 'Lacking a jurisdictional act permitting judicial inquiry, such language cannot be questioned where Indians are seeking payment for appropriate lands; but here in the 1935 statute Congress has authorized decision by the courts upon claims arising out of original Indian title.' 329 U.S. 51, 67 S.Ct. 172. 32 This means, and the Court so treats the claims, that the Indians here get no money by grace or charity or for reasons of honorable dealings with helpless peoples.2 The recovery by them under this act will be because they have had valid claims against the United States on account of their ouster from these lands in 1855. These Indians have not been paid the sums owing them, one deduces from the Court's opinion, because the sovereign, our nation, kept the courts closed to them. The jurisdictional act, the Court holds, removes this bar to recovery. This conclusion conflicts with our understanding of this Government's right in the public lands of the nation. 33 The character of Indian occupancy of tribal lands is at least of two kinds: first, occupancy as aborigines until that occupancy is interrupted by governmental order; and, second, occupancy when by an act of Congress they are given a definite area as a place upon which to live. When Indians receive recognition of their right to occupy lands by act of Congress, they have a right of occupancy which cannot be taken from them without compensation.3 But by the other type of occupancy, it may be called Indian title, the Indians get no right to continue to occupy the lands; and any interference with their occupancy by the United States has not heretofore given rise to any right of compensation, legal or equitable.4 34 This distinction between rights from recognized occupancy and from Indian title springs from the theory under which the European nations took possession of the lands of the American aborigines. This theory was that discovery by the Christian nations gave them sovereignty over and title to the lands discovered. Johnson v. McIntosh, 8 Wheat. 543, 572—586, 5 L.Ed. 681; 1 Story, Commentaries on the Constitution (5th Ed.) § 152. While Indians were permitted to occupy these lands under their Indian title,5 the conquering nations asserted the right to extinguish that Indian title without legal responsibility to compensate the Indian for his loss.6 It is not for the courts of the conqueror to question the propriety or validity of such an assertion of power. Indians who continued to occupy their aboriginal homes, without definite recognition of their right to do so are like paleface squatters on public lands without compensable rights if they are evicted. Tenure for Indian tribes specifically recognized by Congress developed along different lines in the original states, the Louisiana Purchase, the Mexican Session or the lands obtained by the Northwest Boundary Treaty. But there is no instance known to us where there has been intimation or holding that Congressional power to take Indian title to lands is limited. Whenever the lands to which the Indians had only Indian title were required for settlement or public use, the sovereign without legal obligation could extinguish that title by purchase or the sword.7 35 In Barker v. Harvey, 181 U.S. 481, 21 S.Ct. 690, 45 L.Ed. 963 Mission Indians claimed a right of permanent occupancy in former Mexican lands ceded to the United States by the treaty of Guadalupe Hidalgo. They made this claim against a right arising by virtue of a patent that was issued by the United States in confirmation of grants by the Mexican Government in derogation of the Indian title. This Court said as to this Indian title, 181 U.S. p. 491, 21 S.Ct. 694, 'that a claim of a right to permanent occupancy of land is one of far reaching effect, and it could not well be said that lands which were burdened with a right of permanent occupancy were a part of the public domain and subject to the full disposal of the United States.'8 This Court confirmed title contrary to the Indian claim. Rights of occupancy given to Indians by an executive order may be withdrawn without compensation to the Indians where their title was not recognized by Congressional act. The Indians do not hold such lands by the same tenure as they do the lands by the terms of a ratified treaty or statute. Sioux Tribe of Indians v. United States, 316 U.S. 317, 326—328, 62 S.Ct. 1095, 1099—1100, 86 L.Ed. 1501. 36 As we understand the present holding of the Court, it is that the manner of terminating his Indian title by the United States is limited by the duty to pay compensation. Therein, we think, lies the fundamental error of the Court's opinion. It is true that distinctions have been made between plenary authority over tribal lands and absolute power, with the suggestion that Congressional power over Indian title was not unlimited. See Cohen, Handbook of Indian Law, 94, 291, 309, 310, 311. Examination of the authorities cited, however, will show, we think, in every instance that where reference is made to the protection of Indian lands by the Fifth Amendment or to the legal obligation of the United States to compensate Indians for lands taken, the lands under discussion were lands held by the Indians under titles recognized by specific acts of Congress.9 37 When Chief Justice Marshall expounded for the Court the power of the United States to extinguish Indian title, this doctrine was laid down for the nation's guidance in dealing with the Indians: 38 'The United States, then, have unequivocally acceded to that great and broad rule by which its civilized inhabitants now hold this country. They hold, and assert in themselves, the title by which it was acquired. They maintain, as all others have maintained, that discovery gave an exclusive right to extinguish the Indian title of occupancy, either by purchase or by conquest; and gave also a right to such a degree of sovereignty as the circumstances of the people would allow them to exercise. 39 '* * * All our institutions recognize the absolute title of the crown, subject only to the Indian right of occupancy, and recognized the absolute title of the crown to extinguish that right. This is incompatible with an absolute and complete title in the Indians. 40 '* * * Conquest gives a title which the courts of the conqueror cannot deny, whatever the private and speculative opinions of individuals may be, respecting the original justice of the claim which has been successfully asserted. * * * 41 'The title by conquest is acquired and maintained by force. The conqueror prescribes its limits. * * * Where this incorporation is practicable, humanity demands, and a wise policy requires, that the rights of the conquered to property should remain unimpaired; that the new subjects should be governed as equitably as the old, and that confidence in their security should gradually banish the painful sense of being separated from their ancient connections, and united by force to strangers. 42 '* * * the tribes of Indians inhabiting this country were fierce savages, whose occupation was war, and whose subsistence was drawn chiefly from the forest. To leave them in possession of their country, was to leave the country a wilderness; to govern them as a distinct people was impossible, because they were as brave and as high spirited as they were fierce, and were ready to repel by arms every attempt on their independence. 43 'What was the inevitable consequence of this state of things? The Europeans were under the necessity either of abandoning the country, and relinquishing their pompous claims to it, or of enforcing those claims by the sword, and by the adoption of principles adapted to the condition of a people with whom it was impossible to mix, and who could not be governed as a distinct society, or of remaining in their neighborhood, and exposing themselves and their families to the perpetual hazard of being massacred. 44 'Frequent and bloody wars, in which the whites were not always the aggressors, unavoidably ensued. European policy, numbers, and skill, prevailed. As the white population advanced, that of the Indians necessarily receded. The country in the immediate neighborhood of agriculturists became unfit for them. The game fled into thicker and more unbroken forests, and the Indians followed. The soil, to which the crown originally claimed title, being no longer occupied by its ancient inhabitants, was parcelled out according to the will of the sovereign power, and taken possession of by persons who claimed immediately from the crown, or mediately, through its grantees or deputies.' 8 Wheat. 587—591, 5 L.Ed. 681. 45 It is unnecessary for this case to undertake at this late date to weigh the rights and wrongs of this treatment of aboriginal occupancy. Where injustices have been done to friendly peoples, Congress has sought to soften their effect by acts of mercy. Never has there been acknowledgment before of a legal or equitable right to compensation that springs from the appropriation by the United States of the Indian title. 46 'Extinguishment of Indian title based on aboriginal possession is of course a different matter. The power of Congress in that regard is supreme. The manner, method and time of such extinguishment raise political not justiciable issues. Buttz v. Northern Pacific Railroad, supra, 119 U.S. at page 66, 7 S.Ct. at page 104, 30 L.Ed. 330. As stated by Chief Justice Marshall in Johnson v. McIntosh, supra, 8 Wheat. at page 586, 5 L.Ed. 681, 'the exclusive right of the United States to extinguish' Indian title has never been doubted. and whether it be done by treaty, by the sword, by purchase, by the exercise of complete dominion adverse to the right of occupancy, or otherwise, its justness is not open to inquiry in the courts. Beecher v. Wetherby, 95 U.S. 517, 525, 24 L.Ed. 440.' United States v. Santa Fe Pacific R. Co., 314 U.S. 339, 347, 62 S.Ct. 248, 252, 86 L.Ed. 260. 47 The colonies, the states and the nation alike by their e rly legislation provided that only the respective sovereigns could extinguish the Indian title.10 The way in which it was to be extinguished has been held, continually, a political matter.11 The jurisdictional act now under consideration does not purport to change a political matter to a justiciable one. 48 When this present jurisdictional act was considered by Congress, nothing in the reports or the debates12 indicates that Congress intended to create a new liability because Indian title had been taken. This Court relies upon no change of attitude in Congress, but finds that this liability has always existed and that this act merely removes the bar against suit. This we think is contrary to the whole course of our relations with the Indians. 49 The Court finds a basis for this action in that this nation should not take the Indian title without compensation because such a taking would not satisfy the "high standards for fair dealing' required of the United States in controlling Indian affairs.' The language used by the Court is taken from United States v. Santa Fe Pacific R. Co., 314 U.S. 339 at page 356, 62 S.Ct. 248 at page 256, 86 L.Ed. 260. It there referred to an act unauthorized by Congress and not to such takings as here occurred when Congress opened the original home of these respondents for settlement. 50 In Worcester v. State of Georgia, 6 Pet. 515, 543, 544, 547, 556, 8 L.Ed. 483, lands had been specifically set apart for the Cherokees. Therefore Chief Justice Marshall's comments were directed at a situation that does not exist here. 51 A concurring opinion has been filed which holds that Congress in the act here involved 'created an obligation on the part of the Government to pay these Indians' for their Indian title. We do not think this present act is susceptible of that interpretation. We read the act, as we understand the opinion of the Court does, to permit recovery of compensation only in case there were rights in the Indians prior to its passage 'arising under or growing out of the original Indian title.' We think no rights arose from this Indian title. Therefore no compensation is due. 52 As we are of the opinion that the jurisdictional act permitted judgment only for claims arising under or growing out of the original Indian title and are further of the opinion that there were no legal or equitable claims that grew out of the taking of this Indian title, we would reverse the judgment of the Court of Claims and direct that the bill of the respondents should be dismissed. Cf. Northwestern Bands of Shoshone Indians v. United States, 324 U.S. 335, 65 S.Ct. 690, 89 L.Ed. 985. 1 49 Stat. 801. The pertinent section in full provides: 'That jurisdiction is hereby conferred on the Court of Claims with the right of appeal to the Supreme Court of the United States by either party, as in other cases, to hear, examine, adjudicate, and render final judgment * * * (b) any and all legal and equitable claims arising under or growing out of the original Indian title, claim, or rights in, to, or upon th whole or any part of the lands and their appurtenances occupied by the Indian tribes and bands described in the unratified treaties published in Senate Executive Document Numbered 25, Fifty-third Congress, first session (pp. 8 to 15), at and long prior to the dates thereof, except the Coos Bay, Lower Umpqua, and Siuslaw Tribes, it being the intention of this Act to include all the Indian tribes or bands and their descendants, with the exceptions named, residing in the then Territory of Oregon west of the Cascade Range at and long prior to the dates of the said unratified treaties, some of whom, in 1855, or later, were removed by the military authorities of the United States to the Coast Range, the Grande Ronde, and the Siletz Reservations in said Territory.' 2 The remaining seven plaintiff tribes failed to state a cause of action under the jurisdictional act and the rules of the Court of Claims. 3 'Original Indian title' is used to designate the Indian right of occupancy based upon aboriginal possession. 4 9 Stat. 323. The Act created a territorial government and declared: 'That nothing in this act contained shall be construed to impair the rights of person or property now pertaining to the Indians in said Territory, so long as such rights shall remain unextinguished by treaty between the United States and such Indians, or to affect the authority of the government of the United States to make any regulation respecting such Indians, their lands, property, or other rights, by treaty, law, or otherwise, which it would have been competent to the government to make if this act had never passed.' 5 9 Stat. 323. 6 9 Stat. 437. 7 28 Stat. 286, 323. 8 28 Stat. 286, 323. 9 In 1851 Dart and Palmer negotiated treaties with nineteen tribes other than respondents. None of these treaties was ratified; but twelve of the nineteen tribes were included in further treaties made in 1853, 1854, and 1855, and Congress in 1897 and 1912 provided for paying the remaining seven tribes for their lands taken under the unratified treaties. 10 45 Stat. 1256, as amended in respects immaterial here, 47 Stat. 307. 11 Coos Bay, Lower Umpqua and Siuslaw Indian Tribe et al. v. United States, 1938, 87 Ct.Cl. 143, discussed infra 67 S.Ct. 172, arose under the 1929 Act. 12 46 Stat. 531, amending 44 Stat. 1263. Assiniboine Indian Tribe v. United States, 1933, 77 Ct.Cl. 347, was litigated under this jurisdictional act. 13 United States v. Mille Lac Chippewa Indians, 1913, 229 U.S. 498, 500, 33 S.Ct. 811, 812, 57 L.Ed. 1299; Sac and Fox Indians of the Mississippi in Iowa v. Sac and Fox, etc., 1911, 220 U.S. 481, 489, 31 S.Ct. 473, 476, 55 L.Ed. 552. 14 United States v. Santa Fe Pacific R. Co., 1941, 314 U.S. 339, 347, 62 S.Ct. 248, 252, 86 L.Ed. 260, and cases note 27 infra. 15 Johnson v. McIntosh, 1823, 8 Wheat. 543, 573—574, 5 L.Ed. 681. 16 United States v. Santa Fe Pacific R. Co., 1941, 314 U.S. 339, 62 S.Ct. 248, 86 L.Ed. 260. 17 Beecher v. Wetherby, 1877, 95 U.S. 517, 24 L.Ed. 440. 18 The 'moral' obligation upon Congress, of which the cases speak, refers more to the obligation to open the courts to suit by the Indians. It does not mean that there is no substantive right in the Indians. So in United States v. Blackfeather, 1894, 155 U.S. 180, 194, 15 S.Ct. 4, 70, 39 L.Ed. 114, it was held that, 'While there may be a moral obligation on the part of the government to reimburse the money embezzled by the Indian superintendent * * *.', the jurisdictional act in point did not extend to such a claim. Yet, given consent to suit, it would hardly be said that there was no substantive right against the United States for embezzlement of Indian funds. 19 'The practical admission of the European conquerors of this country renders it unnecessary for us to speculate on the extent of that right which they might have asserted from conquest. * * * The conquerors have never claimed more than the exclusive right of purchase from the Indians * * *.' 1821, 1 Op.Atty.Gen. 465, 466 (William Wirt). 20 See the analysis in Cohen, Handbook of Federal Indian Law (1945) 51—66. 21 16 Stat. 544. 22 9 Stat. 323, 329, § 14. 23 43 Stat. 886. 24 Duwamish et al. Indians v. United States, 1934, 79 Ct.Cl. 530, 600. 25 45 Stat. 1407. 26 Northwestern Bands of Shoshone Indians v. United States, 1945, 324 U.S. 335, 337, 339, 354, 65 S.Ct. 690, 691, 692, 699, 89 L.Ed. 985. 27 The statements in many cases are directed to disputes between third parties, one of whom attempts to raise a defect in the other's title by tracing it to a government grant out of Indian territory and attacking the power or the method used by the sovereign to convey Indian lands. Beecher v. Wetherby, 1877, 95 U.S. 517, 525, 24 L.Ed. 440; Buttz v. Northern Pacific Railroad, 1886, 119 U.S. 55, 66, 7 S.Ct. 100, 104, 30 L.Ed. 330; Martin v. Waddell's Lessee, 1842, 16 Pet. 367, 409, 10 L.Ed. 997; Clark v. Smith, 1839, 13 Pet. 195, 201, 10 L.Ed. 123. And in other cases, the issue was not the right of Indian tribes to be compensated for an extinguishment of original Indian title by the United States. Northwestern Bands of Shoshone Indians v. United States, 1945, 324 U.S. 335, 65 S.Ct. 690, 89 L.Ed. 985; United States v. Santa Fe Pacific R. Co., 1941, 314 U.S. 339, 62 S.Ct. 248, 86 L.Ed. 260; Conley v. Ballinger, 1910, 216 U.S. 84, 30 S.Ct. 224, 54 L.Ed. 393; Lone Wolf v. Hitchcock, 1903, 187 U.S. 553, 23 S.Ct. 216, 47 L.Ed. 299; Cherokee Nation v. Hitchcock, 1902, 187 U.S. 294, 23 S.Ct. 115, 47 L.Ed. 183. 28 Lone Wolf v. Hitchcock, 1903, 187 U.S. 553, 566, 23 S.Ct. 216, 221, 47 L.Ed. 299; Beecher v. Wetherby, 1877, 95 U.S. 517, 525, 24 L.Ed. 440. The Lone Wolf case was properly assessed in Shoshone Tribe of Indians of the Wind River Reservation in Wyoming v. United States, 1937, 299 U.S. 476, 497, 57 S.Ct. 244, 251, 81 L.Ed. 360: 'Power to control and manage the property and affairs of Indians in good faith for their betterment and welfare may be exerted in many ways and at times in derogation of the provisions of a treaty.' See also State of Oklahoma v. State of Texas, 1922, 258 U.S. 574, 592, 42 S.Ct. 406, 413, 66 L.Ed. 771. In Barker v. Harvey, 1901, 181 U.S. 481, 21 S.Ct. 690, 45 L.Ed. 963, the Indian claims were deemed extinguished by non-presentment to the land commission, and this was true even if the claims had been 'recognized' by the Mexican government prior to the cession of lands to the United States. 29 United States v. Klamath Indians, 1938, 304 U.S. 119, 58 S.Ct. 799, 82 L.Ed. 1219; Chippewa Indians of Minnesota v. United States, 1937, 301 U.S. 358, 57 S.Ct. 826, 81 L.Ed. 1156; Shoshone Tribe v. United States, 1937, 299 U.S. 476, 57 S.Ct. 244, 81 L.Ed. 360; United States v. Creek Nation, 1935, 295 U.S. 103, 55 S.Ct. 681, 79 L.Ed. 1331. 30 Other cases also draw no distinction between original Indian title and 'recognized' Indian title. 'The Indian title, as against the United States, was merely a title and right to the perpetual occupancy of the land, with the privilege of using it in such mode as they saw fit until such right of occupation had been surrendered to the government. When Indian reservations were created, either by treaty or executive order, the Indians held the land by the same character of title, to wit, the right to possess and occupy the lands for the uses and purposes designated.' Spalding v. Chandler, 1896, 160 U.S. 394, 403, 16 S.Ct. 360, 364, 40 L.Ed. 469. Of similar tenor is Conley v. Ballinger, 1910, 216 U.S. 84, 90, 91, 30 S.Ct. 224, 225, 54 L.Ed. 393. The older cases explaining and giving substance to the Indian right of occupancy contain no suggestion that only 'recogniz d' Indian title was being considered. Indeed, the inference is quite otherwise. Mitchel v. United States, 1835, 9 Pet. 711, 746, 9 L.Ed. 283; Worcester v. Georgia, 1832, 6 Pet. 515, 543—548, 8 L.Ed. 483; Johnson v. McIntosh, 1823, 8 Wheat. 543, 573, 574, 5 L.Ed. 681. 31 Duwamish et al. Indians v. United States, 1934, 79 Ct.Cl. 530. 32 45 Stat. 1256, as amended in respects immaterial here, 47 Stat. 307. 33 'The decade from 1930 to 1939 is as notable in the history of Indian legislation as that of the 1830's or the 1880's.' Cohen, Handbook of Federal Indian Law (1945) 83. 34 Stephens v. Cherokee Nation, 1899, 174 U.S. 445, 478, 19 S.Ct. 722, 734, 43 L.Ed. 1041. 1 See Indian Claims Commission Act, approved August 13, 1946, Pub. No. 726, 79th Cong., 2d Sess.: 'Sec. 2. The Commission shall hear and determine the following claims against the United States on behalf of any Indian tribe, band, or other identifiable group of American Indians residing within the territorial limits of the United States or Alaska: (1) Claims in law or equity arising under the Constitution, laws, treaties of the United States, and Executive orders of the President; (2) all other claims in law or equity, including those sounding in tort, with respect to which the claimant would have been entitled to sue in a court of the United States if the United States was subject to suit; (3) claims which would result if the treaties, contracts, and agreements between the claimant and the United States were revised on the ground of fraud, duress, unconscionable consideration, mutual or unilateral mistake, whether of law or fact, or any other ground cognizable by a court of equity; (4) claims arising from the taking by the United States, whether as the result of a treaty of cession or otherwise, of lands owned or occupied by the claimant without the payment for such lands of compensation agreed to by the claimant; and (5) claims based upon fair and honorable dealings that are not recognized by any existing rule of law or equity. No claim accruing after the date of the approval of this Act shall be considered by the Commission. 'All claims hereunder may be heard and determined by the Commission notwithstanding any statute of limitations or laches, but all other defenses shall be available to the United States.' 25 U.S.C.A. § 70a. 2 There are sound reasons for Congressional generosity toward the remnants of the aborigines. Such reasons as lead the Nation to succor the vanquished in any contest. Cf. United States v. Realty Co., 163 U.S. 427, 16 S.Ct. 1120, 41 L.Ed. 215; Pope v. United States, 323 U.S. 1, 65 S.Ct. 16, 89 L.Ed. 3; and Public No. 726, 79th Cong., 2d Sess., § 24, 28 U.S.C.A. § 259a. 3 Chippewa Indians of Minnesota v. United States, 301 U.S. 358, 375, 376, 57 S.Ct. 826, 833, 81 L.Ed. 1156; United States v. Klamath Indians, 304 U.S. 119, 58 S.Ct. 799, 82 L.Ed. 1219; Shoshone Tribe v. United States, 299 U.S. 476, 497, 57 S.Ct. 244, 251, 81 L.Ed. 360; United States v. Creek Nation, 295 U.S. 103, 109—110, 55 S.Ct. 681, 684, 79 L.Ed. 1331. 4 See Northwestern Band of Shoshone Indians v. United States, 324 U.S. 335, 339, 65 S.Ct. 690, 692, 89 L.Ed. 985. 5 See Mitchel v. United States, 9 Pet. 711, 745, 9 L.Ed. 283. 6 The Treaty of Paris, 1783, confirmed the sovereignty of the United States without reservation of Indian rights. 7 Johnson v. McIntosh, supra, 8 Wheat. at pages 587—589, 5 L.Ed. 681; Lone Wolf v. Hitchcock, 187 U.S. 553, 568, 23 S.Ct. 216, 222, 47 L.Ed. 299; Missouri, Kansas & Texas Ry. Co. v. Roberts, 152 U.S. 114, 117, 14 S.Ct. 496, 497, 38 L.Ed. 377; See Tiger v. Western Investment Co., 221 U.S. 286, 311, 31 S.Ct. 578, 584, 55 L.Ed. 738. 8 Cf. Duwamish et al. Indians v. United States, 79 Ct.Cl. 530, 597—600. 9 E.g. Lane v. Pueblo of Santa Rosa, 249 U.S. 110, 113, 39 S.Ct. 185, 186, 63 L.Ed. 504; United States v. Creek Nation, 295 U.S. 103, 109, 55 S.Ct. 681, 684, 79 L.Ed. 1331; Shoshone Tribe of Indians of Wind River Reservation in Wyoming v. United States, 299 U.S. 476, 496, 57 S.Ct. 244, 251, 81 L.Ed. 360; Chippewa Indians of Minnesota v. United States, 301 U.S. 358, 375—377, 57 S.Ct. 826, 833, 834, 81 L.Ed. 1156. 10 See passim, Laws of the Colonial and State Governments, Relating to Indians and Indian Affairs, from 1633 to 1831, inclusive: With an Appendix Containing the Proceedings of the Congress of the Confederation and the Laws of Congress, from 1800 to 1830, on the Same Subject. 11 Lone Wolf v. Hitchock, 187 U.S. 553, 565, 23 S.Ct. 216, 221, 47 L.Ed. 299; Tiger v. Western Investment Co., 221 U.S. 286, 311, 31 S.Ct. 578, 584, 55 L.Ed. 738. 12 See S.Reps. Nos. 571, 795, 1134, 74th Cong., 1st Sess.; H.Rep. No. 1085, 74th Cong., 1st Sess.; 79 Cong.Rec. 7806, 11188, 12520.

12

329 U.S. 90 67 S.Ct. 133 91 L.Ed. 103 AMERICAN POWER & LIGHT CO.v.SECURITIES & EXCHANGE COMMISSION. ELECTRIC POWER & LIGHT CORPORATION v. SAME. Nos. 4, 5. Reargued Oct. 14, 15, 1946. Decided Nov. 25, 1946. [Syllabus from pages 90-94 intentionally omitted] Mr. Arthur A. Ballantine, of New York City, for American Power & Light co. Mr. Daniel James, of New York City, for Electric Power & Light corporation. Mr. Roger S. Foster, of Philadelphia, Pa., for respondent. Mr. Justice MURPHY delivered the opinion of the Court. 1 We are concerned here with the constitutionality of § 11(b)(2) of the Public Utility Holding Company Act of 19351 and its application to the petitioners, the American Power & Light Company and the Electric Power & Light Corporation. 2 American and Electric are two of the subholding companies in the Electric Bond and Share Company holding company system, certain aspects of which were considered by this Court in Electric Bond & Share Co. v. S.E.C., 303 U.S. 419, 58 S.Ct. 678, 82 L.Ed. 936, 115 A.L.R. 105. This system is a pyramid-like structure of which Bond and Share itself constitutes the apex, five subholding companies (including American and Electric) create an intermediate tier,2 and approximately 237 direct and indirect subsidiaries of the latter form the base. From the standpoint of book capitalization and assets, number of customers and areas served by the operating companies, and quantity of electricity generated and gas sold, the Bond nd Share system constitutes the largest single public utility holding company system registered under the Act. 3 The proceeding now under review was instituted by the Securities and Exchange Commission under § 11(b)(2) of the Act. After appropriate notice and hearing, the Commission found that the corporate structure and continued existence of American and Electric unduly and unnecessarily complicated the Bond and Share system and unfairly and inequitably distributed voting power among the security holders of that system, in violation of the standards of § 11(b)(2). 11 S.E.C. 1146. Orders were accordingly entered requiring the dissolution of both American and Electric and requiring them to submit plans for the effectuation of these orders. The First Circuit Court of Appeals sustained the Commission's action in all respects and affirmed its orders, while refusing to consider certain contentions of American and Electric which had not been raised before the Commission. 141 F.2d 606. We granted certiorari because of the obvious public importance of the issues presented. 325 U.S. 846, 65 S.Ct. 1400, 89 L.Ed. 1968. I. 4 At the outset, we reject the claim that § 11(b)(2), viewed from the standpoint of the commerce clause, is unconstitutional. 5 So far as here pertinent,3 § 11(b)(2) directs the Securities and Exchange Commission, as soon as practicable after January 1, 1938, 'To require by order, after notice and opportunity for hearing, that each registered holding company, and each subsidiary company thereof, shall take such steps as the Commission shall find necessary to ensure that the corporate structure or continued existence of any company in the holding-company system does not unduly or unnecessarily complicate the structure, or unfairly or inequitably distribute voting power among security holders, of such holding-company system. * * * Except for the purpose of fairly and equitably distributing voting power among the security holders of such company, nothing in this paragraph shall authorize the Commission to require any change in the corporate structure or existence of any company which is not a holding company, or of any company whose principal business is that of a public utility company.' 6 Like § 11(b)(1) its statutory companion, § 11(b)(2) applies only to registered holding companies and their subsidiaries. We noted in North American Co. v. S.E.C., 327 U.S. 686, 66 S.Ct. 785, that by making certain interstate transactions unlawful unless a holding company registers with the Commission § 4(a), and by extending § 11(b)(1) to registered holding companies, Congress has effectively applied § 11(b)(1) to those holding companies that are in fact in the stream of interstate activity or that affect commerce in more states than one. The identical observations can be made as to § 11(b)(2). Its impact is likewise limited by reference to the registration requirements, to those holding companies which depend for their very existence upon the constan and systematic use of the mails and the instrumentalities of interstate commerce. Effect is thereby given to the legislative policy set forth in § 1(c) of interpreting all provisions of the Act to meet the problems and to eliminate the evils 'connected with public-utility holding companies which are engaged in interstate commerce or in activities which directly affect or burden interstate commerce.' 15 U.S.C.A. § 79a(c). 7 The Bond and Share system including American and Electric, possesses an undeniable interstate character which makes it properly subject from the statutory standpoint, to the provisions of § 11(b)(2). This vast system embraces utility properties in no fewer than 32 states from New Jersey to Oregon and from Minnesota to Florida, as well as in 12 foreign countries. Bond and Share dominates and controls this system from its headquarters in New York City.4 As was the situation in the North American case, the proper control and functioning of such an extensive multi-state network of corporations necessitates continuous and substantial use of the mails and the instrumentalities of interstate commerce. Only in that way can Bond and Share, or its subholding companies or service subsidiary, market and distribute securities, control and influence the various operating companies, negotiate inter-system loans, acquire or exchange property, perform service contracts, or reap the benefits of stock ownership. See § 1(a). See also International Textbook Co. v. Pigg, 217 U.S. 91, 30 S.Ct. 481, 54 L.Ed. 678, 27 L.R.A.,N.S., 493, 18 Ann.Cas. 1103. Moreover, many of the operating companies on the lower echelon sell and transmit electric energy or gas in interstate commerce to an extent that cannot be described as spasmodic or insignificant. Electric Bond & Share Co. v. S.E.C., supra, 303 U.S. 432, 433, 58 S.Ct. 681, 682, 82 L.Ed. 936, 115 A.L.R. 105.5 Such activities serve to augment the interstate nature of the Bond and Share system. And they make even plainer the fact that this system falls within the intended scope of § 11(b)(2). 8 Congress, of course, has undoubted power under the commerce clause to impose relevant conditions and requirements on those who use the channels of interstate commerce so that those channels will not be conduits for promoting or perpetuating economic evils. North American Co. v. S.E.C., supra; United States v. Darby, 312 U.S. 100, 657, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430; Brooks v. United States, 267 U.S. 432, 45 S.Ct. 345, 69 L.Ed. 699, 37 A.L.R. 1407. Thus to the extent that corporate business § transacted through such channels, affecting commerce in more states than one, Congress may act directly with respect to that business to protect what it conceives to be the national welfare. It may prescribe appropriate regulations and determine the conditions under which that business may be pursued.6 It may compel changes in the voting rights and other privileges of stockholders.7 It may order the divestment or rearrangement of properties.8 It may order the reorganization or dissolution of corporations.9 In short, Congress is completely uninhibited by the commerce clause in selecting the means considered necessary for bringing about the desired conditions in the channels of interstate commerce. Any limitations are to be found in other sections of the Constitution. Gibbons v. Ogden, 9 Wheat. 1, 196, 6 L.Ed. 23. 9 Since the mandates of § 11(b)(2) are directed solely to public utility holding company systems that use the channels of interstate commerce, the validity of that section under the commerce clause becomes apparent. It is designed to prevent the use of those channels to propagate and disseminate the evils which had been found to flow from unduly complicated systems and from inequitable distributions of voting power among security holders of the systems. Such evils are so inextricably entwined around the interstate business of the holding company systems as to present no serious question as to the power of Congress under the commerce clause to eradicate them. 10 In the extensive studies which preceded the passage of the Public Utility Holding Company Act, 15 U.S.C.A. § 79 et seq., it had been found that 'The most distinctive characteristic, and perhaps the most serious defect of the present holding-company organization is the pyramided structure which is found in all of the important holding-company groups examined.'10 The pyramiding device in its most common form consisted of interposing one or more subholding companies between the holding company and the operating companies and issuing, at each level of the structure, different classes of stock with unequal voting rights. Most of the financing of the various companies in the structure occurred through the sale to the public of bonds and preferred stock having low fixed returns and generally carrying no voice in the managements. Under such circumstances, a relatively small but strategic investment in common stock (with voting privileges) in the higher levels of a pyramided structure often resulted in absolute control of underlying operating companies with assets of hundreds of millions of dollars.11 A tremendous 'leverage' in relation to that stock was thus produced; the earnings of the top holding company were greatly magnified by comparatively small changes in the earnings of the operating companies. The common stock of the top holding company might quickly rise in value and just as quickly fall, making it a natural object for specul tion and gambling. In many instances this created financially irresponsible managements and unsound capital structures.12 Public investors in such stock found themselves the innocent victims, while those who supplied most of the capital through the purchase of bonds and preferred stock likewise suffered in addition to being largely disfranchised. Prudent management of the operating companies became a minor consideration, with pressure being placed on them to sustain the excessive capitalization to the detriment of their service to consumers. Reduction of rates was firmly resisted. The conclusion was accordingly reached by those making the studies that the highly pyramided system 'is dangerous and has no justification for existence'13 and 'represents the holding-company system at its worst.'14 11 Such was the general nature of the problem to which Congress addressed itself in § 11(b)(2). Various abuses traceable in substantial measure to the use of the pyramiding device were enumerated in § 1(b). And it was specifically found in § 1(b)(3) that the national public interest and the interests of the investors and consumers are or may be adversely affected 'when control of such (subsidiary) companies is exerted through disproportionately small investment.' 12 The problem which underlies § 11(b)(2), therefore, deals with the very essence of holding company systems. Their pyramided structures and the resulting abuses, like their other characteristics, rest squarely upon an extensive use of the mails and the instrumentalities of interstate commerce. Conversely, every interstate transaction of such systems is impregnated in one degree or another with the effects of complicated corporate structures and inequitable distribution of voting power. Many of these effects may be intangible and indistinct, but they are nonetheless real. 13 To deny that Congress has power to eliminate evils connected with pyramided holding company systems, evils which have been found to be promoted and transmitted by means of interstate commerce, is to deny that Congress can effectively deal with problems concerning the welfare of the national economy. We cannot deny that power. Rather we reaffirm once more the constitutional authority resident in Congress by virtue of the commerce clause to undertake to solve national problems directly and realistically, giving due recognition to the scope of state power. That follows from the fact that the federal commerce power is as broad as the economic needs of the nation. North American Co. v. S.E.C., supra. II. 14 We likewise reject the claim that § 11(b)(2) constitutes an unconstitutional delegation of legislative power to the Securities and Exchange Commission because of an alleged absence of any ascertainable standards for guidance in carrying out its functions. 15 Section 11(b)(2) itself provides that the Commission shall act so as to ensure that the corporate structure or continued existence of any company in a particular holding company system does not 'unduly or unnecessarily complicate the structure' or 'unfairly or inequitably distribute voting power among security holders.' It is argued that these phrases are undefined by the Act, are legally meaningless in themselves and carry with them no historically defined concepts. As a result, it is said, the Commission is forced to use its unlimited whim to determine compliance or non-compliance with § 11(b)(2); and in framing its orders, the Commission has unfettered discretion to decide whose property shall be taken or destroyed and to what extent. Objection is also made on the score that no standards have been developed or announced by the Commission which justify its action in this case. 16 These contentions are without merit. Even standing alone, standards in terms of unduly complicated corporate structures and inequitable distributions of voting power cannot be said to be utterly without meaning, especially to those familiar with corporate realities. But these standards need not be tested in isolation. They derive much meaningful content from the purpose of the Act, its factual background and the statutory context in which they appear. See Intermountain Rate Cases, 234 U.S. 476, 34 S.Ct. 986, 58 L.Ed. 1408. From these sources—From the manifold evils revealed by the legislative investigations, the express recital of evils in § 1(b) of the Act, the general policy declarations of Congress in § 1(c), the standards for new security issues set forth in § 7, the conditions for acquisitions of properties and securities prescribed in § 10, and the nature of the inquiries contemplated by § 11(a)—a veritable code of rules reveals itself for the Commission to follow in giving effect to the standards of § 11(b)(2). These standards are certainly no less definite in nature than those speaking in other contexts in terms of 'public interest,' 'just and reasonable rates,' 'unfair methods of competition' or 'relevant factors.' The approval which this Court has given in the past to those standards thus compels the sanctioning of the ones in issue. See New York Central Securities Corp. v. United States, 287 U.S. 12, 24, 25, 53 S.Ct. 45, 48, 77 L.Ed. 138; Yakus v. United States, 321 U.S. 414, 419-427, and cases cited, 64 S.Ct. 660, 665-669, 88 L.Ed. 834. 17 The judicial approval accorded these 'broad' standards for administrative action is a reflection of the necessities of modern legislation dealing with complex economic and social problems. See Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 398, 60 S.Ct. 907, 914, 84 L.Ed. 1263. The legislative process would frequently bog down if Congress were constitutionally required to appraise before-hand the myriad situations to which it wishes a particular policy to e applied and to formulate specific rules for each situation. Necessity therefore fixes a point beyond which it is unreasonable and impracticable to compel Congress to prescribe detailed rules; it then becomes constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority. Private rights are protected by access to the courts to test the application of the policy in the light of these legislative declarations. Such is the situation here. 18 Under these circumstances, it is of no constitutional significance that the Commission, in executing the policies of § 11(b)(2), also has discretion to fashion remedies of a civil nature necessary for attaining the desired goals. See Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 194, 61 S.Ct. 845, 85 L.Ed. 1271, 133 A.L.R. 1217. The legislative policies and standards being clear, judicial review of the remedies adopted by the Commission safeguards against statutory or constitutional excesses. 19 Nor is there any constitutional requirement that the legislative standards be translated by the Commission into formal and detailed rules of thumb prior to their application to a particular case. If that agency wishes to proceed by the more flexible case-by-case method, the Constitution offers no obstacle. All that can be required is that the Commission's actions conform to the statutory language and policy. III. 20 Our decision in North American Co. v. S.E.C., supra, largely disposes of the objections to § 11(b)(2) on the basis of the due process clause of the Fifth Amendment. 21 Section 11(b)(2), like 11(b)(1), materially affects many property interests of holding companies and their investors; it may even destroy whatever right there is to continued corporate existence on the part of a holding company that is found to complicate a system unnecessarily and to serve no useful function. But Congress carefully considered these various interests and found them 'outweighed by the political and general economic desirability of breaking up concentrations of financial power in the utility field too big to be effectively regulated in the interest of either the consumer or the investor and too big to permit the functioning of democratic institutions.'15 It is not our function to reweigh these diverse factors or to question the conclusion reached by Congress. Nor can we say that § 11(b)(2) on its face authorizes or necessarily involves any destruction of any valuable interests without just compensation. The legislative policy and the statutory safeguards pointed out in the North American case negative that argument. 22 Equally groundless is the contention that § 11(b)(2) is void in the absence of an express provision for notice and opportunity for hearing as to security holders regarding proceedings under that section. The short answer is that such a contention can be raised properly only by a security holder who has suffered injury due to lack of notice or opportunity for hearing. No security holder of that type is now before us. The managements of American and Electric admittedly were notified and participated in the hearings as required by § 11(b)(2); and they possess no standing to assert the invalidity of that section from the viewpoint of the security holders' constitutional rights to notice and hearing. See Tyler v. Judges of Court of Registration, 179 U.S. 405, 410, 21 S.Ct. 206, 208, 45 L.Ed. 252; People of State of New York ex rel. Hatch v. Reardon, 204 U.S. 152, 160, 27 S.Ct. 188, 190, 51 L.Ed. 415, 9 Ann.Cas. 736. 23 However the Commission in this instance actually gave all security holders of American and Electric public notice of the pendency of the § 11(b)(2) proceedings and invited them to file applications for intervention before a stated time. This was done pursuant to § 19, which permits the Commission, in accordance with § ch rules and regulations as it may prescribe, to admit any representative of interested consumers or investors, or any other appropriate person, as a party to any proceeding before that body. These security holders thus received everything which the Constitution could possibly guarantee them in this respect. 24 That the statute does not expressly insist upon what in fact has been given the security holders is without constitutional relevance under these circumstances. Wherever possible, statutes must be interpreted in accordance with constitutional principles. Here, in the absence of definite contrary indications, it is fair to assume that Congress desired that § 11(b)(2) be lawfully executed by giving appropriate notice and opportunity for hearing to all those constitutionally entitled thereto. And when that assumption is added to the provisions of § 19, it becomes quite evident that the Commission is bound under the statute to give notice and opportunity for hearing to consumers, investors and other persons whenever constitutionally necessary. See The Japanese Immigrant Case, 189 U.S. 86, 100, 101, 23 S.Ct. 611, 614, 47 L.Ed. 721. 25 But should the Commission neglect to follow the necessary procedure in a particular case, such failure would at most justify an objection to the administrative determination rather than to the statute itself. It would then be needless to do more than nullify the action taken in disregard of the constitutional rights to notice and opportunity for hearing. Since we do not have that situation here, however, we need only reiterate that § 11(b)(2), fairly construed, neither expressly nor impliedly authorizes unconstitutional procedure. It is thus immune to attack on that basis. See Kentucky Railroad Tax Cases, 115 U.S. 321, 6 S.Ct. 57, 29 L.Ed. 414; Bratton v. Chandler, 260 U.S. 110, 43 S.Ct. 43, 67 L.Ed. 157; Toombs v. Citizens' Bank of Waynesboro, 281 U.S. 643, 50 S.Ct. 434, 74 L.Ed. 1088; Cf. Coe v. Armour Fertilizer Works, 237 U.S. 413, 35 S.Ct. 625, 59 L.Ed. 1027; Wuchter v. Pizzutti, 276 U.S. 13, 48 S.Ct. 259, 72 L.Ed. 446, 57 A.L.R. 1230. IV. 26 Turning to the Commission's action under § 11(b)(2) with respect to American and Electric, we find that the record amply supports the finding that their corporate structures and continued existence unduly and unnecessarily complicate the Bond and Share system and unfairly and inequitably distribute voting power among the security holders of that system. We need do no more here than state the major facts before the Commission underlying this crucial finding. 27 Bond and Share organized these two subholding companies under the laws of Maine in 1909 and 1925, respectively. Until 1935, American and Electric had neither offices nor employees; their books were kept by Bond and Share employees in Bond and Share's offices in New York City. Their officers were employed by and paid by Bond and Share. Their subsidiaries were managed in every detail by Bond and Share. And whenever they dealt with their parent they were represented solely by employees and counsel of Bond and Share. Functionally, the Commission found, American and Electric were mere sets of books in Bond and Share's office. 28 In 1935, shortly before the effective date of the Public Utility Holding Company Act, certain superficial changes were made in the organizational set-up of the Bond and Share system. A separate service subsidiary, Ebasco Services Incorporated, was created to continue functions formerly carried out by the Bond and Share service department. Each of the subholding companies, including American and Electric, was given its own set of officers and employees as well as a separate suite of offices in the Bond and Share office building. Other minor changes took place, but the system in effect continued to operate precisely as it had prior to 1935. Bond and Share still had complete and unquestioned control over American, Electric and their operating subsidiaries. 29 There is an absence of substantial evid nce that either American or Electric is presently able to perform any useful role in the operations of its subsidiaries, such as organizing them into integrated systems or furnishing them with capital or cash. Both companies currently have vast accumulations of unpaid preferred dividends in arrears, not having been able to meet dividend requirements in the ten years preceding 1941. Instances of past functions relating to subsidiaries reveal either harmful results or the guiding hand of Bond and Share. 30 The real purpose of American and Electric, as the Commission found, is to act as the leverage and pyramiding device whereby Bond and Share can amass control over vast sums contributed by others and realize for itself large earnings and profits without proportionate investment—the prime evil at which § 11(b)(2) is directed. 31 Bond and Share holds 20.7% of the total voting stock of American, this holding having a book value of nearly $10,000,000 or 3.68% of American's total capitalization of $270,000,000. Through this investment, Bond and Share controls not only American but also American's 21 subsidiaries with a total capitalization of $29,000,000. An investment of $10,000,000 thus controls $729,000,000, a ratio of 1 to 73. 32 Bond and Share also holds 46.8% of Electric's total voting stock; the book equity of this holding amounts to $17,500,000 or 9.14% of Electric's total capitalization of $192,000,000. Bond and Share is thereby enable to control not only Electric but also Electric's 11 direct and 11 indirect subsidiaries with a total capitalization of $654,000,000. An investment of $17,500,000 thus controls $654,000,000, a ratio of 1 to 37. 33 The Commission, however, made alternative calculations which gave American and Electric the benefit of a more favorable assumption. It adjusted upward the book figures for Bond and Share's common stock interests in these companies to reflect the amount by which the values on the books of the subsidiaries exceeded corresponding values at which American and Electric carried their stock interest in those subsidiaries. But even after such adjustments, Bond and Share's investment equals only 8.2% of American's capitalization and only 3.42% of the book values of American's subsidiaries; and its investment in Electric is the equivalent of only 22.25% of Electric's capitalization and 8.72% of the book values of Electric's subsidiaries.16 34 This disproportion between Bond and Share's investment and the value of the property controlled is even more acute if further adjustments are made to reflect the unconscionable write-ups and inadequate depreciation which the Commission found in the book figures of the various operating companies. American and Electric disagree with many of these adjustments and urge that the book values can be justified; and complaint is made that the Commission refused to consider certain valuation testimony offered by American in this respect. We deem it unnecessary, however, to enter into these disputed matters. Even with the use of the book values, the attenuated investment ratio is such as to justify the Commission's conclusion that Bond and Share's control of the operating companies is achieved 'through disproportionately small investment.' On that basis, over 96% of the investment in American's subsidiaries is without effective voting representation, while over 91% of the book values of Electric's subsidiaries is similarly disfranchised.17 35 Such evidence is more than enough to support the finding that American and Electric are but paper companies without legitimate functional purpose. They serve merely as the mechanism by which Bond and Share maintains a pyramided structure containing the seeds of all the attendant evils condemned by the Act. It was reasonable, therefore, for the Commission to conclude that American and Electric are undue and unnecessary complexities in the Bond and Share system and that their existence unfairly and inequitably distributes voting power among the security holders of the system. V. 36 The major objection raised by American and Electric relates to the Commission's choice of dissolution as 'necessary to ensure' that the evils would be corrected and the standards of § 11(b)(2) effectuated. Emphasis is placed upon alternative plans which are less drastic in nature and which allegedly would meet the statutory standards. 37 It is a fundamental principle, however, that where Congress has entrusted an administrative agency with the responsibility of selecting the means of achieving the statutory policy 'the relation of remedy to policy is peculiarly a matter for administrative competence.' Phelps Dodge Corp. v. National Labor Relations Board, supra, 313 U.S. 194, 61 S.Ct. 852, 85 L.Ed. 1271, 133 A.L.R. 1217. In dealing with the complex problem of adjusting holding company systems in accordance with the legislative standards, the Commission here has accumulated experience and knowledge which no court can hope to attain. Its judgment is entitled to the greatest weight, while recognizing that the Commission's discretion must square with its responsibility. Only if the remedy chosen is unwarranted in law or is without justification in fact should a court attempt to intervene in the matter. Neither ground of intervention is present in this instance. 38 Dissolution of a holding company or a subholding company plainly is contemplated by § 11(b)(2) as a possible remedy. It directs the Commission to take such steps as it finds necessary to ensure that 'the corporate structure or continued existence of any company in the holding-company system' does not violate the standards set forth. American and Electric argue that the phrase 'in the holding-company system' limits the authority of the Commission to orders removing a particular company from the holding company system of which it is a part and does not permit an order terminating its corporate existence. Grammatically, this contention is without merit. The phrase 'in the holding-company system' no more modifies 'continued existence' than it does 'corporate structure.' It relates, rather, to the word 'company,'18 as though the phrase read 'the corporate structure or continued existence of any company which is in the holding-company system.' 39 Such a construction accords with the policy as well as other provisions of the Act. Section 1(c) declares it to be one of the policies of the Act, in accordance with which all provisions shall be interpreted, 'to provide as soon as practicable for the elimination of public-utility holding companies except as otherwise expressly provided in this title.' The last sentence of § 11(b) (2) provides that 'Except for the purpose of fairly and equitably distributing voting power among the security holders of such company, nothing in this paragraph hall authorize the Commission to require any change in the corporate structure or existence of any company which is not a holding company, * * *.' Moreover, §§ 11(f) and 11(g) specifically refer to dissolution or plans for dissolution of registered holding companies or their subsidiaries in accordance with § 11.19 Such statements would be meaningless and unnecessary were dissolution not contemplated as a possible remedy under § 11(b)(2). 40 The legislative history supports this interpretation. The original bill which passed the Senate (S. 2796, 74th Cong., 1st Sess.) contained a provision quite similar to the present first sentence of § 11(b)(2), except that it was mandatory that the Commission require each registered holding company and subsidiary 'to be reorganized or dissolved' when the Commission found that it violated the standards of that section. In addition, § 11(e) as then written permitted a voluntary plan 'for the divestment of control, securities, or other assets, or for the reorganization or dissolution, of such company or any subsidiary company.' The bill also contained a § 11(b)(3), providing that within five years all holding companies should cease to be holding companies unless the equivalent of a certificate of convenience and necessity were obtained from the Federal Power Commission. But the House of Representatives insisted upon the elimination of § 11(b)(3) and the bill finally reported out by the joint conference committee deleted that provision. A further change was made at this time so that § 11(b)(2), instead of specifying reorganization or dissolution as the remedies, gave the Commission power to require 'such steps' as it might find necessary to ensure compliance. Section 11(e) was also changed to permit a voluntary plan 'for the divestment of control, securities, or other assets, or for other action by such company or any subsidiary company thereof.' 41 Thus the compromise bill which became law omitted the unconditional provision of § 11(b)(3) for the elimination of all holding companies within five years, substituting therefor the 'great-grand-father clause' of § 11(b)(2), and gave the Commission discretion to determine the necessary steps for compliance instead of specifying reorganization or dissolution. There is nothing to indicate that the framers of the compromise bill meant to forbid reorganization or dissolution as remedies which the Commission might choose. Indeed, the fact that these two remedies had been previously specified is strong evidence that they were in the minds of those who wrote the portion of § 11(b)(2) now under consideration and that those persons merely wished not to restrict the Commission to those two remedies; they thus gave the Commission discretion to choose whatever remedy it felt necessary. This legislative history, when combined with various references to dissolution in other parts of § 11, compels the conclusion that dissolution is one of the remedies contemplated by § 11(b) (2) and that its choice falls within the allowable area of the Commission's discretion. 42 Nor can we say that the Commission's choice of dissolution with respect to American and Electric is so lacking in reasonableness as to constitute an abuse of its discretion. The Commission chose dissolution because it felt that such action is calculated to correct the situation 'most effectively and quickly, ever bearing in mind the stated policy of the Act to provide as soon as practicable for the elimination of all holding companies except as expressly provided in the Act.' 1 S.E.C. at 1215. It stated that while some measure of amelioration in the statutory offensiveness of American and Electric might be afforded by other approaches, 'in our opinion no approach presently available holds out the promise of effectuating the statute's requirements fully or promptly.' Ibid., p. 1215. Cf. Jacob Siegel Co. v. Federal Trade Commission, 327 U.S. 608, 66 S.Ct. 758. That this choice of dissolution in preference to other remedies is not lightly to be disregarded is shown by the statement of Dr. Walter Splawn, much relied upon by Congress in shaping this statute, that 'The most effective means of preventing pyramiding is to eliminate the so-called intermediary company interposed between the operating company and the company at the top.'20 43 Without attempting to invade the domain of the Commission's discretion, we can readily perceive a factual basis underlying the choice of dissolution in this instance. The Commission reasonably could conclude from the record that American and Electric perform no justifiable function; they are unnecessary complexities enabling Bond and Share to perpetuate its pyramided system. The actual and potential evils resulting from their continued existence may well be said to outweigh any of their claimed advantages, especially since many of the latter seem impossible of attainment due to the unsound financial structures of the companies. The Commission was thus warranted in feeling that dissolution of these companies is necessary to the attainment of the standards of § 11(b) (2). 44 We are unimpressed, moreover, by the claim that dissolution is so drastic a remedy as to be unreasonable. Elimination of useless holding companies may be carried out by fair and equitable methods so as to destroy nothing of real value. American and Electric, the Commission found, are little more than a set of books and a portfolio of securities. And we cannot say that the Commission was without basis for its belief that dissolution under these circumstances would harm no one. It may well have considered the fact brought out in the argument before us that, so far as Bond and Share and the public security holders are concerned, dissolution would mean little more than the receipt of securities of the operating companies in lieu of their present shares in American and Electric. Any number of benefits might thereafter accrue to these security holders. Their equities in the Bond and Share system would be materially strengthened by the removal of the useless and costly subholding companies and their voting power would tend to be more in proportion to their investment. The financial weaknesses of the various companies remaining in the system would be easier to correct, with numerous benefits to the consumers and the general public as well as the investors.21 'In short, the individual investors should receive the kind of a security he thought he was buying in the first place. The actual clearing up, through clean reorganizations, of the tangle in which holding-company finance has left the industry and those who have invested in it, can reestablish a confident, stable market for good utility securities.' Senate Report No. 621, 74th Cong., 1st Sess., p. 17. These factors lend substance to the Commission's conclusion that 'the dissolution of these companies which not only have never served any useful purpose but have been a medium of much harm, will effectuate the provisions and policies of the Act and will in all respects be beneficial to the public interest and the interest of investors and consumers; and we so find.' 11 S.E.C. at 1215. 45 In view of the rational basis for the Commission's choice, the fact that other solutions might have been selected becomes immaterial. The Commission is the body which has the statutory duty of considering the possible solutions and choosing that which it considers most appropriate to the effectuation of the policies of the Act. Our review is limited solely to testing the propriety of the remedy so chosen from the standpoint of the Constitution and the statute. We would be impinging upon the Commission's rightful discretion were we to consider the various alternatives in the hope of finding one that we consider more appropriate. Since the remedy chosen by the Commission in this instance is legally and factually sustainable, it matters not that American and Electric believe that alternative orders should have been entered. It is likewise irrelevant that they feel that Bond and Share is the principal offender against the statutory standards and that the Commission should merely have required Bond and Share to divest itself of its interests in American and Electric. The Commission found that American and Electric violate the statutory standards, a finding that is supportable whatever may be the shortcomings of Bond and Share. 46 Finally, lengthy objections have been made relative to the Commission's procedure in treating alternative plans filed under § 11(e) by American and Electric. These plans were designed to adjust the companies to the standards of § 11(b)(2) without the necessity of dissolution. Motions were made to consolidate the applications for approval of these plans with the proceedings instituted by the Commission under § 11(b)(2), the hearings then having been in progress for more than a year and the record approaching completion. The Commission deferred consideration of the motions until it entered the § 11(b) (2) orders now under review; it then denied the motions and refused to grant hearings on the plans in advance of its orders of dissolution. It did this, however, only after thorough examination of the proposed plans and after finding that they failed to hold out any real promise of effectuating the standards of § 11(b)(2). 47 We fail to perceive any error in this procedure. The filing of the § 11(e) plans, of course, did not oust the Commission of jurisdiction to enter its orders under § 11(b)(2). That jurisdiction grows out of the statutory command that the Commission declare by order, as soon as practicable, what each holding company system requires by way of integration and simplification. Section 11(e) merely permits the holding companies to formulate their own programs for compliance with § 11(b) or to submit plans in conformity with prior Commission orders under § 11(b), appropriate notice and hearing being contemplated. It does not necessarily give such plans the effect of staying proceedings under § 11(b)(2) where such proceedings are initiated prior to the filing of the plans. Any other conclusion would permit the filing of dilatory plans so as to render impotent the power and duty of the Commission to enter § 11(b)(2) orders as soon as practicable. 48 We assume that the Commission will give due consideration to any plans that are filed under § 11(e) before it enters a § 11(b)(2) order. If it finds that such plans may have merit and may effectuate the policies of § 11(b)(2), the principles of orderly administration would dictate that entry of the § 11(b)(2) order be deferred until full hearings are had with respect to the plans.22 It might then become apparent that an involuntary order under § 11(b)(2) would be unnecessary and statutory comp iance could be worked out solely under § 11(e). But where consideration leads the Commission to the conclusion that the plans on their face are incomplete, inadequate and unlikely to satisfy the statutory standards, or where the plans are found to have been filed solely for purposes of delay, it would be contrary to the statutory policy of prompt action to require the Commission to hold hearings on the plans before entering a § 11(b)(2) order. The Commission then would have no reasonable statutory alternative but to enter the § 11(b)(2) order as soon as practicable, especially where the unsatisfactory plans are filed long after the institution of the § 11(b)(2) proceedings. And it is proper for the Commission to make an adverse determination of this nature in regard to the § 11(e) plans at the time of entry of the § 11(b)(2) order, such matter lying within the sound discretion of the Commission. 49 Here the Commission gave due consideration to the § 11(e) plans and found them to be incomplete and inadequate on their face. It pointed out that seven years had elapsed since the effective date of the Act, four and a half years since the date after which action under § 11 was to be required 'as soon as practicable' and more than two years since the present proceedings had been instituted. These factors of time and the lack of substance in the § 11(e) plans led the Commission to conclude that a delay in the entry of the § 11(b) (2) orders which it felt necessary to the effectuation of the statutory standards would not be justified. And our examination of the situation reveals an adequate basis in fact for the Commission's action. Note should be made of the fact that the Commission did not refuse by order to hold hearings on the § 11(e) plans. But to the extent that the entry of the § 11(b)(2) orders has made the plans moot or the hearings unnecessary, the result is one that is inevitable if proper accommodation is to be made for the different sections of the Act and for the various statutory policies. 50 Moreover, a § 11(b)(2) proceeding leads only to the expression of the Commission's view of what must be done to ensure compliance with the statutory standards. Actual compliance comes later. In the meantime, nothing precludes American or Electric from seeking revocation of the dissolution orders on a showing that the conditions upon which the orders were predicated do not exist, thereby making some other type of order more appropriate. Section 11(b) expressly envisages such a procedure, with provision for notice and hearing. American and Electric thus are not yet foreclosed from attacking the Commission's orders under § 11(b)(2). 51 From what we have said it follows that we must affirm the judgment of the court below and sustain the action of the Commission. The other points that have been raised either do not merit discussion or have been adequately answered in the opinion of the court below. 52 Affirmed. 53 Mr. Justice FRANKFURTER agrees with this opinion except that he believes that consideration of the requirements of notice and hearing under § 11(e) does not arise, in view of the particular circumstances under which the §§ 11(b)(2) orders were here made. 54 Mr. Justice REED, Mr. Justice DOUGLAS and Mr. Justice JACKSON took no part in the consideration or decision of these cases. 55 Mr. Justice RUTLEDGE, concurring. 56 I concur in the result and in the Court's opinion, except those portions of Part V dealing with the Commission's procedure in treating the alternative plans filed under § 11(e) of the Act by American and Electric. 57 Although, for reasons to be stated, I think the Commission's action in ent ring its § 11(b)(2) order must be sustained, I do not think its procedure in respect to making provision for dealing with the alternative plans was in compliance with § 11(e) or the rights to notice and hearing on such plans which it assured. Because the matter may be of considerable importance for the future, I desire to state my reasons for difference from the views expressed by the Court in this respect. 58 Section 11(b)(2) makes it the Commission's duty 'as soon as practicable after January 1, 1938:' to require by order each registered holding company and each subsidiary thereof, after notice and opportunity for hearing, to take such steps as the Commission shall find necessary to ensure 'that the corporate structure or continued existence of any company in the holding-company system does not unduly or unnecessarily complicate the structure, or unfairly or inequitably distribute voting power among security holders, of such holding-company system.' 49 Stat. 803, 821, 15 U.S.C.A. § 79k(b)(2). If this section stood alone and unqualified in the Act, the Commission's power would be unquestionable to require the necessary steps to be taken to accomplish the section's stated purposes without reference to voluntary plans submitted by the companies affected. 59 But § 11(b)(2) does not stand alone or unqualified in this respect. Section 11(e)1 expressly provides for the submission of plans to effectuate the objects of § 11(b)(2) by 'any registered holding company or any subsidiary company of a registered holding company.' This is to be done 'in accordance with such rules and regulations or order as the Commission may deem necessary or appropriate in the public interest or for the protection of investors or consumers.' Moreover, 'if, after notice and opportunity for hearing, the Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan, the Commission shall make an order approving such plan * * *.' (Emphasis added.) 60 I do not think that § 11(e) simply provides a procedure alternative to that of § 11(b) which the Commission is free to follow or disregard at its pleasure. Both the terms of the Act and the legislative history show that the purpose of § 11(e) was to allow companies affected 'to work out a plan of reorganization to make unnecessary the issuance of an involuntary order for its reorganization * * *,' which could only be issued under § 11(b). S.Rep.No.621, 74th Cong., 1st Sess., 33; Commonwealth & Southern Corp. v. S.E.C., 3 Cir., 134 F.2d 747, 751. In my opinion this purpose, together with the provision for voluntary plans to be submitted 'in accordance with such rules and regulations or order as the Commission may deem necessary or appropriate in the public interest or for the protection of investors,'2 assu es the right to submit such plans for the Commission's consideration and to have them considered and determined 'after notice and opportunity for hearing.' See Chicago Junction Case, 264 U.S. 258, 264, 265, 44 S.Ct. 317, 319, 68 L.Ed. 667. 61 Furthermore, although the section gives the Commission broad discretion concerning the procedure to be followed, it would seem clear, both from the section's purpose and from its terms, that the Act contemplates that it shall make the required determination, concerning such a voluntary plan properly submitted, prior to the entry of any order under § 11(b). Cf. Ashbacker Radio Corp. v. Federal Communications Commission, 326 U.S. 327, 66 S.Ct. 148. Only in this way could the legislative purpose 'to make unnecessary issuance of an involuntary order' be made effective. This being true, the section cast upon the Commission the duty of providing the appropriate procedure for submitting voluntary plans, by rules, regulations or order comporting with the specified standards, including those for notice and hearing. 62 The record does not disclose that the Commission at any time complied with those requirements in these cases. So far as appears no general rules or regulations were issued. Nor was any order made or entered providing for such a procedure. On the contrary, the procedure followed was not, in its initial stages, in accordance with the statutory provisions, as the following chronology demonstrates. 63 On May 10, 1940, notice of hearing under § 11(b)(2) was served on the petitioners. The notice made no reference to § 11(e) or any possible alternative proceedings under it. The hearing was set for June 10, 1940, scarcely time for the petitioners to prepare both a voluntary plan, even if opportunity for filing and hearing were to be afforded, and a defense on the § 11(b)(2) hearing. Indeed, petitioners recognized that the time was inadequate for preparing their defense, for they applied for postponement of the hearing and other relief.3 The Commission postponed the hearing one week, but found no adequate ground for further extension. 64 The hearing was commenced on June 18, 1940. On July 23, 1941, American submitted its voluntary plan under § 11(e). On December 3, 1941, Electric filed its plan. And on December 6, 1941, both companies moved to consolidate their applications with the pending § 11(b)(2) proceedings.4 By agreement of counsel consideration of the motion was delayed for the Commission to pass upon at the end of the § 11(b)(2) hearing5 and on July 228 1942, that hearing was closed as to petitioners by stipulation. 65 On August 31, 1942, the Commission filed its opinion in support of the orders which are now enforced. In the same opinion it denied the motion to consolidate and also denied petitioners any hearing on their voluntary plans. The motion was denied on the stated ground: 'It appears that if consolidation were granted, the result would be to inject into the present proceeding issues of fact and law in many respects different from, and unrelated to, those here involved. In consequence, no useful purpose would be served by permitting the consolidation of the 11(e) Plans with the present proceeding but on the contrary, delay and confusion would inevitably result.'6 Consistently, separate hearing was denied as to the voluntary plans apparently on the grounds that consideration of them would delay the § 11(b) proceeding, so as to defeat the statutory policy of prompt action,7 and that the plans were incomplete and ineffective. 66 It is apparent from this recital that the Commission did not at any time comply with the requirement of § 11(e) that it provide by rules, regulations or order an orderly procedure to carry out the section's command and purpose for the submission and consideration of voluntary plans. And if petitioners had stood upon their rights in this respect, by timely action taken in good faith, the Commission's failure to observe them would have given ground for reversal. 67 But it is equally obvious that the petitioners did not assert their rights in a manner which invalidates the Commission's action in entering its § 11(b)(2) order or made the denial of the motion for hearing reversible error. The petitioners had notice that the Commission would proceed with the § 11(b)(2) hearing from the time such notice was given in May 1940. They applied for a continuance. But the record does not disclose that they sought it in order to have time to prepare and submit a voluntary plan or indeed that they took any action toward securing a hearing on such a plan until they submitted their plans. In one case this was more than a year after the § 11(b) hearing began, in the other nearly a year and a half after that time. When shortly after the latter submission the motions to consolidate were made, consideration was deferred by agreement of counsel until the end of the § 11(b)(2) hearing; and about seven months later that hearing was closed as to the petitioners by stipulation. 68 Although in my opinion it was the Commission's duty initially to make provision for notice and hearing on voluntary plans, in accordance with § 11(e), the petitioners hardly can be considered to have been ignorant either of this duty or of the Commission's failure to perform it. By standing by through the long period of the § 11(b) proceedings prior to the time of submitting their plans without taking earlier action to secure preservation of their rights to hearing on such plans, the petitioners should be taken to have waived their rights to such hearings. They were not entitled to assert them for the first time at so late a stage in the § 11(b) proceedings. Nor, in my opinion, is the Commission required to give further consideration to such plans in these cases, unless in its own discretion it sees fit to do so.8 1 49 Stat. 803, 821, 15 U.S.C. § 79k(b)(2), 15 U.S.C.A. § 79k(b)(2). 2 The other three subholding companies are the American & Foreign Power Company, Inc., the National Power & Light Company and the American Gas & Electric Company. Bond and Share also has a wholly-owned service subsidiary, Ebasco Services Incorporated. The organizational set-up is more fully explained in the Commission's opinion in this proceeding, 11 S.E.C. 1146, and in In re Electric Bond and Share Company, 9 S.E.C. 978. 3 The so-called 'great-grandfather clause' of § 11(b)(2) is not involved in this case. That provides that 'In carrying out the provisions of this paragraph the Commission shall require each registered holding company (and any company in the same holding-company system with such holding company) to take such action as the Commission shall find necessary in order that such holding company shall cease to be a holding company with respect to each of its subsidiary companies which itself has a subsidiary company which is a holding company.' See Otis & Co. v. S.E.C., 323 U.S. 624, 65 S.Ct. 483, 89 L.Ed. 511. 4 The Commission found that 'This control of the subholding companies by Bond and Share is not limited in operation to the mere casting of a certain percentage of votes at stockholders' meetings. It permeates every stratum and unit of the holding company system in the most comprehensive manner. * * * Through the concentrated voting power of the securities owned by Bond and Share, it is able to elect the directors of the subholding companies and thus govern selection of the respective managements. Through the managements of the subholding companies it is able to govern selection of the directors and managements of each of the operating company subsidiaries of each of the subholding companies. The latter are in turn responsive to Bond and Share's wishes respecting entry into service contracts with Ebasco Services Incorporated, and the details of the operations of their companies.' 11 S.E.C. at 1203—1204. 5 The record before this Court in the Bond and Share case revealed that more than 31% of the total electric energy generated by Bond and Share subsidiaries is transmitted across state lines, while more than 25% of all the electric energy transmitted across state lines in the United States is handled by Bond and Share companies. Approximately 47% of the gas handled by Bond and Share companies is transported across state lines, this amount constituting more than 20% of all the gas transported across state lines in the United States. 6 United States v. Darby, 312 U.S. 100, 657, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430; Electric Bond & Share Co. v. S.E.C., 303 U.S. 419, 58 S.Ct. 678, 82 L.Ed. 936, 115 A.L.R. 105. 7 Northern Securities Co. v. United States, 193 U.S. 197, 24 S.Ct. 436, 48 L.Ed. 679; Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.,N.S., 834, Ann.Cas.1912D, 734; United States v. American Tobacco Co., 221 U.S. 106, 31 S.Ct. 632, 55 L.Ed. 663. 8 North American Co. v. S.E.C., 327 U.S. 686, 66 S.Ct. 785. 9 Northern Securities Co. v. United States, supra; Standard Oil Co. v. United States, supra; United States v. Reading Co., 253 U.S. 26, 40 S.Ct. 425, 64 L.Ed. 760; United States v. Delaware & Hudson Co., 213 U.S. 366, 29 S.Ct. 527, 53 L.Ed. 836. See also Breckenridge, 'Legal Study on Constitutional Power of Congress to Regulate Stock Ownership in Railroads Engaged in Interstate Commerce,' House Report No. 2789, 72st Cong., 3d Sess., Vol. 1, p. 1. 10 Federal Trade Commission Report to the Senate, 'Utility Corporations,' S. Doc. 92, Part 72—A, 70th Cong., 1st Sess., p. 858. See also Bonbright and Means, The Holding Company (1932), p. 147; Barnes, The Economics of Public Utility Regulation (1942), pp. 71—81, 143—148. 11 'By the pyramiding of holdings through numerous intermediate holding companies and by the issue, at each level of the structure, of different classes of stock with unequal voting rights, it has frequently been possible for relatively small but powerful groups with a disproportionately small investment of their own to control and to manage solely in their own interest tremendous capital investments of other people's money.' Report of the National Power Policy Committee on Public-Utility Holding Companies, H.Doc. 137, 74th Cong., 1st Sess., pp. 4, 5. 'The effect of such pyramiding is to multiply greatly the control that can be exercised by the dominant parties through their personal resources. For example, in the illustration just given, an investment of $1 in common stock of Corporation Securities Co. of Chicago would exercise control over about $2,000 invested in properties of some of the operating companies at the bottom of the pyramid. It seems very unsafe to have any form of pyramiding which has such a financial basis not only on account of the excessive concentration of control over immense masses of property but also because of the opportunity it offers to financial adventurers to have too much influence over the general economic interests of the country.' Federal Trade Commission Report, supra, note 10, p. 161. 12 The Federal Trade Commission Report, supra, note 10, p. 860, found that the highly pyramided holding company system tends to make those few in control at the top '(1) neglect good management of operating companies, especially by failing to provide for adequate depreciation; (2) exaggerate profits by unsound, deceptive accounting; (3) seek exorbitant profits from service fees exacted from subsidiaries; (4) disburse unearned dividends, because the apparent gains, so obtained, greatly magnify the rate of earnings for the top holding company; and (5) promote extravagant speculation in the prices of such equity stocks on the exchanges.' 13 Ibid., p. 162. 14 Ibid., p. 860. 15 Senate Report No. 621, 74th Cong., 1st Sess., p. 12. 16 Bond and Share's holdings of voting stock of all five of its subholding companies have a stated book value of only $53,337,600, after adjustment for preferred arrearages, which is equal to about 1.85% of the combined consolidated capitalization of the five subholding company systems. This results, after adjustments, in rendering completely ineffectual whatever voting power remains for the securities in the hands of the public investors who have contributed over 80% of the total capitalizations. 17 We do not understand the Commission to co tend that the percentage of voting power and the percentage of investment should necessarily be equal. Its view simply is that no process of weighting could render fair and equitable a distribution of voting power by which Bond and Share controls all of American's subsidiaries by an investment representing at best 3.42% of their capitalization, or 8.72% in the case of Electric's subsidiaries. See In re Electric Bond and Share Company, 9 S.E.C. 978, 992. 18 The words 'any company in the holding-company system' were substituted for the words 'such company' in an earlier draft of § 11(b)(2). No change in substance was thereby indicated. 19 Section 11(f) refers to fees, expenses and remuneration paid in connection with any reorganization, dissolution, liquidation, bankruptcy or receivership of a registered holding company or a subsidiary thereof. Section 11(g) speaks of proxies, etc., used 'in respect of any plan under this section for the divestment of control, securities, or other assets, or for the dissolution of any registered holding company or any subsidiary company thereof.' 20 Splawn Report, Pt. 2, p. VII, made pursuant to H.J.Res. 572, 72d Cong., 2d Sess., referred to in § 1(d) of the Act. 21 'It is thus apparent that though Section 11 is on occasions still referred to as a 'death sentence,' the sophisticated observer no longer regards even the directed reorganization or liquidation of a holding company as a step to be feared by investo s. There is increased recognition that these steps in the enforcement of the Act have been 'akin to a surgical operation, through which the dead skin (the top holding company) was being cut away from the pores (the operating companies) in order to allow the latter to breathe." Blair-Smith and Helfenstein, 'A Death Sentence or a New Lease on Life?' 94 Univ. of Pa.L.Rev. 148, 201. 22 With reference to S. 2796, it was said: 'Subsection (e) expressly authorizes a holding company subject to the approval of the Commission and the court to work out a plan of reorganization to make unnecessary the issuance of an involuntary order fer its reorganization by the Commission, * * *.' Senate Report No. 621, 74th Cong., 1st Sess., p. 33. 1 'In accordance with such rules and regulations or order as the Commission may deem necessary or appropriate in the public interest or for the protection of investors or consumers, any registered holding company or any subsidiary company of a registered holding company may, at any time after January 1, 1936, submit a plan to the Commission for the divestment of control, securities, or other assets, or for other action by such company or any subsidiary company thereof for the purpose of enabling such company or any subsidiary company thereof to comply with the provisions of subsection (b). If, after notice and opportunity for hearing, the Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan, the Commission shall make an order approving such plan; and the Commission, at the request of the company, may apply to a court, in accordance with the provisions of subsection (f) of section 18, to enforce and carry out the terms and provisions of such plan * * *.' 49 Stat. 801, 822, 15 U.S.C.A. § 79k(e). (Emphasis added.) 2 The requirement obviously is not a permission to the Commission to dispense altogether with such rules, regulations or order in its discretion. It is rather a statutory direction to make them in accordance with the standards prescribed. Any other view would contradict the stated purpose of the section and make of it, in effect, a dead letter. 3 The application stated in part: 'It is obvious from the nature of the proceeding * * * that the matters to be dealt with at the hearing are of vital import to the respondents and their subsidiaries, as well as to the hundreds of thousands of investors in securities of companies in the Electric Bond and Share Company system and the millions of consumers presently receiving necessary public utility service from the operating companies in said system. In the circumstances, respondents believe, first, that they should be given adequate time not only to check and verify the numerous factual allegations contained in the order, but also to develop and correlate for presentation all other facts having a bearing upon the problems and issues presented by the notice and order. * * *' 4 At the same time American, which previously had filed its plan with the Commission, sought to introduce the plan as an exhibit into the § 11(b)(2) hearing. The company's attorney stated, 'This plan which has been filed by American Power & L ght with the Commission sets forth a proposal for the compliance with Section 11 of the Act, and I think that it is material and relevant in this proceeding.' The reply of the trial examiner, sustaining an objection to its admission, apparently typifies the attitude of the Commission toward the requirements of § 11(e): 'Quite possibly it relates to Section 11; quite possibly it is a matter which the Commission will want to consider before it finally makes up its mind. It is quite probable. But, nevertheless, we are here restricted to this particular proceeding and not the power of the Commission or the action of the Commission. The hearing is restricted to 11(b) (2).' The Commission at no time before or during the hearing recognized that § 11(e) plans not only were relevant to whether action should be taken under § 11(b) (2), but also were required to be considered by hearing before such action is taken. Its view apparently is to the contrary. See Matter of Electric Bond and Share Company, 11 S.E.C. 1146, 1217, 1218, quoted in note 7 infra; Matter of The Common-wealth & Southern Corporation, 11 S.E.C. 138, 154—156. The examiner of course, could not help himself. The hearing had been limited to § 11(b)(2). 7 S.E.C. 391. 5 The record does not disclose what the agreement was or for what reasons it was made. To delay consideration of the motion to consolidate was in effect to deny it insofar as it sought a joint hearing, though it was always possible for the Commission to order a hearing on the voluntary plans before it issued its § 11(b)(2) order. 6 11 S.E.C. 1146, 1152. The Commission noted that 'these plans were filed at a time when the record in the present proceeding was nearing completion.' Ibid. 7 'With respect to the former point, that of promptness, it need only be considered that it would be necessary for respondents and the Public Utilities Division to formulate and present, and for us to explore, detailed and very extensive evidence on a number of extremely complex subjects before it would be possible for us to determine even the preliminary question of whether the 11(e) plans do in fact constitute acceptable alternative courses of action for achieving the objections of Section 11. In the event it were necessary to determine the question in the negative, presumably we should be free (even under respondents' contention) to enter our order of dissolution herein following the lengthy delay, unless respondents in the meantime proposed a new 11(e) plan which would necessitate a repetition of this process. On the other hand, in the event we were ultimately able to approve the plans, they would still not become effective unless and until ratified by vote of the companies' stockholders. 'Considering that 7 years have now gone by since the effective date of the Act, that 4 1/2 years have elapsed since the date after which action under Section 11 was to be required 'as soon as practicable', and that more than 2 years have been consumed since the present proceeding was instituted, it is evident that respondents' program is too fraught with potentialities of delay to be acceptable as a substitute for a dissolution order to meet the problems existing under Section 11(b)(2). Section 11(b)(2) which provides a medium for voluntary compliance with Section 11(b) was not intended to oust the Commission of its jurisdiction, or relieve it of its obligation, to enforce the provisions of 11(b).' 11 S.E.C. 1146, 1217—1218. Compare notes 4 and 6, supra. 8 Cf. § 11(b): 'The Commission may by order revoke or modify and order previously made under this subsection, if, after notice and opportunity for hearing, it finds that the conditions upon which the order was predicated do not exist.' 49 Stat. 803, 821, 15 U.S.C.A. § 79k(b).

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329 U.S. 64 67 S.Ct. 154 91 L.Ed. 44 UNITED STATESv.HOWARD P. FOLEY CO., Inc. No. 50. Argued Oct. 25, 1946. Decided Nov. 25, 1946. Mr.A. Devitt Vaneck, of Washington, D.C., for petitioner. Mr. Alexander Heron, of Washington, D.C., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 The Court of Claims rendered a judgment for the respondent and against the Government for an asserted breach of a construction contract. Ct.Cl., 63 F.Supp. 209, 215. We granted the Government's petition for certiorari which alleged that the Court of Claims' decision was in direct conflict with Crook v. United States, 270 U.S. 4, 46 S.Ct. 184, 70 L.Ed. 438 and United States v. Rice, 317 U.S. 61, 63 S.Ct. 120, 87 L.Ed. 53. We hold that the Government's contention is correct. 2 The respondent, an electrical contractor, agreed for a fixed fee to supply the materials for and install a field lighting system at the National Airport, Gravelly Point, Virg nia, then under construction. The agreement was embodied in a standard form Government contract. Respondent promised to complete the job within 120 days after notice to proceed. In fact the job was not finished until 277 days after notice was given. The delay came about in this way. The site of the airport was being built up from under water by a fast but then unique method of hydraulic dredging. As portions of the earth base for the runways and taxiways settled, they were to be paved and the shoulders 'rough-graded.' As segments of this work were finished, respondent was to move in, wire them, and install the lighting fixtures. The dredging took longer than Government engineers had anticipated, because some of the dredged soil, proving to be too unstable for runways and taxiways, had to be replaced. This in turn delayed completion of the runway sections and until each was finished the lighting equipment for each segment could not be installed. The 157 days delay resulted from the consequently long and irregular intervals between the times when these segments were made available to respondent to do its job. But for these delays, respondent apparently could have finished its work in 120 days. 3 The Court of Claims considered that the Government breached its contract by failing to make the runways available in time for respondent to do its work within 120 days. The judgment against the Government was for certain overhead and administrative expenses which respondent incurred during the consequent period of delay.1 4 In no single word, clause, or sentence in the contract does the Government expressly covenant to make the runways available to respondent at any particular time. Cf. United States v. Blair, 321 U.S. 730, 733, 734, 64 S.Ct. 820, 822, 88 L.Ed. 1039. It is suggested that the obligation of respondent to complete the job in 120 days can be inverted into a promise by the Government not to cause performance to be delayed beyond that time by its negligence. But even if this provision standing alone could be stretched to mean that the Government obligated itself to exercise the highest degree of diligence and the utmost good faith in efforts to make the runways promptly available, the facts of this case would show no breach of such an undertaking. For the Court of Claims found that the Government's representatives did this work 'with great, if not unusual, diligence,' and that 'no fault is or can be attributed to them.' Consequently, the Government cannot be held liable unless the contract can be interpreted to imply an unqualified warranty to make the runways promptly available. 5 We can find no such warranty if we are to be consistent with our Crook and Rice decisions, supra. The pertinent provisions in the instant contract are, in every respect here material, substantially the same as those which were held in the former cases to impose no obligation on the Government to pay damages for delay. Here, as in the former cases, there are several contract provisions which showed that the parties not only anticipated that the Government might not finish its work as originally planned, but also provided in advance to protect the contractor from the consequences of such governmental delay, should it occur. The contract reserved a governmental right to make changes in the work which might cause interruption and delay, required respondent to coordinate his work with the other work being done on the site, and clearly contemplated that he would take up his work on the runway sections as they were intermittently completed and paved. Article 9 of the contract entitled 'Delays-Damages,' set out a procedure to govern both parties in case of respondent's delay in completion, whether such delay was caused by respondent, the Govern ent, or other causes. If delay were caused by respondent, the Government could terminate the contract, take over the work, and hold respondent and its sureties liable. Or, in the alternative, the Government could collect liquidated damages. If, on the other hand, delay were due to 'acts of the government' or other specified events, including 'unforeseeable causes,' procedure was outlined for extending the time in which respondent was required to complete its contract, and relieving him from the penalties of contract termination or liquidated damages. 6 In the Crook and Rice cases we held that the Government could not be held liable for delay in making its work available to contractors unless the terms of the contract imposed such liability. Those contracts, practically identical with the one here, were held to impose none. See also United States v. Blair, supra. The distinction which the Court of Claims found between this and the prior cases is not in point. It seems to be this: In the Crook and Rice cases the Government had a prime and a subcontractor; the Government reserved a right to make changes by which the prime contractor must thereafter be governed; the Government exercised this right; these changes made it impossible for the prime contractor and ultimately the subcontractor to do their work in time; since the Government had reserved the right against the prime contractor to make these changes, and the subcontractor knew this, the Government was not contractually responsible for the delay. Therefore it is suggested that the subcontractor in the Rice and Crook cases could know in advance that the performance time was 'provisional' whereas here the contractor had reason to believe that it was certain. But in this case there is ample indication both in the extrinsic facts and in the contract terms that changes and delays were anticipated and remedies therefor provided. The contractor here only lacked the one additional indication that changes were anticipated which he could have read from the prime contract had there been a prime contract and if a prime contract had been available for his to read. If this be a distinction, it is a distinction with no significant difference. This contract, like the others, shows that changes and delays were anticipated and provided for. The question on which all these cases turn is, did the Government obligate itself to pay damages to a contractor solely because of delay in making the work available? We hold again that it did not for the reasons elaborated in the Crook and Rice decisions. 7 Reversed. 8 Mr. Justice REED, Mr. Justice FRANKFURTER, and Mr. Justice JACKSON dissent. It is admitted that the Government had given the contractor 'notice to proceed' which in our opinion had the legal consequences set forth in the opinion of the court below whose judgment we would affirm. 1 The damages awarded were for the wages respondent paid supervisory employees who stood by during the delay intervals, and for certain expenses of respondent incurred on account of these employees for unemployment and similar taxes.

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329 U.S. 69 67 S.Ct. 156 91 L.Ed. 80 RICHFIELD OIL CORPORATIONv.STATE BOARD OF EQUALIZATION. No. 46. Argued Oct. 24, 1946. Decided Nov. 25, 1946. Action by Richfield Oil Corporation against State Board of Equalization to recover, with interest, a sum paid under protest as a retail sales tax and as interest thereon. A judgment was entered by the California Supreme Court, 27 Cal.2d 150, 163 P.2d 1, reversing a judgment for plaintiff after the judgment for the plaintiff had first been affirmed, 155 P.2d 1, and the plaintiff appeals. Appeal from the Supreme Court of the State of California. [Syllabus from pages 69-71 intentionally omitted] Mr. Norman S. Sterry, of Los Angeles, Cal., for appellant. Mr. John L. Nourse, of Los Angeles, Cal., for appellee. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case is here on appeal from the Supreme Court of California which sustained a California tax against the claim that it was repugnant to Article I, Section 10, Clause 2 of the Constitution of the United States. Judicial Code § 237, 28 U.S.C. §§ 344(a) 861a, 28 U.S.C.A. §§ 344(a), 861a. 2 Appellant is engaged in producing and selling oil and oil products in California. It entered into a contract with the New Zealand government for the sale of oil. The price was f.o.b. Los Angeles, payment in London. Delivery was 'to the order of the Naval Secretary, Navy Office, Wellington, into N.Z. Naval tank steamer R.F.A. Nucula at Los Angeles, California.' The oil was to be consigned to the Naval-Officer-In-Charge, Auckland, New Zealand. Appellant carried the oil by pipe line from its refinery in California to storage tanks at the harbor where the Nucula appeared to receive the oil. When the Nucula had docked and was ready to receive the oil, appellant pumped it from the storage tanks into the vessel. Customary shipping documents were given the master, including a bill of lading which designated appellant as shipper and consigned the oil to the designated naval officer in Auckland, Payment of the price was made in London. The oil was transported to Auckland, no portion of it being used or consumed in the United States. Appellant filed with the Collector of Customs a shipper's export declaration. It did not collect, nor attempt to do so, any sales tax from the purchaser. Appellee assessed a retail sales tax against appellant measured by the gross receipts from the transaction. The tax was paid under protest, a claim for refund was filed asserting that the levy of the tax violated the provisions of Article I, Section 10, Clause 2 of the Constitution of the United States and this suit was brought to obtain a refund. The California Supreme Court, one justice dissenting, first allowed a recovery on that ground. 155 P.2d 1. After a rehearing it reversed its position and held the tax constitutional, two justices dissenting. 27 Cal.2d 150, 163 P.2d 1. 3 I. We are met at the outset with the question whether the judgment of the California Supreme Court is a 'final judgment' within the meaning of the Judicial Code § 237, 28 U.S.C. § 344(a), 28 U.S.C.A. § 344(a). The case was tried on the pleadings and stipulated facts, a jury having been waived. The trial court found for appellant. The Supreme Court ordered that the judgment 'be and the same is hereby reversed.' The argument is that under California law where a judgment has been reversed without directions, there is a new trial; that on a new trial appellant might amend its complaint and produce other evidence; and that if a new trial were had, new or different findings of fact might be made. See Erlin v. National Union Fire Ins. Co., 7 Cal.2d 547, 61 P.2d 756. 4 The designation given the judgment by state practice is not controlling. Department of Banking, State of Nebraska v. Pink, 317 U.S. 264, 268, 63 S.Ct. 233, 235, 87 L.Ed. 254. The question is whether it can be said that 'there is nothing more to be decided' (Clark v. Williard, 292 U.S. 112, 118, 54 S.Ct. 615, 618, 78 L.Ed. 1160), that there has been 'an effective determination of the litigation'. Market Street R. Co. v. Railroad Commission, 324 U.S. 548, 551, 65 S.Ct. 770, 773, 89 L.Ed. 1171; See Radio Station W.O.W. v. Johnson, 326 U.S. 120, 123, 124, 65 S.Ct. 1475, 1477, 1478, 89 L.Ed. 2092. That question will be resolved not only by an examination of the entire record (Clark v. Williard, supra) but, where necessary, by resort to the local law to determine what effect the judgment has under the state rules of practice. Brady v. Terminal Railroad Ass'n of St. Louis, 302 U.S. 688, 58 S.Ct. 24, 82 L.Ed. 531; Brady v. Southern R. Co., 319 U.S. 777, 63 S.Ct. 1028, 87 L.Ed. 1723. See Boskey, Finality of State Court Judgments under the Federal Judicial Code, 43 Col.L.Rev. 1002, 1005. 5 This suit is brought under the California Retail Sales Tax Act, § 23, and § 31, which prescribes the sole remedy for challenging the tax. The procedure prescribed is payment of the tax, the filing of a claim for refund which sets forth 'the specific grounds upon which the claim is founded,' Cal.Stats.1941, pp. 1328, 1329, and, in case the claim is denie , the institution of a suit within ninety days 'on the grounds set forth in such claim.' Cal.Stats.1939, pp. 2184, 2185. The claim thus frames and restricts the issues for the litigation. Although the Supreme Court reversed the judgment of the trial court without direction, its decision controls the disposition of the case. See Estate of Baird, 193 Cal. 225, 223 P. 974; Bank of America Nat. Trust and Savings Ass'n v. Superior Court, 20 Cal.2d 697, 128 P.2d 357. Since the facts have been stipulated1 and the Supreme Court of California has passed on the issues which control the litigation, we take it that there is nothing more to be decided. The jurisdictional objection is thus without merit. See Gulf Refining Co. of Louisiana v. United States, 269 U.S. 125, 136, 46 S.Ct. 52, 53, 70 L.Ed. 195. 6 II. We turn then to the merits. Article I, Section 10, Clause 2 of the Constitution provides that 'No State shall without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.' 7 The Supreme Court of California held that this provision did not bar the tax because the delivery of the oil which resulted in the passage of title occurred prior to the commencement of the exportation. The court suggested, and the appellee concedes, that a different result might follow if the oil had been delivered to a common carrier; 'for then it would have been placed in the hands of an instrumentality whose sole purpose is to export goods, thus indelibly characterizing the process as a part of exportation.' 27 Cal.2d at page 153, 163 P.2d at page 3. The court, in reaching the conclusion that the tax was constitutional, rested in part on our recent decisions (particularly McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876; Department of Treasury of State of Indiana v. Wood Preserving Corporation, 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188; International Harvester Co. v. Department of Treasury, 322 U.S. 340, 64 S.Ct. 1030, 88 L.Ed. 1313) which sustained the levy of certain state taxes against the claim that they violated the Commerce Clause. Article 1, § 8, Cl. 3. The court concluded that if this had been an interstate transaction, it would have been subject to the tax. It saw no greater limitation on the power of the States under Article I, Section 10, Clause 2, than this Court has found to exist under the Commerce Clause. 8 We do not pursue the inquiry as to the validity of the tax under the Commerce Clause. For we are of the view that whatever might be the result of that inquiry, the tax is unconstitutional under Article I, Section 10, Clause 2. 9 The two constitutional provisions, while related, are not coterminous. To be sure, a state tax has at times been held unconstitutional both under the Import-Export Clause and under the Commerce Clause. Brown v. State of Maryland, 12 Wheat. 419, 6 L.Ed. 678; Crew-Levick Co. v. Commonwealth of Pennsylvania, 245 U.S. 292, 38 S.Ct. 126, 62 L.Ed. 295. But there are important differences between the two. The invalidity of one derives from the prohibition of taxation on the import or export; the validity of the other turns nowise on whether the article was, or had ever been, an import or export. See Hooven & Allison Co. v. Evatt, 324 U.S. 652, 665, 666, 65 S.Ct. 870, 877, 878, 89 L.Ed. 1252 and cases cited. Moreover, the Commerce Clause is cast, not in terms of a prohibition against taxes, but in terms of a power on the part of Congress to regulate commerce. It is well established that the Commerce Clause is a limitation upon the power of the States, even in absence of action by Congress. Southern Pacific Co. v. State of Arizona, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915; Morgan v. Commonwealth of Virginia, 328 U.S. 373, 66 S.Ct. 1050. But the scope of the limitation has been determined by the Court in an effort to maintain an area of trade free from state interference and at the same time to make interstate commerce pay its way. As recently stated in McGoldrick v. Berwind-White Coal Mining Co., supra, 309 U.S. at page 48, 60 S.Ct. at page 393, 84 L.Ed. 565, 128 A.L.R. 876, the law under the Commerce Clause has been fashioned by the Court in an effort 'to reconcile competing constitutional demands, that commerce between the states shall not be unduly impeded by state action, and that the power to lay taxes for the support of state government shall not be unduly curtailed.' That accommodation has been made by upholding taxes designed to make interstate commerce bear a fair share of the cost of the local government from which it receives benefits (see e.g. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 254, 255, 58 S.Ct. 546, 548, 549, 82 L.Ed. 823, 115 A.L.R. 944, and cases cited; McGoldrick v. Berwind-White Coal Mining Co., supra) and by invalidating those which discriminate against interstate commerce, which impose a levy for the privilege of doing it, which place an undue burden on it. Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429; Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434, 59 S.Ct. 325, 83 L.Ed. 272; Best & Co. v. Maxwell, 311 U.S. 454, 61 S.Ct. 334, 85 L.Ed. 275; Nippert v. Richmond, 327 U.S. 416, 66 S.Ct. 586, 162 A.L.R. 844. 10 It seems clear that we cannot write any such qualifications into the Import-Export Clause. It prohibits every State from laying 'any' tax on imports or exports without the consent of Congress. Only one exception is created—'except what may be absolutely necessary for executing its inspection Laws'. The fact of a single exception suggests that no other qualification of the absolute prohibition was intended. It would entail a substantial revision of the Import-Export Clause to substitute for the prohibition against 'any' tax a prohibition against 'any discriminatory' tax. As we shall see, the question as to what is exportation is somewhat entwined with the question as to what is interstate commerce. But the two clauses, though complementary, serve different ends. And the limitations of one cannot be read into the other. 11 It is suggested, however, that the history of the Import-Export Clause shows that it was designed to prevent discriminatory taxes and not to preclude the levy of general taxes applicable alike to all goods. Support for that is found in the fact that this provision was defended in the Convention2 and later in the debates3 on the ground that it protected the inland States from levies by the coastal States through the taxation of expo ts. Yet that function was only a phase of a larger design. The Import-Export Clause was considered in connection with Article I, Section 9, Clause 5, which provides that 'No Tax or Duty shall be laid on Articles exported from any State.'4 The purpose was to withhold from Congress the power to tax exports,5 and to deprive any State of the power except with the consent of Congress and even then, it seems, to require the net proceeds to be paid into the federal treasury. A proposal was made to prohibit the States 'from taxing the produce of other States exported from their harbours.'6 But that suggestion was not followed. The language adopted was supported by Madison 'as preventing all State imposts'.7 The qualified interpretation urged upon us has therefore no substantial support in the history of the Import-Export Clause. Moreover, to infer qualifications does not comport with the standards for expounding the Constitution. As stated by Chief Justice Marshall in Sturges v. Crowninshield, 4 Wheat. 122, 202, 4 L.Ed. 529, 'it would be dangerous in the extreme to infer from extrinsic circumstances, that a case for which the words of an instrument expressly provide, shall be exempted from its operation.' For, as Chief Justice Taney said in Holmes v. Jennison, 14 Pet. 540, 570, 571, 10 L.Ed. 579: 12 'In expounding the Constitution of the United States, every word must have its due force, and appropriate meaning; for it is evident from the whole instrument, that no word was unnecessarily used, or needlessly added. The many discussions which have taken place upon the construction of the Constitution, have proved the correctness of this proposition; and shown the high talent, the caution, and the foresight of the illustrious men who framed it. Every word appears to have been weighed with the utmost deliberation, and its force and effect to have been fully understood. No word in the instrument, therefore, can be rejected as superfluous or unmeaning;' We cannot, therefore, read the prohibition against 'any' tax on exports as containing an implied qualification. 13 The questions remain whether we have here an export within the meaning of the constitutional provision and, if so, whether this tax was a prohibited impost upon it. 14 The requirement that foreign commerce be involved (Woodruff v. Parham, 8 Wall. 123, 136, 19 L.Ed. 382) is met, for concededly the oil was sold for shipment abroad. The question whether at the time the tax accrued the oil was an export presents a different problem. There are few decisions of the Court under Article I, Section 10, Clause 2, which illuminate the problem. In Brown v. Houston, 114 U.S. 622, 5 S.Ct. 1091, 29 L.Ed. 257, Louisiana taxed coal held in that State for sale. After the tax was assessed some of the coal was sold for export. The Court held that the coal when taxed was not an export, saying, 114 U.S. at pages 629, 630, 5 S.Ct. at page 1095, 29 L.Ed. 257: 15 'When taxed it was not held with the intent or for the purpose of exportation, but with the intent and for the purpose of sale there, in New Orleans. A duty on exports must either be a duty levied on goods as a condition, or by reason of their exportation, or, at least, a direct tax or duty on goods hich are intended for exportation. Whether the last would be a duty on exports, it is not necessary to determine. But certainly, where a general tax is laid on all property alike, it cannot be construed as a duty on exports when falling upon goods not then intended for exportation though they should happen to be exported afterwards.' 16 In Coe v. Town of Errol, 116 U.S. 517, 6 S.Ct. 475, 29 L.Ed. 715, the Court had before it a case under the Commerce Clause. Logs, cut in New Hampshire, were being held on a river there for transportation to Maine. New Hampshire's non-discriminatory tax on them was sustained. What the Court said concerning commerce is what we deem to be the correct principle governing exports: '* * * goods do not cease to be part of the general mass of property in the state, subject, as such, to its jurisdiction, and to taxation in the usual way, until they have been shipped, or entered with a common carrier for transportation, to another state, or have been started upon such transportation in a continuous route or journey.' Page 527 of 116 U.S., page 478 of 6 S.Ct., 29 L.Ed. 715. 17 That view has been followed in cases involving Article I, Section 9, Clause 5 of the Constitution, which, as we have noted, prohibits Congress from laying any tax on 'Articles exported from any state.' In Turpin v. Burgess, 117 U.S. 504, 6 S.Ct. 835, 29 L.Ed. 988, the Court sustained a federal excise tax on manufactured tobacco. The tax was laid upon the goods before they left the factory. The Court said, 117 U.S. at page 507, 6 S.Ct. at page 837, 29 L.Ed. 988, 'They were not in course of exportation; they might never be exported; whether they would be or not would depend altogether on the will of the manufacturer.' The same result was reached in Cornell v. Coyne, 192 U.S. 418, 24 S.Ct. 383, 48 L.Ed. 504, where a federal manufacturing tax on filled cheese was sustained against the claim that it was a tax levied by Congress on exports. The cheese was manufactured under contract for export. The Court said, 'The true construction of the constitutional provision is that no burden by way of tax or duty can be cast upon the exportation of articles, and does not mean that articles exported are relieved from the prior ordinary burdens of taxation which rest upon all property similarly situated. The exemption attaches to the export, and not to the article before its exportation.' Page 427 of 192 U.S., page 384 of 24 S.Ct., 48 L.Ed. 504. 18 That line has been marked by other decisions under Article I, Section 9, Clause 5 of the Constitution. Thus a federal stamp tax on a foreign bill of lading is a tax on exports, since, it is the equivalent of a direct tax on the articles included in the bill of lading. Fairbank v. United States, 181 U.S. 283, 21 S.Ct. 648, 45 L.Ed. 862. The same is true of federal stamp taxes on charter parties made exclusively for the carriage of cargo in foreign commerce, United States v. Hvoslef, 237 U.S. 1, 17, 35 S.Ct. 459, 464, 59 L.Ed. 813, Ann.Cas.1916A, 286, for a tax on those charter parties is 'in substance a tax on the exportation; and a tax on the exportation is a tax on the exports.' The same is likewise true of federal stamp taxes on policies insuring exports against maritime risks. Thames & Mersey Marine Ins. Co. v. United States, 237 U.S. 19, 35 S.Ct. 496, 59 L.Ed. 821, Ann.Cas. 1915D, 1087. The Court stated, 237 U.S. at page 27, 35 S.Ct. at page 499, 59 L.Ed. 821, Ann.Cas.1915D, 1087: 19 'The rise in rates for insurance as immediately affects exporting as an increase in freight rates, and the taxation of policies insuring cargoes during their transit to foreign ports is as much a burden on exporting as if it were laid on the charter parties, the bills of lading, or the goods themselves. Such taxation does not deal with preliminaries, or with distinct or separable subjects; the tax falls upon the exporting process.' 20 Closer in point is Spalding & Bros. v. Edwards, 262 U.S. 66, 43 S.Ct. 485, 67 L.Ed. 865. It involved a federal tax o baseball bats and balls sold by the manufacturer. A Venezuela firm ordered a New York commission house to buy a quantity of bats and balls for their account. The New York commission house placed the order with the manufacturer instructing it to deliver the packages to an exporting carrier in New York for shipment to Venezuela. The goods were delivered to the carrier and an export bill of lading was issued. In due course the goods were transported to Venezuela. The issue, as stated by the Court, 262 U.S. at page 68, 43 S.Ct. at page 486, 67 L.Ed. 865, was 'whether the sale was a step in exportation'. The Court pointed out that the goods would not have been exempt from tax while they were 'in process of manufacture' though they were intended for export but that they would be exempt 'after they had been loaded upon the vessel for Venezuela and the bill of lading issued.' The question was whether the 'export had begun.' After noting that title passed when the goods were delivered into the carrier's hands, the Court stated, 262 U.S. at pages 69, 70, 43 S.Ct. at pages 486, 67 L.Ed. 865: 21 'The very act that passed the title and that would have incurred the tax had the transaction been domestic, committed the goods to the carrier that was to take them across the sea, for the purpose of export and with the direction to the foreign port upon the goods. The expected and accomplished effect of the act was to start them for that port. The fact that further acts were to be done before the goods would get to sea does not matter so long as they were only the regular steps to the contemplated result.' 22 The circumstance that tile was in the New York commission house and that it might change its mind and retain the goods for its own use was dismissed by the statement that 'Theoretical possibilities may be left out of account.' Page 70 of 262 U.S., page 486 of 43 S.Ct., 67 L.Ed. 865. The Court concluded that if exportation was put at a later point, exports would not receive 'the liberal protection that hitherto they have received'. Page 70 of 262 U.S., page 486 of 43 S.Ct., 67 L.Ed. 865. 23 This line of cases was summarized in Willcuts v. Bunn, 282 U.S. 216, 228, 51 S.Ct. 125, 128, 75 L.Ed. 304, 71 A.L.R. 1260, as construing the constitutional prohibition against federal taxation of exports so as to give 'immunity to the process of exportation and to the transactions and documents embraced in that process. * * * Only on that construction can the constitutional safeguard be maintained.' 24 The fact that delivery to a common carrier for export gave the sale immunity in Spalding & Bros. v. Edwards, supra, is seized upon as stating a rule that the process of exportation has not started until such delivery has been made. And cases like Superior Oil Co. v. State of Mississippi, 280 U.S. 390, 50 S.Ct. 169, 74 L.Ed. 504, are relied upon as indicating that delivery to the purchaser is not sufficient. That case arose under the Commerce Clause. Mississippi was upheld in its effort to tax a distributor or wholesaler who purchased gasoline and later took it to Louisiana for sale. The Court said, 280 U.S. at page 395, 50 S.Ct. at page 170, 74 L.Ed. 504, that although the course of business indicated the likely destination of the oil, it was 'in the hands of the purchaser to do with as it liked, and there was nothing that in any way committed it to sending the oil to Louisiana except its own wishes.' The Court held, therefore, that the tax was not on goods moving in interstate commerce. But it added, 280 U.S. at page 396, 50 S.Ct. at page 170, 74 L.Ed. 504, 'Dramatic circumstances, such as a great universal stream of grain from the State of purchase to a market elsewhere, may affect the legal conclusion by showing the manifest certainty of the destination and exhibiting grounds of policy that are absent here.' 25 The certainty that the goods are headed to sea and that the process of exportation has started8 may normally be best evidenced by the fact that they have been delivered to a common carrier for that purpose. But the same degree of certainty may exist though no common carrier is involved. The present case is an excellent illustration. The foreign purchaser furnished the ship to carry the oil abroad. Delivery was made into the hold of the vessel from the vendor's tanks located at the dock. That delivery marked the commencement of the movement of the oil abroad. It is true, as the Supreme Court of California observed, that at the time of the delivery the vessel was in California waters and was not bound for its destination until it started to move from the port. But when the oil was pumped into the hold of the vessel, it passed into the control of a foreign purchaser and there was nothing equivocal in the transaction which created even a probability that the oil would be diverted to domestic use. It would not be clearer that the oil had started upon its export journey had it been delivered to a common carrier at an inland point. The means of shipment are unimportant so long as the certainty of the foreign destination is plain. 26 It seems clear under the decisions which we have reviewed involving Article I, Section 9, Clause 5 of the Constitution that the commencement of the export would occur no later than the delivery of the oil into the vessel. As the meaning of 'export' is the same under that Clause and the Import-Export Clause (see Brown v. State of Maryland, supra, 12 Wheat. at page 445, 6 L.Ed. 678; Turpin v. Burgess, supra, 117 U.S. at page 506, 6 S.Ct. at page 836, 29 L.Ed. 988), the same result follows here. 27 It is argued, however, that the present tax is not an impost within the meaning of the Import-Export Clause. The tax is measured by the gross receipts of retail sales and is levied on retailers 'For the privilege of selling tangible personal property at retail.' Cal.Stats.1935, p. 1253. The retailers are authorized to collect the tax from the consumers. Cal.Stats.1933, p. 2602. And a sale is 'any transfer of title or possession * * * in any manner or by any means whatsoever, of tangible personal property, for a consideration'. Cal.Stats.1935, p. 1256. The California Supreme Court held that the tax is an excise tax for the privilege of conducting a retail business measured by the gross receipts from sales; that it is not laid upon the consumer and does not become a tax on the sale or because of the sale. 27 Cal.2d at page 152, 163 P.2d at page 2. 28 That construction, being a matter of state law, is binding on us. But it is not determinative of the question whether the tax deprives the taxpayer of a federal right. That issue turns not on the characterization which the state has given the tax, but on its operation and effect. See St. Louis Southwestern R. Co. v. State of Arkansas, 235 U.S. 350, 362, 35 S.Ct. 99, 59 L.Ed. 265; Kansas City, Ft. S. & M.R. Co. v. Botkin, Secretary of State of Kansas, 240 U.S. 227, 231, 36 S.Ct. 261, 262, 60 L.Ed. 617. 29 Appellee concedes that the prohibition of the Import-Export Clause would be violated if the goods were taxed as exports or because of their exportation, or if the process of exportation were itself taxed. We perceive, however, no difference in substance between any tax so labeled and the present tax. The California Supreme Court conceded that the delivery of the oil 'resulted in the passage of title and the completion of the sale, and the taxable incident'. 27 Cal.2d at page 153, 163 P.2d at pages 2, 3. The incident which gave rise to the accrual of the tax was a step in the export process. 30 Moreover, Brown v. State of Maryland, supra, rejected an argument that while a State could not tax imports, it could tax the privilege of selling imports. Chief Justice Marshall stated, 12 Wheat. at page 444, 6 L.Ed. 678: 31 'All must perceive, that a tax on the sale of an article, imported only for sale, is a tax on the article itself. It is true, the State may tax occupations generally, b t this tax must be paid by those who employ the individual, or is a tax on his business. The lawyer, the physician, or the mechanic, must either charge more on the article in which he deals, or the thing itself is taxed through his person. This the State has a right to do, because no constitutional prohibition extends to it. So, a tax on the occupation of an importer is, in like manner, a tax on importation. It must add to the price of the article, and be paid by the consumer, or by the importer himself, in like manner as a direct duty on the article itself would be made. This the State has not a right to do, because it is prohibited by the constitution.' 32 The same reasoning was applied to exports, 12 Wheat. at page 445, 6 L.Ed. 678: 33 'The States are forbidden to lay a duty on exports, and the United States are forbidden to lay a tax or duty on articles exported from any State. There is some diversity in language, but none is perceivable in the act which is prohibited. The United States have the same right to tax occupations which is possessed by the States. Now, suppose the United States should require every exporter to take out a license, for which he should pay such tax as Congress might think proper to impose; would government be permitted to shield itself from the just censure to which this attempt to evade the prohibitions of the constitution would expose it, by saying, that this was a tax on the person, not on the article, and that the legislature had a right to tax occupations?' 34 The prohibition contained in the Import-Export Clause against taxation on exports clearly involves more than a mere exemption from taxes laid specifically upon the exported goods themselves. That is true of the constitutional prohibition against federal taxes on exports. United States v. Hvoslef, supra. What was said there (237 U.S. at page 13, 35 S.Ct. at page 463, 59 L.Ed. 813, Ann.Cas.1916A, 286) is equally applicable here: 'If it meant no more than that, the obstructions to exportation which it was the purpose to prevent could readily be set up by legislation nominally conforming to the constitutional restriction, but in effect overriding it.' And see Anglo-Chilean Nitrate Sales Corporation v. State of Alabama, 288 U.S. 218, 53 S.Ct. 373, 77 L.Ed. 710. 35 We conclude that the tax which California has exacted from appellant is an impost upon an export within the meaning of Article I, Section 10, Clause 2, and is therefore unconstitutional. 36 Reversed. 37 Mr. Justice MURPHY took no part in the consideration or decision of this case. 38 Mr. Justice BLACK, dissenting. 39 Richfield Oil Corporation, while doing business in California, sold oil extracted from California soil. Its purchaser bought the oil to transport and use abroad. California, like many other states, raises a large proportion of its revenue by a generally applied tax on sales.1 The Court holds that application of the California sales tax to this transaction is a 'tax on exports' and therefore violates Article 1, Section 10, Clause 2 of the Federal Constitution. I cannot agree. 40 In Spalding & Bros. v. Edwards, 262 U.S. 66, 69, 43 S.Ct. 485, 486, 67 L.Ed. 865, a precedent upon which today's decision heavily relies, this Court said that 'with regard to any transaction we have to fix a point at which, in view of the purpose of the Constitution, the export must be said to begin. As elsewhere in the law there will be other points very near to it on the other side, so that if the necessity of fixing one definitely is not remembered any determination may seem arbitrary.' This principle announced in the Spalding case seems to follow what was said in Cornell v. Coyne, 192 U.S. 418, 427, 24 S.Ct. 383, 384, 48 L.Ed. 504, that the constitutional prohibition against a tax on exports was not int nded to relieve exported articles 'from the prior ordinary burdens of taxation which rests upon all property similarly situated.' Every transaction held by this Court to have occurred after rather than before exportation began makes an encroachment not only on the power of states to tax, but, as the Court points out, the Federal Government's area of taxation is also narrowed. The result of such holding is all the more serious because, unlike the consequences of holding a state tax invalid under the Commerce Clause, the prohibitions against taxing exports are, with a minor exception, permanent, absolute and unqualified. After today's ruling Congress itself can neither tax nor permit states to tax sales like the one here proscribed. To classify sales transactions as having occurred after exportation began therefore results in creating an island of constitutional tax immunity for a substantial proportion of the profitable business of the nation. Such a result not only grants tax immunity to many profitable businesses which share governmental protections from payment of their fair part of taxes; it also throws an unfair part of the tax burden on others. Since we cannot assume that the framers of the Constitution looked with favor on such consequences, we should, before classifying a transaction in such a way as to render a tax on it unconstitutional, give it the most careful factual scrutiny. We should not invalidate such a tax unless satisfied beyond doubt that it falls squarely and wholly within the area marked by the Constitution for tax exemption. 41 The economic consequences of such sales taxes are probably about the same as would flow from a property or severance tax applied to Richfield. For all three types of taxes would likely be reflected in an increased sales price of Richfield's oil. No one, I suppose, would think of saying that such a property or severance tax would be unconstitutional as a tax on exports. The reason would be that the taxable event clearly arose before and not after exportation began. This sales tax was no more applied after export had actually begun than a property or severance tax would have been. The tax was not even levied on an exporter or an exporter's agent or broker. Richfield was neither. Its sale of local California goods was negotiated and completed wholly in California. This purely intrastate sale transaction cannot properly be held to have lost its intrastate pre-exportation status by reason of the fact that the parties did not intend 'title to pass' until the oil was delivered at the purchaser's ship. For formal 'passage of title' is not an adequate criterion for measuring a state's constitutional power to tax sales made within the state. Private parties are free to decide, so far as their own interests are concerned, when legal title shall be considered to 'pass.' But a state surely is not required by the Constitution to forbear from taxing that part of a sales transaction which precedes the particular moment the parties have arbitrarily selected for a conceptual transfer of title. Nor need a state withhold the exercise of its power to tax sales until an article is delivered or paid for. That delivery, perhaps the last step in executing this agreement to sell, happened to border on the imaginary line where the actual exporter took possession does not justify us in concluding that therefore the whole sales transaction occurred after exportation. Constitutional interpretations which make serious inroads into the power of both the States and the Federal Government to tax sales made by local businesses should not turn on fine legal concepts of when title passed or delivery occurred in relation to the beginning of exportation. 42 Concededly, as the Court points out, the Constitution prohibits imposition of state and federal 'imposts and duties' on 'exports.' But the Constitution does not define in words what is an impost or tax on exports and what is not. It is well known that taxation of exports was primarily forbidd n by the Constitution at the insistence of inland states which feared that seaboard states would exact a tribute from all goods sold in the interior which were thereafter transported through ports en route to foreign destinations. It was not intended to bestow a bounty of blanket tax immunity upon all those who engaged in the production, processing, purchase, or sale of goods shipped abroad. There was no broad purpose of encouraging foreign commerce by making all these preliminary steps tax free. The motivation of this tax and its economic consequences plainly are not those which the writers of the Constitution condemned. This was no tax on goods from an inland state which came through California in transit after severance, processing, and sale had been completed. Nor was it a disguised tax on a product of California soil or manufacture imposed solely because the oil was intended for a foreign destination. The tax was nothing more than an effort of California to defray a part of the state's expenses by a uniform sales tax on all those businesses, including Richfield, which enjoyed California's natural resources, the labor of its people, and the services and protection of its government. 43 True, the tax would impose a burden on export commerce to the extent that it increased the export price of Richfield oil. But if a tax on export sales be unconstitutional for imposing such a burden, so is a property tax or a severance tax applied to Richfield's oil anywhere from well to consumer. For all these types of taxes would likely be reflected in the price of Richfield's oil. But the history and the evolution of the constitutional prohibition against taxation of exports manifest that there was no intention to subsidize either export businesses or foreign purchasers by any such broad immunity from state and federal taxation. 44 I cannot believe that it was the purpose of the Constitution to let all goods destined for shipment abroad escape uniformly applied state and federal taxes, nor that a state whose resources are depleted is powerless to enforce its sales tax if the depleter sells to customers for immediate shipment for ultimate use in foreign countries. No persuasive evidence has been produced to indicate that those who wrote the Constitution thought in such terms or that they would have handicapped the state and federal taxing power in such a way. And no other sufficiently cogent reasons have been advanced to require a present interpretation which so disarranges, confuses, and handicaps the sales taxes of all the states. 1 In California a valid stipulation is binding upon the parties. McGuire v. Baird, 9 Cal.2d 353, 70 P.2d 915; Webster v. Webster, 216 Cal. 485, 14 P.2d 522; see 23 Cal.Juris. 826. It is available at a second trial unless in terms otherwise limited, Nathan v. Dierssen, 146 Cal. 63, 79 P. 739; Crenshaw v. Smith, 74 Cal.App.2d 255, 168 P.2d 752; see Le Barron v. City of Harvard, 129 Neb. 460, 262 N.W. 26, 100 A.L.R. 775, and will be controlling at the second trial unless the trial court relieves a party from the stipulation. First National Bank of San Pedro v. Stansbury, 118 Cal.App. 80, 5 P.2d 13. Relief from a stipulation may be granted in the sound discretion of the trial court in cases where the facts stipulated have changed, there is fraud, mistake of fact, or other special circumstance rendering it unjust to enforce the stipulation. Sacre v. Chalupnik, 188 Cal. 386, 205 P. 449; Back v. Farnsworth, 25 Cal.App.2d 212, 77 P.2d 295; Sinnock v. Young, 61 Cal.App.2d 130, 142 P.2d 85; see 161 A.L.R. 1163. In the present case there is no intimation in the record or briefs of fraud, excusable neglect, or other ground for relief. Indeed the parties both accept the stipulation as accurate and complete. 2 See 2 Farrand, The Records of the Federal Convention (1911), pp. 307, 359—362, 442. 3 See particularly Madison's statement, 3 Eilliot's Debates, 2d Ed., p. 483. And see The Federalist No. 42. 4 See 2 Farrand, op cit., supra, note 2, pp. 305—308, 358 363, 441—442. 5 The consenus of opinion was expressed by Gerry—that 'the legislature could not be trusted with such a power. It might ruin the Country. It might be exercised partially, raising one and depressing another part of it.' See 2 Farrand, op cit., supra, note 2, p. 307. Or as stated by Sherman, 'A power to tax exports would shipwreck the whole.' Id., p. 308. 6 This was suggested by Langdon. See 2 Farrand, op. cit., supra, note 2, p. 361. 7 See 2 Farrand, op. cit., supra, note 2, p. 442. 8 See Carson Petroleum Co. v. Vial, 279 U.S. 95, 49 S.Ct. 292, 73 L.Ed. 626. 1 In 1945 California's total revenue was $676,828,000. It collected $242,757,000 from its sales tax. California State Finances in 1945, 1 State Finances: 1945, Dept. of Commerce, Bureau of the Census (1946) 33.

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329 U.S. 187 67 S.Ct. 261 91 L.Ed. 181 BALLARD et al.v.UNITED STATES. No. 37. Argued Oct. 15, 1946. Decided Dec. 9, 1946. Messrs. Roland Rich Woolley and Ralph C. Curren, both of Los Angeles, Cal., for petitioners. Miss Beatrice Rosenberg, of Washington, D.C., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case is here for the second time. It involves the indictment and conviction of respondents for using, and conspiring to use, the mails t defraud. Criminal Code s 215, 18 U.S.C. § 338, 18 U.S.C.A. § 338.; Criminal Code § 37, 18 U.S.C. § 88, 18 U.S.C.A. § 88. The fraudulent scheme charged was the promotion of the I Am movement, which was alleged to be a fraudulent religious organization, through the use of the mails. The nature of the movement and the facts surrounding its origin and growth are summarized in our prior opinion. 322 U.S. 78, 64 S.Ct. 882, 88 L.Ed. 1148. It is sufficient here to say that petitioners were found guilty on a charge by the trial judge which withheld from the jury all questions concerning the truth or falsity of their religious beliefs or doctrines. The Circuit Court of Appeals reversed and granted a new trial, holding it was error to withhold those questions from the jury. 9 Cir., 138 F.2d 540. We in turn, reversed the Circuit Court of Appeals and sustained the District Court in that ruling. Petitioners argued, however, that even though the Circuit Court of Appeals erred in reversing the judgment of conviction on that ground, its action was justified on other distinct grounds. But the Circuit Court of Appeals had not passed on those other questions; and we did not have the benefit of its views on them. We accordingly deemed it more appropriate to remand the cause to that court so that it might first pass on the questions reserved. 2 On the remand the Circuit Court of Appeals, one judge dissenting, affirmed the judgment of conviction without discussion of the issues raised. On a petition for rehearing, which was denied, the Circuit Court of Appeals filed an opinion which discussed some but not all of the questions which had been reserved. 9 Cir., 152 F.2d 941. We granted the petition for certiorari because of the serious questions concerning the administration of criminal justice which were raised. 3 We are met at the outset with the concession that women were not included in the panel of grand and petit jurors in the Southern District of California where the indictment was returned and the trial had; that they were intentionally and systematically excluded from the panel.1 This issue was raised by a motion to quash the indictment and by a challenge to the array of the petit jurors because of intentional and systematic exclusion of women from the panel. Both motions were denied and their denial was assigned as error on appeal. The jury question has been in issue at each stage of the proceedings, except the first time that the case was before us. At that time the point was not assigned or argued. But the case was here at the instance of the United States, not at the instance of the present petitioners. As we have said, there were other issues in the case obscured by the question brought here by the United States and which had not been passed upon below or argued before this Court. Consequently, when we remanded the case for consideration of the remaining issues by the Circuit Court of Appeals, the jury issue was argued. The Circuit Court of Appeals did not hold that it had been waived. That court passed upon the issue, concluding that there was no error in the exclusion of women from the panel. 152 F.2d at page 944, and see dissent at page 953. Under these circumstances we cannot say (and the government does not suggest) that petitioners have lost the right to urge the question here. Moreover, in this case, as in Reynolds v. United States, 98 U.S. 145, 168, 169, 25 L.Ed. 244, the error, though not presented here on the first argument, appears on the face of the record before us. And see Sibbach v. Wilson & Co., 312 U.S. 1, 16, 61 S.Ct. 422, 427, 85 L.Ed. 479. 4 Congress has provided that jurors in a federal court shall have the same qualifications as those of the highest court of law in the State. Judicial Code § 275, 28 U.S. 338; Criminal Code § 37, 18 U.S.C. § 88, C. § 411, 28 .S.C.A. § 411. This provision applies to grand as well as petit juries.2 Congress also has prohibited disqualification of citizens from jury service 'on account of race, color, or previous condition of servitude.'3 It has required that jurors shall be chosen 'without reference to party affiliations'.4 It has provided that jurors shall be returned from such parts of the district as the court may direct 'so as to be most favorable to an impartial trial, and so as not to incur an unnecessary expense, or unduly burden the citizens of any part of the district'.5 None of the specific exemptions6 which it has created is along the lines of sex. 5 These provisions reflect a design to make the jury 'a cross-section of the community' and truly representative of it. Glasser v. United States, 315 U.S. 60, 86, 62 S.Ct. 457, 472, 86 L.Ed. 680. 6 In California, as in most States,7 women are eligible for jury service under local law. Code of Civil Procedure, § 198. The system of jury selection which Congress has adopted contemplated, therefore, that juries in the federal courts sitting in such States would be representative of both sexes. If women are excluded, only half of the available population is drawn upon for jury service. To put the matter another way, Congress has referred to state law merely to determine who is qualified to act as a juror. Whether the method of selecting a jury in the federal court from those qualified is or is not proper is a question of federal law.8 Glasser v. United States, supra, 315 U.S. at pages 85, 86, 62 S.Ct. at pages 471, 472, 86 L.Ed. 680. 7 In Thiel v. Southern Pacific Co., 328 U.S. 217, 66 S.Ct. 984, we were presented with a similar problem. It was a civil case which had been removed to the district court on the ground of diversity of citizenship and involved a question of the liability of a common carrier to a passenger. All persons who worked for a daily wage had been deliberately and intentionally excluded from the jury lists. We held, in the exercise of our power of supervision over the administration of justice in the federal courts, see McNabb v. United States, 318 U.S. 332, 63 S.Ct. 608, 87 L.Ed. 819, that the plaintiff's motion to strike the panel should have been granted. The gist of our ruling is contained in the following statement from the opinion in the Thiel case: 8 'The American tradition of trial by jury, considered in connection with either cr minal or civil proceedings, necessarily contemplates an impartial jury drawn from a cross-section of the community. * * * This does not mean, of course, that every jury must contain representatives of all the economic, social, religious, racial, political and geographical groups of the community; frequently such complete representation would be impossible. But it does mean that prospective jurors shall be selected by court officials without systematic and intentional exclusion of any of these groups. Recognition must be given to the fact that those eligible for jury service are to be found in every stratum of society. Jury competence is an individual rather than a group or class matter. That fact lies at the very heart of the jury system. To disregard it is to open the door to class distinctions and dicriminations which are abhorrent to the democratic ideals of trial by jury.' 328 U.S. 220, 66 S.Ct. 985. 9 We conclude that the purposeful and systematic exclusion of women from the panel in this case was a departure from the scheme of jury selection which Congress adopted and that, as in the Thiel case, we should exercise our power of supervision over the administration of justice in the federal courts, McNabb v. United States, supra, to correct an error which permeated this proceeding. 10 It is said, however, that an all male panel drawn from the various groups within a community will be as truly representative as if women were included. The thought is that the factors which tend to influence the action of women are the same as those which influence the action of men—personality, background, economic status—and not sex.9 Yet it is not enough to say that women when sitting as jurors neither act nor tend to act as a class. Men likewise do not act as a class. But if the shoe were on the other foot, who would claim that a jury was truly representative of the community if all men were intentionally and systematically excluded from the panel? The truth is that the two sexes are not fungible; a community made up exclusively of one is different from a community composed of both; the subtle interplay of influence one on the other is among the imponderables.10 To insulate the courtroom from either may not in a given case make an iota of difference. Yet a flavor, a distinct quality is lost if either sex is excluded. The exclusion of one may indeed make the jury less representative of the community than would be true if an economic or racial group were excluded. 11 The present case involves a prosecution of a mother and her son for the promotion of an allegedly fraudulent religious program. Judge Denman in his dissent below stated: 12 'In the average family from which jurors are drawn, the souls of children in their infant and early adolescent bodies receive the first and most lasting teaching of religious truths from their mothers. In the same families the major social function of men is concerned with the creation of material things, largely food and clothing and housing of the children's bodies. 13 'In the public schools over ninety-five per cent of the primary and grammar school teachers are women. In the churches of all religions the numbers of women attendants on divine service vastly exceed men. The one large and vital religious group created in America since Joseph Smith is that of the Christian Scientists founded by a woman, Mary Baker Eddy. 14 '* * * It matters not that from my viewpoint there is * * * testimony of a conspiracy so mean and vile that it warrants some of the strongest strictures of the prosecution. I am not a woman juror sitting in the Ballard trial, who is the mother of five children at whose knee have been instilled in them the teachings of Jesus as interpreted by Mrs. Eddy. 15 'Well could a sensitive woman, highly spiritual in character, rationalize all the money income acquired by Mrs. Ballard as being devoted to the teachings of the same Jesus as are the profits of the trust created by Mrs. Eddy for the Christian Science Monitor.' 152 F.2d at pages 951, 952. 16 The point illustrates that the exclusion of women from jury panels may at times be highly prejudicial to the defendants. But reversible error does not depend on a showing of prejudice in an individual case.11 The evil lies in the admitted exclusion of an eligible class or group in the community in disregard of the prescribed standards of jury selection. The systematic and intentional exclusion of women, like the exclusion of a racial group, Smith v. Texas, 311 U.S. 128, 61 S.Ct. 164, 85 L.Ed. 84, or an economic or social class, Thiel v. Southern Pacific Co., supra, deprives the jury system of the broad base it was designed by Congress to have in our democratic society. It is a departure from the statutory scheme. As well stated in United States v. Roemig, D.C., 52 F.Supp. 857, 862, 'Such action is operative to destory the basic democracy and classlessness of jury personnel.' It 'does not accord to the defendant the type of jury to which the law entitles him. It is an administrative denial of a right which the lawmakers have not seen fit to withhold from, but have actually guaranteed to him.' Cf. Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239. The injury is not limited to the defendant—there is injury to the jury system, to the law as an institution, to the community at large, and to the democratic ideal reflected in the processes of our courts. 17 If, as in the Thiel case, we had merely an instance of a petit jury drawn from an improper panel, we would remand the cause for a new trial. But, as we have said, the grand jury was likewise drawn from a panel improperly chosen and therefore the indictment was not returned in accordance with the procedure established by Congress. Accordingly, the indictment must be dismissed. In disposing of the case on this ground we do not reach all the issues urged and it is suggested that in so limiting our opinion we prolong an already lengthy proceeding. We are told that these petitioners will again be before us for the determination of questions now left undecided. But we cannot know that this is so, and to assume it would be speculative. The United States may or may not present new charges framed within the limits of our earlier opinion. A properly constituted grand jury may or may not return new indictments. Petitioners may or may not be convicted a second time. 18 Reversed. 19 Mr. Justice JACKSON, concurring. 20 I concur in the result, but for quite different reasons. I join the opinions of Mr. Justice FRANKFURTER and of Mr. Justice BURTON to the effect that we should not now direct dismissal of the indictment upon the jury question. In my opinion, the point either was abandoned by the parties or if not, was ignored or silently rejected by the Court in its prior decision, 322 U.S. 78, 64 S.Ct. 882, 88 L.Ed. 1148, and should not be revived now. I therefore reach the other issues in the case. I would direct dismissal of the indictment upon the grounds stated in dissent in United States v. Ballard, 322 U.S. 78, at page 92, 64 S.Ct. 882, at page 889, 88 L.Ed. 1148, and a further ground. This Court previously ruled that it is improper for the trial court to inquire whether the religious professions and experiences as represented by defendants were true or false but that it can inquire only as to whether they were represented without belief in their truth. This leaves no statutory basis for conviction of fraud and especially no basis for conviction under this indictment. It requires, in my opinion, a provably false representation in addition to knowledge of its falsity to make c iminal mail fraud. Since the trial court is not allowed to make both findings, the indictment should be dismissed. 21 Mr. Justice FRANKFURTER (with whom the CHIEF JUSTICE, Mr. Justice JACKSON and Mr. Justice BURTON concur) dissenting. 22 In the exercise of its supervisory power over the lower federal courts, the Court is directing the dismissal of the indictment in this case, because, following the practice then prevailing in the federal district court in California, no women were included in the panel of the grand jury which found the indictment. My brother BURTON demonstrates, I believe, that under the circumstances the absence of women from the grand jury panel did not vitiate the indictment. But, in any event, this Court's authority to supervise practice in the lower federal courts should be exercised only to vindicate appropriate standards of judicial administration. In finding that the exclusion of women from the grand jury panel is fatal to the indictment, the Court embraces a claim for the benefit of the petitioners which they themselves abandoned more than four years ago. And since women have not been excluded from jury service in the California federal courts since 1944, the Court cannot justify its action as a means of emphasizing to the lower courts the duty of adopting a proper practice. Thus the Court directs the dismissal of an indictment under circumstances in which the Court's action does not advance the proper administration of criminal justice. 23 The defendants were fully cognizant of the facts and of the issues involved when they made their objection to the composition of the grand jury panel and when they abandoned it. They objected to the array before the district court, saved the point when their objection was overruled, and assigned it as one of the errors in their specifications on appeal to the Circuit Court of Appeals. In ample time for the defendants to rely on it in the Circuit Court of Appeals, this Court decided Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680, which indicated that we deemed it important that a jury be selected on what may be described as a modern democratic basis. And yet the point made and overruled in the District Court was not argued in the briefs before the Circuit Court of Appeals, although the defendants vigorously urged other claims to reverse their convictions. The fact that the jury question was 'in issue' before the Circuit Court of Appeals, in the sense of having been assigned as error, but was neither briefed nor argued there, only serves to emphasize the abandonment of the issue before that court. When on the Government's petition the case came before this Court, the defendants surely pressed every claim that seemed to them relevant to sustain the judgment which the Circuit Court of Appeals had entered in their favor. For it is too well settled to require citation of cases that the respondent here may urge and support any ground by which judgment in his favor can be sustained, whether or not it was argued in the court below. Their briefs and oral argument vigorously urged other issues going to the validity of the indictment. The exclusion of women was not even mentioned. And this Court, with the full record before it, took no notice of this question which now is found to undermine the entire proceedings. When we remanded the case to the Circuit Court of Appeals we plainly did so to have that court decide questions argued here which it had left undecided. We would hardly have invited its decision on questions which had been abandoned and not argued before it. If a procedural point can ever be abandoned, objection to the jury panels was here abandoned. 24 With the Glasser opinion before them and with the point properly preserved in their appeal papers, the abandonment of the issue by the petitioners, when the case came before the Circuit Court of Appeals and later before us, can mean only that they had no confidence in the claim, and that, in any event, they had not been hur by what is now deemed a fatal error. It hardly helps the proper administration of criminal justice to allow the defendants to resurrect a point which they had dropped four years earlier.* 25 Even now, this Court does not find that the exclusion of women constitutes an inroad on the vital safeguards for a criminal trial so as to involve a denial of due process. The Court orders dismissal of an indictment because of a past practice pursued in good faith under misapprehension of relevant law. But that misconception has been corrected and the proper practice has been enforced since 1944. The Court's order cannot serve as a means of ensuring a charge in federal practice when that change has already taken place. 26 Dismissal of this indictment will not put an end to prosecution for the offenses which it charges. And so it cannot in any event relieve the Court from the duty of deciding the central issue before us, namely, whether the mails may be used to obtain money by fraud when the final consists of a false claim of belief touching religion. Dismissal of this indictment does not terminate prosecution for these offenses because Congress by the Act of May 10, 1934, 48 Stat. 772, amended, July 10, 1940, 54 Stat. 747, 18 U.S.C. § 587, 18 U.S.C.A. § 587, has expressly saved this prosecution. By that Act, Congress allowed reindictment where an indictment was found defective but the basis of the prosecution is left untouched. As amended it provides that 27 'Whenever an indictment is found defective or insufficient for any cause, after the period prescribed by the applicable statute of limitations has expired, a new indictment may be returned not later than the end of the next succeeding regular term of such court, following the term at which such indictment was found defective or insufficient, during which a grand jury thereof shall be in session.' 28 Considering the history of this litigation, the reasonable assumption is that the Gove nment will press this prosecution. 29 A conviction was had. The Circuit Court of Appeals reversed and ordered a new trial. On petition of the Government we brought the case here. The Government urged that the judgment of conviction be restored, while the defendants challenged its very foundation by invoking the constitutional guaranty of freedom of religion. In April 1944, we reversed the Circuit Court of Appeals and found that the district court had properly 'withheld from the jury all questions concerning the truth or falsity of the religious beliefs or doctrines of respondents.' 322 U.S. 78, at page 88, 64 S.Ct. 882, at page 887, 88 L.Ed. 1148. But the case was remanded to the Circuit Court of Appeals without considering the question whether the First Amendment affords immunity from criminal prosecution for the procurement of money by false statements as to one's religious experiences. Three Justices concluded that the verdict should stand, and, in an opinion by the late Chief Justice, denied that the First Amendment afforded immunity for fraudulent use of the mails simply because the false statements concerned religious beliefs. A fourth Justice likewise thought this issue had to be met. He concluded that the indictment should be dismissed because it raised issues inextricably bound up with traditional liberty and could not be sustained in view of the First Amendment. Upon remand the Circuit Court of Appeals, after considering the issues which impliedly were remitted to it by this Court, found no flaw in the jury's verdict and affirmed the conviction. After three years the case is again here, and the main issue urged, both in argument and in the extensive briefs, is the power of the Government to maintain this prosecution in view of the First Amendment. A decision by this court merely directing the dismissal of the indictment because of error in the selection of the grand jury which found it will inevitably lead to curing of this defect by resubmission to a properly selected grand jury. It can hardly be believed that the Government will not feel under duty to do so. The whole machinery of criminal justice will again be set in motion. A trial will follow, and the District Court will naturally deem itself bound to entertain the prosecution in view of the decision of its Circuit Court of Appeals, twice left undisturbed here, which rejected the claim based on religious liberty. 30 It is too much like playing with justice to await a third review, two or three years hence, before facing this issue explicitly. The doctrine that a constitutional claim should not be prematurely considered is a vital feature in the harmonious functioning of our scheme of government. But it is a rule founded in reason, not a mechanical formula for avoiding an aspect of a litigation which cannot be fairly decided without meeting the constitutional issue. If this controversy could really be disposed of merely by finding that the grand jury was improperly selected, abstention from a constitutional adjudication would be imperative. Such would be the case if further prosecution were barred by the statute of limitations. But the Act of 1934, as we have seen, removes the bar and sanctions a reindictment, which is to be anticipated in view of the circumstances of this litigation. We cannot escape our responsibility by dealing merely with the remediable invalidity of the indictment, leaving untouched the decision of the Circuit Court of Appeals that the prosecution is valid. Of course the defendants might be acquitted at a new trial. But a court which purports to exercise supervisory authority in the interests of the administration of criminal justice ought not to permit the waste and unfairness involved in a new trial if there is no foundation for it. Especially is this a claim on the proper administration of justice in a case which has been in the courts for almost six years, and which is now starting on a new round as a result of the Court's decision. 31 In short, the prosecution ill continue unless we terminate it. We can terminate it only if this Court should deem beyond constitutional authority a prosecution of the charges upon which the jury found the defendants guilty and which the Circuit Court of Appeals sustained. We ought not to give implied sanction to the continuance of this prosecution, if we do not mean to do so, by withholding our view on an issue inescapable in the full disposition of the controversy before the Court. Candor repels it and the requirements of constitutional adjudication do not justify it. 32 Mr. Justice BURTON, dissenting. 33 Altough I concur in this Court's policy of requiring the inclusion in federal jury lists in California of women qualified for service as jurors of the highest court of law in that State, I believe that we are not justified in dismissing the indictment returned in this case in 1941 merely because women were not included in such lists at that time. In the absence of a binding statutory or court rule then requiring such inclusion of women the District Court was compelled to exercise its own discretion in including or excluding them. Without depending on the breadth of the discretion which should be allowed to a District Court under those circumstances, I submit that the reasons for the District Court action strengthen the position that this Court should not now retroactively disapprove the established local federal practice which conformed almost exactly with the established state practice. 34 Ever since its first Judicature Act Congress has subordinated federal practice to state law in determining the qualifications of federal jurors. In that Act it said: 'the jurors shall have the same qualifications as are requisite for jurors by the laws of the State of which they are citizens, to serve in the highest courts of law of such State, * * *.' Section 29, Act of September 24, 1789, 1 Stat. 73, 88. Similarly, the present law reads: 'Jurors to serve in the courts of the United States, in each State respectively, shall have the same qualifications, subject to the provisions hereinafter contained, and be entitled to the same exemptions, as jurors of the highest court of law in such State may have and be entitled to at the time when such jurors for service in the courts of the United States are summoned.' Section 275, Judicial Code, 36 Stat. 1087, 1164, 28 U.S.C. § 411, 28 U.S.C.A. § 411.1 35 There is no constitutional, statutory or court rule or policy requiring women to be placed on all federal jury lists. Congress might have required such a course and might have set up complete federal qualifications for federal jurors, but it never has done so. Instead, it has provided that state action shall determine most of the qualifications for federal jury service. As a result, it would be reversible error for the federal courts to include women on federal juries in those states which do not make women eligible for service as jurors of the highest court of law in such states. Cf. Crowley v. United States, 194 U.S. 461, 24 S.Ct. 731, 48 L.Ed. 1075. This is an inescapable recognition by Congress that it sees nothing seriously prejudicial in the continued use of exclusively male federal juries in states where women are not eligible for state jury duty. The availability of appropriate accommodations for the two sexes has been treated as a material factor in determining whether women and men shall be called for jury duty. Acts and Resolves of R.I. (1939), c. 700, § 37;People v. Shannon, 203 Cal. 139, 263 P. 522. See Report to the Judicial Conference of the Committee on the Selection of Jurors (1942), 23. Subordination of the need for women on federal juries to the availability of physical accommodations for them is a tacit recognition that no fundamental infraction of the rights of litigants is involved in the continuance of exclusively male juries. 36 In some employments, women are distinguished from men, as a matter of law, in connection with their hours and conditions of work. West Coast Hotel Co. v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 81 L.Ed. 703, 108 A.L.R. 1330. These distinctions are due to considerations not applicable to jury service. The general and increasing absence of sound reasons for distinctions between men and women in matters of suffrage, office holding, education, economic status, civil liberties, church membership, cultural activities, and even war service, emphasizes the lack of reason for making a point of the presence or absence of either sex, as such, on either grand or petit juries. See Miller, The Woman Juror (1922), 2 Ore.L.Rev. 30, 40. 37 By a general practice of not calling women for jury duty although eligible for such duty, the state courts of California, in effect, have granted women a substantial exemption from that duty. People v. Parman, 14 Cal.2d 17, 92 P.2d 387; People v. Shannon, supra. See United States v. Ballard, D.C., 35 F.Supp. 105, 107. The California courts thus have treated men and women as equally qualified and have assumed that litigants will have an adequate impartial jury, regardless of the sex of the jurors, provided the jurors otherwise are qualified to serve. Cf. Hyde v. United States, 225 U.S. 347, 374, 32 S.Ct. 793, 804, 56 L.Ed. 1114, Ann.Cas.1914A, 614; Agnew v. United States, 165 U.S. 36, 44, 17 S.Ct. 235, 238, 41 L.Ed. 624. While such a state practice is not binding upon the federal courts as a matter of law, yet it is persuasive as indicating that litigants need not be treated as having been prejudiced when a Federal District Court has conformed its practice to that of the state. For the state rule see People v. Parman supra; In re Mana, 178 Cal. 213, 172 P. 986, L.R.A.1918E, 771; People v. Manuel, 41 Cal.App. 153, 182 P. 306. 38 The error in the federal practice cannot be the exclusion of women, as such, because such exclusion not only is permitted but is required by federal statute in states where they are not eligible for state jury duty. The error, if any, must consist of the failure to require the listing of women, as well as men, for all federal jury service in a state which permits such listing for state jury service, even though the state regards such listing as directory to and not mandatory upon the state courts. 39 There are ample grounds for distinguishing Thiel v. Southern Pacific Co., 328 U.S. 217, 66 S.Ct. 984, from this case. For example, in the Thiel case, the Court acted in the absence of actual notice that the objectionable practice had been discontinued,2 whereas, here, we have notice that the practice objected to was changed more than two years ago to conform, at least substantially, to the approved practice. Also, in the Thiel case, the procedure complained of consisted of the exclusion of an economic group, thereby detracting from the representative character of the jury list, in a manner contrary to the tradition and purpose of the jury system. Here the exclusion of women, as such, from jury service not only was in accordance with the traditional practice, but is in accordance with the congressionally approved future practice in the federal and state courts of about 40% of the states. This shows that the only objectionable practice here was that, after the State h d established a directory system of eligibility of women for state jury service, the federal court did not at once enlarge that policy into a mandatory requirement that all qualified women be placed upon all federal jury lists. 40 For these reasons, I am unable to concur in the judgment setting aside the indictment and verdict. The convictions in this case should be affirmed, and I concur in the statement by Mr. Chief Justice Stone: 'Certainly none of respondents' constitutional rights are violated if they are prosecuted for the fraudulent procurement of money by false representations as to their beliefs, religious or otherwise.' United States v. Ballard, 322 U.S. 78, 90, 64 S.Ct. 882, 888, 88 L.Ed. 1148. 41 The CHIEF JUSTICE and Mr. Justice FRANKFURTER join in this dissent. Mr. Justice JACKSON joins in it except in so far as the final paragraph relates to an affirmance of the convictions. 1 Women have been members of both grand and petit juries in that district since the beginning of the February Term, 1944. See United States v. Chaplin, D.C., 54 F.Supp. 682. 2 Thus Judicial Code § 276, 28 U.S.C. § 412, 28 U.S.C.A. § 412, provides for the drawing of 'All such jurors, grand and petit' from persons 'possessing the qualifications prescribed' in § 411. 3 Judicial Code § 278, 28 U.S.C. § 415, 28 U.S.C.A. § 415. 4 Judicial Code § 276, 28 U.S.C. § 412, 28 U.S.C.A. § 412. 5 Judicial Code § 277, 28 U.S.C. § 413, 28 U.S.C.A. § 413. 6 No person shall serve as a petit juror 'more than one term in a year'. Judicial Code § 286, 28 U.S.C. § 423, 28 U.S.C.A. § 423. Artificers and workmen employed in armories and arsenals of the United States are exempted from service as jurors. 50 U.S.C. § 57, 50 U.S.C.A. § 57. Cf. Judicial Code § 288, 28 U.S.C. § 426, 28 U.S.C.A. § 426, dealing with disqualifications of jurors in prosecutions for bigamy, polygamy or unlawful cohabitation. 7 Report to the Judicial Conference of the Committee on Selection of Jurors (1942), p. 23. 8 An earlier indictment (subsequently dismissed) was returned against petitioners who moved to quash because of the exclusion of women from the panel of grand jurors. The motion was denied. United States v. Ballard, D.C., 35 F.Supp. 105. That ruling seems to have been influenced by the thought that California law determined whether the exclusion of women resulted in a proper jury. Under California law the inclusion of women on the panel is not obligatory, the statutory provisions which qualify them for jury service being directory only. People v. Shannon, 203 Cal. 139, 263 P. 522; People v. Parman, 14 Cal.2d 17, 92 P.2d 387. 9 See Miller, The Woman Juror, 2 Oregon L.Rev. 30; cf. Carson, Women Jurors (1928), p. 15. 10 The problem is reflected in the discussions of the androcentric theory and the gynaecocentric theory in scientific literature. See Ward, Pure Sociology (1903), Ch. XIV; Draper et al., Human Constitution in Clinical Medicine (1944), Ch. VI. 11 Cf. Wuichet v. United States, 6 Cir., 8 F.2d 561—563. * The two cases invoked by the Court are inapposite. The circumstances in Reynolds v. United States, 98 U.S. 145, 168, 169, 25 L.Ed. 244, are so different from those now before us that the Court's action in that case can afford no support for what is here done. In affirming the conviction the Court had not noticed that the sentence imposed after trial was imprisonment at hard labor, whereas the applicable statute authorized only sentence to ordinary imprisonment. It had not been called to the Court's attention, and it was not the kind of error that the Court would notice. But the error, which everybody had overlooked, would, if uncorrected, have subjected a defendant to punishment far more severe than any authorized by Congress. In the case before us the error, such as it may be, goes to a procedural point not bearing on the fairness of the trial, or the conviction, or the sentence. And the result of this Court's action as to this procedural point is to vitiate the entire proceeding, not merely to remand for formal resentencing as in the Reynolds case. Also, in the Reynolds case the Court noted the error when indicated to it in a petition for rehearing at the same term of Court. It had not previously been indicated to any court and evidently had not previously been noted by anyone. It did not, as here, make its way to the surface after it had been duly and vigorously urged, had been assigned as error, then dropped, buried for three years, only to be resurrected as an afterthought and a makeweight to argument on the merits. Again, in Sibbach v. Wilson & Co., 312 U.S. 1, 16, 61 S.Ct. 422, 427, 85 L.Ed. 479, the District Court sought to punish for contempt action which was specifically exempt from such punishment. Error of a 'fundamental nature' was apparently noticed and pressed by the defendants for the first time when the case came to this Court. And the Court considered the point while the case was before it, not, as here, when it reappears as tail to another issue three years after the record containing the alleged error first came before us. 1 The federal courts, therefore, are bound by state definitions of jurors' qualifications subject to federal constitutional and statutory limitations. It has been argued that the Fifth and Sixth Amendments to the Constitution guarantee the continuance of the exclusively male common law federal juries, but it is now generally agreed that women are qualified to serve on federal juries wherever the states have declared them qualified as jurors of the highest court of law in their respective states. See United States v. Wood, 299 U.S. 123, 145, 57 S.Ct. 177, 185, 81 L.Ed. 78; Tynan v. United States, 9 Cir., 297 F. 177, 178, 179, certiorari denied, 266 U.S. 604, 45 S.Ct. 91, 69 L.Ed. 463; Hoxie v. United States, 9 Cir., 15 F.2d 762, certiorari denied, 273 U.S. 755, 47 S.Ct. 459, 71 L.Ed. 876. 2 It now appears, however, that, beginning in 1943, the practice objected to in the Thiel case has been discontinued. Louis E. Goddman, U.S. District Judge, N.D., Calif., Federal Jury Selections as Affected by Thiel v. Southern Pacific Company, 21 Journal of the State Bar of California 352, 357.

12

329 U.S. 143 67 S.Ct. 245. 91 L.Ed. 136 UNEMPLOYMENT COMPENSATION COMMISSION OF TERRITORY OF ALASKA et al.v.ARAGAN et al. No. 25. Reargued Nov. 13, 1946. Decided Dec. 9, 1946. [Syllabus from pages 143-145 intentionally omitted] Mr.Marshall P. Madison, of San Francisco, Cal., for petitioners. Mr. Herbert Resner, of San Francisco, Cal., for respondents. The CHIEF JUSTICE delivered the opinion of the Court. 1 In May, 1940, the individual respondents filed claims for unemployment benefits with the Unemployment Compensation Commission of the Territory of Alaska. After an initial determination by an examiner and after decision by a referee the Commission held that the claimants were disqualified from receiving benefits for a period of eight weeks since their unemployment was due to a labor dispute n active progress within the meaning of the Alaska Unemployment Compensation Law.1 The United States District Court affirmed the Commission's holding in all particulars. The Circuit Court of Appeals reversed, one judge dissenting. We granted certiorari because of the public importance of the questions involved.2 2 Among the petitioners are three corporations engaged principally in the business of salmon fishing, canning, and marketing. One of the companies owns canneries and other facilities at Karluk, Chignik, and Bristol Bay, Alaska. The other two companies operate only at Bristol Bay. Catching and canning salmon is a seasonal activity.3 The companies customarily hire workers at San Francisco at the beginning of the season, transport them to the Alaskan establishments, and return them to San Francisco at the season's end. Similar operations are carried on by other companies out of other west coast ports, notably Seattle and Portland. The individual respondents are all members of the Alaska Cannery Workers Union Local No. 5, and each worked in Alaska for one of the three companies during the 1939 season. Local No. 5 is the recognized bargaining agent of the cannery workers in the San Francisco area. 3 In 1939, as had been the practice for some years, the union entered into a written agreement with the companies covering in considerable detail the matters of wages, hours, conditions of employment, and the like. After the end of the 1939 season, the companies terminated the agreement then in effect, which made necessary the negotiation of a new contract for the 1940 season. Consequently, on March 6, 1940, the companies through their authorized agent, Alaska Salmon Industry, Inc., invited the union to enter into negotiations for a new agreement. In a series of meetings held shortly thereafter, serious disagreement appeared which quickly developed into an impasse on the question of wages. The union demanded wages equal to or in excess of those paid under the terms of the 1939 agreement. The companies offered wages which for the most part were below those paid in 1939. On April 1, 1940, the union caused the negotiations as to the wage issue to be transferred from San Francisco to Seattle where an attempt was being made to effect a coastwide agreement to cover all west coast companies carrying on salmon operations in Alaska. Local No. 5, however, refused to sign a 'memorandum' agreement incorporating such terms as might result from the concurrent Seattle negotiations. 4 On April 3, the companies notified the union that if operations were to be carried on in Karluk and Chignik during the 1940 season, an agreement with respect to the former would have to be reached by April 10 and with respect to the latter by April 12. Although negotiations proceeded up to the deadlines, the parties arrived at no understanding, and on April 22 Alaska Salmon Industry, Inc., formally announced that no operations would be carried on in Karluk and Chignik during 1940. Meetings continued, however, in an effort to come to an understanding with respect to Bristol Bay before the arrival of the May 3d deadline which had been set for those operations. Although federal mediators intervened in an attempt to d scover a suitable compromise, the deadline date passed without agreement. It appears that after May 3, negotiations continued in Seattle where a contract affecting only canners and workers operating out of ports other than San Francisco was finally executed on May 29. The companies and union which are involved in this case were specifically excluded from the terms of the 1940 Seattle agreement. 5 Shortly after May 3, the individual respondents filed claims for unemployment benefits with the Alaska Unemployment Compensation Commission. The Commission, acting through an examiner, held that respondents were disqualified from receiving payments for the statutory period of eight weeks under the provisions of § 5(d) of the Alaska law. At the time this case arose, that section stated in part: 'An individual shall be disqualified for benefits * * * (d) For any week with respect to which the Commission finds that his total or partial unemployment is due to a labor dispute which is in active progress at the factory, establishment or other premises at which he is or was last employed; provided, that such disqualification shall not exceed the 8 weeks immediately following the beginning of such dispute * * *' 6 In pursuance of the appeal provisions of the statute,4 respondents asked for a review of the examiner's determination. The Commission, in response to this application, appointed a Referee to pass on the disputed claims. The scope of the hearings was confined to the issue of whether the unemployment of the claimants was caused by the existence of a labor dispute. At the end of the proceedings, the Referee came to the conclusion that although there was a labor dispute in existence initially, the dispute was no longer 'in active progress' after the passing of the dates fixed by the companies for consummation of the working agreements. Consequently, the disqualification under § 5(d) with respect to each of the localities was held no longer to attach after the passage of the respective deadline dates.5 7 The Commission, on appeal,6 reversed the Referee's decision and held that within the meaning of the Alaska law, a labor dispute was in active progress throughout the entire eight week statutory period of disqualification beginning with the opening of the season in each locality. Consequently, no benefits were payable until the expiration of the disqualification period. The United States District Court affirmed the Commission's decision in all particulars.7 The Circuit Court of Appeals, with one judge dissenting, reversed, however, on the ground that the labor dispute was not physically at the Alaska canneries where the individual respondents had been last employed. 8 We are met at the outset with the contention that the facts of this case do not present a 'labor dispute' within the meaning of § 5(d) of the Alaska Act. Respondents urge that the term must be narrowl construed to require a strike or leaving of employment which, in turn, calls for a presently-existing employment relation at the time the dispute arises.8 According to this view, the term would not cover a situation, such as presented here, where the controversy precedes the employment. Respondents would justify this restricted construction on the ground that the Unemployment Compensation Law is remedial legislation, and any provision limiting benefits under the Act should be narrowly interpreted. 9 The term 'labor dispute', is not defined in the statute. The term appears in the Act in one other connection, however. Section 5(c)(2)(A) provides that benefits under the Act will not be denied any individual, otherwise eligible, who refuses to accept new work 'if the position offered is vacant due directly to a strike, lockout, or other labor dispute.' The Social Security Act of 19359 requires that the state or territorial law contain a provision to this effect before the legislation can be approved by the Social Security Board. Obviously, for the purposes of § 5(c)(2)(A), the term, 'labor dispute,' has a broader meaning than that attributed to it by respondents. Unless the Territorial Legislature intended to give a different meaning to the same language appearing in another subdivision of the same section, the term must be given a broader meaning than that contended for by the respondents, for the purposes of § 5(d) as well. We need not determine whether 'labor dispute' must in all cases be construed as broadly as it is defined in the Norris-LaGuardia Act,10 and the National Labor Relations Act.11 But here there was full-scale controversy. Companies engaged in carrying on a seasonal business were ranged against a union representing seasonal workers who had been employed by the companies in the previous year. Dispute there certainly was; and the subject of that dispute consisted of matters usually contested in labor disputes as that term is normally understood.12 Since we find nothing to indicate that the Territorial Legislature intended a contrary result, we conclude that the Commission might properly find a 'labor dispute' here presented within the meaning of § 5(d) of the Alaska Act. 10 We think that there is evidence in the record to support the Commission's conclusion that respondents' unemployment was 'due' to a labor dispute insofar as that holding relates to the individual respondents employed in 1939 by the Alaska Packers Association and the Red Salmon Canning Company. At the hearings before the Referee the respondents attempted to establish that the companies called off their 1940 operations for reasons other than their inability to negotiate a satisfactory labor agreement. It was argued, for example, that the companies feared a poor catch as a result of governmental restrictions on fishing applicable to the 1940 season. The evidence adduced before the Referee indicates that both of the above-mentioned companies made extensive preparations for the 1940 operations. In anticipation, equipment and supplies of the value of several hundred thousand dollars were purchased. Ships were prepared and held in readiness for the expeditions. The Referee found that these companies negotiated in good faith and failed to operate in Alaska during the 1940 season only because of their inability to negotiate satisfactory labor agreements before the passing of the deadline dates. There is evidence that the Alaska Packers Association expected to hire about two-thirds the number of workers in 1940 it had employed in 1939. But there is nothing in the record to establish that any of the claimants in this action would have been unemployed as a result of this contemplated curtailment in activity or if any of the respondents would have been affected, which of their number would have been unemployed. It appears that the Red Salmon Canning Company expected to use the same number of workers in 1940 as in 1939, or possibly a few more. Under these circumstances, we think that the Commission's finding that the unemployment was 'due' to the labor dispute, should stand, insofar as it relates to the claimants indicated. 11 But a different situation is presented with reference to the respondents employed by the Alaska Salmon Company in 1939. That company has an establishment only at Bristol Bay. On April 30, three days before the deadline relating to the Bristol Bay operations, Alaska Salmon withdrew from the negotiations with the union and announced that it was unable to send an expedition to Alaska in 1940. The Referee found that the withdrawal was caused primarily by factors other than the company's inability to negotiate a satisfactory labor contract. At the hearings before the Referee, counsel for the company stipulated that even though the other companies had negotiated a labor agreement with the union before the deadline date, Alaska Salmon would have conducted no operations out of San Francisco in 1940 after its withdrawal from negotiations. We conclude that the record does not support the finding of the Commission that the respondents employed by the Alaska Salmon Company in 1939 were unemployed 'due' to a labor dispute at the establishment at which last employed. 12 Respondents urge that, assuming their unemployment was due to a labor dispute, there was no labor dispute in 'active progress' within the meaning of the Act after the passage of the deadline dates. It is argued that when the expeditions were abandoned by the companies, the dispute must necessarily have terminated since there was no possible way in which negotiations could have brought about a settlement. It should be observed, however, that the record does n t reveal that negotiations abruptly terminated with the passing of the last deadline date. Conferences continued at Seattle in which both the companies and the union were represented. The respondents considered the negotiations sufficiently alive to make an offer of terms at least as late as May 29. Even if it be assumed that at some time within the eight week period of disqualification the point was reached when all possibility of settlement disappeared, it does not follow that the Commission's finding of a dispute in 'active progress' must be overturned. Here, as in National Labor Relations Board v. Hearst Publications, Inc., 1944, 322 U.S. 111, 131, 64 S.Ct. 851, 860, 861, 88 L.Ed. 1170, the question presented 'is one of specific application of a broad statutory term in a proceeding in which the agency administering the statute must determine it initially.' To sustain the Commission's application of this statutory term, we need not find that its construction is the only reasonable one or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings. The 'reviewing court's function is limited'. All that is needed to support the Commission's interpretation is that it has 'warrant in the record' and a 'reasonable basis in law'. National Labor Relations Board v. Hearst Publications, Inc., supra; Rochester Telephone Corporation v. United States, 1939, 307 U.S. 125, 59 S.Ct. 754, 83 L.Ed. 1147. 13 Applying these tests, we are unable to say that the Commission's construction was irrational or without support in the record. The Commission apparently views a dispute as 'active' during the continuance of a work stoppage induced by a labor dispute. That agency might reasonably conclude that the unemployment resulting from such work stoppage is not of the 'involuntary' nature which the statute was designed to alleviate, as indicated by the statement of public policy incorporated in the Act by the Territorial Legislature.13 We see nothing in such a view to require our substituting a different construction from that made by the Commission entrusted with the responsibility of administering the statute.14 14 Nor can we accept the argument of the majority of the Court of Appeals that since negotiations between the companies and the workers were carried on in San Francisco and Seattle, the dispute could not be said to be 'at' the Alaskan establishments as required by the statute. So far as we are able to determine, this issue was injected for the first time by the opinion of the majority of the Court of Appeals. The contention does not seem to have been raised or pressed by respondents up to that point. The responsibility of applying the statutory provisions to the facts of the particular case was given in the first instance to the Commission. A reviewing court usurps the agency's function when it sets aside the administrative determination up n a ground not theretofore presented and deprives the Commission of an opportunity to consider the matter, make its ruling, and state the reasons for its action.15 Nor do we find the argument advanced below convincing on its merits. It is clear that the subject matter of the dispute related to the operation of the Alaskan establishments. As a result of the dispute the normal activities involved in catching and canning salmon were not carried on throughout the 1940 season at any of those establishments. We do not consider significant the fact that the companies and the union did not negotiate at the canneries or on the ships in Alaskan waters. A legislature familiar with the nature of seasonal operations carried on in the Territory could hardly have been unaware of the fact that companies and workers customarily carried on negotiations far distant from the Alaskan establishments. It seems unlikely that it was intended that this ordinary and usual procedure should defeat the disqualification for benefits incorporated in the Act. Furthermore, it should be observed that the respondent union voluntarily entered into the negotiations conducted at San Francisco and Seattle and at no time challenged the propriety of this practice. Thus if we assume with respondents that this issue is properly presented for consideration, we conclude that under the circumstances of this case the dispute was 'at the factory, establishment, or other premises' in the sense intended by the Territorial Legislature. 15 For the reasons stated, the judgment of the Circuit Court of Appeals is affirmed insofar as it holds that the statutory eight-week period of disqualification is inapplicable to the individual respondents employed by the Alaska Salmon Company in 1939. In all other particulars, the judgment of the Circuit Court of Appeals is reversed and the case remanded to the District Court with instructions to remand for further proceedings pursuant to this opinion. 16 Affirmed in part and reversed and remanded in part. 1 Extraordinary Session Laws of Alaska, 1937, Chapter 4 as amended by Chapters 1 and 51, Session Laws of Alaska, 1939. 2 The alaska statute is part of the legislative scheme for unemployment compensation induced by the provisions of the Social Security Act of 1935. 49 Stat. 620, 626—627, 640, 42 U.S.C.A. § 301 et seq. It is said that forty-three states and territories have provisions similar to those in the Alaska law disqualifying from unemployment benefits persons unemployed due to a labor dispute. 3 As provided by Benefit Regulation No. 10 of the Alaska Unemployment Compensation Commission, the season at Karluk extends from April 5 to September 5, at Chignik from April 1 to September 10, and at Bristol Bay from May 5 to August 25. 4 Section 6(c) and § 6(d). Chapter 1, Session Laws of Alaska, 1939. 5 The Referee found that there had been unemployment due to a labor dispute in active progress at Karluk from April 5, when the season opened, to April 10, the deadline date, and at Chignik from April 1 to April 12. Since the deadline date with respect to Bristol Bay was set two days before the season opened there, the Referee found that there was no dispute in active progress at those plants. 6 This procedure was in pursuance of § 6(e) of the Act as amended by Chapter 1, Session Laws of Alaska, 1939. 7 Section 6(i) of the Act provides that within thirty days after the decision of the Commission has become final, any party aggrieved may secure judicial review in the United States District Court. The section states, 'In any judicial proceeding under this Section, the findings of the Commission as to the facts, if supported by evidence and in the absence of fraud, shall be conclusive, and the jurisdiction of said Court shall be confined to questions of law.' 8 A number of state courts in construing similar legislation have found 'labor disputes' to have existed in situations where no contractual employment relation presently existed. Each of these cases involved a work stoppage in the interval between the expiration of an old labor contract and the consummation of a new agreement. Miners in General Group v. Hix, 1941, 123 W.Va. 637, 17 S.E.2d 810; Ex parte Pesnell, 1940, 240 Ala. 457, 199 So. 726; Barnes v. Hall, 1940, 285 Ky. 160, 146 S.W.2d 929; Block Coal & Coke Co. v. United Mine Workers of America, 1941, 177 Tenn. 247, 148 S.W.2d 364, 149 S.W.2d 469; Sandoval v. Industrial Comm., 1942, 110 Colo. 108, 130 P.2d 930. 9 49 Stat. 640, 26 U.S.C. § 1603(5)(A), 26 U.S.C.A. Int.Rev.Code, § 1603(a) (5)(A). 10 47 Stat. 70, 29 U.S.C. § 101, 29 U.S.C.A. § 101. The Norris-LaGuardia Act contains the following definition: 'The term 'labor dispute' includes any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee.' 47 Stat. 73, 29 U.S.C. § 113(c), 29 U.S.C.A. § 113(c). A number of state courts have found this and the similar definition in the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., persuasive in their construction of the term appearing in unemployment compensation legislation similar to the Alaska Act. Miners in General Group v. Hix, 1941, 123 W.Va. 637, 17 S.E.2d 810; Barnes v. Hall, 1940, 285 Ky. 160, 146 S.W.2d 929; Ex parte Pesnell, 1940, 240 Ala. 457, 199 So. 726; Sandoval v. Industrial Comm., 1942, 110 Colo. 108, 130 P.2d 930. The Alabama legislature incorporated the definition appearing in the Norris-LaGuardia Act into the Alabama unemployment compensation act. Ala.Code, Tit. 26 § 214(A). 11 49 Stat. 449, 29 U.S.C. § 151, 29 U.S.C.A. § 151. 12 The Examiner, the Referee, the Commission, the District Court, and presumably the Circuit Court of Appeals all found a 'labor dispute' to have existed, at least before the arrival of the deadline dates. 13 The 'Declaration of Territorial Public Policy' states that 'Involuntary unemployment is * * * a subject of general interest and concern which requires appropriate action by the legislature.' It is further stated that the public welfare demands the compulsory setting aside of unemployment reserves 'for the benefit of persons unemployed through no fault of their own.' Chapter 4, Extraordinary Session Laws of Alaska, 1937. Several state courts have concluded that the disqualification relating to unemployment due to a labor dispute is a reflection of the broad policy of the legislation to compensate only persons involuntarily unemployed. Barnes v. Hall, 1940, 285 Ky. 160, 146 S.W.2d 929; Deshler Broom Factory v. Kinney, 1942, 140 Neb. 889, 2 N.W.2d 332; Sandoval v. Industrial Commission, 1942, 110 Colo. 108, 130 P.2d 930. 14 National Labor Relations Board v. Hearst Publications, supra; Rochester Telephone Corporation v. United States, supra. Cf. Social Security Board v. Nierotko, 1946, 327 U.S. 358, 66 S.Ct. 637, 162 A.L.R. 1445. 15 Section 6(h) of the Act states that judicial review of the Commission's decision 'shall be permitted only after any party claiming to be aggrieved thereby has exhausted his administrative remedies as provided in the Act.' Cf. Myers v. Bethlehem Shipbuilding Co., 1938, 303 U.S. 41, 50, 51, 58 S.Ct. 459, 463, 464, 82 L.Ed. 638; Regal Knitwear Co. v. National Labor Board, 1945, 324 U.S. 9, 13, 65 S.Ct. 478, 481, 89 L.Ed. 661; Phelps Dodge Corporation v. National Labor Board, 1941, 313 U.S. 177, 196, 197, 61 S.Ct. 845, 853, 854, 85 L.Ed. 1271, 133 A.L.R. 1217.

67

329 U.S. 211 67 S.Ct. 224 91 L.Ed. 196 FISWICK et al.v.UNITED STATES. No. 51. Dec. 9, 1946. Argued Nov. 19, 20, 1946. [Syllabus from pages 211-213 intentionally omitted] Frederick M. P. Pearse, of Washington, D.C., for petitioners. Leon Ulman, of Washington, D.C., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 The Alien Registration Act of 1940, 54 Stat. 670, 8 U.S.C. § 451 et seq., 8 U.S.C.A. § 451 et seq., required aliens, with certain exceptions, to register pursuant to regulations of the Commissioner of Immigration and Naturalization.1 Among the disclosures required was whether during the preceding five years th alien had been 'affiliated with or active in (a member of, official of, a worker for) organizations, devoted in whole or in part to influencing or furthering the political activities, public relations, or public policy of a foreign government.'2 2 Petitioners are German nationals who registered under the Act, the last of the three, Mayer, registering on December 23, 1940. Each stated when he registered that he was not affiliated with or active in such an organization. Each failed to disclose in answer to another question pertaining to 'memberships or activities in clubs, organizations, or societies' that he was in any way connected with the Nazi party. They were indicted in 1944 with 28 others for conspiring to defraud the United States in the exercise of its governmental functions (see Curley v. United States, 1 Cir., 130 F. 1, 4) in violation of § 37 of the Criminal Code, 18 U.S.C. § 88, 18 U.S.C.A. § 88. 3 The indictment charges that petitioners continuously between September 1, 1939, and the date the indictment was returned, September 13, 1944, conspired with each other and with Draeger, the German consul in New York City and leader of the Nazi party in this country, with Draeger's secretary, Vogel, and with other representatives of the Third Reich, to defraud the United States by concealing and misrepresenting their membership in the Nazi party. It charges that since 1933 the Nazi party was devoted to furthering the political activities and policy of the German Reich in this country, that each petitioner during the five years prior to his registration was a member of that party, that Draeger and Vogel directed petitioners in registering under the Act to conceal and falsify their connection with the Nazi party, that petitioners followed such directions, that after their registration they continued from day to day to misrepresent to the government their connection with and activities in the Nazi party. The indictment alleges that as a means of accomplishing the conspiracy the petitioners appeared for registration and in registering falsely failed to disclose their connection with and activities in the Nazi party. The indictment sets forth 40 overt acts. Many related to instructions given by Draeger and Vogel to various defendants from September to December 1940, in connection with their registration. Others related to the registering by petitioners in November and December, 1940. The last over act alleged to have been committed by any of petitioners was the filing by Mayer of his registration statement on December 23, 1940. 4 Of the 31 indicted, only the three petitioners were convicted after a jury trial.3 Fiswick and Rudolph were sentenced to imprisonment for 18 months each. Mayer was sentenced to imprisonment for a year and a day. The judgments of conviction were affirmed by the Circuit Court of Appeals, one judge dissenting. 3 Cir., 153 F.2d 176. The case is here on a petition for a writ of certiorari which we granted because the rulings of the lower courts on the continuing nature of the conspiracy were apparently in conflict with decisions of this Court. See United States v. Irvine, 98 U.S. 450, 25 L.Ed. 193; United States v. Kissel, 218 U.S. 601, 31 S.Ct. 124, 54 L.Ed. 1168. 5 First. The nature and duration of the conspiracy assumed great importance at the trial for the following reason. Each petitioner after he was apprehended made damaging statements to agents of the Federal Bureau of Investigation. Mayer, in November, 1943, stated that he had applied for membership in the Nazi party and had not disclosed the fact because Vogel told him not to. Fiswick's statement made in April, 1944, was to the same effect. Rudolph made substantially the same admissions in November, 1943 and then in September, 1944, retracted them insofar as he had said that in registering under the Act and in failing to disclose his Nazi party affiliation he had followed instructions. His later reason for non-disclosure was his asserted desire to protect his family. Each of these statements was admitted at the trial. At first, each was admitted only as against the maker. At the close of the government's case, however, the District Court ruled that each of these statements was admissible against each of the other coconspirators. It so charged the jury. Later the jury returned to the courtroom for further instructions. One of the questions on which the foreman stated that they desired instruction related to that part of the charge 'where you said something about all of the defendants were bound by the act of one or something, something as a group, and the other said the individuals.' The judge then repeated that the admissions of each were admissible against all provided there was a conspiracy and they were all in it. 6 The Solicitor General now rightly concedes that that ruling was erroneous. Though the result of a conspiracy may be continuing, the conspiracy does not thereby become a continuing one. See United States v. Irvine, supra. Continuity of action to produce the unlawful result, or as stated in United States v. Kissel, supra, page 607 of 218 U.S., at page 126 of 31 S.Ct., 54 L.Ed. 1168, 'continuous co-operation of the conspirators to keep it up' is necessary. A conspiracy is a partnership in crime. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 253, 60 S.Ct. 811, 858, 84 L.Ed. 1129. Under § 37 of the Criminal Code, the basis of the present indictment, an overt act is necessary to complete the offense.4 The statute of limitations, unless suspended,5 runs from the last overt act during the existence of the conspiracy. Brown v. Elliott, 225 U.S. 392, 401, 32 S.Ct. 812, 815, 56 L.Ed. 1136. The overt acts averred and proved may thus mark the duration, as well as the scope, of the conspiracy. 7 In this case the last overt act, as we have noted, was the filing by Mayer of his registration statement on December 23, 1940. That act was adequate as an overt act in furtherance of a conspiracy to make a false return. But there is difficulty in also making it serve the function of an overt act in furtherance of a conspiracy to conceal from 1940 to 1944 the fact that false returns had been made. All continuity of action ended with the last overt act in December, 1940. There was no overt act of concealment which followed the act of making false statements. If the latter is permitting to do double duty, then a continuing result becomes a continuing conspiracy. If, as we think, the conspiracy charged and proved did not extend beyond the date of the last overt act, the admissions of each petitioner were improperly employed against the others. While the act of one partner in crime is admissible against the others where it is in furtherance of the criminal undertaking, Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, and ca es cited, all such responsibility is at an end when the conspiracy ends. Logan v. United States, 144 U.S. 263, 309, 12 S.Ct. 617, 632, 36 L.Ed. 429; Brown v. United States, 150 U.S. 93, 98, 14 S.Ct. 37, 39, 37 L.Ed. 1010. Moreover, confession or admission by one coconspirator after he has been apprehended is not in any sense a furtherance of the criminal enterprise. It is rather a frustration of it. If, as the Circuit Court of Appeals thought, the maintenance of the plot to deceive the government was the objective of this conspiracy, the admissions made to the officers ended it. So far as each conspirator who confessed was concerned, the plot was then terminated. He thereupon ceased to act in the role of a conspirator. His admissions were therefore not admissible against his erstwhile fellow-conspirators. Gambino v. United States, 3 Cir., 108 F.2d 140, 142, 143. 8 It is earnestly argued, however, that the error was harmless. The 'harmless error' statute, Judicial Code, § 269, 28 U.S.C. § 391, 28 U.S.C.A. § 391, provides that 'On the hearing of any appeal, certiorari, * * * or motion for a new trial, in any case, civil or criminal, the court shall give judgment after an examination of the entire record before the court, without regard to technical errors, defects, or exceptions which do not affect the substantial rights of the parties.' We have recently reviewed the history of this statute and the function it was designed to serve in criminal cases. Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239. The Court there stated, page 1248 of 66 S.Ct.: 'If, when all is said and done, the conviction is sure that the error did not influence the jury, or had but very slight effect, the verdict and the judgment should stand, except perhaps where the departure is from a constitutional norm or a specific command of Congress. * * * But if one cannot say, with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error, it is impossible to conclude that substantial rights were not affected. The inquiry cannot be merely whether there was enough to support the result, apart from the phase affected by the error. It is rather, even so, whether the error itself had substantial influence. If so, or if one is left in grave doubt, the conviction cannot stand.' 9 We cannot say with fair assurance in this case that the jury was not substantially swayed by the use of these admissions against all petitioners. It is not enough to say that there may be a strong case made out against each petitioner. The indictment charges a conspiracy, not the substantive crime of falsely registering. The evidence that petitioners conspired with each other and with Draeger, Vogel, and others, is not strong. Though we assume there was enough evidence to go to the jury on the existence of that conspiracy, the case was one which a prosecutor would be anxious to bolster. 10 The prosecutor's case, apart from the admissions, may be briefly summarized. Draeger and Vogel were active in the affairs of the Nazi party in this country. Their stenographer, a government witness, testified that applications for membership in the party were received at their office. Dues were paid there. A car file of members of the party and of applicants for membership was kept there. The name of each petitioner was on the list. A letter was sent to all on the list in August or September, 1940, over Draeger's signature, requesting them to discuss a matter with Draeger. Those who appeared in response to the letter were told to conceal their Nazi party membership or affiliation when they registered under the Act. Another witness for the government—a defendant in the case who was granted a severance—also testified that Vogel gave instructions to party members not to disclose their affiliation with the Nazi party. And a clerk in Draeger's office testified for the government that the party members who came to the cons late were told to say in their registration statement that they were members of an innocuous sounding association of German nationals. There was no evidence that petitioners came to the consulate seeking advice. There was no direct evidence that petitioners had received the instructions from the consulate to conceal their party membership. There was no direct evidence that petitioners came to the consulate in response to the letter which was sent. They were not identified as being with any group which called there. There was no evidence that they conferred with Draeger or Vogel or with each other. 11 The Solicitor General states with commendable candor that in this state of the proof it was manifestly important for the prosecutor 'to bring into the case against petitioners evidence of a character that might better convince the jury that when each failed to reveal his Party connection in registering he had done so upon Party instructions, and, hence, that he was a member of the conspiracy.' The admissions served that purpose. They supplied the first direct evidence that petitioners acted pursuant to the instructions of the consulate. It is true, as respondent emphasizes, that none of these admissions implicates any petitioner except the maker. But since, if there was a conspiracy, Draeger and Vogel were its hub, evidence which brought each petitioner into the circle was the only evidence which cemented them together in the illegal project. And when the jury was told that the admissions of one, though not implicating the others, might be used against all, the element of concert of action was strongly bolstered, if not added. Without the admissions the jury might well have concluded that there were three separate conspiracies, not one. Cf. Kotteakos v. United States, supra. With the admissions the charge of conspiracy received powerful reinforcement. And the charge that each petitioner conspired with the others became appreciably stronger, not from what he said but from what the other two said. We therefore cannot say with any confidence that the error in admitting each of these statements against the other petitioners did not influence the jury or had only a slight effect. Indeed, the admissions may well have been crucial. The admissions apparently became of considerable importance in the deliberations of the jury, for, as we have noted, they asked for clarification of the instructions on that point. And the admissions so strongly bolstered a weak case that it is impossible for us to conclude the error can be disregarded under the 'harmless error' statute. The use made of the admissions at the trial constituted reversible error. 12 Second. A further question remains. As we have noted, Fiswick was sentenced to imprisonment for 18 months. No fine was imposed. It now appears that he has served his sentence. Accordingly, it is suggested that the cause is moot and that the writ of certiorari should be dismissed as to him. We followed that procedure in St. Pierre v. United States, 319 U.S. 41, 42, 63 S.Ct. 910, 911, 87 L.Ed. 1199, saying that since the sentence had been served, 'there was no longer a subject matter on which the judgment of this Court could operate.' We added, however, that the petitioner had not shown that 'under either state or federal law further penalties or disabilities can be imposed on him as a result of the judgment which has now been satisfied.' At page 43 of 319 U.S., at page 911 of 63 S.Ct., 87 L.Ed. 1199. 13 The situation here is different. Fiswick is an alien. An alien sentenced to imprisonment for one year or more 'because of conviction in this country of any crime involving moral turpitude' is, unless pardoned, subject to deportation if the crime was committed within five years after the alien's entry into the United States. 39 Stat. 874, 889, 8 U.S.C. § 155, 8 U.S.C.A. § 155. The conspiracy with which Fiswick is charged was formed and executed within that five year period, as his last entry was in 1937. The conspiracy of whic he was convicted was one to impede the government in one of its lawful functions, to prevent it from obtaining information which the Executive and Congress deemed vital to our internal security, to conceal by fraud, deceit, and perjury6 the ramifications of an organization in our midst bent on our undoing. We need not determine in this collateral way whether conviction for such a crime would involve 'moral turpitude' within the meaning of the deportation laws.7 But the judgment, if undisturbed, stands as unimpeachable evidence that Fiswick committed the crime charged. The hazards of deportation because of that fact are real.8 To leave him to defend a deportation order on the ground that the crime of which he was convicted did not involve 'moral turpitude' is to add to his burdens by depriving him of his best defense—that he was not properly convicted. 14 Moreover, other disabilities or burdens may flow from the judgment, improperly obtained, if we dismiss this cases as moot and let the conviction stand. If Fiswick seeks naturalization, he must establish that during the five years immediately preceding the date of filing his petition for naturalization he 'has been and still is a person of good moral character.' 54 Stat. 1137, 1142, 8 U.S.C. § 707(a)(3), 8 U.S.C.A. § 707(a)(3). An outstanding judgment of conviction for this crime stands as ominous proof that he did what was charged and puts beyond his reach any showing of ameliorating circumstances or explanatory matter that might remove part or all of the curse. And even though he succeeded in being naturalized, he would, unless pardoned, carry through life the disability of a felon;9 and by reason of that fact he might lose certain civil rights.10 Thus Fiswick has a substantial stake in the judgment of conviction which survives the satisfaction of the sentence imposed on him. In no practical sense, therefore, can Fiswick's case be said to be moot. 15 It is said however, that having served his sentence, Fiswick may not be resentenced on a new trial and that if his conviction is reversed, he thereby escapes deportation. The argument is that he thwarts the deportation policy by electing to serve his sentence. We cannot assume, however, that Fiswick is guilty of the conspiracy charged. He was not accorded the trial to which he is entitled under our system of government. The conviction which e suffered was not in accordance with law. The errors in the trial impeach the conviction; and he must stand in the position of any man who has been accused of a crime but not yet shown to have committed it. To dismiss his case as moot would permit the government to compound its error at Fiswick's expense. That course does not comport with our standards of law enforcement. 16 Reversed. 1 See 5 Fed.Reg. 2836 for the regulations. 2 Regulations, supra, note 1, § 29.4(1)(15). 3 Six entered pleas of guilty. There was a dismissal as to one, a severance as to 14. Ten were tried. The jury acquitted three and disagreed as to the other four. 4 At common law it was not necessary to aver or prove an overt act. See Hyde v. United States, 225 U.S. 347, 359, 32 S.Ct. 793, 799, 56 L.Ed. 1114, Ann.Cas.1914A, 614. The same is true under the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1—7, 15 note. Nash v. United States, 229 U.S. 373, 378, 33 S.Ct. 780, 782, 57 L.Ed. 1232; United States v. Socony-Vacuum Oil Co., supra, at page 252 of 310 U.S., at page 857 of 60 S.Ct., 84 L.Ed. 1129. But § 37 of the Criminal Code requires not only an agreement to do the unlawful act but also the doing of 'any act to effect the object of the conspiracy'. See Hyde v. United States, supra, at page 359, of 225 U.S., at page 799 of 32 S.Ct., 56 L.Ed. 1114, Ann.Cas.1914A, 614. 5 See, for example, § 1 of the Act of August 24, 1942, 56 Stat. 747, 18 U.S.C.Supp. II, § 590a, as amended by § 19(b) of the Act of July 1, 1944, 58 Stat. 649, 667, 18 U.S.C.Supp. IV, § 590a, 18 U.S.C.A. § 590a. 6 The registration statements required by the Act were sworn statements. Regulations, supra note 1, § 29.4(g), (j). 7 Convictions for perjury, Kaneda v. United States, 9 Cir., 278 F. 694, for frauds on the revenues, Guarneri v. Kessler, 5 Cir., 98 F.2d 580, United States ex rel. Berlandi v. Reimer, 2 Cir., 113 F.2d 429, for frauds with respect to property, United States ex rel. Medich v. Burmaster, 8 Cir., 24 F.2d 57, have been held by the lower courts to meet that test. And counterfeiting was so classified by the Court in United States ex rel. Volpe v. Smith, 289 U.S. 422, 53 S.Ct. 665, 77 L.Ed. 1298. As to deportation for violations of the Alien Registration Act of 1940 see § 20(b)(4) and (5). See also Alien Enemy Act of 1798, Rev.Stat. §§ 4067—4070, as amended 40 Stat. 531, 50 U.S.C. §§ 21 24, 50 U.S.C.A. §§ 21—24; Presidential Proclamation No. 2655, 10 Fed.Reg. 8947. 8 Although deportation is not technically a criminal punishment, it may visit great hardship on the alien. Bridges v. Wixon, 326 U.S. 135, 147, 65 S.Ct. 1443, 1449, 89 L.Ed. 2103. As stated by the Court, speaking through Mr. Justice Brandeis, in Ng Fung Ho. v. White, 259 U.S. 276, 284, 42 S.Ct. 492, 495, 66 L.Ed. 938, deportation may result in the loss 'of all that makes life worth living.' 9 'All offenses which may be punished by death or imprisonment for a term exceeding one year, shall be deemed felonies.' Criminal Code § 335, 18 U.S.C. § 541, 18 U.S.C.A. § 541. 10 Thus Mo.R.S.A. § 4561 renders such person incompetent to serve on a jury and forever disqualifies him from voting or holding office, unless pardoned.

01

329 U.S. 156 67 S.Ct. 237 91 L.Ed. 162 VANSTON BONDHOLDERS PROTECTIVE COMMITTEEv.GREEN et al. SAME v. EARLY et al. VANHORN BONDHOLDERS PROTECTIVE COMMITTEE v. GREEN et al. SAME v. EARLY et al. Nos. 42, 44, 43, 45. Argued Oct. 22, 1946. Decided Dec. 9, 1946. Rehearing Denied Jan. 13, 1947. See 329 U.S. 833, 67 S.Ct. 497. [Syllabus from pages 156-158 intentionally omitted] Mr.George W. Jaques, of New York City, for petitioner Vanston Bondholders Protective Committee. Mr. Robert J. Bulkley, of Washington, D.C., for petitioner Vanhorn Bondholders Protective Committee. Mr. Charles I. Dawson, of Louisville, Ky., for respondents Carl B. Early et al. Mr. Jay Raymond Levinson, of New York City, for respondents, Green Committee et al. Mr. Roger S. Foster, of Philadelphia, Pa., for Securities and Exchange Commission. Mr. Justice BLACK delivered the opinion of the Court. 1 December 2, 1930, a Kentucky District Court appointed an equity receiver of Inland Gas Corporation to take complete and exclusive control, possession, and custody of all of inland's properties, and enjoined Inland's officers from paying its debts. At that time there was no interest unpaid on Inland's first mortgage bonds. February 1, 1931, semiannual interest coupons fell due on these bonds. The debtor could not pay; the court did not direct the receiver to pay. The indenture trustee, acting under the terms of the indenture, promptly declared the entire principal due and payable despite the previous assumption of custody of the estate by the federal court. In 1935, the same District Court approved a creditor's petition for reorganization under § 77B of the Bankruptcy Act, 11 U.S.C.A. § 207, and at a subsequent date the reorganization was continued as a Chapter X proceeding.1 The indenture provides for payment of interest on unpaid interest. Inland is insolvent, but its assets are sufficient to pay the first mortgage bondholders in full, including the interest on interest. Should interest on interest be paid, however, subordinate creditors would receive a greatly reduced share in the reorganized corporation. These latter concede that the first mortgage bondholders should receive simple interest on the principal due them, but challenge their right to be paid interest on interest2 which fell due after the court took charge of Inland, and which interest the Court, out of consideration for orderly and fair administration of the estate, directed the receiver not to pay on the due date. It is this controversy which we must determine. 2 The first mortgage indenture document was written and signed in New York, designated a New York bank as trustee, and provided for payment of the bonds and attached interest coupons at the office of the trustee in New York, or at the option of the bearer, at a bank in Chicago, Illinois. A group of investment bankers underwrote the issue, sold the bonds to the public, and received a percentage of the proceeds and additional compensation for their services. Inland was organized under the corporation laws of Delaware. Its principal place of business was in Kentucky, and the property mortgaged was located in that state. 3 Under these circumstances the District Court was of the opinion that it must allow the claim for interest on interest if the indenture covenant was valid; that its validity must be determined by the law of New York, because the indenture was signed and the bonds were payable there; and that the covenant was valid there. Accordingly, the first mortgage bondholders were held entitled to interest on interest. Holding that New York prohibited covenants for payment of interest on interest, the Circuit Court of Appeals reversed. 6 Cir., 151 F.2d 470. We granted certiorari because of the importance of the questions raised. 4 The Circuit Court of Appeals thought the bankruptcy court must allow or disallow the claim for interest on interest according to whether the covenant to pay it was valid or invalid as between the parties to that covenant. It considered the covenant invalid and therefore unenforceable in bankruptcy upon two alternative assumptions. First, it assumed that a controlling federal rule required the bankruptcy court to determine validity or invalidity of the contract by looking to the law of New York, the state where the court found that the contract was 'made' and primarily payable.3 Second, since the bankruptcy court was sitting in Kentucky, it should determine validity of the covenant as would a Kentucky court. Reviewing Kentucky decisions, the Circuit Court of Appeals concluded that Kentucky courts also would apply New York substantive law. Arriving at New York law by both hypotheses, the Circuit Court of Appeals interpreted that law as rendering the covenant invalid. We agree with the conclusion of the Circuit Court of Appeals that the claim for interest on interest should not be permitted to share in the debtor's assets, but disagree with the reasons given for that conclusion. 5 A purpose of bankruptcy is so to administer an estate as to bring about a ratable distribution of assets among the bankrupt's creditors. What claims of creditors are valid and subsisting obligations against the bankrupt at the time a petition in bankruptcy is filed, is a question which, in the absence of overruling federal law, is to be determined by reference to state law.4 Bryant v. Swofford Bros. Dry Goods Co., 214 U.S. 279, 290, 291, 29 S.Ct. 614, 618, 53 L.Ed. 997; Security Mortgage Co. v. Powers, 278 U.S. 149, 153, 154, 49 S.Ct. 84, 85, 73 L.Ed. 236. But obligations, such as the one here for interest, often have significant contacts in many states so that the question of which particular state's law should measure the obligat on seldom lends itself to simple solution. In determining which contact is the most significant in a particular transaction, courts can seldom find a complete solution in the mechanical formulae of the conflicts of law. Determination requires the exercise of an informed judgment in the balancing of all the interests of the states with the most significant contacts in order best to accommodate the equities among the parties to the policies of those states. Certainly the part of this transaction which touched New York, namely, that the indenture contract was written, signed, and payable there, may be a reason why that state's law should govern. But apparently the bonds were sold to people all over the nation. And Kentucky's interest in having its own laws govern the obligation cannot be minimized. For the property mortgaged was there; the company's business was chiefly there; its products were widely distributed there; and the prices paid by Kentuckians for those products would depend, at least to some extent, on the stability of the company as affected by the carrying charges on its debts. But we need not decide which, if either, of these two states' laws govern the creation and subsistence and validity of the obligation for interest on interest here involved. For assuming, arguendo, that the obligation for interest on interest is valid under the law of New York, Kentucky, and the other states having some interest in the indenture transaction, we would still have to decide whether allowance of the claim would be compatible with the policy of the Bankruptcy Act. Cf. Kuehner v. Irving Trust Co., 299 U.S. 445, 451, 57 S.Ct. 298, 301, 81 L.Ed. 340. 6 In determining what claims are allowable and how a debtor's assets shall be distributed, a bankruptcy court does not apply the law of the state where it sits. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, has no such implication. That case decided that a federal district court acquiring jurisdiction because of diversity of citizenship should adjudicate controversies as if it were only another state court. See Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582. But bankruptcy courts must administer and enforce the Bankruptcy Act as interpreted by this Court in accordance with authority granted by Congress to determine how and what claims shall be allowed under equitable principles.5 And we think an allowance of interest on interest under the circumstances shown by this case would not be in accord with the equitable principles governing bankruptcy distributions. 7 When and under what circumstances federal courts will allow interest on claims against debtors' estates being administered by them has long been decided by federal law. Cf. Board of Com'rs of Jackson County v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313; Royal Indemnity Co. v. United States, 313 U.S. 289, 61 S.Ct. 995, 85 L.Ed. 1361. The general rule in bankruptcy and in equity receivership has been that interest on the debtors' obligations ceases to accrue at the beginning of proceedings. Exaction of interest, where the power of a debtor to pay even his contractual obligations is suspended by law, has been prohibited because it was considered in the nature of a penalty imposed because of delay in prompt payment—a delay necessitated by law if the courts are properly to preserve and protect the estate for the benefit of all interests involved. Thus this Court has said: 'We cannot agree that a penalty in the name of interest should be inflicted upon the owners of the mortgage lien for resisting claims which we have disallowed. As a general rule, after pr perty of an insolvent passes into the hands of a receiver or of an assignee in insolvency, interest is not allowed on the claims against the funds. The delay in distribution is the act of the law; it is a necessary incident to the settlement of the estate.' Thomas v. Western Car Co., 149 U.S. 95, 116, 117, 13 S.Ct. 824, 833, 37 L.Ed. 663. Cf. American Iron & Steel Mfg. Co. v. Seaboard Air Line Ry., 233 U.S. 261, 34 S.Ct. 502, 58 L.Ed. 949. Courts have felt that it would be inequitable for anyone to gain an advantage or suffer a loss because of such delay. Sexton v. Dreyfus, 219 U.S. 339, 346, 31 S.Ct. 256, 258, 55 L.Ed. 244. Accrual of simple interest on unsecured claims in bankruptcy was prohibited in order that the administrative inconvenience of continuous recomputation of interest causing recomputation of claims could be avoided. Moreover, different creditors whose claims bore diverse interest rates or were paid by the bankruptcy court on different dates would suffer neither gain nor loss caused solely by delay.6 8 Simple interest on secured claims accruing after the petition was filed was denied unless the security was worth more than the sum of principal and interest due. Sexton v. Dreyfus, supra. To allow a secured creditor interest where his security was worth less than the value of his debt was thought to be inequitable to unsecured creditors. Thus we recently said: 'Since the distribution provided for these bonds on the basis of their mortgage securities is less than the principal amount of their claim, the limitation of their right to share the unmortgaged assets ratably with the unsecured creditors on the basis of principal and interest prior to bankruptcy only is justified under the rule of Ticonic National Bank v. Sprague, 303 U.S. 406, 58 S.Ct. 612, 82 L.Ed. 926.' Group of Institutional Investors v. Chicago, Milwaukee, St. Paul & Pacific R. Co., 318 U.S. 523, 573, 63 S.Ct. 727, 753, 87 L.Ed. 959. But where an estate was ample to pay all creditors and to pay interest even after the petition was filed, equitable considerations were invoked to permit payment of this additional interest to the secured creditor rather than to the debtor. Coder v. Arts, 213 U.S. 223, 245, 29 S.Ct. 436, 445, 53 L.Ed. 772, 16 Ann.Cas. 1008; Sexton v. Dreyfus, supra. See also Johnson v. Norris, 5 Cir., 190 F. 459.7 9 It is manifest that the touchstone of each decision on allowance of interest in bankruptcy, receivership and reorganization has been a balance of equities between creditor and creditor or between creditors and the debtor. See Sexton v. Dreyfus, supra, 219 U.S. at page 346, 31 S.Ct. at page 258, 55 L.Ed. 244. That the proceeding before us has moved from equity receivership through § 77B to Chapter X in the wake of statutory change does not make these equitable considerations here inapplicable. A Chapter X or § 77B reorganization court is just as much a court of equity as were its statutory and chancery antecedents. See Consolidated Rock Products Co. v. Du Bois, 312 U.S. 510, 527, 61 S.Ct. 675, 685, 85 L.Ed. 982.8 10 In this case where by order of the court interest was left unpaid, we do not think that imposition of interest on that unpaid interest can be justified by 'an application of equitable principles.' See Dayton v. Stanard, 241 U.S. 588, 590, 36 S.Ct. 695, 696, 60 L.Ed. 1190.9 Prior to the beginning of the equity receivership, Inland would have never owed interest on interest unless and until it had breached its obligation to pay simple interest promptly—on the date it was due. Before the receivership began a failure by Inland to pay coupons on the date they were due might have breached an existing obligation. This breach would have imposed upon Inland, under the terms of the covenant, a duty to pay interest on the interest it had failed to pay.10 But when the equity receivership intervened, these interrelated obligations were drastically changed. The obligation to make prompt payment of simple interest coupons was suspended. In fact, both Inland and the receiver were ordered by the court not to pay the coupons on the dates they were, on their face, supposed to have been paid. The contingency which might have created a present obligation to pay interest on interest—i.e., a free decision by the debtor that it would not or could not pay simple interest promptly—was prohibited from occurring by order of the court. That order issued for a good cause, we may assume: to preserve and protect the debtor's estate pending a ratable distribution among all the creditors according to their interests as of the date the receivership began. The extra interest covenant may be deemed added compensation for the creditor or, what is more likely, something like a penalty to induce prompt payment of simple interest. In either event, first mortgage bondholders would have been enriched and subordinate creditors would have suffered a corresponding loss, because of a failure to pay when payment had been prohibited by a court order entered for the joint benefit of debtor, creditors, and the public. Such a result is not consistent with equitable principles. For legal suspension of an obligation to pay is an adequate reason why no added compensation or penalty should be enforced for failure to pay. 11 Affirmed. 12 Mr. Justice REED took no part in the consideration or decision of this case. 13 Mr. Justice FRANKFURTER, with whom Mr. Justice JACKSON joins, concurring; Mr. Justice BURTON having concurred in the opinion of the Court also joins in this opinion. 14 In 1928 the Inland Gas Corporation, chartered by Delaware, floated a first mortgage bond issue covering property located in Kentucky where it had its principal place of business. The mortgage indenture was executed in New York, designated a New York corporation as trustee, and made the bonds and coupons payable in New York, or, at the option of the holder, in Chicago where the debtor had a paying agent. By an explicit clause in the indenture the debtor agreed to pay interest on defaulted coupons at the rate which applied to the bonds themselves before maturity. The bonds were sold to the public in many States. 15 The debt r defaulted on coupons and also on the bonds when they became due. Reorganization proceedings under § 77 of the Bankruptcy Act were begun by creditors in the District Court for the Eastern District of Kentucky. Subsequently Chapter X of that Act was made applicable. In these proceedings a claim, based on the covenant in the indenture, was made by mortgage bondholders for interest on the defaulted interest coupons. The bankruptcy court allowed the claim, apparently because it concluded that the covenant is valid by the law of New York. The Circuit Court of Appeals for the Sixth Circuit reversed. 151 F.2d 470. That court, apparently deeming itself ultimately controlled by the local law of Kentucky which, in turn, looked to the law of New York, ruled that the claims should have been disallowed because the contract for the payment of interest on coupons was void under New York law. On the other hand, the Securities and Exchange commission, a statutory party to the proceedings (§ 208 of the Bankruptcy Act, 11 U.S.C. § 608, 11 U.S.C.A. § 608), urges allowance of the claim if the covenant would, apart from bankruptcy, be upheld in the courts of any State 'having a substantial relationship to the transaction'. The Commission therefore supports allowance of the claim because it finds that two of the States related to the transaction would uphold the covenant: Delaware, the State of the debtor's incorporation, and Kentucky, its principal place of business and the site of the mortgage property. Finally another view suggests that whether interest should be allowed in this case is a matter of federal law to be fashioned by the bankruptcy court in the light of general, undefined notions of equity policy and of bankruptcy administration. 16 Of course, where rights are created by the Constitution, treaties or statutes of the United States and do not owe their origin to the laws of any State, the granting or withholding of interest as part of the remedy is also a function of federal law. That is the upshot of the decision in Board of Commissioners of Jackson County v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313. The factors legally decisive of the present problem are the opposite of those which controlled our decision in that case. There we had a right created by federal law. In this case, it was beyond the power of federal law to create the right for which claim was made, although, if by State law such a right came into being, it might become a question whether the federal courts should recognize such a right when they are sought to be utilized as instruments for its enforcement. 17 Conflict-of-law problems have a beguiling tendency to be made even more complicated than they are. Therefore, they are often, as now, fitting occasions for observing the classic admonition to begin at the beginning. The business of bankruptcy administration is to determine how existing debts should be satisfied out of the bankrupt's estate so as to deal fairly with the various creditors. The existence of a debt between the parties to an alleged creditor-debtor relation is independent of bankruptcy and precedes it. Parties are in a bankruptcy court with their rights and duties already established, except insofar as they subsequently arise during the course of bankruptcy administration or as part of its conduct. Obligations to be satisfied out of the bankrupt's estate thus arise, if at all, out of tort or contract or other relationship created under applicable law. And the law that fixes legal consequences to transactions is the law of the several States. Except for the very limited obligations created by Congress, e.g., Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, a debt is not brought into being by federal law. Obligations exist or do not exist by force of State law though federal bankruptcy legislation is in force, just as State law determined whether they came into being or did not come into being between 1878 and 1898 when there was no bankruptcy law. The fact that subsequent to the creation of a debt a party comes into a bankruptcy court has no relevance to the rules concerning the creation of the obligation. Of course a State may affix to a transaction an obligation which the courts of other States or the federal courts need not enforce because of overriding considerations of policy. And so, in the proper adjustment of the rights of creditors and the desire to rehabilitate the debtor, Congress under its bankruptcy power may authorize its courts to refuse to allow existing debts to be proven. It may do so, for instance, where the recognition of such claims would undermine the fair administration of a debtor's estate, even though before bankruptcy such a claim would have supported a valid judgment in the courts of the State which created the obligation, or even in the courts of the State where the bankruptcy court is sitting. But the threshold question for the allowance of a claim is whether a claim exists. And clarity of analysis justifies repetition that except where federal law, wholly apart from bankruptcy, has created obligations by the exercise of power granted to the federal government, a claim implies the existence of an obligation created by State law. If there was no valid claim before bankruptcy, there is no claim for a bankruptcy court either to recognize or to reject. 18 Such an analysis, however phrased, is indispensable to the solution of the problem now before us. Putting the wrong questions is not likely to beget right answers even in law. One way of putting our problem is to ask whether the bankruptcy court executing the policy of Congress could recognize a claim for interest on coupons and allow it to share in the distribution of the bankrupt's assets. But thus to frame the question is to avoid the crucial preliminary inquiry whether any obligation exists to be recognized. For nothing comes into a bankruptcy court to which congressional policy can apply unless it is an obligation created by applicable State law. And no obligation finds its way into a bankruptcy court unless by the law of the State where the acts constituting a transaction occur, the legal consequence of such a transaction is an obligation to pay. See Bryant v. Swofford Bros. Dry Goods Co., 214 U.S. 279, 290, 291, 29 S.Ct. 614, 618, 53 L.Ed. 997; Benedict v. Ratner, 268 U.S. 353, 45 S.Ct. 566, 69 L.Ed. 991; Security Mortgage Co. v. Powers, 278 U.S. 149, 49 S.Ct. 84, 73 L.Ed. 236. Where a transaction in its entirety occurs in one State it is clearly the law of that State that determines if an obligation is born, whether the question becomes relevant in a bankruptcy court or in any other court. But the mere fact that an agreement is made in one State by citizens of a second State for performance in a third and affecting individuals in all forty-eight States does not change the principle inherent in our federal scheme, that the existence of a debt comes about not by federal law but by force of some State law, even though the right to enforce the debt, if it exists, may raise federal questions if bankruptcy ensues. Bankruptcy legislation is superimposed upon rights and obligations created by the laws of the States. Compare Marshall v. People of State of New York, 254 U.S. 380, 41 S.Ct. 143, 65 L.Ed. 315. We do not reach considerations of policy in bankruptcy administration until there are rights, created by applicable local law, to be recognized. 19 This brings us to the immediate situation. This is not a case where damages are claimed, in the form of interest, for the detention of monies due. In such a situation the right to interest and its measure become matters for judicial determination. The claim here asserted is based solely on the terms of the agreement. The covenant for interest on interest was entered into by the parties in New York. The dominant place of performance was also New York. In the circumstances, if the words of the indenture created an obligation, they did so only if the law of New York says they did. Williston, ontracts § 1792. If New York outlawed such a covenant neither Kentucky nor Delaware nor the States in which bonds were sold or where bondholders reside could give effect to an obligation which never came into being. Compare John Hancock Mut. Life Ins. Co. v. Yates, 299 U.S. 178, 57 S.Ct. 129, 81 L.Ed. 106. And the ultimate voice of New York law, the New York Court of Appeals, speaking through Judge Cardozo, stated it as settled law that 'a promise to pay interest upon interest is void * * *'. Newburger-Morris Co. v. Talcott, 219 N.Y. 505, 510, 114 N.E. 846, 847. This view of the New York law is supported by the great weight of Judge Mack's authority. American Brake Shoe & Foundry Co. v. Interborough Rapid Transit Co., D.C., 11 F.Supp. 418, 419, 420. But see American Brake Shoe & Foundry Co. v. Interborough Rapid Transit Co., D.C., 26 F.Supp. 954, contra. However, it is not for us to ascertain independently whether the law of New York deemed a nullity the agreement that was here sought to be made the basis of a claim. We would not have brought the case here on that issue. The Circuit Court of Appeals made such an investigation and concluded that in New York the undertaking to pay interest was void. We accept this finding and conclude that since no obligation was created there was no claim provable in bankruptcy. And so we are not now called upon to decide whether as a matter of bankruptcy administration an agreement to pay interest on interest, where it is an obligation enforceable by State law, is enforceable in bankruptcy. That is a question that can arise only where such an obligation arose under State law. The opposite is the assumption in the case before us. 20 It is argued however, that this conclusion subjects the fate of a claim in bankruptcy to the whim of State law. We are told that this result is against the policy of Congress implied in measures for the protection of investors and contravenes the requirement of 'uniform Laws on the subject of Bankruptcies.' Art. I, § 8, Cl. 4. But this misconceives the purpose and settled understanding of the bankruptcy clause of the Constitution. The Constitutional requirement of uniformity is a requirement of geographic uniformity. It is wholly satisfied when existing obligations of a debtor are treated alike by the bankruptcy administration throughout the country regardless of the State in which the bankruptcy court sits. See Hanover National Bank v. Moyses, 186 U.S. 181, 190, 22 S.Ct. 857, 861, 46 L.Ed. 1113. To establish uniform laws of bankruptcy does not mean wiping out the differences among the forty-eight States in their laws governing commercial transactions. The Constitution did not intend that transactions that have different legal consequences because they took place in different States shall come out with the same result because they passed through a bankruptcy court. In the absence of bankruptcy such differences are the familiar results of a federal system having forty-eight diverse codes of local law. These differences inherent in our federal scheme the day before a bankruptcy are not wiped out or transmuted the day after. 1 Section 77B was enacted June 7, 1934, 48 Stat. 912. The § 77B petition in this case was filed while the estate continued in the equity receivership. Section 77B was superseded by Chapter X, 52 Stat. 883, 11 U.S.C. § 501 et seq., 11 U.S.C.A. § 501 et seq. Section 276 of Chapter X, 11 U.S.C. § 676, 11 U.S.C.A. § 676, authorized continuance of the § 77B proceedings under Chapter X. See Youn v. Higbee Co., 324 U.S. 204, 205, n. 1, 65 S.Ct. 594, 595, 89 L.Ed. 890. 2 The claims for interest on interest amount to some $500,000. 3 The Circuit Court of Appeals thought a reference to New York law was authorized by the following cases: Cromwell v. County of Sac, 96 U.S. 51, 24 L.Ed. 681; Scudder v. Union National Bank, 91 U.S. 406, 412, 23 L.Ed. 245; Liverpool & G. W. Steam Co. v. Phenix Ins. Co., 129 U.S. 397, 453, 9 S.Ct. 469, 476, 32 L.Ed. 788. None of these cases nor any cited by petitioner here, e.g., Seeman v. Philadelphia Warehouse Co., 274 U.S. 403, 47 S.Ct. 626, 71 L.Ed. 1123, involve questions of distribution of a debtor's assets in receivership, bankruptcy or reorganization to meet claims for interest on interest said to have accrued after a court took possession of a debtor's estate. 4 Of course, there might be instances where the validity of the obligation would be determined by reference to the law of some foreign country. 5 Heiser v. Woodruff, 327 U.S. 726, 66 S.Ct. 853; American Surety Co. v. Sampsell, 327 U.S. 269, 272, 66 S.Ct. 571, 573; Pepper v. Litton, 308 U.S. 295, 303—306, 60 S.Ct. 238, 243—245, 84 L.Ed. 281. 6 See § 63, sub. a(1) of the Bankruptcy Act, 11 U.S.C. § 103, sub. a(1), 11 U.S.C.A. § 103, sub. a(1); cf. § 63 of the Act of 1898, 30 Stat. 562 and § 19 of the Bankruptcy Act of 1867, 14 Stat. 525. For a discussion of interest claims in bankruptcy see 3 Collier on Bankruptcy, 14th Ed., 281, 1835. 7 Analogous principles have been applied to the liquidation of national banks. White v. Knox, 111 U.S. 784, 786, 787, 4 S.Ct. 686, 687, 28 L.Ed. 603, relied on in Sexton v. Dreyfus, supra, 219 U.S. at page 346, 31 S.Ct. at page 258, 55 L.Ed. 244; Ticonic National Bank v. Sprague, 303 U.S. 406, 412, 413, 58 S.Ct. 612, 615, 82 L.Ed. 926. 8 Section 115 of Chapter X, 11 U.S.C. § 515, 11 U.S.C.A. § 515, authorizes a Chapter X court to exercise 'all the powers, not inconsistent with the provisions of this chapter, which a court of the United States would have if it had appointed a receiver in equity of the property of the debtor * *.' Former § 77B of the Bankruptcy Act, 48 Stat. 912 and § 77, sub. a, 11 U.S.C. § 205, sub. a, 11 U.S.C.A. § 205, sub. a (Railroad Reorganization) contain similar provisions. 9 Petitioner and the Circuit Court have cited non-bankruptcy cases which award interest on interest to support the award in this reorganization. Town of Genoa v. Woodruff, 92 U.S. 502, 23 L.Ed. 586; Edwards v. Bates County, 163 U.S. 269, 16 S.Ct. 967, 41 L.Ed. 155. Diversity of citizenship brought these cases to the federal courts. None of them presented to the courts the special bankruptcy problems of uniformity, ratable distribution and fairness and equity which grow out of the context of the bankruptcy law. 10 Had a breach occurred and a suit been filed in state court prior to receivership or bankruptcy, that court would have been required to determine whether the covenant was valid under the controlling state law.

78

329 U.S. 230 67 S.Ct. 252 91 L.Ed. 209 UNITED STATESv.CARMACK. No. 40. Argued Oct. 18, 1946. Decided Dec. 9, 1946. Rehearing Denied Feb. 3, 1947. See 329 U.S. 834, 67 S.Ct. 627. [Syllabus from pages 230-232 intentionally omitted] Mr.John J. Cooney, of Washington, D.C., for petitioner. Mr. J. R. Kelso, of Cape Girardeau, Mo., for respondent. Mr. Justice BURTON delivered the opinion of the Court. 1 This proceeding was instituted by the United States to condemn land as a site for a post office and customhouse in the City of Cape Girardeau, Missouri, in reliance upon several federal statutes, including the general Condemnation Act of August 1, 1888, and the Public Buildings Act of May 25, 1926.1 The City and site were selected by the Federal Works Administrator and the Postmaster General acting jointly under the Public Buildings Act. The principal issue is: Was the Federal Works Administrator authorized by the foregoing statutes to acquire by condemnation land held in trust and used by the City for such public purposes as those of a local park, courthouse, city hall and public library? 2 In 1941, the United States petitioned the United States District Court for the Eastern District of Missouri to condemn as a site for a United States post office and customhouse about one and one-half acres, near the center of the City of Cape Girardeau, together with the improvements thereon except a public library building. This site was part of a four acre public park and the improvements to be condemned included a building used as the county courthouse and city hall, a memorial fountain, a small memorial monument and a portion of a bandstand. The library building apparently was to be removed by its owners on 30 days' notice from the United States. 3 The petition included as parties defendant the City and County, numerous officials and all known and unknown heirs or others who might claim an interest in this site especially through those who conveyed it, in trust, in 1807 to the Commissioners of the District or, in trust, in 1820 to the inhabitants of the Town of Cape Girardeau. Respondent was the only defendant to file an answer. Finding that she had no interest permitting her to maintain the defenses she asserted, the District Court entered a preliminary decree in favor of the United States. On respondent's appeal the Circuit Court of Appeals remanded the cause for further proceedings consistent with its opinion holding that the respondent had a special interest entitling her to object to the property being taken for a purpose destructive of the public use to which it had been dedicated by her ancestors. Carmack v. United States, 8 Cir., 135 F.2d 196. 4 In 1944, on retrial before a different judge, the District Court recognized the respondent as entitled to contest the condemnation and, at the direction of the Circuit Court of Appeals, heard evidence as to whether or not the officials of the United States acted capriciously and arbitrarily in selecting this site. It held that 'the selection of the site described in the petition, under all the facts re erred to, amounts in law to an arbitrary and unnecessary act' and dismissed the petition. United States v. Certain Land Situate in City of Cape Girardeau, Mo., D.C., 55 F.Supp. 555, 564. The Circuit Court of Appeals affirmed the judgment on the ground that the Federal Works Administrator and the Postmaster General did not have sufficient statutory authority 'to take the particular land sought to be condemned.' It then expressly found it unnecessary to consider whether or not the federal officials had acted 'capriciously or arbitrarily.' United States v. Carmack, 151 F.2d 881, 882. Because of the importance of the construction of the statutes authorizing the condemnation of land for federal uses, we granted certiorari. 327 U.S. 775, 66 S.Ct. 959.2 5 Both the general Condemnation Act and the Public Buildings Act3 expressly authorized the acquisition of land by the United States by condemnation as a site for a United States post office, customhouse or courthouse. Neither Act expressly named the City or designated the site to be condemned in this case. Neither expressly stated whether or not sites already in use for conflicting federal, state or local public purposes were subject to condemnation. The Condemnation Act supplemented the federal right 'to procure real estate for the erection of a public building or for other public uses,' by adding to it a general federal power of condemnation under judicial process to be exercised by an officer of the Government 'whenever in his opinion it is necessary or advantageous to the Government to do so.' The Public Buildings Act, as an incident to an original $150,000,000 program, gave authority and direction to the Secretary of the Treasury (later substituting the Federal Works Administrator) 'to acquire by purchase, condemnation, or otherwise, such sites * * * as he may deem necessary, * * *.' It specified that as to 'buildings to be used in whole or in part for postoffice purposes, the Federal Works Administrator, under regulations to be prescribed by him, shall act jointly with the Postmaster General in the selection of towns or cities in which buildings are to be constructed and the selection of sites therein: * * *.'4 These Acts were natural means for Congress to adopt in putting its constitutional powers into use on a scale commensurate with the size of the nation and the need of the time. Neither Act imposed expressly any limitations upon the authority of the officials designated by Congress to exercise its power of condemnation in procuring sites for public buildings deemed necessary by such officials to enable the Government to perform certain specified functions.5 Far removed from the time and circumstances that led to the enactment of these statutes in 1888 and 1926, this Court must be slow to read into them today unexpressed limitations restricting the authority of the very officials named in the Acts as the ones upon whom Congress chose to rely. 6 The power of eminent domain is essential to a sovereign government. If the United States has determined its need for certain land for a public use that is within its federal sovereign powers, it must have the right to appropriate that land. Otherwise, the owner of the land, by refusing to sell it or by consenting to do so only at an unreasonably high price, is enabled to subordinate the constitutional powers of Congress to his personal will. The Fifth Amendment, in turn, provides him with important protection against abuse of the power of eminent domain by the Federal Government.6 7 While in its early days the Federal Government filed its condemnation cases in the State courts, this Court, in Kohl v. United States, 91 U.S. 367, 23 L.Ed. 449, disposed of the idea that this was necessary. In that case, which has become the leading case on the federal power of eminent domain, Mr. Justice Strong also said: 8 'It has not been seriously contended during the argument that the United States government is without power to appropriate lands or other property within the States for its own uses, and to enable it to perform its proper functions. Such an authority is essential to its independent existence and perpetuity. These cannot be preserved if the obstinacy of a private person, or if any other authority, can prevent the acquisition of the means or instruments by which alone governmental functions can be performed. The powers vested by the Constitution in the general government demand for their exercise the acquisition of lands in all the States. These are needed for forts, armories, and arsenals, for navy-yards and light-houses for custom-houses, post-offices, and court-houses, and for other public uses. If the right to acquire property for such uses may be made a barren right by the unwillingness of property-holders to sell, or by the action of a State prohibiting a sale to the Federal government, the constitutional grants of power may be rendered nugatory, and the government is dependent for its practical existence upon the will of a State, or even upon that of a private citizen. This cannot be. No one doubts the existence in the State governments of the right of eminent domain,—a right distinct from and paramount to the right of ultimate ownership. It grows out of the necessities of their being, not out of the tenure by which lands are held. It may be exercised, though the lands are not held by grant from the government, either mediately or immediately, and independent of the consideration whether they would escheat to the government in case of a failure of heirs. The right is the offspring of political necessity; and it is inseparable from sovereignty, unless denied to it by its fundamental law. * * * But it is no more necessary for the exercise of the powers of a State government than it is for the exercise of the conceded powers of the Federal government. That government is as sovereign within its sphere as the States are within theirs. True, its sphere is limited. Certain subjects only are committed to it; but its power over those subjects is as full and complete as is the power of the States over the subjects to which their sovereignty extends. 9 'If the United States have the power, it must be complete in itself. It can neither be enlarged nor diminished by a State. Nor can any State prescribe the manner in which it must be exercised. The consent of a State can never be a condition precedent to its enjoyment.' (Italics supplied.) Kohl v. United States, supra, 91 U.S. 371, 372, 374, 23 L.Ed. 449. 10 The Kohl case approved the condemnation of privately owned land, then subject to a perpetual leasehold, for a post office site in Cincinnati, Ohio, under an Act of Congress expressly naming that City but not expressly naming the site. The respondent here seeks, by judicial interpretation of the general Condemnation Act and the Public Buildings Act, to exclude from condemnation a particular site in Cape Girardeau selected for a post office by the appropriate federal officials. She depends upon the fact that the site already is being used by a governmental subdivision of Missouri for other public purposes impressed upon it by its private owners over a century ago. The principle of federal supremacy, so well expressed in the Kohl case, argues against such a subordination of the decisions of federal representatives to those of individual grantors or local officials as to the means of carrying out an admittedly federal governmental function.7 11 It makes little difference that the site here sought to be condemned is held by the City in trust instead of in fee. The city government is not resisting the condemnation. The Federal Government can obtain, by voluntary conveyance, whatever title the City can convey. The weakness in the City's right to sell or exchange this site arises from restrictions in the conveyance to it. Through the inclusion, as defendants, of all claimants who might rely upon such restrictions or might claim an interest through the grantors of this site, a decree of condemnation will dispose of the suggested defects. By giving notice to all claimants to a disputed title, condemnation proceedings provide a judicial process for securing better title against all the world than may be obtained by voluntary conveyance. 12 Both in themselves and from the relation of these Acts to the Constitution, we find substantial reason for making their broad language effective to its full constitutional limit. While the federal power of eminent domain is limited to taking property for federal public uses, the question of the existence of a federal public use presents no difficulty here because the constitutional power of Congress to establish post offices is express.8 13 The considerations that made it appropriate for the Constitution to declare that the Constitution of the United States, and the laws of the United States made in pursuance thereof, shall be the supreme law of the land9 make it appropriate to recognize that the power of eminent domain, when exercised by Congress within its constitutional powers, be equally supreme. Mr. Justice Bradley stated this principle clearly, while on circuit, in Stockton v. Baltimore & N.Y.R. Co., C.C., 32 F. 9, 19: 'The argument based upon the doctrine that the states have the eminent domain or highest dominion in the lands comprised within their limits, and that the United States have no dominion in such lands, cannot avail to frustrate the supremacy given by the constitution to the government of the United States in all matters within the scope of its sovereignty. This is not a matter of words, but of things. If it is necessary that the United States government should have an eminent domain still higher than that of the state, in order that it may fully carry out the objects and purposes of the constitution, then it has it. Whatever may be the necessities or conclusions of theoretical law as to eminent domain or anything else, it must be received as a postulate of the constitution that the government of the United States is invested with full and complete power to execute and carry out its purposes.'10 14 The Fifth Amendment to the Constitution says 'nor shall private property be taken for public use, without just compensation.' This is a tacit recognition of a preexisting power to take private property for public use, rather than a grant of new power.11 It imposes on the Federal Government the obligation to pay just compensation when it takes another's property for public use in accordance with the federal sovereign power to appropriate it. Accordingly, when the Federal Government thus takes for a federal public use the independently held and controlled property of a state or of a local subdivision, the Federal Government recognizes its obligation to pay just compensation for it and it is conceded in this ca e that the Federal Government must pay must compensation for the land condemned.12 15 The foregoing establishes the principle of the supremacy of a federal public use over all other uses in a clearly designated field such as that of establishing post offices. The Government here contends that the officials designated by Congress have been authorized by Congress to use their best judgment in selecting post office sites. It contends also that if the officials so designated have used such judgment, in good faith, in selecting the proposed park site in spite of its conflicting local public uses, the Federal Works Administrator has express authority to direct the condemnation of that site. We agree with those contentions. We find in the broad terms of the Public Buildings Act authority for the designated officials to select the site they did. We find, in both Acts, authority for them to acquire by condemnation the site thus lawfully selected. The judgment exercised by the designated officials in selecting this site out of 22 sites suggested, and out of two closely balanced alternatives, constituted an administrative and legislative decision not subject to judicial review on its merits. It was within the legislative power of Congress to choose or reject this site by direct action. It would have been within its legislative power to exclude from the consideration of its representatives this or other sites, the selection of which might interfere with local governmental functions. Such an exclusion would have been an act of legislative policy. We find no such express or necessarily implied exclusion in the broad language of these Acts.13 16 In this case, it is unnecessary to determine whether or not this selection could have been set aside by the courts as unauthorized by Congress if the designated officials had acted in bad faith or so 'capriciously and arbitrarily' that their action was without adequate determining principle or was unreasoned.14 The record presents no such issue here. The procedure followed in making the selection of the site showed extraordinary effort to arrive at a fair and reasoned conclusion.15 The site inspector, in his original report, recommended the park site as his second choice and demonstrated the reasonableness of a choice, by his superiors, of either of his first two selections.16 His estimate of divided community sentiment, with apparent community preference for the park site, indicates the absence of capriciousness and arbitrariness in the Government's final selection of the park site.17 The popular referendum vote of 1612 to 1344 in favor of the transfer of the park site by the City to the Federal Government, in exchange for the Government's transfer of its present post office site to the City, confirms his estimate. These federal officials had the right, if not the obligation, to consider at this time the necessity of disposing of the present post office site and of the single purpose governmental building thereon. That issue inevitably would confront the Government at some time if a new site were chosen. The opportunity to exchange or sell the present site to the City in connection with the acquisition of the park site for a new post office was, therefore, a reasonable rather than a capricious consideration. 17 On the present record, the petitioner was entitled to a preliminary judgment of condemnation. The fin ing of the District Court on the second trial that the selection of the park site 'amounts in law to an arbitrary and unnecessary act' appears, from the context, to have been a finding largely of the comparative undesirability and lack of necessity for the selection of that site and not to have been a finding that the selection had been made without adequate determining principle and without reason.18 The comparative desirability and necessity for the site were matters for legislative or administrative determination rather than for a judicial finding.19 Even if the word 'arbitrary', as used by the District Court, was intended by it to have the ordinary meaning which that word has when used alone, we are unable to conclude on the record before us that the selection of the park site for a post office in Cape Girardeau, was, as a matter of law, capricious and arbitrary in any sense that, under any construction of the Acts before us, would invalidate the selection here made. 18 The judgment of the Circuit Court of Appeals, therefore, is reversed and the cause remanded to the District Court for further proceedings consistent with this opinion. 19 Reversed. 20 Mr. Justice DOUGLAS concurs in the result and substantially agrees with the opinion of the Court. But he reserves judgment as to the circumstances under which authority to condemn land owned by a city or a state should be inferred from a general condemnation statute, if the local government challenged the taking. 1 '* * * in every case in which the Secretary of the Treasury or any other officer of the Government has been, or hereafter shall be, authorized to procure real estate for the erection of a public building or or other public uses he shall be, and hereby is, authorized to acquire the same for the United States by condemnation, under judicial process, whenever in his opinion it is necessary or advantageous to the Government to do so, * * *.' Sec. 1, Condemnation Act of August 1, 1888, 25 Stat. 357, 40 U.S.C. § 257, 40 U.S.C.A. § 257. 'To enable the Federal Works Administrator to provide suitable accommodations * * * for courthouses, post offices, immigration stations, customhouses, marine hospitals, quarantine stations, and other public buildings of the classes under the control of the Federal Works Agency in the States, Territories, and possessions of the United States, he is hereby authorized and directed to acquire, by purchase, condemnation, or otherwise, such sites and additions to sites as he may deem necessary, * * * Provided, That * * * insofar as relates to buildings to be used in whole or in part for post office purposes, the Federal Works Administrator, under regulations to be prescribed by him, shall act jointly with the Postmaster General in the selection of towns or cities in which buildings are to be constructed and the selection of sites therein: * * *.' 40 U.S.C. § 341, 40 U.S.C.A. § 341. This is codified from § 1 of the Public Buildings Act of May 25, 1926, 44 Stat. 630—631, as modified by Reorganization Plan I, §§ 301—303, 53 Stat. 1426—1427, 5 U.S.C. following section 133t, 5 U.S.C.A. following section 133t. See also, 40 U.S.C. §§ 342—350, 40 U.S.C.A. §§ 342—350, and the balance of the original Act. The petition likewise relied upon the Declaration of Taking Act of February 26, 1931, 46 Stat. 1421, 40 U.S.C. §§ 258a—258e, 40 U.S.C.A. §§ 258a—258e; Third Deficiency Appropriation Act, fiscal year 1937, 50 Stat. 755, 773; Federal Public Buildings Appropriation Act of 1938, 52 Stat. 818; and the Reorganization Act of 1939, 53 Stat. 561, 5 U.S.C. § 133 et seq., 5 U.S.C.A. § 133 et seq., under which Reorganization Plan I was submitted to Congress and made effective July 1, 1939, 53 Stat. 813, 5 U.S.C. § 133s, 5 U.S.C.A. § 133s. 2 The right of the respondent to contest the condemnation turns upon the effect of the deeds, executed by certain of her ancestors in 1807 and 1820, pursuant to which this site long has been put to local public use. Her interest, turning largely on Missouri law, was upheld by the Circuit Court of Appeals, following the first trial, Carmack v. United States, 8 Cir., 135 F.2d 196, and, as we do not have to question that interest in order to reach our decision, we do not reexamine it. Board of Regents for Normal School Dist. No. 3 v. Painter, 102 Mo. 464, 14 S.W. 938, 10 L.R.A. 493; Mott v. Morris, 249 Mo. 137, 155 S.W. 434; and 25 Stat. 357, 40 U.S.C. § 258, 40 U.S.C.A. § 258. The proceeding to condemn the land being in rem, the jurisdiction of the court does not turn upon her participation in the case. Cf. United States v. Dunnington, 146 U.S. 338, 352, 13 S.Ct. 79, 83, 36 L.Ed. 996; In re Condemnation Suits by United States, D.C., 234 F. 443, 445. 3 See note 1, supra. 4 For the three foregoing quotations, see note 1, supra. 5 Noth ng has been found in the legislative history of these Acts to indicate that Congress intended to give its agents less than the fullest possible authority of Congress in selecting cities and sites. See H.R. Rep. No. 132, especially minority views at pp. 6, 7, 10, and H.R. Rep. No. 1223, 69th Cong., 1st Sess.; S. Rep. No. 197, 69th Cong., 1st Sess.; 67 Cong.Rec. 4023—4028, 8356, 8357, 8359, 8494, 8567. 6 'No person shall * * * be deprived of life, liberty, or property, without due process of law; nor shall private property by taken for public use, without just compensation.' U.S.Const. Amend. V. 7 See also, Albert Hanson Lumber Co. v. United States, 261 U.S. 581, 587, 43 S.Ct. 442, 444, 67 L.Ed. 809, for emphasis on the all-inclusiveness of the general Condemnation Act of August 1, 1888. 8 U.S.Const. Art. I, § 8, Cls. 7 and 18. 9 U.S.Const. Art. VI. 10 An appeal in Stockton v. Baltimore & N.Y.R. Co., supra, was dismissed in this Court, 140 U.S. 699, 11 S.Ct. 1028, 35 L.Ed. 603, and, in the meantime, Mr. Justice Bradley's statement was quoted with approval in Cherokee Nation v. Southern Kansas Ry. Co., 135 U.S. 641, 656, 10 S.Ct. 965, 970, 34 L.Ed. 295; See also, United States v. Gettysburg Electric Ry. Co., 160 U.S. 668, 681, 16 S.Ct. 427, 429, 40 L.Ed. 576; Luxton v. North River Bridge Co., 153 U.S. 525, 529, 530, 14 S.Ct. 891, 892, 38 L.Ed. 808. When Congress has wished to subordinate its selection of state lands to state approval it has done so by express provision. In the Weeks Forestry Act of March 1, 1911, 36 Stat. 961, 962, 43 Stat. 1215, 45 Stat. 1010, 48 Stat. 955, 16 U.S.C. § 516, 16 U.S.C.A. § 516, and the Migratory Bird Conservation Act of February 18, 1929, 45 Stat. 1222, 1223, 16 U.S.C. § 715f, 16 U.S.C.A. § 715f, the consent of the state legislature to the federal acquisition of land is made an express condition of the acceptance of such land. Such consent does not deprive the state of civil or criminal jurisdiction over the land. 36 Stat. 963, 16 U.S.C. § 480, 16 U.S.C.A. § 480, and 45 Stat. 1224, 16 U.S.C. § 715g, 16 U.S.C.A. § 715g. See also, The Upper Mississippi River Wild Life and Fish Refuge Act of June 7, 1924, 43 Stat. 650, 16 U.S.C. § 724, 16 U.S.C.A. § 724. The acquisition of federal legislative jurisdiction, as distinguished from federal title to the land, is a different matter. If the Federal Government desires exclusive legislative jurisdiction over land acquired by it, the Constitution indicates that the consent of the state in which the land is located is necessary. Art. I, § 8, Cl. 17, provides that 'The Congress shall have Power * * * To exercise exclusive Legislation * * * over all Places purchased by the consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; * * *.' See Stockton v. Baltimore & N.Y.R. Co., C.C., 32 F. 9, 18, appeal dismissed, 140 U.S. 699, 11 S.Ct. 1028, 35 L.Ed. 603. See also, Joint Resolution of September 11, 1841, 5 Stat. 468, and Rev.Stat. § 355, which formerly required the consent of state legislatures to federal purchases of certain sites as a condition of expending federal funds to pay for them. Since February 1, 1940, such consent has not been required except where the United States has sought 'exclusive or partial' legislative jurisdiction. Unless and until the United States accepts such jurisdiction over lands acquired since February 1, 1940, it is presumed conclusively that no such jurisdiction has been accepted. 54 Stat. 19, 54 Stat. 1083, 40 U.S.C. § 255, 40 U.S.C.A. § 255. The exercise of exclusive legislative jurisdiction is not an issue in this case and, in any event, Missouri has consented to it. 'The consent of the State of Missouri is hereby given in accordance with the seventeenth clause, eighth section of the first article of the Constitution of the United States to the acquisition by the United States by purchase or grant of any land in this State which has been or may hereafter be acquired, for the purpose of establishing and maintaining postoffices, * * *.' Mo.R.S.A. (1939), § 12691. 11 See United States v. Cooper, 20 D.C. 104, 116, affirmed sub nom., Shoemaker v. United States, 147 U.S. 282, 13 S.Ct. 361, 37 L.Ed. 170; In re Rugheimer, D.C., 36 F. 369, 371. 12 When, however, a sovereign state transfers its own public property from one governmental use to another, or when the Federal Government takes property from state ownership merely so as to put it to a federal public use for which the state already holds it in trust, a like obligation does not arise to pay just compensation for it. See In re Certain Land in Lawrence, D.C., 119 F. 453; Stockton v. Baltimore & N.Y.R. Co., C.C., 32 F. 9, 19, appeal dismissed, 140 U.S. 699, 11 S.Ct. 1028, 35 L.Ed. 603. 13 In the instant case, we deal with broad language employed to authorize officials to exercise the sovereign's power of eminent domain on behalf of the sovereign itself. This is a general authorization which carries with it the sovereign's full powers except such as are excluded expressly or by necessary implication. A distinction exists however, in the case of statutes which grant to others, such as public utilities, a right to exercise the power of eminent domain on behalf of themselves. These are, in their very nature, grants of limited powers. They do not include sovereign powers greater than those expressed or necessarily implied, especially against others exercising equal or greater public powers. In such cases the absence of an express grant of superiority over conflicting public uses reflects an absence of such superiority. See United States v. Jotham Bixby Co., D.C., 55 F.2d 317, 319, affirmed sub nom., C.M. Patten & Co. v. United States, 9 Cir., 61 F.2d 970, decree vacated as moot, 289 U.S. 705, 53 S.Ct. 687, 77 L.Ed. 1462; In re Condemnations for Improvement of Rouge River, D.C., 266 F. 105; United States v. City of Tiffin, C.C., 190 F. 279, 281. 14 'Arbitrary' is defined by Funk & Wagnalls New Standard Dictionary of the English Language (1944), as '1 * * *; without adequate determining principle; * * *' and by Webster's New International Dictionary, 2d Ed. (1945), as '2. Fixed or arrived at through an exercise of will or by caprice, without consideration or adjustment with reference to principles, circumstances, or significance, * * * decisive but unreasoned; * * *.' 'Capricious' in defined by Webster's New International Dictionary, 2d Ed. (1945), as '2. * * *; apt to change suddenly; freakish; whimsical; humorsome.' Cf. Fox Film Corp. v. Trumbull, D.C., 7 F.2d 715, 727; Puget Sound Power & Light Co. v. Public Utility Dist. No. 1, of Whatcom County, 9 Cir., 123 F.2d 286, 290, certiorari denied, 315 U.S. 814, 62 S.Ct. 798, 86 L.Ed. 1212; United States v. Eighty Acres of Land in Williamson County, D.C., 26 F.Supp. 315, 319. See, also, United States v. Certain Parcels of Land in Town of Denton of Caroline County, Md., D.C., 30 F.Supp. 372, 379; United States v. Parcel of Land in Town of Middletown, New Castle County, D.C., 32 F.Supp. 718, 721. 15 It apparently followed regulations of the Federal Works Agency and Post Office Department as authorized by 5 U.S.C. §§ 22, 369, 5 U.S.C.A. §§ 22, 369; 40 U.S.C. §§ 341, 347, 40 U.S.C.A. §§ 341, 347. Among its principal steps were the following: June 12, 1940, approval of the general project for Cape Girardeau by Federal Works Administrator and Acting Postmaster General based upon the recommendation of the Commissioner of Public Buildings and the Fourth Assistant Postmaster General; July 23—26, 29—31, 1940, Post Office Inspector and Site Agent visited Cape Girardeau; August 20, 1940, he submitted his recommendations, showing that he inspected 22 proposals, eliminated all but 6 on general grounds, carefully considered the remainder and submitted full report on 3. His first choice was to enlarge the present post office site; his second, to acquire the site here in controversy; his third, to acquire a site between the two. Further studies were made in Cape Girardeau or in Washington by the Associate Architect for the Federal Works Agency, the Fiscal Manager of the Public Buildings Administration and the Superintendent of the Division of Post Office Quarters in the Post Office Department. All wishing to be heard were heard. February 11, 1941, the City Council passed an ordinance proposing an exchange of the park site for the present post office site and submitting this proposal to a special election. March 4, 1941, a majority of those voting in 8 of the 10 wards approved the exchange, the city wide vote being 1612 to 1344. May 26, 1941, the Acting Commissioner of Public Buildings notified the Mayor of the Government's acceptance of the proposed exchange. September 25, 1941, the Actin Administrator of the Federal Works Agency advised the Attorney General that, under authority of the Public Buildings Act, the Agency had contracted for the exchange. After referring to his failure to secure title by voluntary conveyance from the City in spite of the willingness of the City officials to make the exchange if they had legal authority to do so, he asked the Attorney General to file this condemnation proceeding. It was done November 22, 1941. In accordance with the opinion of the Circuit Court of Appeals after the first trial, the Government, on June 10, 1943, secured evidence of a formal joint action, signed personally by the Federal Works Administrator and the Postmaster General, expressly selecting the site in suit. This was included in the record of the second trial. The actions of June 12, 1940, and June 10, 1943, refer to the project as one for a post office and courthouse, whereas the petition for condemnation refers to it as one for a post office and customhouse. This variation was not pressed in the litigation and is not material to the main issue of statutory construction. The foregoing narration of the steps taken in this instance in not intended as an indication that all or any of them are essential to the exercise of the statutory authority to select sites in other cases. They are set forth to help demonstrate that, in the face of them, the selection here cannot be classed as 'capricious and arbitrary,' under any appropriate definition of those words. 16 'For First Choice I recommend that the present government-owned site be retained and that the adjoining property, Site 2 offered by H. Bermermann be purchased for $15,000, and that a counter offer be made to the owner of Site 3, Ella M. Drum to purchase this site for $600. 'This recommendation is made because it is believed that the present location is the most outstanding site in this city, and because of the numerous limitations on all of the other competing sites which would prevent an advantageous or desirable transaction. 'For Second Choice I have selected Site No. 1, the city-owned park, which could be developed into an attractive setting for the new building, and which could no doubt be secured in an exchange resulting in mutual benefit to the city and Government. The bid submitted by the City is not intended to be a final offer, and it is expected that after a review of the facts by the Site Committee a counter-offer could be made with respect to a definite area of about 175 x 215 within the park grounds and with respect to improvements in surrounding approaches, removal of trees and fountain, and demolition of present city building. The mayor and city council verbally agreed to favor any reasonable counter-offer to be made by the Government. It is my opinion that the government-owned site is valued at approximately $225 per front foot, whereas the park site has a value of about $100 per front foot, and this must be taken into consideration in submitting a counter-offer. The question of the City Council's authority to make an exchange of this property is in dispute, but this could no doubt be settled by friendly condemnation proceedings, as the city officials are willing and desirous for the trade.' 17 '* * * the city park property, is actively favored by the City Council, and almost unanimously favored by the business men on Main Street. * * * 'Because of the divergence of opinion, the Chamber of Commerce in a recent meeting decided not to make any official comment as to a certain location. * * * 'The postmaster, who has no financial or personal interest in any of the locations, but who is conscientiously interested in civic development, regards the government-owned site as an outstanding location but recommends the city park as first choice because this trade would allow the city to retain a good improvement and allow the Federal Government to secure a site with attractive surroundings.' 18 The District Court said: 'The right of plaintiff to condemn the land must stand or fall on the determination by this court of the question, Did the Acting Administrator of Federal Works Agency and the Postmaster General, under the circumstances here presented, act arbitrarily and capriciously in selecting the site—was the act necessary? The term 'arbitrarily and capriciously' has been defined to mean an act done 'without adequate determining principle; not founded in the nature of things; not done or acting according to reason or judgment'; an unnecessary act. 'That this action was taken by the Joint Committee, with information in their possession with respect to availability of other sites which shows unquestionably that the action of the plaintiff is unnecessary and the site selected is not now, nor was it when selected, the most desirable and available.' (Italics supplied.) United States v. Certain Land Situate in City of Cape Girardeau, Mo., D.C., 55 F.Supp. 555, 557, 563. 19 United States ex rel. T.V.A. v. Welch, 327 U.S. 546, 66 S.Ct. 715; Rindge Co. v. Los Angeles County, 262 U.S. 700, 708 710, 43 S.Ct. 689, 693, 67 L.Ed. 1186; Joslin Mfg. Co. v. City of Providence, 262 U.S. 668, 678, 43 S.Ct. 684, 689, 67 L.Ed. 1167; Bragg v. Weaver, 251 U.S. 57, 58, 40 S.Ct. 62, 63, 64 L.Ed. 135; Sears v. City of Akron, 246 U.S. 242, 251, 38 S.Ct. 245, 248, 62 L.Ed. 688; Adirondack Ry. Co. v. People of State of New York, 176 U.S. 335, 349, 20 S.Ct. 460, 465, 44 L.Ed. 492; Shoemaker v. United States, 147 U.S. 282, 298, 13 S.Ct. 361, 390, 37 L.Ed. 170; Mississippi & Rum River Boom Co. v. Patterson, 98 U.S. 403, 406, 25 L.Ed. 206. See also: 'The federal statute * * * does not require proof of 'necessity,' but makes that question depend solely on the 'opinion' of the federal officer. It is controlling here.' United States v. State of Montana, 9 Cir., 134 F.2d 194, 197, certiorari denied, 319 U.S. 772, 63 S.Ct. 1438, 87 L.Ed. 1720.

34

329 U.S. 207 67 S.Ct. 211 91 L.Ed. 193 UNITED § ATESv.BRUNO. No. 67. Argued Nov. 22, 1946. Decided Dec. 9, 1946. Mr.Stanley M. Silverberg, of Washington, D.C., for petitioner. Mr. George R. Sommer, of Newark, N.J., for respondent. 1 Mr. Justice DOUGLAS delivered the opinion of the Court.DP A criminal information was brought against Bruno for having wilfully sold1 waste paper at prices higher than the ceilings established by Maximum Price Regulation 30.2 The information contained five counts, each count charging a sale of a carload lot in 1944 at prices above the established ceilings. The jury found Bruno guilty on all five counts. He was sentenced to imprisonment for six months and fined $500. The judgment of conviction was reversed by the Circuit Court of Appeals. 3 Cir., 153 F.2d 843. The case is here on a petition for a writ of certiorari which we granted because of an asserted conflict in principle between the decision below and United States ex rel. Bowles v. Seidmon, 154 F.2d 228, in the Seventh Circuit Court of Appeals. 2 Bruno was in charge of a business, owned by a relative, which bought and sold waste paper. Carrano was a middleman who bought waste paper from Bruno on orders from Carrano's customers. The paper was shipped by Bruno direct to the customers, Carrano paying Bruno the price. 3 In each of the five sales challenged here Carrano ordered from Bruno a grade of paper known as No. 1 assorted kraft. In each Bruno invoiced the shipment as such and charged the ceiling price for that grade of waste paper. Carrano paid Bruno the invoice price. It appears that the orders were subject to inspection and approval of the waste paper by the customers; that they customarily made the inspections on receipt of the shipments; and that if the paper was below the grade at which it had been invoiced, the customers would pay Carrano the lower ceiling price, Carrano debiting Bruno with the difference. Each of the five shipments in question was inspected by the customer on its arrival. It was discovered that each shipment was largely composed of corrugated paper, a grade carrying a lower ceiling price. In three cases the customers paid Carrano only for the quality of waste paper received. Carrano thereupon debited Bruno with the difference. In two cases the customer did not complain of the upgrading and Bruno retained the over-charges.3 Moreover, the debits to Bruno in the three instances mentioned followed on the heels of an investigation by the Office of Price Administration. It also appears that the debits were not shown on Bruno's books. His ledger showed sales, not at the invoice price, but at lower prices. The concealed amounts were explained by Bruno as constituting his commissions on the sales. 4 The District Court charged the jury that 'before you can find him guilty, there must have been in his mind an intention not to set a price and then have it adjusted afterwards according to the truth of the situation, but an intent to fix this price and charge it and get away with it—an intent to commit the crime, the formation of a purpose in his mind when he did this thing, to get more money for that paper than the ceiling price established by law.'4 The court also charged that there could be no conviction if Bruno did not sell the waste paper 'with the intent of receiving higher than ceiling price, and did not actually receive higher than ceiling price'. 5 We think it was proper to submit the case to the jury. The evidence seems to us ample to support the conviction. There was false grading in each invoice. The sales were not made at a price to be determined on the customers' inspection of the grade. They were made at specific invoice prices which were above the ceiling. The goods were delivered at those prices; and those were the prices actually paid. In some instances there was a subsequent adjustment of the price to conform to the price ceiling for the grade actually shipped. But in others there was not. And bearing on the integrity of the system were two other facts—(1) the debits made followed the OPA investigation; (2) the inflated prices were not disclosed on Bruno's books. In a seller's market upgrading may be a convenient device for black market operations. As the Circuit Court of Appeals noted, when paper is scarce the seller may send not what is ordered but what he has, on the assumption that manufacturers will be glad to take any kind of paper they can get. In view of the inadequacy of the supply, buyers cannot always be expected to reject upgraded shipments or insist upon price adjustments. The facts of this case sustain that theory, for in two instances no price adjustment was sought or made. In view of all the circumstances, the jury could well conclude that the system adopted by Bruno was designed to bring him more for the goods than was lawful. 6 Reversed. 1 Section 205(b), Emergency Price Control Act of 1942, 56 Stat. 23, 33, 50 U.S.C.App.Supp. III § 925(b), 50 U.S.C.A.Appendix, § 925(b). 2 See 7 Fed.Reg. 9732, 8 Fed.Reg. 13049, 17483. 3 The Circuit Court of Appeals seemed to proceed on the assumption, that in no instance did the ultimate price which was paid exceed the ceiling price. 4 The preceding part of the charge was: 'In order that there may be a crime here, there must have been an intent on the part of this defendant to commit that crime, which was to receive a price for the paper which he sold which was in excess of the ceiling price. Now, if actually there had been paid to him more than the ceiling price, but it was the intent and intention of all persons respecting it, not to accept that as the final price necessarily, but to accept it subject to adjustment which would be made upon the examination of the paper actually delivered and the establishment of the price set by law for that paper, that is, if they had the idea that the only price to be received was that which the law set for the paper actually delivered, and that actually was what was paid, then there was no intent on his part to break the law. But if he sold this paper to the dealer, the wholesale dealer for a price which was above the ceiling price, and that was the price that he intended to get, and if you find as a fact that the only reason he didn't get it was because he didn't get away with it and there was a discovery without his having intent to do the honest decent thing, and that was the only reason he didn't get it, still he would have had an intent to commit the crime and would have effectively committed it when he received above-ceiling price which he intended to receive, if he did so intend, and if the only reason that he didn't get the ceiling price was because he was found out.'

01

329 U.S. 223 67 S.Ct. 213 91 L.Ed. 204 FEDERAL COMMUNICATIONS COMMISSIONv.WOKO, Inc. No. 65. Argued Nov. 22, 1946. Decided Dec. 9, 1946. Decision of Federal Communications Commission refusing to renew radio station's license because station's general manager appeared on behalf of station of various hearings before Federal Radio Commission and Federal Communications Commission and furnished false testimony, so as to conceal holdings of one stockholder, could not be reversed because it would injure innocent stockholders or because commission had previously taken less drastic measures in prior similar cases. Communications Act of 1934, §§ 308(b), 312(a), 402(e), 47 U.S.C.A. §§ 308(b), 312(a), 402(e). Decision of Federal Communications Commission refusing to renew radio station's license because station's general manager appeared on behalf of station at various hearings before Federal Radio Commission and Federal Communications Commission and furnished testimony, so as to conceal holdings of one stockholder, could not be reversed by court on ground that the decision imposed a penalty or because of commission's failure to make findings with respect to quality of station's service in the past and its equipment for good service in the future. Communications Act of 1934, §§ 308(b), 31 (a), 402(e), 47 U.S.C.A. §§ 308(b), 312(a), 402(e). Mr.Harry M. Plotkin, of Washington, D.C., for petitioner. [Argument of Counsel from page 224 intentionally omitted] Mr.William J. Dempsey, of Washington, D.C., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 WOKO, Incorporated, for some years has operated a radio station at Albany, New York, and appears to have readered public service of acceptable quality and to be able to continue. The Federal Communications Commission refused to renew its license because of misrepresentations made to the Commission and its predecessor as to the ownership of the applicant's capital stock. Two hundred and forty shares, being twenty-four per cent of its outstanding capital stock, was owned by one Pickard and his family. For some twelve years they received all dividends paid on the stock and Pickard took an active interest in the Company's affairs. He also was a vice-president of the Columbia Broadcasting Company and had obtained the stock on the assurance that he would help to secure Columbia affiliation for Station WOKO, would furnish, without charge, Columbia engineers to construct the station at Albany, and supply a grand piano and certain newspaper publicity. 2 The company, however, in reporting to the Federal Radio Commission and to the Federal Communications Commission the names of its stockholders as it was required to do for many years and in many applications, concealed the fact that the Pickards held this stock interest and represented that the shares were held by others. Its general manager appeared on behalf of the applicant at various hearings and furnished false testimony to both Commissions regarding the identity of the corporation stockholders and the shares held by each so as to conceal the Pickard holdings. The purpose of the concealment was to prevent the facts from becoming known to Pickard's Columbia colleagues. 3 The Court of Appeals for the District of Columbia reversed the Commission's decision denying renewal of the license, a majority for the various reasons that we will consider. The dissenting Chief Justice noted that he did 'very heartily agree with the view that this is a hard case. The Commission's drastic order, terminating the life of the station, punishes the innocent equally with the guilty, and in its results is contrary to the Commission's action in several other comparable cases. But that the making of the order was within the discretion of the Commission, I think is reasonably clear.' We granted certiorari because of the importance of the issue to the administration of the Act. 4 We come to a consideration of the reasons which led the Court of Appeals to reverse the order of the Commission under the admonition that 'review by the court shall be limited to questions of law and that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive unless it shall clearly appear that the findings of the Commission are arbitrary or capricious.' 48 Stat. 1094, 47 U.S.C. § 402(e), 47 U.S.C.A. § 402(e). 5 The Act provides as to applications such as WOKO filed that 'All such applications shall set forth such facts as the Commission by regulation may prescribe as to the citizenship, character, and financial, technical, and other qualifications of the applicant to operate the station; the ownership and location of the proposed station * * * and such other information as it may require.' It requires such statements to be under oath or affirmation. 48 Stat. 1084, 47 U.S.C. § 308(b), 47 U.S.C.A. § 308(b). It provides, too, that any station license may be revoked for false statements in the application. 48 Stat. 1086, 47 U.S.C. § 312(a), 47 U.S.C.A. § 312(a). 6 It is said that in this case the Commission failed to find that the concealment was of material facts or had influenced the Commission in making any decision, or that it would have acted differently had it known that the Pickards were the beneficial owners of the stock. We think this is beside the point. The fact of concealment may be more significant than the facts concealed. The willingness to deceive a regulatory body may be disclosed by immaterial and useless deceptions as well as by material and persuasive ones. We do not think it is an answer to say that the deception was unnecessary and served no purpose. If the applicant had forthrightly refused to supply the information on the ground that it was not material, we should expect the Commission would have rejected the application and would have been sustained in so doing. If we would hold it not unlawful, arbitrary or capricious to require the information before granting a renewal, it seems difficult to say that it is unlawful, arbitrary or capricious to refuse a renewal where true information is withheld and false information is substituted. 7 We are told that stockholders owning slightly more than 50 per cent of the stock are not found to have had any part in or knowledge of the concealment or deception of the Commission. This may be a very proper consideration for the Commission in determining just and appropriate action. But as matter of law, the fact that there are innocent stockholders can not immunize the corporation from the consequences of such deception. If officers of the corporation by such mismanagement waste its assets, presumably the State law affords adequate remedies against the wrongdoers. But in this as in other matters, stockholders entrust their interests to their chosen officers and often suffer for their dereliction. Consequences of such acts cannot be escaped by a corporation merely because not all of its stockholders participated. 8 Respondent complains that the present case constitutes a departure from the course which the Commission has taken in dealing with misstatements and applications in other cases. Much is made in argument of the fact that deceptions of this character have not been uncommon and it is claimed that they have not been dealt with so severely as in this case. Cf. Navarro Broadcasting Association, 8 F.C.C. 198. But the very fact that temporizing and compromising with deception seemed not to discourage it, may have led the Commission to the drastic measures here taken to preserve the integrity of its own system of reports. The mild measures to others and the apparently unannounced change of policy are considerations appropriate for the Commission in determining whether its action in this case is too drastic, but we cannot say that the Commission is bound by anything that appears before us to deal with all cases at all times as it has dealt with some that seem comparable. 9 It also is contended that this order inflicts a penalty, that the motive is punishment and that since the Commission is given no powers to penalize persons, its order must fall. We think it unnecessary to indulge in the exposition of what a penalty is. It is enough to decide this case to know what a penalty is not. A denial of an application for a license because of the insufficiency or deliberate falsity of the information lawfully required to be furnished is not a penal measure. It may hurt and it may cause loss, but it is not made illegal, arbitrary or capricious by that fact. 10 Lastly, and more importantly, the Court of Appeals suggested that in order to justify refusal to renew, the Commission should have made findings with respect to the quality of the station's service in the past and its equipment for good service in the future. Evidence of the station's adequate service was introduced at the hearing. The Commission on the other hand insists that in administering the Act it must rely upon the reports of licensees. It points out that this concealment was not caused by slight inadvertence nor was it an isolated instance, but that the Station carried on the course of deception for approximately twelve years. It says that in deciding whether the proposed operations would serve public interest, convenience or necessity, con ideration must be given to the character, background and training of all parties having an interest in the proposed license, and that it cannot be required to exercise the discretion vested in it to entrust the responsibilities of a licensee to an applicant guilty of a systematic course of deception. 11 We cannot say that the Commission is required as a matter of law to grant a license on a deliberately false application even if the falsity were not of this duration and character, nor can we say that refusal to renew the license is arbitrary and capricious under such circumstances. It may very well be that this Station has established such a standard of public service that the Commission would be justified in considering that its deception was not a matter that affected its qualifications to serve the public. But it is the Commission, not the courts, which must be satisfied that the public interest will be served by renewing the license. And the fact that we might not have made the same determination on the same facts does not warrant a substitution of judicial for administrative discretion since Congress has confided the problem to the latter. We agree that this is a hard case, but we cannot agree that it should be allowed to make bad law. 12 The judgment of the Court of Appeals is reversed and the case remanded to that court with direction to remand to the Commission. 13 Reversed and remanded with directions. 14 Mr. Justice BLACK took no part in the consideration or decision of this case.

78

329 U.S. 129 67 S.Ct. 231 91 L.Ed. 128 ALMA MOTOR CO.v.TIMKEN-DETROIT AXLE CO. et al. No. 11. Reargued Oct. 24, 25, 1946. Decided Dec. 9, 1946. [Syllabus from pages 129-131 intentionally omitted] Messrs. Thomas J. Hughes, of Detroit, Mich., and John G. Buchanan, of Pittsburgh, Pa., for petitioner. Mr. William A. Strauch, of Washington, D.C., for respondent Timkin-Detroit Axle Co. Mr. John F. Lonnett, Asst. Atty. Gen., for The United States. The CHIEF JUSTICE delivered the opinion of the Court. 1 Certiorari was granted in this case February 5, 1945, 324 U.S. 832, 65 S.Ct. 587, 89 L.Ed. 1398, on a petition addressed to the question of the constitutionality of the Royalty Adjustment Act of October 31, 1942,1 and of Royalty Adjustment Order No. W—3, issued by the War Department July 28, 1943. We find now, however, that the Circuit Court of Appeals had before it, not only the constitutional question, which was decided, but also a nonconstitutional question, which might properly have alone served as an adequate ground on which to dispose of the appeal. This non-constitutional question was neither considered nor decided by the court below, nor argued here. We have concluded, therefore, that we should not pass on the constitutional question at this time, but should vacate the judgment of the Circuit Court of Appeals, and remand the case to it for decision of any non-constitutional issues material to the appeal. 2 To explain the reasons for this conclusion, we must state the history of the present proceedings in some detail. 3 They were begun by a complaint in a District Court filed by respondent, The Timken-Detroit Axle Company, against petitioner, Alma Motor Company, asking a declaratory judgment as to their respective rights under a patent held by Alma and a coextensive license from Alma to Timken. The complaint alleged the existence of the patent, purporting to cover certain 'transfer cases', or auxiliary automotive transmissions, and the license, by which Timken was authorized to manufacture the patented articles and required to pay certain specified royalties. It further alleged that Timken was engaged in manufacturing various designs of transfer cases, that some of these were once believed to have been covered by Alma's patent and had been made the subject of royalty payments, but on the basis of later information Timken had concluded that none of them were covered, and that the patent was invalid. It asked for a judgment confirming this conclusion. 4 Alma answered, claiming that all Timken's transfer cases were covered, that the patent was valid, and that Timken was estopped from challenging validity, and counterclaimed for a money judgment for unpaid royalties. 5 Following a trial, the District Court filed findings and an opinion,2 and entered judgment December 2, 1942. It held Timken estopped from challenging the validity of Alma's patent; that certain specified types of Timken's transfer cases (generally those denominated T—32 and T—43) were covered by the patent and license; that Timken was indebted to Alma for royalties thereon; and that other types (generally those denominated T—79), were outside the patent and license. The court indicated that unless the parties could agree on the amount of the royalties so held to be payable, a special master would be appointed to determine the amount. 6 Shortly before this judgment was entered, Congress enacted the Royalty Adjustment Act, which Alma seeks to attack here. The primary purpose of this Act was to reduce royalties for which the United States was ultimately liable on inventions manufactured for it by a licensee, from pre-war rates to rates appropriate to the volume of production in war-time. Whenever during the war a government contractor manufactured under a license, and the royalties seemed excessive to the head of the department concerned, the latter was empowered to stop payments by notice to the licensor and licensee, and after a hearing, to fix by order 'fair and just' royalties, 'taking into account the conditions of wartime production.'3 Thereafter, the licensor could collect royalties from the licensee only at the rate so determined. If the licensor felt that the reduction was unfair, his remedy was by suit against the United States in the Court of Claims, where he could recover 'fair and just compensation * * * taking into account the conditions of wartime production.'4 Whatever reduction was effected by the order was to inure to the benefit of the United States. 7 The notice, stopping payment of royalties from Timken to Alma, was issued by the War Department December 30, 1942. Royalty Adjustment Order No. W—3 followed on July 28, 1943, fixing a 'fair and just' royalty at zero. The basis of this determination was the alleged invalidity of Alma's patent, which the United States claims that the Act permits it to assert.5 8 In the meantime, Alma had taken an appeal from Paragraph 5 of the judgment of the District Court, which held that the T—79 transfer cases were outside the patent. Timken did not appeal. After the Order was promulgated, Timken moved to dismiss the appeal and remand to the District Court with directions to vacate its judgment. The motion was predicated on an affidavit that Timken had manufactured transfer cases for the United States alone, together with the argument that the operation of the Act and Order transferred jurisdiction of the subject matter of the entire case to the Court of Claims. Alma countered with an attack on the constitutionality of the Act and Order, primarily as working a deprivation of property in contravention of the Fifth Amendment. 9 The United States had at this time already submitted an amicus brief, in which it argued that the Order had made the appeal moot; and when Alma's constitutional attack was filed, the United States intervened in support of the Act and Order. 10 In its opinion6 the Circuit Court of Appeals considered that the question of the applicability of the Act and Order in this case was simply a question of their constitutional validity. It proceeded to consider this latter question, and decided that both the Act and the Order were entirely valid. Accordingly, it entered the following order: 11 '* * * it is now here ordered and adjudged by this Court that Paragraph 5 of the judgment of the said District Court in this case be, and the same is hereby vacated and the cause is remanded to the District Court with directions to proceed no further therein unless and until it shall appear to the Court that a justiciable controversy again7 exists between the parties arising out of the facts set forth in the complaint, except that the Court may, if it deems such action to be appropriate, vacate all or any part of the remainder of the judgment and dismiss the complaint as moot.' 12 The War Department notice was issued after the District Court's judgment, but before appeal was filed in the Circuit Court of Appeals. It appears that at no time did any party urge on the Circuit Court of Appeals or did that court pass on the question whether the T—79 transfer cases were covered by Alma's pat nt and license. Indeed, it was not until after we had granted certiorari and heard argument at the October 1944 term on the constitutional question, and set the case down for further argument this term, that the United States pointed to this omission, and suggested that the Circuit Court of Appeals should have avoided the question of constitutionality by first considering the question of coverage. It argued here that the prior determination of any non-constitutional questions which might dispose of a controversy is a practice which is dictated by sound principles of judicial administration. It moved to vacate the judgment of the Circuit Court of Appeals, and to remand the case to it for such determination. Both Alma and Timken opposed the motion. Action was withheld pending argument on the motion and the case itself. 13 This Court has said repeatedly that it ought not pass on the constitutionality of an act of Congress unless such adjudication is unavoidable. This is true even though the question is properly presented by the record. If two questions are raised, one of non-constitutional and the other of constitutional nature, and a decision of the non-constitutional question would make unnecessary a decision of the constitutional question, the former will be decided.8 This same rule should guide the lower courts as well as this one. We believe that the structure of the problems before the Circuit Court of Appeals required the application of the rule to this case. 14 At the outset that court was confronted with the merits of the appeal, which involved simply the coverage by the patent and license of the T—79 transfer cases. Later, however, it was confronted also with a problem of jurisdictional nature. This involved the effect wrought by the Act and Order on its power to proceed to an adjudication on the merits. If for any reason, the Act and Order had no applicability in the case, the court should proceed to the merits. If, however, they were controlling, Alma was relegated to its statutory remedy against the United States, and the court would be required to dismiss the appeal, and to vacate Paragraph 5 of the judgment in the District Court. 15 In the determination of this jurisdictional problem, we are of the opinion that the Circuit Court of Appeals erred. It assumed that this problem involved only the question of the constitutionality of the Act and Order. But the Act and Order whether or not constitutional, do not control the disposition of this case unless they were intended to apply to it. The question of their applicability is a non-constitutional question, the decision of which might have made unnecessary any consideration of constitutionality. 16 Were the Act and Order intended to apply? Their terms seem to make that depend upon whether the subject-matter of the appeal—the T—79 transfer cases—were covered by the patent and license. The Act provides that it is only 'whenever an invention * * * shall be manufactured * * * for the United States, with license from the owner thereof * * *.' and the department head believes the stipulated royalties to be unreasonable, that the latter shall give 'written notice of such fact to the licensor and to the licensee.' It is only after such notice that the department head may fix 'fair and just' royalties, and only 'such licensee' who is forbidden to pay additional amounts as royalties, and only 'such licensor' who is relegated to the Court of Claims.9 Conversely, if the putative invention is manufactured without license, or if the putative patentee is not actually the owner, these powers and disabilities do not arise. E en Order No. W—3 does not refer to T 79 transfer cases as such. It forbids the payment of royalties only on transfer cases 'under' this license, or any license pursuant to this patent 'which embody * * * the * * * alleged inventions.' Again, if the T—79s are not 'under' the Alma-Timken license, or if they do not 'embody' Alma's patented claim, then the Order expressly leaves Alma's and Timken's rights and remedies unaffected. 17 Consequently, coverage of the T—79s, as well as constitutionality of the Act and Order, was a crucial issue in deciding the jurisdiction of the Circuit Court of Appeals. If they are covered, the Act and Order apply, and it was then necessary to decide constitutionality in order to determine whether the court could proceed to a judgment on the merits. If the T—79s are not covered, the Act and Order manifestly do not apply, and the court could proceed to a judgment on the merits, whether the Act and Order are constitutional or not. In that event, of course, no constitutional question would be decided. 18 The Circuit Court of Appeals may have thought that the applicability of the Act and Order turn not on actual coverage, but on a claim of coverage, and hence that applicability was undisputed and only constitutionality was pertinent to jurisdiction in this case. Such construction is said to have some support in cases like Smithers v. Smith, 204 U.S. 632, 27 S.Ct. 297, 51 L.Ed. 656, and Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, in which bona fide claims of rights were held to satisfy jurisdictional requirements as to the amount in controversy and as to the existence of a certain federal question, regardless of whether such claims would ultimately be established. 19 The answer to this argument is that the statutory language10 which controlled the cited cases expressly refers to the claim as the test of jurisdiction, whereas, as we have shown, the instant Act refers to the objective event. Furthermore, the test in the Smithers and Bell cases, supra, is a condition precedent to the exercise of jurisdiction. Unless such exercise is made to turn on what the plaintiff rather than what the court says is at stake, the court's jurisdictional ruling will often deny the plaintiff a forum when a full hearing might later have shown a right to relief. The test in this case, on the other hand, is a condition subsequent, in certain instances depriving the court of jurisdiction, and the same danger is not present. 20 Timken contends that the jurisdiction of all suits with respect to inventions manufactured for the United States in war-time is transferred to the Court of Claims, and that the coverage question is immaterial. It argues that where the Royalty Adjustment Act does not accomplish this transfer because the manufacture is not by a licensee, the Act of June 25, 1910, as amended,11 should apply, and that it has the same effect. It is said, therefore, that the case should have been dismissed whether there was coverage or not, and that the Circuit Court of Appeals properly refrained from deciding that question. 21 Assuming the premise is correct, we do not reach the same conclusion. Dismissa can be ordered under the 1910 Act, if it applies, without deciding any constitutional questions, for that Act has already been before this Court and been approved.12 To order dismissal under the 1942 Act, however, or under one of the two Acts alternatively, requires a determination of the constitutionality of the latter. As we have already indicated, this is sufficient reason for first deciding which Act impels the transfer. 22 It is true that § 2 of the Royalty Adjustment Act provides that if the licensor sues in the Court of Claims the United States 'may avail itself of any and all defenses, general or special, that might be pleaded by a defendant in an action for infringement as set forth in title sixty of the Revised Statutes, or otherwise.'13 We deem it clear that such defenses would include questions of coverage as well as validity of a patent. But we do not think that § 2 reflects a decision by Congress that all suits involving licenses under the Act and presenting questions of coverage or validity should be tried in the Court of Claims. As respects the problem with which we are now concerned, § 2 does no more than to make available such defenses in the Court of Claims whenever the suits authorized by the Act are brought there. 23 Both Alma and Timken maintain that the constitutional question could not be avoided by the Circuit Court of Appeals, because the T—32 and T—43 transfer cases were covered, if the T 79s were not, and were therefore necessarily subject to the Order. Indeed, the District Court decided that they were covered, and Timken did not appeal. 24 This point carries its own refutation. Neither party appealed from the adjudication as to the T—32 and T—43 transfer cases. No claim as to them was before the Circuit Court of Appeals. There is no claim now that a litigant may not appeal from part of a judgment, or that an appeal from part brings up the whole.14 The Circuit Court of Appeals was not properly concerned with their coverage, or with the applicability to them of the Act or Order. Therefore, the part of its order affecting T—32s and T—43s was unwarranted, and should not now be made the basis for approving a constitutional decision which was otherwise unnecessary. 25 Alma objects strenuously to the Government 'mending its hold' between the time it urged dismissal in an amicus brief in the Circuit Court of Appeals and argued constitutionality there and here, and the time it filed here its motion to vacate and remand. The Government certainly aided and abetted the Circuit Court of Appeals in its error. But Alma is not without fault in creating the confusion. In its 'Petition to Review' the Order, Alma asked the Circuit Court f Appeals to hold the Order unconstitutional. In its petition to the Circuit Court of Appeals for rehearing, it argued that the court should not have passed on constitutionality because Timken had not charged any royalties to the United States on T—79s, and the Act and Order were allegedly inapplicable. Before this Court it has returned to its original position. 26 We agree that much time has been wasted by the earlier failure of the parties to indicate, or the Circuit Court of Appeals or this Court to see, the course which should have been followed. This, however, is no reason to continue now on the wrong course. The principle of avoiding constitutional questions is one which was conceived out of considerations of sound judicial administration. It is a traditional policy of our courts.15 27 The judgment is vacated and the case remanded for further proceedings in conformity with this opinion. 28 Reversed and remanded. 1 56 Stat. 1013, 35 U.S.C.Supp. V, §§ 89—96, 35 U.S.C.A. §§ 89—96. 2 Timken-Detroit Axle Co. v. Alma Motor Co., D.C.Del.1942, 47 F.Supp. 582. 3 35 U.S.C.Supp. V, § 89, 35 U.S.C.A. § 89. 4 35 U.S.C.Supp. V, § 90, 35 U.S.C.A. § 90. 5 35 U.S.C.Supp. V, § 90, 35 U.S.C.A. § 90. 6 Timken-Detroit Axle Co. v. Alma Motor Co. (United States, Intervenor), 3 Cir., 1944, 144 F.2d 714. 7 The word 'again' was deleted by an order of October 2, 1944. 8 Siler v. Louisville & Nashville R. Co., 213 U.S. 175, 193, 29 S.Ct. 451, 455, 53 L.Ed. 753; Light v. United States, 220 U.S. 523, 538, 31 S.Ct. 485, 488, 55 L.Ed. 570; Spector Motor Co. v. McLaughlin, 323 U.S. 101, 105, 65 S.Ct. 152, 154, 89 L.Ed. 101. See Brandeis, J., concurring in Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 347, 56 S.Ct. 466, 483, 80 L.Ed. 688. 9 35 U.S.C.Supp. V, § 89, 35 U.S.C.A. § 89. 10 'The district courts shall have original jurisdiction * * * where the matter in controversy exceeds * * * the sum or value of $3,000, and (a) arises under the Constitution or laws of the United States * * *.' 28 U.S.C. § 41, 28 U.S.C.A. § 41. 11 Act of June 25, 1910, as amended by the Act of July 1, 1918, 36 Stat. 851, 40 Stat. 705, 35 U.S.C. § 68, 35 U.S.C.A. § 68, provides in part: 'Whenever an invention described in and covered by a patent of the United States shall hereafter be used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, such owner's remedy shall be by suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use and manufacture * * *.' 12 Crozier v. Fried Krupp, 224 U.S. 290, 32 S.Ct. 488, 56 L.Ed. 771; Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 48 S.Ct. 194, 72 L.Ed. 303. 13 Section 2 provides in full: 'Any licensor aggrieved by any order issued pursuant to section 1 hereof, fixing and specifying the maximum rates or amounts of royalties under a license issued by him, may institute suit against the United States in the Court of Claims, or in the District Courts of the United States insofar as such courts may have concurrent jurisdiction with the Court of Claims, to recover such sum, if any, as, when added to the royalties fixed and specified in such order, shall constitute fair and just compensation to the licensor for the manufacture, use, sale, or other disposition of the licensed invention for the United States, taking into account the conditions of wartime production. In any such suit the United States may avail itself of any and all defenses, general or special, that might be pleaded by a defendant in an action for infringement as set forth in title sixty of the Revised Statutes, or otherwise.' 14 Rule 73(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, provides that the 'notice of appeal * * * shall designate the judgment or part thereof appealed from * * *.' 15 Charles River Bridge v. Proprietors of Warren Bridge, 1837, 11 Pet. 420, 425, 553, 9 L.Ed. 773.

89

329 U.S. 173 67 S.Ct. 216 91 L.Ed. 172 CARTERv.PEOPLE OF STATE OF ILLINOIS. No. 36. Argued Nov. 15, 1946. Decided Dec. 9, 1946. Mr. Stephen A. Mitchell, of Chicago, Ill., for petitioner. Mr. William C. Wines, of Chicago, Ill., for respondent. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 In 1928 petitioner pleaded guilty to an indictment for murder and was sentenced to imprisonment for 99 years. In 1945 he brought a petition for his release on writ of error in the Supreme Court of Illinois claiming that the conviction on which his confinement was based was vitiated by the denial of his right under the Fourteenth Amendment to the assistance of counsel. The Supreme Court of Illinois affirmed the original judgment of conviction. 391 Ill. 594, 63 N.E.2d 763. In view of the importance of the claim, if valid, we brought the case here. 328 U.S. 827, 66 S.Ct. 1009. 2 In a series of cases of which Moore v. Dempsey, 261 U.S. 86, 43 S.Ct. 265, 67 L.Ed. 543, was the first, and Ashcraft v. State of Tennessee, 327 U.S. 274, 66 S.Ct. 544, the latest, we have sustained an appeal to the Due Process Clause of the Fourteenth Amendment for a fair ascertainment of guilt or innocence. Inherent in the notion of fairness is ample opportunity to meet an accusation. Under pertinent circumstances, the opportunity is ample only when an accused has the assistance of counsel for his defense. And the need for such assistance may exist at every stage of the prosecution, from arraignment to sentencing. This does not, however, mean that the accused may not make his own defense; nor does it prevent him from acknowledging guilt when fully advised of all its implications and capable of understanding them. Neither the historic conception of Due Process nor the vitality it derives from progressive standards of justice denies a person the right to defend himself or to confess guilt. Under appropriate circumstances the Constitution requires that counsel be tendered; it does not require that under all circumstances counsel be forced upon a defendant. United States ex rel. McCann v. Adams, 320 U.S. 220, 64 S.Ct. 14, 88 L.Ed. 4. 3 The solicitude for securing justice thus embodied in the Due Process Clause is not satisfied by formal compliance or merely procedural regularity. It is not conclusive that the proceedings resulting in incarceration are unassailable on the face of the record. A State must give one whom it deprives of his freedom the opportunity to open an inquiry into the intrinsic fairness of a criminal process even though it appears proper on the surface. Mooney v. Holohan, 294 U.S. 103, 55 S.Ct. 340, 79 L.Ed. 791, 98 A.L.R. 406. Questions of fundamental justice protected by the Due Process Clause may be raised, to use lawyers' language, dehors the record. 4 But the Due Process Clause has never been perverted so as to force upon the forty-eight States a uniform code of criminal procedure. Except for the limited scope of the federal criminal code, the prosecution of crime is a matter for the individual States. The Constitution commands the States to assure fair judgment. Procedural details for securing fairness it leaves to the States. It is for them, therefore, to choose the methods and practices by which crime is brought to book, so long as they observe those ultimate dignities of man which the United States Constitution assures. Brown v. State of New Jersey, 175 U.S. 172, 175, 20 S.Ct. 77, 78, 44 L.Ed. 119; State of Missouri v. Lewis, 101 U.S. 22, 31, 25 L.Ed. 989. Wide discretion must be left to the States for the manner of adjudicating a claim that a conviction is unconstitutional. States are free to devise their own systems of review in criminal cases. A State may decide whether to have direct appeals in such cases, and if so under what circumstances. McKane v. Durston, 153 U.S. 684, 687, 14 S.Ct. 913, 915, 38 L.Ed. 867. In respecting the duty laid upon them by Mooney v. Holohan, the States have a wide choice of remedies. A State may provide that the protection of rights granted by the Federal Constitution be sought through the writ of habeas corpus or coram nobis. It may use each of these ancient writs in its common law scope, or it may put them to new uses; or, it may afford remedy by a simple motion brought either in the court of original conviction or at the place of detention. See, e.g., New York ex rel. Whitman v. Wilson, 318 U.S. 688, 63 S.Ct. 840, 87 L.Ed. 1083; Matter of Lyons v. Goldstein, 290 N.Y. 19, 25, 47 N.E.2d 425, 146 A.L.R. 1422; Matter of Morhous v. New York Supreme Court, 293 N.Y. 131, 56 N.E.2d 79; People v. Gersewitz, 294 N.Y. 163, 168, 61 N.E.2d 427; Matter of Hogan v. Court of General Sessions, 296 N.Y. 1, 9, 68 N.E.2d 849. So long as the rights under the United States Constitution may be pursued, it is for a State and not for this Court to define the mode by which they may be vindicated. 5 An accused may have been denied the assistance of counsel under circumstances which constitute an infringement of the United States Constitution. If the State affords no mode for redressing that wrong, he may come to the federal courts for relief. But where a remedy is provided by the State, a defendant must first exhaust it in the manner in which the State prescribes. Ex parte Hawk, 321 U.S. 114, 64 S.Ct. 448, 88 L.Ed. 572; House v. Mayo, 324 U.S. 42, 65 S.Ct. 517, 89 L.Ed. 739. For the relation of the United States and the courts of the United States to the States and the courts of the States is a very delicate matter. See Ex parte Royall, 117 U.S. 241, 251, 6 S.Ct. 734, 740, 29 L.Ed. 868. When a defendant, as here, invokes a remedy provided by the State of Illinois the decision of the local court must be judged on the basis of the scope of the remedy provided and what the court properly had before it in such a proceeding. Woods v. Nierstheimer, 328 U.S. 211, 66 S.Ct. 996. The only thing before the Illinois Supreme Court was what is known under Illinois practice as the common law record. That record, as certified in this case, included only the indictment, the judgment on plea of guilty, the minute entry bearing on sentence, and the sentence. And so the very narrow question now before us is whether this common law record establishes that the defendant's sentence is void because in the proceedings that led to it he was denied the assistance of counsel. 6 This case is quite different from a case like Rice v. Olson, 324 U.S. 786, 65 S.Ct. 989, 89 L.Ed. 1367. In that case the record properly before this Court contained specific allegations bearing on the disabilities of the defendant to stand prosecution without the aid of counsel. There was not, as we have here, an unchallenged finding by the trial court that the accused was duly apprised of his rights and, in awareness of them, chose to plead guilty. The judgment against Carter explicitly states: 7 'And the said defendant Harice Leroy Carter commonly known as Roy Carter having been duly arraigned and being called upon to plead expresses a desire to plead guilty to the crime of murder as charged in the indictment. Thereupon the Court fully explained to the Defendant Harice Leroy Carter commonly known as Roy Carter the consequence of such plea and of all his rights in the premises including the right to have a lawyer appointed by the Court to defend him and also of his right to a trial before a jury of twelve jurors sworn in open Court and of the degree of proof that would be required to justify a verdict of guilty against him under the plea of not guilty but the defendant Harice Leroy Carter commonly known as Roy Carter persists in his desire to plead guilty and for a plea says he is guilty in manner and form as charged in the indictment.' 8 This, then, is not a case in which intelligent waiver of counsel is a tenuous inference from the mere fact of a plea of guilty. Rice v. Olson, supra, 324 U.S. at page 788, 65 S.Ct. at page 990, 89 L.Ed. 1367. A fair reading of the judgment against Carter indicates a judicial attestation that the accused, with his rights fully explained to him, consciously chose to dispense with counsel. And there is nothing in the record to contradict the judicial finding. From the common law record, we do not know what manner of man the defendant was. Facts bearing on his maturity or capacity of comprehension or on the circumstances under which a plea of guilty was tendered and accepted are wholly wanting. We have only the fact that the trial judge explained what the plea of guilty involved. To be sure, the record does not show that the trial court spelled out with laborious detail the various degrees of homicide under Illinois law and the various defenses open to one accused of murder. But the Constitution of the United States does not require of a judge that he recite with particularity that he performed his duty. 9 The only peg on which the defendant seeks to hang a claim that his right to counsel was denied is the fact that the judge did assign him counsel when it came to sentencing. From this fact alone, we are asked to draw the inference that the accused was not capable of understanding the proceedings which led to his plea of guilty, and was therefore deprived of the indispensable assistance of counsel. We cannot take such a jump in reasoning. A trial court may justifiably be convinced that a defendant knows what he is about when he pleads guilty and that he rightly believes that a trial is futile because a defense is wanting. But the imposition of sentence presents quite different considerations. There a judge usually moves within a large area of discretion and doubts. Such is the situation under Illinois law. The range of punishment which a judge in Illinois may impose for murder is between fourteen years and death. It is a commonplace that no more difficult task confronts judges than the determination of punishment not fixed by statute. Even the most self-assured judge may well want to bring to his aid every consideration that counsel for the accused can appropriately urge. In any event, the designation of counsel to assist the accused at the sentencing stage of the prosecution in no wise implies that the defendant was not capable of intelligent self-protection when he pleaded guilty. Cf. Canizio v. People of State of New York, 327 U.S. 82, 66 S.Ct. 452. 10 We conclude that on the record before the Supreme Court of Illinois there was no showing that Carter's plea of guilty was made under circumstanc § which cut the ground from under the resulting sentence. In restricting its review to that record the Supreme Court of Illinois followed local practice, and the practice constitutes allowable State appellate procedure. Factors that might suggest fundamental unfairness in the proceedings before the trial judge—e.g., the racial handicap of the defendant, his mental capacity, his inability to make an intelligent choice, precipitancy in the acceptance of a plea of guilty—are not before us because they were not in the common law record which was all that was before the Supreme Court of Illinois. Whether the defendant is entitled to press such claims to show a denial by the State of Illinois of a constitutional right, it will be time enough to consider when that issue is properly before us after being presented in a proceeding in the State courts appropriate to that purpose, or, if none is available, in a federal court. Woods v. Nierstheimer, supra; Ex parte Hawk, supra. 11 After indicating the restricted scope of review in this proceeding, the court below observed that under Illinois law a defendant who desires counsel must ask for it and show that he cannot afford one of his own choice. There are situations when justice cannot be administered unless persons charged with crime are defended by capable and responsible counsel. But there is nothing in the record before us to indicate that the circumstances made it necessary for Carter to have professional guidance other than that given by the trial court. There is therefore nothing in the statement of the Illinois Supreme Court alone from which we can infer that these normal requirements of Illinois law prejudiced this defendant or made their observance in this case incongruous with his constitutional rights. 12 Judgment affirmed. 13 Mr. Justice DOUGLAS, with whom Mr. Justice BLACK and Mr. Justice RUTLEDGE concur, dissenting. 14 If, as the opinion of the Court suggests, the Illinois Supreme Court had ruled that petitioner could not raise the question of his right to counsel by reason of the abbreviated common law record, I would agree that the judgment should be affirmed. For then petitioner would be remitted to other state procedures for vindication of his constitutional right. The Illinois Supreme Court rested on that ground when it refused to consider his claim that he was deprived of due process of law by reason of the method of his arrest and the unfairness of the trial. But when it came to consider the question of his right to counsel, the inadequacy of the record was not the ground it gave for barring him from showing that he was unqualified to waive the constitutional right: 15 'His first contention is that the court erred in not appointing an attorney to represent him during arraignment. The right to be represented by counsel is one which the defendant may waive or claim, as he shall determine. No duty rests upon the court to provide legal assistance for an accused, unless he states, under his oath, his inability to procure counsel, and expresses a desire to have the court appoint one for him. (People v. Braner, 389 Ill. 190, 58 N.E.2d 869; People v. Corrie, 387 Ill. 587, 56 N.E.2d 767; People v. Childers, 386 Ill. 312, 53 N.E.2d 878.) There being no bill of exceptions, and it not appearing that plaintiff in error sought to have an attorney appointed for him, this assignment of error cannot be sustained. People v. Stubblefield, (391 Ill. 609), 63 N.E.2d (763, 764); People v. Stack, 391 Ill. 15, 62 N.E.2d 807; People v. Braner, 389 Ill. 190, 58 N.E.2d 869.' 391 Ill. 594, 595; 63 N.E.2d 763, 764. 16 By the rule there announced the record was inadequate only in one respect—the absence of a bill of exceptions showing that petitioner asked that an attorney be appointed for him. But that neglect by a defendant is not fatal, at least in a capital case. If a defendant is not capable of making his own defense, it is the duty of the court to appoint counsel, whether requested so to do or not. Williams v. Kais r, 323 U.S. 471, 476, 65 S.Ct. 363, 89 L.Ed. 398. As we stated in that case, 323 U.S. at pages 475, 476, 65 S.Ct. at page 366, 89 L.Ed. 398: 17 'The decision to plead guilty is a decision to allow a judgment of conviction to be entered without a hearing—a decision which is irrevocable and which forecloses any possibility of establishing innocence. If we assume that petitioner committed a crime, we cannot know the degree of prejudice which the denial of counsel caused. See Glasser v. United States, 315 U.S. 60, 75, 76, 62 S.Ct. 457, 467, 468, 86 L.Ed. 680. Only counsel could discern from the facts whether a plea of not guilty to the offense charged or a plea of guilty to a lesser offense would be appropriate. A layman is usually no match for the skilled prosecutor whom he confronts in the court room. He needs the aid of counsel lest he be the victim of overzealous prosecutors, of the law's complexity, or of his own ignorance or bewilderment.' 18 Therefore the least which we should do is to vacate this judgment and remand the case to the Illinois Supreme Court. For as Mr. Justice Murphy points out, there is ample evidence in the record, certified to us from that court, to support petitioner's claim that he was not capable of making his defense. If that evidence may be considered in this proceeding, petitioner should prevail. Though the basis of the action of the Illinois Supreme Court be deemed less clear than I have indicated, a remand to it would be appropriate so that any state procedural question may be untangled from the question arising under the federal constitution. See State Tax Commission of Utah v. Van Cott, 306 U.S. 511, 59 S.Ct. 605, 83 L.Ed. 950. 19 Mr. Justice MURPHY, dissenting. 20 The admitted facts of this case plainly reveal that the petitioner has not been convicted of murder and sentenced to 99 years in prison in accordance with due process of law. Rather he has been deprived of his freedom for life without the aid of an attorney to guide him along the complicated and twisting labyrinths of the law. And there is no affirmative indication that he intelligently waived his right to counsel or that he understood the intricate legal problems involved in his indictment and conviction. Due process cannot thrive in the absence of such evidence. 21 There is an initial problem as to what evidence is before this court at this time. It is said that we are limited to the common law record before the Supreme Court of Illinois, a record that includes only the indictment, the judgment on the plea of guilty, the minute entry bearing on the sentence, and the sentence itself. We are asked to close our eyes to a transcript of testimony in connection with a hearing on mitigation of the offense. This testimony was taken after the conviction. It has been certified, presumably by the stenographer recording the testimony at the hearing, and notarized. It appears in the printed record before this Court. We are also asked to overlook certain information about the petitioner given to the Illinois State Penitentiary by the State's attorney and concurred in by the presiding judge. The State of Illinois does not deny any of these facts; it merely requests that we disregard them as did the Supreme Court of Illinois, that we blind ourselves to what is printed in the record before us. 22 Legal technicalities doubtless afford justification for our pretense of ignoring plain facts before us, facts upon which a man's very life or liberty conceivably could depend. Moreover, there probably is legal warrant for our not remanding the case to the Supreme Court of Illinois to allow those facts to be incorporated in the formal record before it and to consider its decision in light thereof. But the result certainly does not enhance the high traditions of the judicial process. 23 In my view, when undisputed facts appear in the record before us in a case involving a man's life or liberty, they should not be ignored if justice demands their use. Here the facts in question fortuna ely are not crucial, since the bare common law record alone reveals a lack of due process. But the additional facts do serve to emphasize the absence of an intelligent waiver of counsel and petitioner's failure to comprehend the legal problems placed in his path. They serve to make any decision on the issue in the case more intelligent and more just. The discussion that follows, therefore, is based on all the certified facts in the record before us. 24 Petitioner, a Negro, was 30 years of age at the time of the relevant events in 1928. He had no schooling, although he was able to read and write. He was of average mentality and had never before run afoul of the law. During the preceding eleven years he had worked as a cook and a mechanic. By reputation he was quiet and industrious. 25 While driving a car back from a fishing trip, petitioner became involved in a bitter and prolonged dispute with the driver of a horse-drawn gravel wagon over the right-of-way on a road. This driver, a white man, refused to give petitioner enough room to pass. A violent argument in racial terminology ensued; rocks and gravel were thrown at petitioner's car. Eventually, when the dispute was renewed after a short interval, the driver got off his wagon and advanced toward petitioner's car. Petitioner claimed that he thought the driver was reaching into his shirt for a gun. Petitioner got out of his car and fired three times killing the driver. 26 Petitioner was taken into custody that same evening and was questioned far into the night. He was taken to an adjoining town, allegedly to avoid mob violence. Twelve days later, on June 12, 1928, he was indicted. It was charged that he 'did then and there unlawfully, and feloniously, with malice aforethought, by shooting, kill' the named individual. On June 15 he was arraigned without the benefit of counsel, it being alleged by petitioner that he was held incommunicado from the time of his arrest. He was handed a copy of the five-page indictment, under which he could have been convicted of first-degree murder, lesser degrees of homicide, voluntary or involuntary manslaughter, assault with a deadly weapon, or lesser degrees of assault. Various considerations of defense, including self-defense, were accordingly raised. Upon being asked how he pleaded, he expressed a desire to plead guilty as charged in the indictment. The trial court's order, which bears striking resemblance to the Illinois statute on the subject (Ill.Rev.Stat., 1945, Ch. 38, par. 732), recited that the judge 'fully explained' to petitioner 'the consequences of such plea' and his rights to counsel and to jury trial, but that petitioner 'persists in his desire to plead guilty' as charged. There is no affirmative evidence that petitioner understood the necessary consequences of his plea or that, fully appreciating all of his legal rights, he intelligently waived his rights to counsel or to jury trial. All that appears is that he 'persisted' in his desire to plead guilty and that the court convicted him of murder, the statutory punishment for which was death by electrocution or imprisonment for any period from fourteen years to life. 27 A further hearing was held on the same day and an attorney was appointed, apparently not at petitioner's request, to represent petitioner at a hearing upon the 'question of mitigation or aggravation of said crime of murder to which defendant has pleaded guilty.' Such a hearing was required by state law (Ill.Rev.Stat., 1945, Ch. 38, par. 732) where a guilty plea has been entered and where the court has discretion as to the extent of the punishment. A hearing on this matter was held three days later, on June 18, petitioner's appointed counsel being present. On June 29, in the absence of counsel, petitioner appeared in court and was sentenced to serve 99 years in prison. 28 I do not believe that these facts add up to due process of law. Petitioner, an uneducated, bewildered layman, was allegedly held incommunicado for fifteen days and was the called upon to make a vital decision upon the basis of his unintelligent understanding of the indictment—a legalistic, verbose document of five pages which would doubtless mean many things to many learned lawyers in light of the particular facts involved. Petitioner's very life and liberty depended upon his ability to comprehend the variety of crimes covered by the indictment and which one, if any, applied to the facts of his case. He was compelled to weigh the factors involved in a guilty plea against those resulting from the submission of his case to a jury. He was forced to judge the chances of setting up a successful defense. These are all complicated matters that only a man versed in the legal lore could hope to comprehend and to decide intelligently. Petitioner obviously was not of that type. Yet at this crucial juncture petitioner lacked the aid and guidance of such a person. In my view, it is a gross miscarriage of justice to condemn a man to death or to life imprisonment in such a manner. See Powell v. State of Alabama, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158, 84 A.L.R. 527; Williams v. Kaiser, 323 U.S. 471, 65 S.Ct. 363, 89 L.Ed. 398; Rice v. Olson, 324 U.S. 786, 65 S.Ct. 989, 89 L.Ed. 1367. 29 It is said, of course, that petitioner waived his right to counsel. My answer is that such action is immaterial in a capital case of this nature without affirmative evidence of an intelligent waiver. Such evidence is non-existent here, even looking solely at the common law record. Its absence becomes even more emphasized when we view the background of ignorance, racial antagonism and threats of mob violence. When the life of a man hangs in the balance, we should insist upon the fullest measure of due process. Society is here attempting to take away the life or liberty of one of its members. That attempt must be tested by the highest standards of justice and fairness that we know. It is no excuse that the individual is willing to forego certain basic rights unless we are certain that he has a full and intelligent comprehension of what he is doing. Otherwise we take from due process of law a substantial part of its content. 30 Nor is it significant that counsel was appointed for petitioner to represent him at the hearing as to the mitigation of the offense. The error was done, the damage was committed, when petitioner was arraigned, compelled to plead and convicted without the assistance of counsel. The special hearing on mitigation held thereafter, for which counsel was provided, afforded no opportunity for undoing the effect of the unaided arraignment or plea of guilty. Cf. Canizio v. People of State of New York, 327 U.S. 82, 66 S.Ct. 452. The failure to have counsel in regard to those matters permeated the entire proceeding, with indelible effects that could not be removed at the special hearing. Due process of law still was lacking. 31 Insistence upon counsel at all stages of a capital case, where an intelligent waiver is lacking, imposes no intolerable burden upon the law enforcement process. It is merely a recognition of our attempt to be civilized, a recognition that the process of condemning human life is to be judged by standards higher than those applied to a prosecution for violation of a minor ordinance or regulation. 32 I would therefore reverse the judgment below.

01

329 U.S. 296 67 S.Ct. 271 91 L.Ed. 296 ROTHENSIES, Collector of Internal Revenue,v.ELECTRIC STORAGE BATTERY CO. No. 48. Argued Nov. 15—18, 1946. Decided Dec. 16, 1946. Mr.Arnold Raum, of Washington, D.C., for petitioner. Mr. Laurence H. Eldredge, of Philadelphia, Pa., for respondent. Mr. Justice JACKSON, delivered the opinion of the Court. 1 This case represents an effort, thus far successful, to obtain advantage by way of recoupment of a claim for tax refund long since barred by the statute of limitations. The facts of this singular situation are not in dispute. From April 1919 to April 1926 the Electric Storage Battery Company paid excise taxes on the sale of storage batteries in the belief, shared by the Government, that such sales were subject to tax. In July of 1926 the company asserted otherwise and filed a refund claim. It asked refund only of the part of the taxes which it had paid between 1922 and 1926. Refund of the taxes paid earlier which the company now seeks to recoup were then barred by the statute of limitations and no claim ever has been filed for their refund and no action ever was begun for their recovery. Suit was brought, however, against the Collector for refund of the taxes paid after July 1922; judgment therefor was obtained in the district court, Electric Storage Battery Co. v. McCaughn, 52 F.2d 205; 54 F.2d 814, and affirmed by the Circuit Court of Appeals, 3 Cir., 63 F.2d 715. The Government finally settled by refund of $1,395,515.35, of which $825,151.52 represented tax and the balance interest. 2 During the years that the refunded excise tax was being collected, the taxpayer deducted it from income before calculation of its income tax, thereby deriving substantial benefits. The Commissioner, therefore, treated the refund as income for 1935, the year in which it was received, and because of it assessed additional income and excess profits taxes which with interest thereon totaled 229,805.34. The taxpayer paid the deficiency, filed claim for refund, and after it was rejected sued the Collector. It contended that the refund from the Government was not income to the taxpayer but that if it were so considered taxpayer should be permitted, as against the additional tax caused by its inclusion, to recoup the amount of the barred excise taxes which it had paid between 1919 and 1922. Both courts below correctly held that the refund was properly assessed as income. D.C., 57 F.Supp. 731; 3 Cir., 152 F.2d 521. Cf. Security Flour Mills Co. v. Commissioner, 321 U.S. 281, 64 S.Ct. 596, 88 L.Ed. 725; Freihofer Baking Co. v. Commissioner, 3 Cir., 151 F.2d 383. Both have held, however, that the income tax liability for 1935 should be extinguished by rec upment of the 1919 to 1922 excise taxes. The gravity of this holding to the administration of the tax laws led us to grant certiorari. Rothensies v. Electric Storage Battery Co., 327 U.S. 774, 66 S.Ct. 825. 3 It is not contended that there is any statutory warrant for allowing barred tax refund claims by way of recoupment or otherwise.1 Authority for it is said to be found in case law and taxpayer relies chiefly on two decisions of this Court, Bull v. United States, 295 U.S. 247, 55 S.Ct. 695, 79 L.Ed. 1421, and Stone v. White, 301 U.S. 532, 57 S.Ct. 851, 81 L.Ed. 1265. The essence of the doctrine of recoupment is stated in the Bull case; 'Recoupment is in the nature of a defense arising out of some feature of the transaction upon which the plaintiff's action is grounded.' 295 U.S. 247, 262, 55 S.Ct. 700, 79 L.Ed. 1421. It has never been thought to allow one transaction to be offset against another, but only to permit a transaction which is made subject of suit by a plaintiff to be examined in all its aspects, and judgment to be rendered that does justice in view of the one transaction as a whole. 4 The application in this general principle to concrete cases in both of the cited decisions is instructive as to the limited scope given to recoupment in tax litigation. In both cases a single transaction constituted the taxable event claimed upon and the one considered in recoupment. In both, the single transaction or taxable event had been subjected to two taxes on inconsistent legal theories, and what was mistakenly paid was recouped against what was correctly due. In Bull v. United States, the one taxable event was receipt by executors of a sum of money. An effort was made to tax it twice once under the Income Tax Act as income to the estate after decedent's death and once under the Estate Tax Act as part of decedent's gross estate. This Court held that the amount of the tax collected on a wrong theory should be allowed in recoupment against an assessment under the correct theory.2 In Stone v. White, likewise, both the claim and recoupment involved a single taxable event, which was receipt by an estate of income for a period. The trustees had paid the income tax on it but this Court held it was taxable to the beneficiary. Assessment against the beneficiary had meanwhile become barred. Then the trustees sued for a refund, which would inure to the beneficiary. The Court treated the transaction as a whole and allowed recoupment of the tax which the beneficiary should have paid against the tax the Government should not have collected from the trustees. Whatever may have been said indicating a broader scope to the doctrine of recoupment, these facts are the only ones in which it has been applied by this Court in tax cases. 5 The Government has argued that allowance of the claim of recoupment involved here would expand the holding in the Bull case. The Circuit Court of Appeals agreed that in the Bull case 'The main claim and recoupment claim were more closely connected than they are here.' Electric Storage Batt ry Co. v. Rothensies, 3 Cir., 152 F.2d 521, 524. But the court nevertheless allowed the claim because it considered that this Court had introduced the doctrine of recoupment into tax law and that it was 'based on concepts of fairness.' 152 F.2d 521, 524. It said it saw no reason for narrowly construing the requirement that both claims originate in the same transaction. We think this misapprehends the limitations on the doctrine of recoupment as applied to tax law and it leads us to state more fully reasons for declining to expand the doctrine beyond the facts of the cited cases. 6 It probably would be all but intolerable, at least Congress has regarded it as ill-advised, to have an income tax system under which there never would come a day of final settlement and which required both the taxpayer and the Government to stand ready forever and a day to produce vouchers, prove events, establish values and recall details of all that goes into an income tax contest. Hence a statute of limitation is an almost indispensable element of fairness as well as of practical administration of an income tax policy. 7 We have had recent occasion to point out the reason and the character of such limitation statutes. 'Statutes of limitation, like the equitable doctrine of laches, in their conclusive effects are designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. The theory is that even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of stale claims in time comes to prevail over the right to prosecute them.' Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 348, 349, 64 S.Ct. 582, 586, 88 L.Ed. 788. 'They are by definition arbitrary, and their operation does not discriminate between the just and the unjust claim, or the voidable (avoidable) and unavoidable delay. They have come into the law not through the judicial process but through legislation.' Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S.Ct. 1137, 1142, 89 L.Ed. 1628. 8 As statutes of limitation are applied in the field of taxation, the taxpayer sometimes gets advantages and at other times the Government gets them. Both hardships to the taxpayers and losses to the revenues may be pointed out.3 They tempt the equity-minded judge to seek for ways of relief if individual cases. 9 But if we should approve a doctrine of recoupment of the breadth here applied we would seriously undermine the statute of limitations in tax matters. In many, if not most, cases of asserted deficiency the items which occasion it relate to past years closed by statute, at least as closely as does the item involved here. Cf. Hall v. United States, 95 Ct.Cl. 539, 43 F.Supp. 130. The same is true of items which form the basis of refund claims. Every assessment of deficiency and each claim for refund would invite a search of the taxpayer's entire tax history for items to recoup. This cas provides evidence of the extent to which this would go. When this suit was brought in 1943, the claim pleaded as a recoupment was for taxes collected over twenty years before and for over sixteen years barred by the statute. That claims dead so long can be resurrected under this doctrine, is enough to show its menace to the statute of limitations—at least as to those taxpayers whose affairs by accident or design take such shape that they can avail themselves of recoupment remedies. Moreover, we have held that the Tax Court has no jurisdiction to consider recoupment. Gooch Milling and Elevator Co. v. Commissioner, 320 U.S. 418, 64 S.Ct. 184, 88 L.Ed. 139. Hence, the availability of the remedy would depend on diverting the litigation to the district courts. 10 We cannot approve such encroachments on the policy of the statute out of consideration for a taxpayer who for many years failed to file or prosecute its refund claim. If there are to be exceptions to the statute of limitations, it is for Congress rather than for the Courts to create and limit them. 11 The judgment below is reversed. 12 Reversed. 13 Mr. Justice MURPHY is of the opinion, in which Mr. Justice BLACK and Mr. Justice RUTLEDGE join, that the judgment below should be affirmed. He believes that the claims for refund of the illegal assessments exacted from 1919 to 1922 arise out of the same subject matter as was involved in the Government's demand for additional taxes for 1935, thereby making applicable the rule of Bull v. United States, 295 U.S. 247, 55 S.Ct. 695, 79 L.Ed. 1421. 1 Indeed, the applicable provisions of the Revenue Act of 1928 seem to direct a result opposite to that asked by respondent. Section 608 provides that 'A refund of any portion of an internal-revenue tax (or any interest, penalty, additional amount, or addition to such tax) made after the enactment of this Act, shall be considered erroneous—(a) if made after the expiration of the period of limitation for filing claim therefor, unless within such period claim was filed; * * *.' 26 U.S.C.A. Int.Rev.Acts, page 459. Section 609(b) provides, 'A credit of an overpayment in respect of any tax shall be void if a refund of such overpayment would be considered erroneous under section 608.' 45 Stat. 874, 875, 26 U.S.C.A. Int.Rev.Acts, page 460. And cf. McEachern v. Rose, 302 U.S. 56, 58 S.Ct. 84, 82 L.Ed. 46. 2 But the Court emphasized that refund of the incorrect tax was not barred by the statute at the time the Government proceeded for collection of the correct tax. 3 In American Light & Traction Co. v. Harrison, 7 Cir., 142 F.2d 639, 154 A.L.R. 1042, the court did not allow recoupment to the Government. But judiciously, it said, 'Although here a hardship on the Government results from the taxpayer's inconsistency, the correlative provisions of this same statute will, in the converse of the instant situation, work an equal hardship on the taxpayer.' 142 F.2d 639, 643. Whether or not the statute, §§ 608 and 609 of the Revenue Act of 1928, be taken to compel the conclusion we reach in this case, the court's recognition that both parties to taxation are affected impartially, though perhaps harshly, by policy of repose has application here. It may easily be overlooked, when the unfairness of the Government's retaining incorrectly collected monies of respondent is stressed, that the statute of limitations is primarily an instrument of fairness.

1112

329 U.S. 249 67 S.Ct. 274 91 L.Ed. 265 FREEMANv.HEWIT, Director of Gross Income Tax Division, Department of Treasury, State of Indiana. No. 3. Reargued Oct. 14, 1946. Decided Dec. 16, 1946. Rehearing Denied Jan. 13, 1947. See 329 U.S. 832, 67 S.Ct. 497. Appeal from the Supreme Court of the State of Indiana. Mr. Harry T. Ice, of Indianapolis, Ind., for appellant. John J. McShane, of Indianapolis, Ind., for appellee. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 This case presents another phase of the Indiana Gross Income Tax Act of 1933, which has been before this Court in a series of cases beginning with Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429. The Act imposes a tax upon 'the receipt of the entire gross income' of residents and domiciliaries of Indiana but excepts from its scope 'Such gross income as is derived from business conducted in commerce between this state and other states of the United States * * * to the extent to which the state of Indiana is prohibited from taxing such gross income by the Constitution of the United States.' Indiana Laws 1933, pp. 388, 392, as amended, Laws 1937, p. 615, Burns' Ind.Stat.Anno. § 64-2601 et seq. 2 Appellant's predecessor domiciled in Indiana, was trustee of an estate created by the will of a decedent domiciled in Indiana at the time of his death. During 1940, the trustee instructed his Indiana broker to arrange for the sale at stated prices of securities forming part of the trust estate. Through the broker's New York correspondents the securities were offered for sale on the New York Stock Exchange. When a purchaser was found, the New York brokers notified the Indiana broker who in turn informed the trustee, and the latter brought the securities to his broker for mailing to New York. Upon their delivery to the purchasers, the New York brokers received the purchase price, which, after deducting expenses and commission, they transmitted to the Indiana broker. The latter delivered the proceeds less his commission to the trustee. On the gross receipts of these sales, amounting to $65,214.20, Indiana, under the Act of 1933, imposed a tax of 1%. Having paid the tax under protest, the trustee brought this suit for its recovery. The Supreme Court of Indiana, reversing a court of first instance, sus ained the tax on the ground that the situs of the securities was in Indiana. 221 Ind. 675, 51 N.E.2d 6. The case is here on appeal under § 237(a) of the Judicial Code, 28 U.S.C. 344(a), 28 U.S.C.A. § 344(a), and has had the consideration which two arguments afford. 3 The power of the States to tax and the limitations upon that power imposed by the Commerce Clause have necessitated a long, continuous process of judicial adjustment. The need for such adjustment is inherent in a federal government like ours, where the same transaction has aspects that may concern the interests and involve the authority of both the central government and of the constituent States.1 4 The history of this problem is spread over hundreds of volumes of our Reports. To attempt to harmonize all that has been said in the past would neither clarify what has gone before not guide the future. Suffice it to say that especially in this field opinions must be read in the setting of the particular cases and as the product of preoccupation with their special facts. 5 Our starting point is clear. In two recent cases we applied the principle that the Commerce Clause was not merely an authorization to Congress to enact laws for the protection and encouragement of commerce among the States, but by its own force created an area of trade free from interference by the States. In short, the Commerce Clause even without implementing legislation by Congress is a limitation upon the power of the States. Southern Pacific Co. v. Arizona, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915; Morgan v. Virginia, 328 U.S. 373, 66 S.Ct. 1050. In so deciding we reaffirmed, upon fullest consideration, the course of adjudication unbroken through the Nation's history. This limitation on State power, as the Morgan case so well illustrates, does not merely forbid a State to single out interstate commerce for hostile action. A State is also precluded from taking any action which may fairly be deemed to have the effect of impeding the free flow of trade between States. It is immaterial that local commerce is subjected to a similar encumbrance. It may commend itself to a State to encourage a pastoral instead of an industrial society. That is its concern and its privilege. But to compare a State's treatment of its local trade with the exertion of its authority against commerce in the national domain is to compare incomparables. 6 These principles of limitation on State power apply to all State policy no matter what State interest gives rise to its legislation. A burden on interstate commerce is none the lighter and no less objectionable because it is imposed by a State under the taxing power rather than under manifestations of police power in the conventional sense. But, in the necessary accommodation between local needs and the overriding requirement of freedom for the national commerce, the incidence of a particular type of State action may throw the balance in support of the local need because interference with the national interest is remote or unsubstantial. A police regulation of local aspects of interstate commerce is a power often essential to a State in safeguarding vital local interests. At least until Congress chooses to enact a nation-wide rule, the power will not be denied to the State. T e Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 402 et seq., 33 S.Ct. 729, 741, 57 L.Ed. 511, 48 L.R.A.,N.S., 1151, Ann.Cas.1916A, 18; South Carolina State Hwy. Dept. v. Barnwell Bros., 303 U.S. 177, 625, 58 S.Ct. 510, 82 L.Ed. 734; Union Brokerage Co. v. Jensen, 322 U.S. 202, 209—212, 64 S.Ct. 967, 972—973, 88 L.Ed. 1227, 152 A.L.R. 1072. State taxation falling on interstate commerce, on the other hand, can only be justified as designed to make such commerce bear a fair share of the cost of the local government whose protection it enjoys. But revenue serves as well no matter what its source. To deny to a State a particular source of income because it taxes the very process of interstate commerce does not impose a crippling limitation on a State's ability to carry on its local function. Moreover, the burden on interstate commerce involved in a direct tax upon it is inherently greater, certainly less uncertain in its consequences, than results from the usual police regulations. The power to tax is a dominant power over commerce. Because the greater or more threatening burden of a direct tax on commerce is coupled with the lesser need to a State of a particular source of revenue, attempts at such taxation have always been more carefully scrutinized and more consistently resisted than police power regulations of aspects of such commerce. The task of scrutinizing is a task of drawing lines. This is the historic duty of the Court so long as Congress does not undertake to make specific arrangements between the national government and the States in regard to revenues from interstate commerce. See Act of July 3, 1944, 58 Stat. 723, 49 U.S.C.A. § 425 note; H.Doc. 141, 79th Cong., 1st Sess., 'Multiple Taxation of Air Commerce'; and compare 54 Stat. 1059, 4 U.S.C. § 13 et seq., 4 U.S.C.A. § 13 et seq. (permission to State to extend taxing power to Federal areas). Considerations of proximity and degree are here, as so often in the law, decisive. 7 It has been suggested that such a tax is valid when a similar tax is placed on local trade, and a specious appearance of fairness is sought to be imparted by the argument that interstate commerce should not be favored at the expense of local trade. So to argue is to disregard the life of the Commerce Clause. Of course a State is not required to give active advantage to interstate trade. But it cannot aim to control that trade even though it desires to control its own. It cannot justify what amounts to a levy upon the very process of commerce across State lines by pointing to a similar hobble on its local trade. It is true that the existence of a tax on its local commerce detracts from the deterrent effect of a tax on interstate commerce to the extent that it removes the temptation to sell the goods locally. But the fact of such a tax, in any event, puts impediments upon the currents of commerce across the State line, while the aim of the Commerce Clause was precisely to prevent States from exacting toll from those engaged in national commerce. The Commerce Clause does not involve an exercise in the logic of empty categories. It operates within the framework of our federal scheme and with due regard to the national experience reflected by the decisions of this Court, even though the terms in which these decisions have been cast may have varied. Language alters, and there is a fashion in judicial writing as in other things. 8 This case, like Adams Mfg. Co. v. Storen, supra, involves a tax imposed by the State of the seller on the proceeds of interstate sales. To extract a fair tithe from interstate commerce for the local protection afforded to it, a seller State need not impose the kind of tax which Indiana here levied. As a practical matter, it can make such commerce pay its way, as the phrase runs, apart from taxing the very sale. Thus, it can tax local manufacture even if the products are destined for other States. For some purposes, manufacture and the shipment of its products beyond a State may be look d upon as an integral transaction. But when accommodation must be made between state and national interests, manufacture within a State, though destined for shipment outside, is not a seamless web so as to prevent a State from giving the manufacturing part detached relevance for purposes of local taxation. American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084; Utah Power & L. Co. v. Pfost, 286 U.S. 165, 52 S.Ct. 548, 76 L.Ed. 1038. It can impose license taxes on domestic and foreign corporations who would do business in the State, Cheney Brothers Co. v. Commonwealth of Massachusetts, 246 U.S. 147, 38 S.Ct. 295, 62 L.Ed. 632; St. Louis Southwestern Ry. v. State of Arkansas, 235 U.S. 350, 364, 35 S.Ct. 99, 103, 59 L.Ed. 265, though it cannot, even under the guise of such excises, 'hamper' interstate commerce. Western Union Tel. Co. v. State of Kansas, 216 U.S. 1, 30 S.Ct. 190, 54 L.Ed. 355; Pullman Co. v. State of Kansas, 216 U.S. 56, 30 S.Ct. 232, 54 L.Ed. 378 (particularly White, J. concurring at p. 63); Henderson, The Position of Foreign Corporations in American Constitutional Law (1918) 118—23, 128—31. It can tax the privilege of residence in the State and measure the privilege by net income, including that derived from interstate commerce. United States Glue Co. v. Oak Creek, 247 U.S. 321, 38 S.Ct. 499, 62 L.Ed. 1135, Ann.Cas.1918E, 748; cf. Atlantic Coast Line v. Doughton, 262 U.S. 413, 43 S.Ct. 620, 67 L.Ed. 1051. And where, as in this case, the commodities subsequently sold interstate are securities, they can be reached by a property tax by the State of domicil of the owner. Commonwealth of Virginia v. Imperial Sales Co., 293 U.S. 15, 19, 55 S.Ct. 12, 13, 79 L.Ed. 171; and see Citizens National Bank of Cincinnati v. Durr, 257 U.S. 99, 42 S.Ct. 15, 66 L.Ed. 149. 9 These illustrative instances show that a seller State has various means of obtaining legitimate contribution to the costs of its government, without imposing a direct tax on interstate sales. While these permitted taxes may in an ultimate sense, come out of interstate commerce, they are not, as would be a tax on gross receipts, a direct imposition on that very freedom of commercial flow which for more than a hundred and fifty years has been the ward of the Commerce Clause. 10 It is suggested, however, that the validity of a gross sales tax should depend on whether another State has also sought to impose its burden on the transactions. If another State has taxed the same interstate transaction, the burdensome consequences to interstate trade are undeniable. But that, for the time being, only one State has taxed is irrelevant to the kind of freedom of trade which the Commerce Clause generated. The immunities implicit in the Commerce Clause and the potential taxing power of a State can hardly be made to depend, in the world of practical affairs, on the shifting incidence of the varying tax laws of the various States at a particular moment. Courts are not possessed of instruments of determination so delicate as to enable them to weigh the various factors in a complicated economic setting which, as to an isolated application of a State tax, might mitigate the obvious burden generally created by a direct tax on commerce. Nor is there any warrant in the constitutional principles heretofore applied by this Court to support the notion that a State may be allowed one single tax-worth of direct interference with the free flow of commerce. An exaction by a State from interstate commerce falls not because of a proven increase in the cost of the product. What makes the tax invalid is the fact that there is interference by a State with the freedom of interstate commerce. Such a tax by the seller State alone must be judged burdensome in the context of the circumstances in which the tax takes effect. Trade being a sensitive plant, a direct tax upon it to some extent at least deters trade even if its effect is not precisely calculable. Many States, for instance, impose taxe on the consumption of goods and such taxes have been sustained regardless of the extra-State origin of the goods, or whether a tax on their sale had been imposed by the seller State. Such potential taxation by consumer States is but one factor pointing to the deterrent effect on commerce by a superimposed gross receipts tax. 11 It has been urged that the force of the decision in the Adams case has been sapped by McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 398, 84 L.Ed. 565, 128 A.L.R. 876. The decision in McGoldrick v. Berwind-White was found not to impinge upon 'the rationale of the Adams Manufacturing Co. case,' and the tax was sustained because it was 'conditioned upon a local activity delivery of goods within the state upon their purchase for consumption.' 309 U.S. at page 58, 60 S.Ct. at page 398, 84 L.Ed. 565, 128 A.L.R. 876. Compare McLeod v. J. E. Dilworth Co., 322 U.S. 327, 64 S.Ct. 1023, 88 L.Ed. 1304. Taxes which have the same effect as consumption taxes are properly differentiated from a direct imposition on interstate commerce, such as was before the Court in the Adams case and is now before us. The tax on the sale itself cannot be differentiated from a direct unapportioned tax on gross receipts which has been definitely held beyond the State taxing power ever since Fargo v. State of Michigan, 121 U.S. 230, 7 S.Ct. 857, 30 L.Ed. 888, and Philadelphia & S. M. Steamship Co. v. Commonwealth of Pennsylvania, 122 U.S. 326, 7 S.Ct. 1118, 30 L.Ed. 1200. See also, e.g., Galveston, Harrisburg & S.A.R. Co. v. State of Texas, 210 U.S. 217, 28 S.Ct. 638, 52 L.Ed. 1031; Kansas City, Ft. S. & M. Ry., v. Botkin, 240 U.S. 227, 231, 36 S.Ct. 261, 262, 60 L.Ed. 617; Puget Sound Stevedoring Co. v. Tax Commission, 302 U.S. 90, 94, 58 S.Ct. 72, 74, 82 L.Ed. 68; and compare Wallace v. Hines, 253 U.S. 66, 40 S.Ct. 435, 64 L.Ed. 782. For not even an 'internal regulation' by a State will be allowed if it directly affects interstate commerce. Robbins v. Taxing District of Shelby Co., 120 U.S. 489, 494, 7 S.Ct. 592, 594, 30 L.Ed. 694. 12 Nor is American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084, or International Harvester Co. v. Department of Treasury, 322 U.S. 340, 64 S.Ct. 1019, 1030, 88 L.Ed. 1313, any justification for the present tax. The American Mfg. Co. case involved an imposition by St. Louis of a license fee upon the conduct of manufacturing within that city. It has long been settled that a State can levy such an occupation tax graduated according to the volume of manufacture. In that case, to lighten the manufacturer's burden, the imposition of the occupation tax was made contingent upon the actual sale of the goods locally manufactured. Sales in St. Louis of goods made elsewhere were not taken into account in measuring the license fee. That tax, then, unlike this, was not in fact a tax on gross receipts. Cf. Cornell v. Coyne, 192 U.S. 418, 24 S.Ct. 383, 48 L.Ed. 504. And, if words are to correspond to things, the tax now here is not 'a tax on the transfer of property' within the State, which was the basis for sustaining the tax in International Harvester Co. v. Dept of Treasury, supra, 322 U.S. at page 348, 64 S.Ct. at page 1023, 88 L.Ed. 1313. 13 There remains only the claim that an interstate sale of intangibles differs from an interstate sale of tangibles in respects material to the issue in this case. It was by this distinction that the Supreme Court of Indiana sought to escape the authority of Adams Mfg. Co. v. Storen, supra. Latin tags like mobilia sequuntur personam often do service for legal analysis, but they ought not to confound constitutional issues. What Mr. Justice Holmes said about that phrase is relevant here. 'It is a fiction, the historical origin of which is familiar to scholars, and it is this fiction that gives whatever meaning it has to the saying mobilia sequuntur personam. But being a fiction it is not allowed to obscure the facts, when the facts become important.' Blackstone v. Miller, 18 U.S. 189, 204, 23 S.Ct. 277, 278, 47 L.Ed. 439. Of course this is an interstate sale. And constitutionally it is commerce no less and no different because the subject was pieces of paper worth $65,214.20, rather than machines. 14 Reversed. 15 Mr. Justice BLACK dissents. 16 Mr. Justice RUTLEDGE, concurring. 17 This is a case in which the grounding of the decision is more important than the decision itself. Whether the Court now intends simply to qualify or to repudiate entirely, except in result, Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429, I am unable to determine from its opinion. But that one or the other consequence is intended seems obvious from its refusal to rest the present decision squarely on that case, together with the wholly different foundation on which it now relies. In either event, the matter is important and calls for discussion. 18 * The Adams case held the Indiana tax now in issue to be invalid when applied, without apportionment, to gross receipts derived from interstate sales of goods made by Indiana manufacturers who sold and shipped them to purchasers in other states. 'The vice of the statute' as thus applied, it was held, was 'that the tax includes in its measure, without apportionment, receipts derived from activities in interstate commerce; and that the exaction is of such a character that if lawful it may in substance be laid to the fullest extent by states in which the goods are sold as well as those in which they are manufactured. Interstate commerce would thus be subjected to the risk of a double tax burden to which intrastate commerce is not exposed, and which the commerce clause forbids.' (Emphasis added.) 304 U.S. 307, 311, 58 S.Ct. 913, 916, 82 L.Ed. 1365, 117 A.L.R. 429.1 19 Today's opinion refuses to rest squarely on the Adams case, although that case would be completely controlling if no change in the law were intended. No basis for distinguishing the cases on the facts or the ultimate questions is found or stated. The Court takes them as identical.2 Yet it places no emphasis upon apportionment, the absence of which the Adams opinion held crucial. The Court also puts to one side as irrelevant the factor there most stressed, namely, the danger of multiple taxation, that is, of similar taxation by other states, if the Indiana tax should be upheld in the attempted application. 20 Those matters were the very essence of the Adams decision. They were in its words 'the vice' of the statute as applied. The Adams opinion gives no reason for believing that the application of the tax would not have been sustained if either of the two elements vitiating it had been absent. On the contrary, the fair, indeed the necessary, inference from the language and reasons given is that the tax would not have been voided if there had been no danger of multiple state taxation or if the tax had been apportioned so as to eliminate that risk. Moreover those groundings were strictly in accord with long lines of previous decisions rendered here,3 were int nded to conform to them and to preserve them unimpaired. 21 Yet now they are put to one side, either as irrelevant or as not controlling and therefore presumably as insufficient,4 in favor of another rationalization which ignores them completely. Shortly, this is, in reiterated forms, that the tax as applied is laid 'directly on' interstate commerce, is a levy 'on the very sale' or 'the very process' of such commerce, is therefore and solely thereby a 'burden' on it, and consequently is an exaction the commerce clause forbids. What outlaws it is neither comparative disadvantage with local trade nor any actual or probable clogging or impeding effect in fact.5 It is simply the 'direct' bearing and 'incidence' of the tax on interstate commerce and this alone. Stripped of any discriminatory element and of any actual or probable tendency to block or impede the commerce in fact, this 'direct incidence' is itself enough without more to invalidate the tax, although it is one of general application singling out the commerce neither for separate nor for distinct or invidious treatment. 22 If this ever was the law, it has not been such for many years. In a sense it is a reversion to ideas once prevalent, but long since repudiated6 about the 'exclusiveness' of Congress' power over interstate commerce which, if now resurrected for general application, will strike down state taxes in a great variety of forms sustained consistently of late. Not since Cooley v. Board of Wardens, 12 How. 299, 13 L.Ed. 996, has the notion prevailed that the mere existence of power in Congress to regulate commerce excludes the states from exacting revenue from it through exercise of their powers of taxation.7 Yet if a general tax, applying to all commerce alike, is to be outlawed, regardless of discriminatory consequences or actual or probable impeding effect in fact, simply because it bears 'directly' on the commerce and for no other reason, not only will there be a resurrection of Marshall's 'exclusive' idea, never prevailing after the Cooley case. The effect will be to knock down many types of state taxes held valid since that landmark decision.8 23 That consequence must follow if the presently asserted basis for decision is to be taken as a principle fit for general application and intended to be so used. We cannot assume that t e Court intends it to be used otherwise, for that would be to make of it an arbitrary formula applied to dispose of the present case alone and having no validity for any other situation. But the ground relied upon is broad enough to include many other types of situation and of tax, and cannot be restricted logically or in reason to these narrow facts. If discrimination and real risk, in the sense of practical effect to clog or impede trade, are irrelevant to the validity of this type of tax, they are equally irrelevant to many others, unless sheer fiction and arbitrary distinction based on inconsequential factors are to be controlling. If the grounding which disregards them is adequate for disposing of this case, it is adequate also for disposing of many others involving it in which the Court has been at great pains to rest on other factors, unnecessarily it now would seem. 24 It will be appropriate before turning to further consideration of the more pertinent decisions, to note the only basis upon which the Court grounds its ruling that 'direct' state taxes on 'the very process' of interstate commerce are void. This is because, in the words of the opinion, the commerce clause 'by its own force created an area of trade free from interference by the States.' Although this is stated as grounding for the long established conclusion that even without implementing legislation by Congress the clause is a limitation upon state power, it also is quite obviously the foundation of the further conclusion that 'direct' taxes laid by the states within that area are outlawed regardless of any other factor than their direct incidence upon it. II. 25 I agree that the commerce clause 'of its own force' places restrictions upon state power to tax, as well as to regulate, interstate commerce. This has been held through various lines of decision extending back to Gibbons v. Ogden, 9 Wheat. 1, 6 L.Ed. 23, some of them unbroken.9 I also agree that this construction is consonant with the great purpose of the commerce clause to maintain our distinctively national trade free from state restrictions and barriers against it which the clause was adopted to prevent. But, at any rate since Cooley v. Board of Wardens, supra, this has not meant that the clause was intended to or could secure 'by its own force' that vast area of commercial activity wholly free from 'interference,' that is, from taxation and regulation, by the states.10 Nor for many years has it meant that the field of interstate commerce is to be free from such 'interference,' simply because it is 'direct' or has immediate incidence upon it.11 True, language frequently appears in the cases, especially the earlier ones, to the effect that 'direct' taxation and regulation by the states are forbidden. But apart from its inconsistency with both language and results in other cases,12 in most of those where it has appeared there were other invalidating factors, such as singling out the commerce for special treatment, other types of discrimination, or failure to apportion where multiple state taxation could result if the tax were sustained.13 26 The fact is that 'direct incidence' of a state tax or regulation, apart from the presence of such a factor, has long since been discarded as being in itself sufficient to outlaw state legislation. 'Local' regulations, under the Cooley formula, bear directly on the commerce itself.14 But they are not outlawed for that reason. Calling them 'incidental,' where this is done, does not make them 'indirect,' except in judicial perspective. Police regulations bear no more indirectly or remotely upon the interstate commerce which must observe them than upon the local commerce falling equally within their incidence. 27 Again, an apportioned tax on interstate commerce is a 'direct' tax bearing immediately upon it in incidence. But such a tax is not for that reason invalid. Decisions have sustained such taxes repeatedly, regardless of their direct bearing, provided the apportionment were fairly made and no other vitiating element were present, such as those above mentioned.15 It was this fact, without question, which the Court had in mind in the Adams case, when it carefully saved from its ban any question concerning such a tax as Indiana's if properly apportioned in a situation like the ones presented there and now.16 III 28 The language purporting to outlaw 'direct' taxes because they are direct has appeared more frequently perhaps in relation to gross receipts taxes than any other including both 'direct' taxes, apportioned and unapportioned and others considered 'indirect' because purporting to be laid not 'on the commerce itself' but upon some 'local incident.' We have recently held that a tax having effects forbidden by the commerce clause will not be saved merely because it is cast in terms of bearing upon some 'local incident.'17 As we then said, all interstate commerce takes place within the states and the consequences forbidden by the commerce clause cannot be achieved legally simply by the device of hooking the tax or other forbidden regulation to some selected 'local incident.' That such a factor may be chosen for bearing the 'direct' incidence of the tax may be a consideration to be taken into account in determining its validity. But it cannot validate a tax or regulation which produces the forbidden consequences, any more than a 'direct tax' which does not produce them can be outlawed because it is direct. Not 'directness' or 'immediacy' of incidence per se, whether 'upon the commerce itself' or upon a 'local incident,' is the outlawing factor, but whether the tax, regardless of the special point of incidence, has the consequences for interstate trade intended to be outlawed by the commerce clause. 29 The difficulty of any other rule or approach is disclosed most clearly perhaps by contrasting the decision in American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084, with the Adams decision and this one, in both of which efforts are made, unsuccessfully in my opinion, to distinguish the American case. There the tax was laid upon the manufacture, locally done, of goods sold locally and out of state. But the tax was 'measured by' the gross receipts from sales of the goods manufactured, including those sold interstate.18 30 A tax upon a local privilege measured by the volume of gross receipts from both local and interstate trade19 would seem to have, in practical effect, the same consequences for blocking or impeding the commerce as one laid 'directly' upon it in any situation where no multiple levy is made, likewise in any where more than one state might find such a local privilege for pegging the tax.20 And a tax upon gross receipts 'in lieu of' property or other taxes21 cannot be said either to be less 'direct' in its incidence upon the commerce than the application of the Indiana tax now in issue or to afford protection against multiple levies the risk of which was held in Adams Mfg. Co. v. Storen to make the Indiana tax inherently vicious in that application.22 31 Unless we are to return to the formalism of another day, neither the 'directness' of the incidence of a tax 'upon the commerce itself' nor the fact that its incidence is manipulated to rest upon some 'local incident' of the interstate transaction can be used as a criterion or, many times, as a consideration of first importance in determining the validity of a state tax bearing upon or affecting interstate commerce. Not the words 'direct' and 'indirect' or 'local incident' can fulfill the function of judgment in deciding whether the tax brings the forbidden results. See the dissenting opinion of Mr. Justice Stone in Di Santo v. Commonwealth of Pennsylvania, 273 U.S. 34, 44, 47 S.Ct. 267, 271, 71 L.Ed. 524, quoted in note 11. That can be done only by taking account of the specific effects of state legislation the clause was intended to outlaw, and of the consequences actual or probable of the legislation called in question to create them. IV 32 Judgments of this character and magnitude cannot be made by labels or formulae. They require much more than pointing to a word. It is for this reason that increasingly with the years emphasis has been placed upon practical consequences and effects, either actual or threatened, of questioned legislation to block or impede interstate commerce or place it at practical disadvantage with the local trade.23 Formulae and adjectives have been retained at times in intermixture with the effective practical considerations. But proportionately the stress upon them has been greatly reduced, until the present decision; and the trend of recent decisions to sustain state taxes formerly regarded as invalid has been due in large part to this fact. 33 The commerce clause was not designed or intended to outlaw all state taxes bearing 'directly' on interstate commerce. Its design was only to exclude those having the effects to block or impede it which called it and the Constitution itself into being. Not all state taxes, nor indeed all direct state taxes, can be said to produce those effects. On the other hand, many 'indirect' forms of state taxation, that is, 'indirect' as related to 'incidence,' do in fact produce such consequences and for that reason are invalid. 34 It is for this reason that selection of a 'local incident' for hanging the tax will not save it, if also the exaction does not in fact avoid the outlawed interferences w th the free flow of commerce. Selection of a local incident for pegging the tax has two functions relevant to determination of its validity. One is to make plain that the state has sufficient factual connections with the transaction to comply with due process requirements.24 The other is to act as a safeguard, to some extent, against repetition of the same or a similar tax by another state.25 These matters are often interrelated, cf. Western Union Telegraph Co. v. Kansas, 216 U.S. 1, 30 S.Ct. 190, 54 L.Ed. 355, though in other situations they may be entirely separate. The important difference is between situations where it is essential to show minimal factual connections of the transaction with the taxing state in order to sustain the levy as against due process objections for 'want of jurisdiction to tax';26 and other situations where, although such connections clearly are present, the necessity is for showing that the tax, if sustained, will create a multiple tax load or other consequences having the forbidden effects. 35 This case is not one of the former sort. The transactions were as closely connected in fact with Indiana as with any other state.27 But the case is one of the latter type, that is where, despite those connections, there were equally close and important ones in another state, New York; and therefore, as the Adams case declared, the risk of multiple state taxation would be incurred, unless one or the other or both states were forbidden to tax the transaction as such, or were required to apportion the tax. Not the 'directness' of the tax in its bearing upon the commerce, but this danger is the crucial issue in this case, as it was in the Adams case. In other words, but for the possibility that more states than one would levy the same or a similar tax, such an application as was made of Indiana's tax in the Adams case and here would be no more burdensome or objectionable than other applications of the same tax this Court has sustained or of other taxes likewise held valid.28 36 This Court has gone far in sustaining state taxes laid upon local incidents of interstate transactions by both the state of origin and the state of the market in recent years.29 Perhaps it may be said, in view of such decisions, that it has more clearly sustained such taxes at the marketing end than by the state of origin,30 although this may be matter for debate. In any event, the factual connections of the taxing state with the interstate transaction in the cases where the tax has been sustained hardly can be regarded as greater or more important than those of Indiana with the transactions involved in the Adams case and here. Nor could it be shown in fact that in some of them, at any rate, the danger of multiple state taxation was appreciably less, if it be assumed that the forwarding state has the same power to tax the transaction, by pegging the tax upon a local incident, as has been recognized for the state of market. 37 Such taxes, whether in one state or the other, may in fact block or impede interstate commerce as much as, or more than, one placed directly upon the commerce itself. They have been sustained, nevertheless, not simply because of their bearing upon a local incident, but because in the circumstances of their application they were considered to have neither discriminatory effects upon interstate trade as compared with local commerce nor to impose upon it the blocking or impeding effects which the commerce clause was taken to forbid.31 38 This in my judgment is the appropriate criterion to be applied, rather than any mere question of 'direct' or 'indirect' incidence upon a 'local incident.' The absence of any such connection with the taxing state is highly material.32 Its presence cannot be the controlling consideration for validiating the tax. Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 162 A.L.R. 844. In this view it would seem clear that the validity of such a tax as Indiana's, applied to situations like those presented in the Adams case and now, should be determined by reference not merely to the 'direct incidence' of the tax, but by whether those forbidden consequences would be produced, either through the actual incidence of multiple taxes laid by different states or by the threat of them, with resulting uncertainties producing the same impeding consequences.33 39 Thus, it is highly doubtful that the levy in this case, or in the Adams case, actually had any impeding effect whatever upon the transactions or the free flow interstate of such commerce.34 But the Adams case found the impediment in the assumption that if one state could tax, so also could the other, and in that event, a double burden would result for interstate commerce not borne by local trade. This danger, it was said, was inherent in the type of the tax, since it was not apportioned, and in consequence the tax as applied must fall. 40 The basic assumption was not true as a universally or even a generally resulting consequence, for two reasons. One is that it would not follow necessarily as a matter of fact that both states would tax or, if they did so, that the combined effects of the taxes would be either to clog or to impede the commerce.35 The other, it no more follows, as a matter of law, that because one state may tax the other may do likewise. 41 The Adams decision did not take account of any difference, as regards the risk of multiple state taxation, between situations where the multiple burden would actually or probably be incurred in fact and others in which no such risk would be involved. It rather disregarded such differences, so that 'the risk of double tax burden' on which the Court relied to invalidate the levy was not one actually, probably, or even doubtfully imposed in fact by another state.36 It rather was one which resulted only from an assumed, and an unexercised, power in that state to impose a similar tax. 42 The Court was not concerned with whether the forbidden consequences had been incurred in the particular situation or might not be incurred in others covered by its ruling. The motivating fear was more general. The ultimate risk which the Court sought to avoid was the danger that gross income or gross receipts tax legislation, without apportionment, might be widely adopted if the door were once opened and, if adopted and applied to interstate sales by all or many of the states, would result generally in bringing such sales within the incidence of multiple state taxation of that nature. Rather than incur this risk, with the anticipated consequent widespread creation of multiple levies, the Court in effect forestalled them at the source. Its action was prophylactic and the prophylaxis was made absolute. 43 By thus relieving interstate commerce from liability to pay taxes in either state, without any showing that both had laid them, the effect was, not simply to relieve that commerce from multiple burden, but to give it exemption from taxes all other trade must bear.37 Local trade was thus placed at disadvantage with interstate trade, by the amount of the tax, and the commerce clause thereby became a refuge for tax exemption, not simply a means of protection against unequal or undue taxation. Certainly its object was not to create for interstate trade such a specially privileged p sition. 44 But the alternatives to such a ruling were not themselves free from difficulty, they may be stated shortly. But preliminarily, I accept the view frequently declared38 that a state runs afoul the commerce clause when it singles out interstate commerce for special taxation not applied to other trade or otherwise discriminates against it or treats it invidiously. Moreover, all other things being equal, multiple state taxation of gross receipts, although by nondiscriminatory taxes of general applicability, does compel the latter to bear a heavier tax burden than local trade in either state. The cumulative tax burden is in effect discriminatory, involving in any practical view the exact effects of a single discriminatory tax. Although the difference in total tax load may not be sufficient actually to block or impede the free flow of interstate trade,39 discrimination alone, without regard to showing or further consequences, has been held consistently to be sufficient for outlawing the tax. 45 This too I accept. For discrimination not only is ordinarily itself invidious treatment, but has an obvious tendency toward blocking or impeding the commerce, if not always the actual effect of doing so. Nor is the discriminatory tendency or effect lessened because it results from cumulation of tax burdens rather than from a single tax producing the same consequence. To allow both states to tax 'to the fullest extent' would produce the invidious sort of barrier or impediment the commerce clause was designed to stop. But the bare power of another state to tax unexercised does not produce such results. It only opens the way for them to be produced. This danger is not fanciful but real, more especially in a time when new sources of revenue constantly are being sought. Accordingly, I agree that this door should not be opened. 46 But it is not necessary to go as far as the Adams case went, or as the decision not rendered goes, in order to prevent the anticipated deluge. There is no need to give interstate commerce a haven of refuge from taxation, albeit of gross receipts or from 'direct' incidence, in order to safeguard it from evils against which the commerce clause is designedly protective. Less broad and absolute alternatives are available and are adequate for the purpose of protection without creating the evils of total exemption. 47 The alternative methods available for avoiding the multiple state tax burden may now be stated. They are: (1) To apply the Adams ruling, stopping such taxes at the source, unless the tax is apportioned, thus eliminating the cumulative burdens;40 (2) To rule that either the state of origin or the state of market, but not both, can levy the exaction; (3) To determine factually in each case whether application of the tax can be made by one state without incurring actual danger of its being made in another or the risk of real uncertainty whether in fact it will be so made. 48 The Adams solution is not unobjectionable, for reasons already set forth. To deprive either state, whether of origin or of market, of the power to lay the tax, permitting the other to do so, has the vice of allowing one state to tax but denying this power to the other when neither may be as much affected by the deprivation as would be the one allowed to tax and, in any event, both may have equal or substantial due process connections with the transaction. The solution by factual determination in particular cases of the actual or probable incidence of both taxes is open to two objections. One is that to some extent it would make the taxing power of one or both states depend upon whether the other had exercised, or probably would exercise, the same power. The other would lie in the volume of litigation such a rule would incite and the difficulties, in some cases at least, of making the factual determination. VI 49 The problem of multiple state taxation, absent other factors making for prohibition, is therefore one of choosing among evils. There is no ideal solution. To leave the matter to Congress, allowing both states to tax 'to the fullest extent' until it intervenes, would run counter to the long-established rules not only requiring apportionment where incidence of multiple taxes would be likely, but also in substance and effect to those forbidding discrimination, without the consent of Congress, cf. Prudential Life Ins. Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 1151, as well as the long settled rule that the clause is 'of its own force' a prohibition upon the states. To require factual determination of forbidden effects in each case would be to invite costly litigation, make decision turn in some cases, perhaps many, on doubtful facts or conclusions, and encourage the enactment of legislation involving those consequences. The Adams ruling, as I have said, creates for many situations a tax refuge for interstate commerce and does this in both states. 50 As among the various possibilities, I think the solution most nearly in accord with the commerce clause, at once most consistent with its purpose and least objectionable for producing either evils it had no design to bring or practical difficulties in administration, would be to vest the power to tax in the state of the market, subject to power in the forwarding state also to tax by allowing credit to the full amount of any tax paid or due at the destination. This too is more nearly consonant with what the more recent decisions have allowed, if full account is taken of their effects. 51 In McLeod v. J. E. Dilworth, 322 U.S. 327, 361, 64 S.Ct. 1023, 1036, 88 L.Ed. 1304, I have set forth the reasons leading to this conclusion.41 It may be added that such a result would avoid altogether the undesirable features of factual determination in each case; would prevent the multiple and, in effect, discriminatory burden which would follow from allowing both states to tax until Congress should intervene; and would reduce by half, at least, the tax refuge created by the Adams ruling, without incurring other outlawed effects. 52 It is true this view logically would deny the state of original power to tax, notwithstanding its adequate due process connections, except by giving credit for taxes due at the destination.42 But the forwarding state has no greater power under the Adams ruling and none at all under the present one if it is to be applied consistently and, as I think, this can be taken to outlaw both unapportioned and apportioned taxes. 53 I have no doubt that under the law prevailing until now this tax would have been sustained, if apportioned, under the Adams decision and others.43 Nor have I any question that such a tax laid by New York would be upheld under those decisions. Indeed, in my opinion, the necessary effect of McGoldrick v. Berwind-White Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876, as appellee asserts, is to sustain power in the state of the market to tax 'to the fullest extent' without apportionment by nondiscriminatory taxes of general applicability, transactions essentially no different from the ones involved in this case and in the Adams case. 54 It is true the Berwind-White case purported to distinguish the Adams case. But it did so by pointing out that the New York tax was 'conditioned upon a local activity delivery of goods within the state upon their purchase for consumption' and that 'The effect of the tax, even though measured by the sales price, as has been shown, neither discriminates against nor obstructs interstate commerce more than numerous other state taxes which have repeatedly been sustained as involving no prohibited regulation of interstate commerce.' 309 U.S. 33, 58, 60 S.Ct. 388, 398, 84 L.Ed. 565, 128 A.L.R. 876. 55 This comes down to sustaining the tax, as was done in American Mfg. Co. v. City of St. Louis, supra, relied upon to distinguish the Adams case, simply because the tax was pegged upon the 'local incident' of delivery. Apart from the reasons I have set forth above for regarding this as not being controlling, that basis was flatly repudiated in Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 162 A.L.R. 844, as adequate for sustaining a tax having otherwise the forbidden effects and features. So here, in my opinion, it is hardly adequate to distinguish the Adams case, leaving it unimpaired, or to differentiate consistently the broader ruling made in this case. 56 I therefore agree with the appellee that the effect of the Berwind-White ruling was in substance, though not in words, to qualify the Adams decision, and that the combined effect of the two cases, taken together, was to permit the state of the market to tax the interstate transaction, but to deny this power to the forwarding state, unless by credit or otherwise it should make provision for apportionment. See Powell, New Light on Gross Receipts Taxes (1940) 53 Harv.L.Rev. 909, 939. Whether or not such a provision would save the Indiana tax as now applied, in view of what I think was the effect of Berwind-White on any basis other than sheer formalism, need not now be considered.44 57 Whether or not acknowledgment of this effect of the Berwind-White decision would require reconsideration of the validity of apportioned taxes otherwise than by full credit, laid by the forwarding state,45 neither that fact nor the effect of Berwind-White in qualifying the Adams ruling justifies the broader ruling now made to reach the same result as the Adams case reached. The trend of recent decisions has been toward sustaining state taxes formerly regarded as outlawed by the commerce clause. The present decision, by its reversion to the formal and discarded grounding in the 'direct incidence' of the tax is a reversal of that trend. It is one, moreover, unnecessary for sustaining the result the Court has reached. Its consequence, if followed in logical application to apportioned taxes, will be to outlaw them, for they bear as 'directly' on 'the commerce itself' as does the tax now stricken down in its present application. So also does the type of tax sustained in the Berwind-White case, in everything but verbalism. 58 I think the result now reached is justified, as necessary to prevent the cumulative and therefore discriminatory tax burden which would rest on or seriously threaten interstate commerce if more than one state is allowed to impose the tax, as does Indiana, upon the gross receipts from the sale without apportionment or credit for taxes validly imposed elsewhere. This result would follow in view of the Berwind-White decision and others like it,46 if not only the state of the market but also the forwarding state could tax the sale 'to the fullest extent' upon the gross receipts. For this reason I concur in the result. 59 But in doing so I dissent from grounding the decision upon a foundation which not only will outlaw properly apportioned taxes, thus going beyond the Adams decision, unless the Court is merely to reiterate the rule forbidding 'direct' taxation of interstate sales only to recall it when a case involving a property apportioned tax shall arise; but also will require outlawing many other types of tax heretofore sustained, unless a similar retreat is made. 60 Mr. Justice DOUGLAS, with whom Mr. Justice MURPHY concurs, dissenting. 61 I think the Court confuses a gross receipts tax on the Indiana broker with a gross receipts tax on his Indiana customer. Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434, 59 S.Ct. 325, 83 L.Ed. 272, would hold invalid a gross receipts tax, unapportioned, on the broker. In that case, the taxpayer was a marketing agent for fruit growers in the State of Washington. The agent made sales and deliveries of the fruit in other States and in foreign countries, collected the sales prices, and remitted the proceeds, less charges, to the customers. The Court held that the gross receipts tax, being unapportioned, was invalid. There are two reasons why that result followed. In the first place, as the Court stated 305 U.S. at page 437, 59 S.Ct. at page 327, 83 L.Ed. 272, 'The entire service for which the compensation is paid is in aid of the shipment and sale of merchandise' in interstate or foreign commerce. 'Such services are within the protection of the commerce clause'. In the second place, as the Court stated 305 U.S. at page 439, 59 S.Ct. at page 328, 83 L.Ed. 272, 'If Washington is free to exact such a tax, other states to which the commerce xtends may, with equal right, lay a tax similarly measured for the privilege of conducting within their respective territorial limits the activities there which contribute to the service. The present tax, though nominally local, thus in its practical operation discriminates against interstate commerce, since it imposes upon it, merely because interstate commerce is being done, the risk of a multiple burden to which local commerce is not exposed.' 62 Under that view a tax on the commissions of the Indiana broker would be invalid. But I see no more reason for giving the customer immunity than I would for giving immunity to the fruit growers who sold their fruit through the broker in Gwin, White & Prince Inc. v. Henneford, supra. 63 Concededly almost any local activity could, if integrated with earlier or subsequent transactions, be treated as parts of an interstate whole. In that view American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084, would find survival difficult. For in that case a state tax on a manufacturer was upheld though the tax was measured by the value of the goods manufactured within the State and thereafter sold in interstate commerce. In Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944, a tax laid on the gross receipts of a trade journal published in New Mexico was sustained although out-of-state advertisements were included in the journal and there was interstate distribution of it. The Court treated the local business as separate and distinct from the transportation and intercourse which are interstate commerce and which were employed to conduct the business. 64 I think the least that can be said is that the local transactions or activities of this taxpayer can be as easily untangled from the interstate activities of his broker. 65 Any receipt of income in Indiana from out-of-state sources involves, of course, the use of interstate agencies of communication. That alone, however, is no barrier to its taxation by Indiana. Western Live Stock v. Bureau of Revenue, supra. Cf. People of State of New York et rel. Cohn v. Graves, 300 U.S. 308, 57 S.Ct. 466, 81 L.Ed. 666, 108 A.L.R. 721. The receipt of income in Indiana, like the delivery of property there, International Harvester Co. v. Dept. of Treasury, 322 U.S. 340, 64 S.Ct. 1030, 88 L.Ed. 1313, is a local transaction which constitutionally can be made a taxable event. For a local activity which is separate and distinct from interstate commerce may be taxed though interstate activity is induced or occasioned by it. Western Live Stock v. Bureau of Revenue supra, 303 U.S. at page 253, 58 S.Ct. at page 547, 82 L.Ed. 823, 115 A.L.R. 944. The management of an investment portfolio with income from out-of-state sources is as much a local activity as the manufacture of goods destined for interstate commerce, American Mfg. Co. v. City of St. Louis, supra, the publication of a trade journal with interstate revenues, Western Live Stock v. Bureau of Revenue, supra, or the growing of fruit for interstate markets, Gwin, White & Prince Inc. v. Henneford, supra. All such taxes affect in some measure interstate commerce or increase the cost, of doing it. But, as we pointed out in McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 48, 60 S.Ct. 388, 393, 84 L.Ed. 565, 128 A.L.R. 876, that is no constitutional obstacle. 66 Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429, is different. In that case the taxpayer had its factory and place of business in Indiana and sold its products in other States on orders taken subject to approval at the home office. The Court thought the risk of multiple taxation was real, because of the interstate reach of the taxpayer's business activities. The fact is that the incidence of that tax was comparable to the incidence of an unapportioned tax on interstate freight revenues. 67 The present tax is not aimed at interstate commerce and does not discriminate agains it. It is not imposed as a levy for the privilege of doing it. It is not a tax on interstate transportation or communication. It is not an exaction on property in its interstate journey. It is not a tax on interstate selling. The tax is on the proceeds of the sales less the brokerage commissions and therefore does not reach the revenues from the only interstate activities involved in these transactions. It is therefore essentially no different, so far as the Commerce Clause is concerned from a tax by Indiana on the proceeds of the sale of a farm or other property in New York where the mails are used to authorize it, to transmit the deed, and to receive the proceeds. 68 I would adhere to the philosophy of our recent cases1 and affirm the judgment below. 1 Compare Report of the (Australian) Royal Commission on the Constitution (1929) pp. 260, 322—24, and Report of the (Canadian) Royal Commission on Dominion-Provincial Relations (1940), bk. II, pp 62—67, 111—21, 150—62, 216—19. See Australia, Act No. 1, 1946, repealing Act No. 20, 1942, and Act No. 43, 1942; South Australia v. Commonwealth, 65 C.L.R. 373; also Proposals of the Government of Canada, Dominion-Provincial Conference on Reconstruction pp. 47 49; Proceedings of the Dominion-Provincial Conference (1945) passim, particularly the statement of Prime Minister Mackenzie King, p. 388, and the discussion following. And see Maxwell, The Fiscal Impact of Federalism in the United States (1946) cc. II, XIII, XIV. 1 The Court added: 'We have repeatedly held that such a tax is a regulation of and a burden upon, interstate commerce prohibited by article 1, section 8, of the Constitution. The opinion of the State Supreme Court stresses the generality and nondiscriminatory character of the exaction but it is settled that this will not save the tax if it directly burdens interstate commerce.' 304 U.S. 307, 311, 312, 58 S.Ct. 913, 916, 82 L.Ed. 1365, 117 A.L.R. 429. Cf. notes 5 and 16. 2 The only factual difference is that here the sales were of securities, there of goods. It was this upon which Indiana has relied to distinguish the Adams case, asserting originally that it gave domiciliary foundation for sustaining the tax. This claim disappeared, in effect, at the second oral argument, and the Court does not rest on it. I agree that, for present purposes, sales of intangibles should be treated identically with sales of goods. 3 See, e.g. Pullman's Palace Car Co. v. Commonwealth of Pennsylvania, 141 U.S. 18, 11 S.Ct. 876, 35 L.Ed. 613; Cudahy Packing Co. v. State of Minnesota, 246 U.S. 450, 38 S.Ct. 373, 62 L.Ed. 827; United States Express Co. v. State of Minnesota, 223 U.S. 335, 32 S.Ct. 211, 56 L.Ed. 459. And see especially discussion in Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 255—257, 58 S.Ct. 546, 548, 549, 82 L.Ed. 823, 115 A.L.R. 944. 4 Compare the opinion of Mr. Justice Frankfurter in Northwest Airlines v. State of Minnesota, 322 U.S. 292, 64 S.Ct. 950, 88 L.Ed. 1283, 153 A.L.R. 245. 5 As the Court says, 'An exaction by a State from interstate commerce falls not because of a proven increase in the cost of the product. What makes the tax invalid is the fact that there is interference by a State with the freedom of interstate commerce.' The only 'interference' held to be important is the direct incidence of the tax on the commerce, not the double burden or risk of it. Cf. notes 1 and 16. 6 See e.g. Ribble, State and National Power Over Commerce (1937) 204; Dowling, Interstate Commerce and State Power (1940) 27 Va.L.Rev. 1, 3—10. See also Frankfurter, The Commerce Clause (1937) 53: 'Had Marshall's theory of the 'dormant' commerce power prevailed, the taxable resources of the states would have been greatly confined. The full implications of his theory, if logically pursued, might well have profoundly altered the relations between the state and the central government.' 7 See note 6. See also Wechsler, Stone and the Constitution (1946) 46 Col.L.Rev. 764, 785, quoted in note 10 infra. 8 Cf. text infra at notes 14 to 16, also 21, and authorities cited. 9 See e.g., Robbins v. Taxing District of Shelby County, 120 U.S. 489, 7 S.Ct. 592, 30 L.Ed. 694; Real Silk Hosiery Mills v. City of Portland, 268 U.S. 325, 45 S.Ct. 525, 69 L.Ed. 982; Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 162 A.L.R. 844, and authorities cited. 10 See Ribble, supra, at 72 ff.; Frankfurter, supra, at 24, 56; Wechsler, Stone and the Constitution (1946) 46 Col.L.Rev. 764, 785: 'It will summarize his basic conception to say that as the issues were framed in the long debate the position taken by the Court in Cooley v. Board of Wardens comes closest to according with his thought.' 11 'Experience has taught that the opposing demands that the commerce shall bear its share of local taxation, and that it shall not, on the other hand, be subjected to multiple tax burdens merely because it is interstate comm rce, are not capable of reconciliation by resort to the syllogism. Practical rather than logical distinctions must be sought.' Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 259, 58 S.Ct. 546, 550, 82 L.Ed. 823, 115 A.L.R. 944. See also the dissenting opinion of Mr. Justice Stone in Di Santo v. Commonwealth of Pennsylvania, 273 U.S. 34, 44, 47 S.Ct. 267, 271, 71 L.Ed. 524 (overruled by State of California v. Thompson, 313 U.S. 109, 61 S.Ct. 930, 85 L.Ed. 1219), 'In thus making use of the expressions, 'direct' and 'indirect interference' with commerce, we are doing little more than using labels to describe a result rather than any trustworthy formula by which it is reached.' 12 See, e.g., McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876; Gwin, White & Prince v. Henneford, 305 U.S. 434, 59 S.Ct. 325, 83 L.Ed. 272; Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 162 A.L.R. 844. 13 Gross receipts taxes which have been sustained fall into the following groups: (a) Those which were fairly apportioned. See, e.g., Illinois Cent. R. v. State of Minnesota, 309 U.S. 157, 60 S.Ct. 419, 84 L.Ed. 670; Pullman's Palace Car Co. v. Commonwealth of Pennsylvania, 141 U.S. 18, 11 S.Ct. 876, 35 L.Ed. 613; Wisconsin & Michigan Ry. v. Powers, 191 U.S. 379, 24 S.Ct. 107, 48 L.Ed. 229; United States Express Co. v. State of Minnesota, 223 U.S. 335, 32 S.Ct. 211, 56 L.Ed. 459; Ficklen v. Taxing District, 145 U.S. 1, 12 S.Ct. 810, 36 L.Ed. 601. (b) Those which have been justified on a 'local incidence' theory. See, e.g., Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944, with which compare Fisher's Blend Station v. Tax Comm., 297 U.S. 650, 56 S.Ct. 608, 80 L.Ed. 956; McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876; American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084. See also cases cited in note 21. In many cases apportioned gross receipts taxes have been sustained not on the ground that they were apportioned but that they were local in nature. See, e.g., State of Maine v. Grand Trunk Ry., 142 U.S. 217, 12 S.Ct. 163, 35 L.Ed. 994; New York, L. Erie & U. Railroad v. Commonwealth of Pennsylvania, 158 U.S. 431, 15 S.Ct. 896, 39 L.Ed. 1043; Wisconsin & Michigan Ry. v. Powers, supra; United States Express Co. v. State of Minnesota, supra. Gross receipts taxes which have not been sustained fall into the following groups: (a) Those which were not fairly apportioned. See, e.g., Meyer v. Wells Fargo Co., 223 U.S. 298, 32 S.Ct. 218, 56 L.Ed. 445. (b) Those which were not apportioned and subjected interstate commerce to the risk of multiple taxation. Philadelphia & So. S.S. Co. v. Commonwealth of Pennsylvania, 122 U.S. 326, 7 S.Ct. 1118, 30 L.Ed. 1200; Ratterman v. Western Union Telegraph Co., 127 U.S. 411, 8 S.Ct. 1127, 32 L.Ed. 229; Western Union Telegraph Co. v. State of Alabama, 132 U.S. 472, 10 S.Ct. 161, 33 L.Ed. 409; Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429; Gwin, White & Prince v. Henneford, 305 U.S. 434, 439, 59 S.Ct. 325, 328, 83 L.Ed. 272. Cf. Fargo v. State of Michigan, 121 U.S. 230, 7 S.Ct. 857, 30 L.Ed. 888, as explained in Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 256, 58 S.Ct. 546, 549, 82 L.Ed. 823, 115 A.L.R. 944. (c) Those in which there was a discriminatory element in that they were directed exclusively 'at transportation or communication,' Lockhart, Gross Receipts Taxes on Transportation (1943) 57 Harv.L.Rev. 40, 65—66. Galveston, H. & S.A. Ry. v. State of Texas, 210 U.S. 217, 28 S.Ct. 638, 52 L.Ed. 1031, and cf. New Jersey Bell Tel. Co. v. State Tax Board, 280 U.S. 338, 50 S.Ct. 111, 74 L.Ed. 463. But see Nashville, C. & St. L. Ry. v. Browning, 310 U.S. 362, 60 S.Ct. 968, 84 L.Ed. 1254. In both the Galveston and New Jersey Telephone Company cases, although the taxable events all occurred within the taxing state, the possibility of multiple taxation was nevertheless present. ( ) Those in which there was no discrimination but a possible multiple burden. Fisher's Blend Station v. Tax Comm., supra, as explained in Western Live Stock v. Bureau of Revenue, 303 U.S. at pages 260, 261, 58 S.Ct. at pages 550, 551, 82 L.Ed. 823, 115 A.L.R. 944. (e) Those in which there was no discrimination, no apportionment and no possibility of multiple burden. Puget Sound Stevedoring Co. v. Tax Commission, 302 U.S. 90, 58 S.Ct. 72, 82 L.Ed. 68. This decision, it may be noted, might have been rested upon the clause of the Constitution forbidding the states to tax exports. Cf. Richfield Oil Corp. v. State Board of Equalization, 329 U.S. 69, 67 S.Ct. 156. 14 Cf. State of California v. Thompson, 313 U.S. 109, 61 S.Ct. 930, 85 L.Ed. 1219; Union Brokerage Co. v. Jensen, 322 U.S. 202, 64 S.Ct. 967, 88 L.Ed. 1227, 152 A.L.R. 1072; Robertson v. California, 328 U.S. 440, 66 S.Ct. 1160. Indeed, sometimes police regulations bear more heavily on interstate commerce. Cf. Robertson v. California, supra, and cases cited at note 28 therein. 15 See cases cited in note 13, supra. 16 The Court said, in answer to the Indiana Supreme Court's emphasis upon the 'generality and nondiscriminatory character' of the levy, 'but it is settled that this will not save the tax if it directly burdens interstate commerce.' 304 U.S. at page 312, 58 S.Ct. at page 916, 82 L.Ed. 1365, 117 A.L.R. 429; cf. note 1 supra. The same statement is now made in this case not to support the conclusion that these features cannot save a tax where the risk of multiple state taxation would outlaw it, as in the Adams case, but to support the vastly broader grounding that the tax is invalid simply because it is 'direct' in its incidence. The quoted Adams statement had no such significance, as appears not only from its immediate context but also from the further statement, made apropos American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084, in an effort to distinguish it: 'It is because the tax, forbidden as to interstate commerce, reaches indiscriminately and without apportionment, the gross compensation for both interstate commerce and intrastate activities that it must fail in its entirety so far as applied to receipts from sales interstate.' (Emphasis added.) 304 U.S. at page 314, 58 S.Ct. at page 917, 82 L.Ed. 1365, 117 A.L.R. 429. Not 'direct' taxation simply, but taxing the entire proceeds without apportionment in the face of threatened or possible multiple state taxation was the 'direct burden' found and outlawed in the Adams case. 17 'If the only thing necessary to sustain a state tax bearing upon interstate commerce were to discover some local incident which might be regarded as separate and distinct from 'the transportation or intercourse which is' the commerce itself and then to lay the tax on that incident, all interstate commerce could be subjected to state taxation and without regard to the substantial economic effects of the tax upon the commerce.' Nippert v. City of Richmond, 327 U.S. 416, 423, 66 S.Ct. 586, 589, 162 A.L.R. 844. 18 To say that this was not in substance a tax on gross receipts, because sales in St. Louis of goods made elsewhere were not taken into account in measuring the tax, is simply to ignore the fact that the tax did include all interstate sales of goods manufactured and all returns from them. That the local sales of goods brought in from other states were excepted does not mean either that those sales were interstate transactions (which it was not necessary to decide in view of their exemption) or that the sales out of state included in the measure were not interstate transactions; or that they were not, in substantial effect, taxed upon their gross returns by the measure, notwithstanding the tax was made legally to fall upon the privilege of manufacturing. The Adams decision purported to distinguish American Mfg. Co. v. City of St. Louis simply on the ground that the tax was not one laid on the taxpayer's sales or the income derived from them, but was a license fee for engaging in the manufacture which could be measured 'by the sales price of the goods produced rather than by their value at the date of manufacture.' 19 In addition to American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084, see Oliver Iron Mining Co. v. Lord, 262 U.S. 172, 43 S.Ct. 526, 67 L.Ed. 929; Hope Natural Gas Co. v. Hall, 274 U.S. 284, 47 S.Ct. 639, 71 L.Ed. 1049; Utah Power & Light Co. v. Pfost, 286 U.S. 165, 52 S.Ct. 548, 76 L.Ed. 1038. 20 Cf. Galveston, H. & S.A.R. Co. v. State of Texas, 210 U.S. 217, 227, 28 S.Ct. 638, 640, 52 L.Ed. 1031; Morrison, State Taxation of Interstate Commerce (1942) 36 Ill.L.Rev. 727, 738. 21 See Postal Telegraph-Cable Co. v. Adams, 155 U.S. 688, 15 S.Ct. 360, 39 L.Ed. 311; United States Express Co. v. State of Minnesota, 223 U.S. 335, 32 S.Ct. 211, 56 L.Ed. 459; Pullman Co. v. Richardson, 261 U.S. 330, 43 S.Ct. 366, 67 L.Ed. 682. See also discussion in Galveston, H. & S.A.R. Co. v. State of Texas, 210 U.S. 217, 226, 227, 28 S.Ct. 638, 639, 640, 52 L.Ed. 1031. 22 This is true, though concededly such a tax might work to prevent cumulative or higher tax burdens imposed by a single taxing state. Cf. Lockhart, Gross Receipts Taxes on Interstate Transportation and Communication (1943) 57 Harv.L.Rev. 40. 23 See Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 162 A.L.R. 844; Best & Co. v. Maxwell, 311 U.S. 454, 61 S.Ct. 334, 85 L.Ed. 275. Cf. Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142. See also Wechsler, Stone and the Constitution (1946) 46 Col.L.Rev. 764, 785—787. 24 See dissenting opinion in McLeod v. J. E. Dilworth, 322 U.S. 327, at pages 356, 357, 64 S.Ct. 1023, 1034, 88 L.Ed. 1304. See also State of Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444, 445, 61 S.Ct. 246, 249, 250. 25 See McNamara, Jurisdictional and Interstate Commerce Problems in the Imposition of Excises on Sales (1941) 8 Law & Contemp.Prob. 482, 491. Compare the discussion of a proposed federal statute to give the buyer's state the right to impose nondiscriminatory sales taxes. Proc. 27th Ann.Conf.Nat.Tax Assn. (1934) 136—160. See also Perkins, The Sales Tax and Transactions in Interstate Commerce (1934) 12 N.C.L.Rev. 99. 26 Cf. note 25. 27 Indiana was the state by whose law the trust was created. It was the situs of the trust's administration. It was the place where the securities were kept prior to mailing for delivery in accordance with the terms of their sale. Cf. Curry v. McCanless, 307 U.S. 357, 59 S.Ct. 900, 83 L.Ed. 1339, 123 A.L.R. 162. The directions for sale were given there. The proceeds were forwarded to Indiana and there received into the corpus of the trust. The state's connections with the trust, and with the property which was the subject of the sale, more than satisfy and due process requirement for exercise of the power to tax either the property or transactions relating to its disposition taking place as largely within Indiana's borders as did the sales in this case. 28 The cases, aside from Adams Mfg. Co. v. Storen, 304 U.S. 307, 58 S.Ct. 913, 82 L.Ed. 1365, 117 A.L.R. 429, which involve the Indiana gross receipts tax are: Department of Treasury of State of Indiana v. Wood Preserving Corporation, 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188; Department of Treasury of State of Indiana v. Ingram-Richardson Mfg. Co., 313 U.S. 252, 61 S.Ct. 866, 85 L.Ed. 1313; International Harvester Co. v. Dept. of Treasury, 322 U.S. 340, 64 S.Ct. 1030, 88 L.Ed. 1313; Ford Motor Co. v. Dept. of Treasury, 323 U.S. 459, 65 S.Ct. 347, 89 L.Ed. 389. ee also General Trading Co. v. State Tax Commission, 322 U.S. 335, 64 S.Ct. 1028, 88 L.Ed. 1309; cf. Northwestern Airlines v. State of Minnesota, 322 U.S. 292, 64 S.Ct. 950, 88 L.Ed. 1283, 153 A.L.R. 245. 29 See, e.g., McGoldrick v. Berwind-White Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876; Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 61 S.Ct. 586, 85 L.Ed. 888, 132 A.L.R. 475; General Trading Co. v. State Tax Commission, 322 U.S. 335, 64 S.Ct. 1028, 88 L.Ed. 1309; Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944; Coverdale v. Arkansas-Louisiana Pile Line Co., 303 U.S. 604, 58 S.Ct. 736, 82 L.Ed. 1043; Department of Treasury of State of Indiana v. Ingram-Richardson Mfg. Co., 313 U.S. 252, 61 S.Ct. 866, 85 L.Ed. 1313. 30 Compare McGoldrick v. Berwind-White Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876, with McLeod v. J. E. Dilworth, 322 U.S. 327, 64 S.Ct. 1023, 88 L.Ed. 1304. See Powell, New Light on Gross Receipts Taxes (1940) 53 Harv.L.Rev. 909. 31 See McGoldrick v. Berwind-White Co., 309 U.S. 33, 58, 60 S.Ct. 388, 398, 84 L.Ed. 565, 128 A.L.R. 876, quoted infra Part VI. 32 As a matter of minimal due process requirements. Cf. text infra at notes 24 to 27. 33 The danger of an impending burden or barrier from multiple state taxation could be real and substantial in a particular case if the threat of such taxation were actual or probable or if its threatened incidence were involved in such actual uncertainty that this uncertainty itself would constitute, in practical effect a substantial clog. 34 The Indiana tax was only one per cent of the proceeds of the sales. The record indicates, too, that the New York Stock Transfer tax was collected from the proceeds of the sale in New York. The amount of the tax was three cents per share sold for less than twenty dollars, and four cents per share sold for more than twenty dollars. Tax Law §§ 270, 270a; O'Kane v. State of New York, 283 N.Y. 439, 28 N.E.2d 905. The tax did not apply to the transfer of bonds. Cf. Op.Atty.Gen.N.Y.1939, p. 208. 35 Cf. note 31. Whether such a tax would in fact produce the forbidden results or not would depend upon the incidence or likelihood of the incidence of a like tax in the other or another, jurisdiction having similar power. Frequently this likelihood will be, in fact, either nil or small. 36 The opinion discloses no consideration of any question or suggestion whether a like or other tax had been or was likely to be imposed by the state of destination, or even that such a tax by that state was doubtfully incident. Such an inquiry would have been inconsistent with the Court's thesis. 37 It is assumed, of course, that a nondiscriminatory tax of general applicability laid by the taxing state would be involved. 38 See Best & Co. v. Maxwell, 311 U.S. 454, 61 S.Ct. 334, 85 L.Ed. 275; Hale v. Bimco Trading Co., 306 U.S. 375, 59 S.Ct. 526, 83 L.Ed. 771; Buy v. Baltimore, 100 U.S. 434, 25 L.Ed. 743; Webber v. State of Virginia, 103 U.S. 344, 26 L.Ed. 565; Welton v. State of Missouri, 91 U.S. 275, 23 L.Ed. 347; Voight v. Wright, 141 U.S. 62, 11 S.Ct. 855, 35 L.Ed. 638; Brimmer v. Rebman, 138 U.S. 78, 11 S.Ct. 213, 34 L.Ed. 862. 39 For a variety of reasons, among which might be the larger capacity of such trade to absorb the difference, by reason of greater volume, without sustaining loss of profit, in the particular sort of commerce or type of transaction. See also note 34. 40 The Adams decision, of course, made no direct ruling upon an actual tax laid by the state of destination. But the basic premise of its rationalization would be altogether without substance if it were taken to mean that such a tax would be levied there with ut meeting the same barrier, and for the same reason, as the tax levied by Indiana, the state of origin, encountered. 41 'If in this case it were necessary to choose between the state of origin and that of market for the exercise of exclusive power to tax, or for requiring allowance of credit in order to avoid the cumulative burden, in my opinion the choice should lie in favor of the state of market rather than the state of origin. The former is the state where the goods must come in competition with those sold locally. It is the one where the burden of the tax necessarily will fall equally on both classes of trade. To choose the tax of the state of origin presents at least some possibilities that the burden it imposes on its local trade, with which the interstate traffic does not compete, at any rate directly, will be heavier than that placed by the consuming state on its loc l business of the same character.' 42 Credit allowed for taxes paid elsewhere, see Henneford v. Silas Mason Co., 300 U.S. 577, 57 S.Ct. 524, 81 L.Ed. 814; General Trading Co. v. State Tax Commission, 322 U.S. 335, 64 S.Ct. 1028, 88 L.Ed. 1309, is a form of apportionment, though not the only one. 43 See also Gwin, White & Prince v. Henneford, 305 U.S. 434, 59 S.Ct. 325, 83 L.Ed. 272. 44 It is obvious that an apportioned tax laid by the forwarding state, taken in conjunction with an unapportioned one levied by the state of the market, would produce the effect of multiple state levies to the extent of the apportioned tax unless the apportionment were made by giving full credit for the other tax. In the latter event, of course, there would be no effect of multiple burden in the sense forbidden by the rule requiring apportionment and sustaining properly apportioned taxes. In the absence of a credit to the full amount of the marketing state's tax, he apportioned tax of the forwarding state, although making a cumulative burden, would impose only a reduced one as compared with an unapportioned tax by that state. 45 Cf. note 44. 46 See the 'use tax' cases: General Trading Co. v. State Tax Commission, 322 U.S. 335, 64 S.Ct. 1028, 88 L.Ed. 1309; Felt & Tarrant Mfg. Co. v. Gallagher, 306 U.S. 62, 59 S.Ct. 376, 83 L.Ed. 488; Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 61 S.Ct. 586, 85 L.Ed. 888, 132 A.L.R. 475; Nelson v. Montgomery Ward & Co., 312 U.S. 373, 61 S.Ct. 593, 85 L.Ed. 897. See also Jagels v. Taylor, 309 U.S. 619, 60 S.Ct. 469, 84 L.Ed. 983, discussed in McNamara, supra, note 25, at 487. 1 Of which Gwin, White & Prince, Inc. v. Henneford, supra, Western Live Stock v. Bureau of Revenue, supra, and McGoldrick v. Berwind-White Coal Mining Co., supra, are illustrative.

78

329 U.S. 287 67 S.Ct. 207 91 L.Ed. 290 UNITED STATESv.RUZICKA et al. No. 54. Decided Dec. 16, 1946. Argued Nov. 20, 21, 1946. Mr. George T. Washington, of Washington, D.C., Acting Sol. Gen., for petitioner. Mr. William Parker Ward, of Chicago, Ill., for respondents. Mr. Justice FRANKFURTER delivered the opinion of the Court. 1 We brought this case here, 327 U.S. 776, 66 S.Ct. 964, because it raises questions of importance in the administration of the Agricultural Marketing Agreement Act of 1937. 50 Stat. 246, 7 U.S.C.A. § 601 et seq., 7 U.S.C.A. § 601 et seq. The general scheme of the Act and its operation have been before us in a series of cases. United States v. Rock Royal Co-op., 307 U.S. 533, 59 S.Ct. 993, 83 L.Ed. 1446; United States v. Wrightwood Dairy Co., 315 U.S. 110, 62 S.Ct. 523, 86 L.Ed. 726; Stark v. Wickard, 321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733. Our immediate concern is with the provisions of the Act that distribute enforcing authority between the courts and the Secretary of Agriculture. These become relevant to the enforcement of Milk Order No. 41, an 'Order Regulating the Handling of Milk in the Chicago, Illinois, Marketing Area', and more particularly the portion of that elaborate Order which defines the rights and obligations of 'handlers' of milk. Section 941.1(5). The Order was issued under the powers delegated to the Secretary of Agricultur to effectuate the purposes of the Act. Section 8c of the Act. 2 Order No. 41 classifies milk received into the Chicago area according to its uses. To milk in each of the four classes the market administrator assigns a uniform 'use value.' All handlers are required to report to the market administrator the quantity of milk purchased and put to its classified uses. On the basis of these reports the administrator, taking into account the total quantity of milk produced and the amount devoted to each classification, as well as the balance in the Producersettlement Fund, and making authorized adjustments, announces monthly a uniform minimum price to be paid by handlers to producers. Since a handler's receipts from the re-sale of milk, or the sale of milk products, vary with the amount of the milk distributed in each class, the uniform price paid by handlers will create inequities unless adjustment is made, based on the comparative use value of the milk distributed by a particular handler. The mechanism for adjustment is the Producersettlement Fund. Handlers are required to contribute to this Fund whenever the use value of the milk handled by them during the month is greater than the norm on which the uniform price is based. Conversely, handlers whose milk distribution is of low use value and whose fixed minimum costs are therefore out of line with their receipts, are recompensed from this Fund. Effective enforcement of such a marketing scheme rests on proper accounting, reliable reports and alert inspection. At best, however, errors are inevitable, which may call for payments by handlers into the Fund. The reliance of the industry upon that Fund makes prompt payments into it imperative. 3 An order for payment into the Fund and its resistance led to this litigation. The Ruzickas, handlers of milk, filed with the market administrator required reports and received from him a transcript of their account with the Fund for the period in controversy. Deficiencies were disclosed which the Ruzickas refused to pay, in disregard of § 941.8(e) and (g) of Order 41 requiring a handler to pay within five days 'the amount so billed'. Under § 8a(6) of the Agricultural Marketing Agreement Act this suit was begun in the Northern District of Illinois for enforcement. The Government prayed for a mandatory injunction commanding compliance with Order 41 by payment of the sums alleged to be due to the Fund. If it be relevant, it was not alleged that there was danger of irreparable loss because of insolvency of the Fund. By their answer the Ruzickas justified their failure to pay, chiefly on the ground that the demand was based upon faulty inspection of their accounts and improper tests of their milk and milk products. The District Court ruled that 'the defendants having failed to avail themselves of the administrative remedy provided by said Act, may not raise such issues of fact before this Court'. On the issue in the suit thus limited, the District Court granted the Government's motion for judgment on the pleadings. The Circuit Court of Appeals for the Seventh Circuit, one judge dissenting, reversed the District Court, ruling that the validity of the demand by the Secretary of Agriculture may be contested in an enforcement proceeding under § 8a(6). 152 F.2d 167. 4 Thus the question before us is whether a handler may resist a claim against him by the Secretary of Agriculture, made according to the procedure defined in the Act, without previously having sought to challenge the claim in a proceeding, also defined in the Act, before the Secretary of Agriculture. The answer is found on a fair reading of the Agricultural Marketing Agreement Act in the context of its purposes and of the scheme designed by Congress for their realization. 5 The sections of the statute directly relevant to our problem are set out in the margin.1 Briefly, the district courts of the United States are 'vested with jurisdiction specifically to enforce' o ders issued pursuant to the Act.2 The Act authorizes a handler to challenge before the Secretary of Agriculture his order 'or any obligation imposed in connection therewith' as 'not in accordance with law', and to ask to have it modified or to be exempted from it. When the order is so challenged, the determination of the Secretary of Agriculture, after hearing, is final but only 'if in accordance with law'. Section 8c(15)(A). To test whether such ruling is 'in accordance with law' the handler may bring the Secretary's action for review before the appropriate district court. Section 8c(15)(B). But the very subsection, (15), which gives the handler access to the Secretary of Agriculture for administrative relief and opportunity for judicial review of his determination, provides that the pendency of the proceedings before the Secretary, or in the district court to review the Secretary's ruling, 'shall not impede, hinder, or delay the United States or the Secretary of Agriculture from obtaining relief' under § 8a(6). It is only when 'a final decree has been rendered in proceedings between the same parties, and covering the same subject matter, instituted pursuant to this subsection (15)' that proceedings brought for enforcement under § 8a(6) 'shall abate'. Section 8c(15)(B). 6 To be sure, Congress did not say in words that, in a proceeding under § 8a(6) to enforce an order, a handler may not question an obligation which flows from it. But meaning, though not explicitly stated in words, may be mbedded in a coherent scheme. And such we find to be the provisions taken in their entirety as a means for attaining the purposes of the Act while at the same time protecting adequately the interests of individual handlers. 7 The procedure devised by Congress explicitly gave to an aggrieved handler an appropriate opportunity for the correction of errors or abuses by the agency charged with the intricate business of milk control. In addition, if the Secretary fails to make amends called for by law the handler may challenge the legality of the Secretary's ruling in court. Handlers are thus assured opportunity to establish claims of grievances while steps for the protection of the industry as a whole may go forward. Sections 8a(6) and 8c(15) thus form a complementary procedural scheme. Contrariwise, it would make for disharmony to extrapolate from these provisions of the statute the right to consider independently, in a proceeding by the Government for the enforcement of the Secretary's order, questions for which Congress explicitly furnished the handler an expert forum for contest with ultimate review by a district court. 8 The situation before us indicates how disruptive it would be to allow issues that may properly come before a district court in a proceeding under § 8c(15) to be open for independent adjudication in a suit for enforcement under § 8a(6). After a presumably careful study by those technically equipped, a program was devised for the dairy farmers in one of the large areas of the country. The success of the operation of such Congressionally authorized milk control must depend on the efficiency of its administration. Promptness of compliance by those subject to the scheme is the presupposition of Order No. 41. Thus, definite monthly deadlines are fixed by the Order for every step in the program. In large measure, the success of this scheme revolves around a 'producers' fund which is solvent and to which all contribute in accordance with a formula equitably determined and of uniform applicability. Failure by handlers to meet their obligations promptly would threaten the whole scheme. Even temporary defaults by some handlers may work unfairness to others, encourage wider non-compliance, and engender those subtle forces of doubt and distruct which so readily dislocate delicate economic arrangements. To make the vitality of the whole arrangement depend on the contingencies and inevitable delays of litigation, no matter how alertly pursued, is not a result to be attributed to Congress unless support for it is much more manifest than we here find. That Congress avoided such hazards for its policy is persuasively indicated by the procedure it devised for the careful administrative and judicial consideration of a handler's grievance. It thereby safeguarded individual as well as collective interests. In the case before us, administrative proceedings were instituted before the Secretary of Agriculture and, apparently, are awaiting his action. Presumably the Secretary of Agriculture will give the respondents the rights to which Congress said they were netitled. If they are dissatisfied with his ruling, they may question it in a district court. The interests of the entire industry need not be disturbed in order to do justice to an individual case.3 9 It is suggested that Congress did not authorize a district court to enforce an order not 'in accordance with law'. The short answer to this rather dialectic point is that whether such an order is or is not in accordance with law is not a question that brings its own immediate answer, or even an answer which it is the familiar, everyday business of courts to find. Congress has provided a special procedure for ascertaining whether such an order is or is not in accordance with law. The questions are not, or may not be, abstract questions of law. Even when they are formulated in constitutional terms, they are questions of law arising out of, or entwined with, factors that call for understanding of the milk industry. And so Congress has provided that the remedy in the first instance must be sought from the Secretary of Agriculture. It is on the basis of his ruling, and of the elucidation which he would presumably give to his ruling, that resort may be had to the courts. Congress seems to have emphasized the different functions in the enforcement of the Act that § 8a and § 8c serve by explicitly directing that the proceedings for relief instituted by a handler under § 8c shall not 'impede, hinder, or delay' enforcement proceedings by the United States under § 8a. 10 We are dealing here solely with the rights of handlers. This is not Stark v. Wickard, 321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733. In that case it was concluded that since Congress had provided no administrative remedy for a producer to review the legality of an order against him, presumably the courts were not closed to him. But by § 8c(15) Congress has made precisely such provisions for handlers. As to them the procedural scheme is complete. 11 The Agricultural Marketing Agreement Act is one of many enactments by which Congress in regulating economic enterprise has divided the duty of enforcement between courts and administrative agencies. But there is the greatest variety in the manner in which Congress has distributed this responsibility. Those who are entitled to speak tell us that the development of the natural sciences has often suffered from premature generalization. Certainly the recent growth of administrative law counsels against generalizations regarding what is compendiously called judicial review of administrative action. And so we deem it desirable, in a case like this, to hug the shore of the precise problem before us in relation to the provisions of the particular Act immediately relevant. One general observation, may, however, be permitted. Both courts and administrative bodies are law-enforcing agencies, utilized by Congress as such. In construing the enforcement provisions of legislation like the Marketing Act, it is important to remember that courts and administrative agencies are collaborative 'instrumentalities of justice', and not business rivals. See United States v. Morgan, 307 U.S. 183, 191, 59 S.Ct. 795, 799, 83 L.Ed. 1211; Federal Communications Commission v. Pottsville Broadcasting Co., 309 U.S. 134, 141 et seq., 60 S.Ct. 437, 440 et seq., 84 L.Ed. 656. And so we are not called upon to decide what powers inhere in a court of equity, exercising due judicial discretion, even in a suit such as was here brought by the United States for the enforcement of an order under § 8a. We say this because it appears that at a stage in the proceedings in the district court a motion for a stay, pending disposition of the petition by the Ruzickas before the Secretary of Agriculture, was made by the respondents. With the court's leave, this motion was subsequently withdrawn. The power of the district court to have acted on it is therefore not before us. Compare Scripps Howard Radio v. Federal Communications Com'n, 316 U.S. 4, 62 S.Ct. 875, 86 L.Ed. 1229; Hecht Co. v. Bowles, 321 U.S. 321, 64 S.Ct. 587, 88 L.Ed. 754. 12 Judgment reversed. 13 Mr. Justice DOUGLAS concurs in the result. 1 '8a(6) The several district courts of the United States are hereby vested with jurisdiction specifically to enforce, and to prevent and restrain any person from violating any order, regulation, or agreement, heretofore or hereafter made or issued pursuant to this title, in any proceeding now pending or hereafter brought in said courts.' '8c(15)(A) Any handler subject to an order may file a written petition with the Secretary of Agriculture, stating that any such order or any provision of any such order or any obligation imposed in connection therewith is not in accordance with law and praying for a modification thereof or to be exempted therefrom. He shall thereupon be given an opportunity for a hearing upon such petition, in accordance with regulations made by the Secretary of Agriculture, with the approval of the President. After such hearing, the Secretary shall make a ruling upon the prayer of such petition which shall be final, if in accordance with law.' '8c(15)(B) The District Courts of the United States (including the district court of the United States for the District of Columbia) in any district in which such handler is an inhabitant, or has his principal place of business, are hereby vested with jurisdiction in equity to review such ruling, provided a bill in equity for that purpose is filed within twenty days from the date of the entry of such ruling. Service of process in such proceedings may be had upon the Secretary by delivering to him a copy of the bill of complaint. If the court determines that such ruling is not in accordance with law, it shall remand such proceedings to the Secretary with directions either (1) to make such ruling as the court shall determine to be in accordance with law, or (2) to take such further proceedings as, in its opinion, the law requires. The pendency of proceedings instituted pursuant to this subsection (15) shall not impede, hinder, or delay the United States or the Secretary of Agriculture from obtaining relief pursuant to section 8a(6) of this title. Any proceedings brought pursuant to section 8a(6) of this title (except where brought by way of counterclaim in proceedings instituted pursuant to this subsection (15)) shall abate whenever a final decree has been rendered in proceedings between the same parties, and covering the same subject matter, instituted pursuant to this subsection (15).' 2 Section 8a(8) is also invoked by petitioner. But that section adds to the Government's remedies. It implies no judicial review in favor of handlers. 3 'During the period while any such petition is pending before the Secretary and until notice of the Secretary's ruling is given to the petitioner, the penalties imposed by the act for violation of an order cannot be imposed upon the petitioner if the court finds that the petition was filed in good faith and not for delay. The Secretary may, nevertheless, during this period proceed to obtain an injunction against the petitioner pursuant to section 8a(6) of the Agricultural Adjustment Act. * * * It is believed that these provisions establish an equitable and expeditious procedure for testing the validity of orders, without hampering the Government's power to enforce compliance with their terms.' S.Re . No. 1011, 74th Cong., 1st Sess., p. 14.

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329 U.S. 317 67 S.Ct. 320 91 L.Ed. 318 EAGLES, Post Commanding Officer, Fort Dix, N.J.,v.UNITED STATES ex rel. HOROWITZ. No. 58. Argued Nov. 21, 1946. Decided Dec. 23, 1946. Mr.Irving S. Shapiro, of Washington, D.C., for petitioner. Mr. Meyer Kreeger, of New York City, for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This is a companion case to Eagles v. Samuels, 329 U.S. 304, 67 S.Ct. 313. Certiorari also brings it here from the Third Circuit Court of Appeals. That court followed the same procedure here as it did in Samuels' case; it reversed the District Court which had dismissed the writ of habeas corpus brought on behalf of Horozitz, and remanded the cause to the District Court with directions to discharge him from military custody. United States ex rel. Samuels v. Pearson, 3 Cir., 151 F.2d 801. 2 It appears that after the remand Horowitz was enlarged upon a recognizance as permitted under our rules. Rule 45, 28 U.S.C.A. following section 354. The suggestion that the case is therefore moot is without merit for the reasons stated in Samuels' case. 3 Horowitz registered pursuant to the Selective Training and Service Act of 1940, as amended, 50 U.S.C.A.Appendix, § 301 et seq., early in 1941 and filed a questionnaire stating he was a college student preparing for a career as a psychiatric social worker. At the tme he asked for a deferment in induction until February, 1943, saying that 'if you take me now, you practically negate my possibilities to attain the position I seek in life, namely, a psychiatric social worker.' Shortly after he was physically examined and found qualified for military service, he advised the local board that he had been enrolled in the Rabbinical Seminary of America, a recognized theological school. On July 1, 1941, he was classified I—A. The board of appeal likewise gave him that classification in August, 1941. 4 Meanwhile, he claimed exemption under § 5(d) of the Act. The basis of his claim was the representation that he was a student in a recognized theological school for rabbis and was preparing for the rabbinate. In an affidavit he stated that he had not disclosed his intention to become a rabbi because he had no 'concrete facts' to present, only 'hopes'. In November, 1941, the local board classified him IV—D which classification he retained until May, 1944. In 1942 he filed an occupational questionnaire with the local board stating that he was taking a course in rabbinical studies at the seminary and also a bachelor of social science course at another institution which he hoped to complete in 1944. He listed himself as a social worker. 5 In April, 1944, the city director of Selective Service reviewed the file and requested Horowitz to appear before an advisory theological panel. He appeared before a panel and there was a hearing. The panel stated that all students in this seminary were not necessarily preparing for the ministry and that each individual case should be separately appraised.1 It concluded that his attendance at the seminary had been motiva ed by a desire to secure a basis for exemption under the Act. This was based on his declared intention early in 1941 to be a social worker, inconsistencies in his explanation of his failure to refer to the rabbinate at that time, his indifferent and unsystematic manner in preparing for that professed objective, and an appraisal of his reliability and candor. The transcript of proceedings before the panel and later the report were transmitted to the local board by the office of the city director of Selective Service with a request to the board to reopen and reconsider his classification. The report made by the panel was not signed. Moreover, the report was headed 'Confidential Statement for the Record.' The local board was advised by the city director's office that while it should give careful consideration to the recommendation of the panel, determination of the classification must be made by the board itself or by an appeal agency. 6 Horowitz was immediately reclassified as I—A. He asked for a hearing which was granted. It appears that the panel which interviewed him and rendered the report was composed of three prominent Jewish laymen but no rabbi. Whether that was the cause does not appear, but the board, as a result of the hearing, referred the file to a rabbi for another advisory recommendation. The rabbi recommended that Horowitz be classified IV—D. The local board gave him that classification in June, 1944. In August, 1944, the local board held another hearing. Horowitz was present and was examined. The board concluded that he should be in I—A and so classified him, stating as its reason that he became a student in the rabbinical school after he had registered under the Act. He requested and was granted another hearing, at which he submitted additional evidence. The local board refused to change the classification. On appeal the board of appeal classified him as I—A. 7 On two subsequent occasions Horowitz asked that his classification be reopened and submitted additional evidence. The board was unpersuaded and refused to reopen the classification. The office of the city director advised the boards that the panel which interviewed Horowitz had been composed solely of laymen and that if by virtue of that fact the board of appeal desired to reconsider the case, to inform the office. Both the local board and the board of appeal replied that there was no oc asion for reopening the classification. The board of appeal stated that it had 'once again unanimously agreed that the registrant's status does not warrant a IV—D classification.' Early in 1945 Horowitz was inducted into the Army. 8 Horowitz relies upon affidavits and statements from various people concerning the bona fides of his professed desire to become a rabbi, on a statement made when he graduated from the public schools in 1932 that that was his ambition in life, on the fact that he stated in 1936 that his first vocational choice was the rabbinate, and on all of his subsequent activities which, he asserted, fitted into that pattern. On the other hand, it does appear that in 1937 his first vocational choice was teaching, his secound the rabbinate. Furthermore, as already noted, his professed objective stated to the local board early in 1941 was social work. And he in fact entered the seminary shortly after he had passed his physical examination and qualified for military service. These circumstances alone make his claim to exemption colorable. Certainly we cannot say that the action of the board of appeal in finally classifying him as I—A was without any support in the evidence. 9 The question remains whether there was anything in the administrative procedure which vitiated Horowitz' classification. What we have said about the use of a theological panel and the range of its inquiry in Eagles v. Samuels, supra, need not be repeated here. There is nothing in the present case which makes for a different result. We can no more conclude here, than in Samuels' case, that the board abdicated its function. It first followed the panel's recommendation. But its mind was not closed, as evidenced by the fact that it later sought the advice of a rabbi and followed his recommendation. And when it returned to its earlier position, it proceeded on the ground that the basic defect in Horowitz' case was the shift in his position in 1941 after he had registered. The record shows indecision by the board but no subservience to the panel. As respects the fact that the panel's report was unsigned, only a word need be added. Horowitz, like Samuels, appeared in person before the panel and saw its members face to face. At no time does it appear that he sought the identity of the members and was refused the information. 10 The essential procedural differences between this case and Samuels' are two—it appears that this panel was composed entirely of laymen; and its report was not only unsigned but marked confidential for the file. The first objection carries little weight. These laymen were prominent citizens of the Jewish faith. There is no showing that they were of a sect hostile to Horowitz. There is nothing to impeach their integrity or to suggest that they were not qualified to serve in the expert role assigned to them. 11 The fact that their report was marked confidential is given great emphasis. It is argued that although the use of a theological panel may be authorized, there is no warrant for clothing its action in such secrecy. 12 The regulations, indeed, prescribe that no information in a registrant's file shall be confidential as to him or any one having written authority from him. Section 605.32(a), 8 Fed.Reg. 2641, 9 Fed.Reg. 9190. But the difficulty here is that it is not shown that the panel's report was in fact treated as confidential by the local board. It is not shown that Horowitz sought and was denied access to the report. Nor is it shown that when Horowitz examined the file the report was not made available to him. If those were the facts, we do not doubt that Horowitz' counsel would have established them at the habeas corpus hearing. We find no command to the local board to keep the report confidential. We cannot presume that the board violated the regulations. Yet that is in effect what we are asked to hold. Horowitz, like Samuels, points to possibilities of abuse in the use of the panel. But like Samuels he fails to establish prejudice in his case. The judgment below must therefore be reversed. 13 Reversed. 1 The approach of the panel to the question is shown as follows in its statement: 'Orthodox tradition has always encouraged advanced study of talmudic literature, both privately and at academies instituted for that purpose, irrespective of the specific occupational objective of those engaged in such study, and all courses offered by these academies are open to qualified students without regard to the individual student's specific intention to prepare for a career of service in the rabbinate. 'Thus, a student ultimately intending to enter business or a profession, or some non-rabbinic activity in the field of religion, may be enrolled in the same courses attended by other students who are specifically concerned with preparation for the rabbinate. It is, therefore, essential for purposes of Selective Service classification to determine in each individual case the purpose which the registrant has in mind in pursuing his course of study. 'Moreover, the fact that the religious tradition in question does not attempt to distinguish between the serious student of talmudic literature and the student preparing for a professional career in the rabbinate, tends to make it extremely difficult for school officials, ministers, and others identified with that tradition, to have and express an objective judgment in such matters. 'To the extent that the distinction is understood, there is a tendency to accept at face vaue assertions made by the registrant and members of his family and to resolve any doubt in his favor, where it is at least apparent that he is a serious and pious talmudic student.'

23

329 U.S. 324 67 S.Ct. 324 91 L.Ed. 322 NATIONAL LABOR RELATIONS BOARDv.A. J. TOWER CO. No. 60. Argued Nov. 21, 1946. Decided Dec. 23, 1946. Mr.Gerhard P. Van Arkel, of Washington, D.C., for petitioner. Mr. John T. Noonan, of Boston, Mass., for respondent. Mr. Justice MURPHY delivered the opinion of the Court. 1 The issue here concerns the procedure used in elections under the National Labor Relations Act1 in which employees choose a statutory representative for purposes of collective bargaining. Specifically, we must determine the propriety of the National Labor Relations Board's refusal to accept an employer's post-election challenge to the eligibility of a voter who participated in a consent election. 2 The respondent and a union entered into an agreement to conduct an election by secret ballot on May 5, 1944, under the supervision of the Board's regional director, to determine whether the employees at respondent's Roxbury plant in the unit defined in the agreement desired to be represented by the union. The agreement was approved by the regional director and provided that the election was to be held 'in accordance with the National Labor Relations Act, the Board's Rules and Regulations, and the customary procedures and policies of the Board.' 3 The agreement set forth the qualifications for participation in the election. Only those who appeared on the pay-roll on April 21, 1944, were eligible; included were those employees who did not work at the time because they were ill, or on vacation, or temporarily laid off, or in the armed forces. The respondent had the duty of furnishing the regional director with an accurate list of the eligible voters, together with a list of the ineligible employees.2 The list of eligible voters was duly submitted on May 1, 1944. 4 The agreement further provided that both the union and the respondent could have observers at the polling places to assist in the handling of the election, to challenge the eligibility of voters and to verify the tally. If challenges were made and if they were determinative of the results of the election, the regional director was to investigate the challenges and issue a report thereon. All objections 'to the conduct of the ballot' or 'to a determination of representatives based on the results thereof' were to be filed with the regional director within five days after issuance of the 'Tally of Ballots.' If the regional director sustained the objections, he had the power to void the results and order a new election. The determination of the regional director was to be final and binding upon any question, 'including questions as to the eligibility of voters, raised by any party hereto relating in any manner to the election.' Cf. Article III, §§ 10 and 12, of the Board's Rules and Regulations (Series 3, effective Nov. 26, 1943). 5 The balloting took place on May 5 in accordance with this agreement. After the ballots were counted, the union and the respondent signed a 'Tally of Ballots,' in which the regional director certified that, of the 230 valid votes counted, 116 were cast for the union and 114 against it, with one other ballot being challenged by the union.3 Four days later, on May 9, respondent's counsel wrote the regional director that subsequent to the election 'it came to the attention of the management of the Company that Mrs. Jennie A. Kane, one of the persons who voted at the election, was not at the time an employee of the Company.'4 The letter explained that Mrs. Kane was employed by respondent from March 16, 1943, through March 24, 1944, but that after the latter date she had nev r reported again for work and had never appeared at the plant except for purpose of voting on May 5. It was admitted that the respondent, 'not being advised by Mrs. Kane of any intention on her part to leave their employ, assumed that she was ill, and continued her among their list of employees and, therefore, did not exclude her from the list of employees they believed eligible to vote.' The letter accordingly challenged Mrs. Kane's right to vote, as well as the ballot cast by her. A hearing was requested for the purpose of passing upon the one ballot challenged by the union. If that challenge were not sustained and the ballot proved to be a vote against the union, Mrs. Kane's ballot would become material to the result of the election; on that condition, the respondent requested a hearing on its challenge to Mrs. Kane's vote. 6 A hearing on the matters raised by this letter was held before the regional director. He subsequently made a report in which he found that respondent included Mrs. Kane's name on the list of eligible voters submitted on May 1 on the assumption that she was ill and had not quit her job; that reaspondent made no attempt between May 1 and May 5 to remove Mrs. Kane's name from the list, although prior to the election respondent received by mail a notice of Mrs. Kane's claim for unemployment compensation; that respondent's observers at the polls had not challenged Mrs. Kane when she voted in their presence; and that these observers certified before the ballots were counted that the election had been properly conducted. The regional director also found that the evidence was conflicting as to Mrs. Kane's actual status.5 But he concluded that under the circumstances the respondent had waived its right to challenge her vote or to object to the election on this ground. This determination made it unnecessary for him to rule on the ballot previously challenged by the union, since it could not affect the result. He thus found that the union had received a majority of the valid votes cast and was the exclusive representative of the employees in the appropriate unit. 7 The respondent thereafter refused to bargain with the union in question. Upon a complaint issued by the Board, the respondent admitted its refusal but denied that the union had ever been designated by a majority of the employees in the appropriate unit. It asserted that the election of May 5 was inconclusive on the subject because if Mrs. Kane's ballot were subtracted from the union's total and if the ballot challenged by the union were opened upon overruling the challenge and proved to be against the union, the outcome of the election would be a tie vote. The Board, after the usual proceedings, held that it would not disturb the rulings of a regional director on questions arising out of a consent election 'unless such rulings appear to be unsupported by substantial evidence or are arbitrary or capricious' and that no such grounds for disturbing the ruling were present in the instant case. As an alternative ground for its action, the Board held that the regional director's refusal under the Circumstances to permit an attack on Mrs. Kane's status as a voter after the results of the election had been announced 'is in complete accord with the extablished principles and policy of the Board'—which excluded post-election challenges 'because of our belief that otherwise an election could be converted from a definitive resolution of preference into a protracted resolution of objections disregarded or suppressed against the contingency of an adverse result.' See also Matter of Norris, Inc., 63 N.L.R.B. 502, 512. The Board accordingly ordered respondent to cease and desist from its unfair labor practice and to take the affirmative action of bargaining collectively with the union. 60 N.L.R.B. 1414. 8 The First Circuit Court of Appeals, however, set aside the Board's order. 152 F.2d 275. It construed the Act as making it a jurisdictional prerequisite to a determination that an employer has committed the unfair labor practice of refusing to bargain collectively that the union with which he has refused to deal should have been chosen by a majority of those voting who were in fact employees. It held that since the vote challenged by the union may have been cast against it and since Mrs. Kane was not found to have been an employee on the crucial date, there may have been a tie vote and the Board was without jurisdiction to find the respondent guilty of a violation of § 8(5). We granted certiorari, 328 U.S. 827, 66 S.Ct. 1011, because of the importance of the matter in the administration of the Act and because of a conflict between the result below and that reached by the Sixth Circuit Court of Appeals in N.L.R.B. v. Capital Greyhound Lines, 140 F.2d 754. 9 As we have noted before, Congress has entrusted the Board with a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees. Southern S.S. Co. v. National Labor Board, 316 U.S. 31, 37, 62 S.Ct. 886, 890, 86 L.Ed. 1246; National Labor Board v. Waterman S.S. Co., 309 U.S. 206, 226, 60 S.Ct. 493, 503, 84 L.Ed. 704; National Labor Board v. Falk Corporation, 308 U.S. 453, 458, 60 S.Ct. 307, 310, 84 L.Ed. 396. Section 9(c) of the Act authorizes the Board to 'Take a secret ballot of employees, or utilize any other suitable method to ascertain such representatives.' In carrying out this task, of course, the Board must act so as to give effect to the principle of majority rule set forth in § 9(a), a rule that 'is sanctioned by our governmental practices, by business procedure, and by the whole philosophy of democratic institutions.' S.Rep. No. 573, 74th Cong., 1st Sess., p. 13. It is within this democratic framework that the Board must adopt policies and promulgate rules and regulations in order that employees' votes may be recorded accurately, efficiently and speedily. 10 The principle of majority rule, however, does not foreclose practical adjustments designed to protect the election machinery from t e ever-present dangers of abuse and fraud. Indeed, unless such adjustments are made, the democratic process may be perverted and the election may fail to reflect the will of the majority of the electorate. One of the commonest protective devices is to require that challenges to the eligibility of voters be made prior to the actual casting of ballots, so that all uncontested votes are given absolute finality. In political elections, this device often involves registration lists which are closed some time prior to election day; all challenges as to registrants must be made during the intervening period or at the polls. Thereafter it is too late. The fact that cutting off the right to challenge conceivably may result in the counting of some ineligible votes is thought to be far outweighed by the dangers attendant upon the allowance of indiscriminate challenges after the election. To permit such challenges, it is said, would invade the secrecy of the ballot, destroy the finality of the election result, invite unwarranted and dilatory claims by defeated candidates and 'keep perpetually before the courts the same excitements, strifes, and animosities which characterize the hustings, and which ought, for the peace of the community, and the safety and stability of our institutions, to terminate with the close of the polls.' Cooley, Constitutional Limitations (8th Ed., 1927), p. 1416. 11 Long experience has demonstrated the fairness and efficaciousness of the general rule that once a ballot has been cast without challenge and its identity has been lost, its validity cannot later be challenged. This rule is universally recognized as consistent with the democratic process. And it is generally followed in corporate elections. The Board's adoption of the rule in elections under the National Labor Relations Act is therefore in accord with the principles which Congress indicated should be used in securing the fair and free choice of collective bargaining representatives. 12 Moreover, the rule in question is one that is peculiarly appropriate to the situations confronting the Board in these elections. In an atmosphere that may be charged with animosity, post-election challenges would tempt a losing union or an employer to make undue attacks on the elegibility of voters so as to delay the finality and statutory effect of the election results. Such challenges would also extend an opportunity for the inclusion of ineligible pro-union or anti-union men on the pay-roll list in the hope that they might escape challenge before voting, thereafter giving rise to a charge that the election was void because of their ineligibility and the possibility that they had voted with the majority and were a decisive factor. The privacy of the voting process, which is of great importance in the industrial world, would frequently be destroyed by post-election challenges. And voters would often incur union or employer disfavor through their reaction to the inquiries. 13 We are unable to say, therefore, that the Board's prohibition of post-election challenges is without justification in law or in reason. It gives a desirable and necessary finality to elections, yet affords all interested parties a reasonable period in which to challenge the eligibility of any voter. And an exception to the rule is recognized where the Board's agents or the parties benefiting from the Board's refusal to entertain the issue know of the voter's ineligibility and suppress the facts.6 The Board thus appears to apply the prohibition fairly and equitably in light of the realities involved. 14 The reliance of the court below upon the asserted jurisdictional requirement was misplaced. It is true that it is an unfair labor practice for an employer to refuse to bargain with a union only if that union was chosen by a majority of the voting employees. But the determination of whether a majority in fact voted for the un on must be made in accordance with such formal rules of procedure as the Board may find necessary to adopt in the sound exercise of its discretion. The rule prohibiting post-election challenges is one of those rules. When it is applied properly, it cannot deprive the Board of jurisdiction to find an unlawful failure to bargain collectivly. That is true even where it subsequently is ascertainable that some of the votes cast were in fact ineligible and that the result of the election might have been different had the truth previously been known. The rule does not pretend to be an absolute guarantee that only those votes will be counted which are in fact eligible. It is simply a justifiable and reasonable adjustment of the democratic process. 15 There is no basis in the instant case for disregarding the Board's policy in this respect. The fact that the respondent may have been honestly mistaken as to the status of Mrs. Kane has no relevance whatever to the justification for the use of the policy. And nothing in the consent agreement constituted a waiver of the policy by the Board. On the contrary, the agreement expressly stated that the election was to be held in accordance with 'the customary procedures and policies of the Board,' which would include the policy prohibiting post-election challenges. The provision as to the filing of objections 'to the conduct of the ballot' and 'to a determination of representatives based on the results thereof' within five days after issuance of the 'Tally of Ballots,' a provision which was quite separate from that relating to challenges, obviously has no application here. Objections and challenges are two different things in electoral parlance. Objections relate to the working of the election mechanism and to the process of counting the ballots accurately and fairly. Challenges, on the other hand, concern the eligibility of prospective voters. The Board uses this clear distinction as a matter of policy and we are not free to disregard it.7 16 Neither the record in this case nor the past history of the policy against post-election challenges justifies an assumption that the interests of the anti-union employees in this election were inadequately protected. Due notice of the manner and conduct of the election was given to all employees; and, despite the lack of any affirmative provisions in the consent agreement, there was no indication that any of the employees were prohibited from examining the eligibility list or from challenging any prospective voter. Nor was there competent evidence that any anti-union employee made any objection, either before or after the election, to the procedure adopted or to the casting of any ballots.8 Moreover, the representatives of the Board, as well as those of the respondent, were bound to perform their electoral functions on behalf of all employees, including those with anti-union sentiments. In the absence of any evidence that such representatives discriminated against the anti-union employees in preparing the eligibility list or in raising timely eligibility issues, we cannot say that the interests of those employees were inadequately represented. 17 Since we rest our decision solely on the propriety of the Board's policy against post-election challenges, it is unnecessary to discuss the effect to be given by the Board to the regional director's ruling that the respondent waived its right to challenge Mrs. Kane's vote or the effect to be given to the terms of the consent election agreement apart from the general policy. 18 It follows that the court below erred in refusing to enforce the Board's order in full. 19 Reversed. 20 Mr. Justice FRANKFURTER concurs in the result. 21 Mr. Justice JACKSON, dissenting. 22 If the only interests affected were the complaining employer and the victorious union, I should agree with the Court's decision. But there is a third and, as usual, a forgotten interest here—those employees who did not want to be represented by the union. 23 The election was held by agreement between the employer and the union which was seeking to organize the plant. The Company was to furnish a list of eligible voters. The Company and the union were each to have observers attend, with the right to challenge the voters. The agreement did not give anit-organization employees either observers or the right to challenge. The certified result of 116 union against 114 anti-union votes was reached by not counting a ballot which the union challenged and by counting the ballot which the Company now points out was probably invalid. Mrs. Kane's vote, no matter whether valid or invalid, is thus allowed to decide the election. 24 It is in evidence and undisputed that after the election, an employee—presumably anti-union, from the circumstance that he was objecting—raised the question that Mrs. Kane, who was carried on the Company's eligible list because the Company believed she was absent for illness, had, in fact, left the employ of the Company with no intention to return. If that is true, she was not a qualified voter. 25 But because there was no challenge at the time her ballot was cast, the Court holds there can be no inquiry into its validity. Comparison with the practice at general public elections is specious, for in those elections every citizen has a right of challenge and registration lists usually are made up and available in advance. No comparable safeguards for the employees opposed to the union appear to exist here, though both the employer and the union were protected. 26 The Court takes the position that although every other interest has affirmative protection, there is no necessity for similar affirmative protection to the anti-union employees. Despite the fact that both of the contracting parties were careful to provide such protection for themselves, the Court assumes it is unnecessary for the third interest. The Court says that in the absence of evidence it will assume that such interests were adequately represented, at the same time closing the door to hearing evidence as to whether those interests were prejudiced unless those who are denied affirmative representation or challenge rights should have made affirmative objection before the wrong was consummated by casting the illegal ballot. And, of course, the members of such a minority have no standing to bring their problems either to the Board or to the Court. We hear of their grievance, if at all, only through its being identical with some complaint which the employer raises. 27 The Court fears that to permit inquiry into the validity of Mrs. Kane's vote would 'extend an opportunity for the inclusion of ineligible pro-union or anti-union men on the payroll list' who would be challenged after the election in the hope of voiding an unwanted result. Of course, there are opportunities for manipulation of such a list, for collusion between employer and favored groups, for fraud, and for honest mistakes. 28 But if the Court i concerned to keep the elections pure, why close the door to proof of such corruption or mistake when it operates against an anti-union group, because it has not been challenged by one of the parties to it: to wit, the employer? In the usual election, it may be desirable to put an end to challenges at the time when the ballots become intermingled and indistinguishable. But to justify cutting off inquiry, it should appear that all persons interested in the election have had adequate opportunity to question the ballots cast. As long as no such provision is made for employees who are opposed to organization, I would protect their rights by allowing post-election challenges on such grounds as are urged here. 29 Of course the protection this gives is far from satisfactory. The challenge must be initiated by the parties the Board recognizes, the employer or the union. But there will be some instances in which their interest coincides with that of the anti-union employees. On the other hand, I can scarcely think of a more perfect device for encouraging unscrupulousness, than to invest it with finality against all inquiry either by the Board or the courts. Here half the employees are forced to accept union representation as the result of an election in which they were not allowed to protect the ballot, and those who were, failed to do so. If I really wanted to discourage fraud, collusion, and mistakes, and protect the integrity of elections and the rights of both minority and majority, I should hold that such elections can be looked into whenever irregularity appears to have affected the result. 1 49 Stat. 449, 29 U.S.C. § 151 et seq., 29 U.S.C.A. § 151 et seq. 2 Among the ineligible persons were those who had quit or been discharged for cause and had not been rehired or reinstated prior to the date of the election. 3 It was unnecessary to rule on the challenged ballot since it could not affect the result of the election, even though the ballot proved to be agaifnst the union 4 The letter recited that 'it has nov come to their attention, however that or April 28, 1944, Mrs. Kane filed with the Division of Employment Security of the Commonwealth of Massachusetts a claim for unemployment benefits stating, in connection with that claim, that she had left the employ of the A. J. Tower Company in March, 1944, and that her reason for leaving was that she 'could not continue to do heavy work of carrying bundles which was part of her job'. The Company has also learned that on the same day, April 28, 1944, Mrs. Kane visited the United States Employment Office and was placed on its list of persons available for employment.' 5 An agent of the Board interviewed Mrs. Kane and was told by her that: 'On April 28, 1944, I applied for Unemployment Compensation benefits, thinking I was entitled to such because of my illness. At no time, prior or since, have I considered myself not an employee of the A. J. Tower Co. I have never requested my release of the A. J. Tower Co. and in fact I intend to return to the Company when I have regained my strength. I did not think my application for unemployment benefits would be considered a termination from the Company. * * * On May 5, 1944, when I presented myself at the election polls at the A. J. Tower Co., I considered myself as an employee of the Company and therefore entitled to cast a ballot. I still consider myself an employee of the A. J. Tower Co.' But the regional director pointed out that, despite this statement, subsequent investigation confirmed the fact that Mrs. Kane advised the Division of Employment Security on April 28, 1944, that she had left her employment with the respondent in March because of the heavy work in carrying bundles. See note 4, supra. 6 See Matter of Wayne Hale, 62 N.L.R.B. 1393; Matter of Beggs & Cobb, Inc., 62 N.L.R.B. 193. 7 'The Board follows a policy of differentiating between objections to the conduct of an election and challenges (to) the eligibility of voters and it does not ordinarily permit challenges under the guise of objections after the election.' Matter of Norris, Inc., 63 N.L.R.B. 502, 512. Cf. Matter of Great Lakes Steel Corporation, 15 N.L.R.B. 510. 8 The respondent's factory superintendent testified that an unidentified employee came to him and 'objected to the vote of this Jennie Kane' several days after the election and even longer after the receipt by respondent of the notice of Mrs. Kane's unemployment compensation claim, which had been mailed to respondent before the election. This testimony was admitted merely to show 'how the company became interested in the question' of Mrs. Kane's eligibility. The Board, of course, was not compelled to accept this testimony as proof of an objection to Mrs. Kane's vote by an anti-union employee or as an indication that the interests of anti-union employees may have been inadequately represented.

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329 U.S. 304 67 S.Ct. 313 91 L.Ed. 308 EAGLES, Post Commanding Officer, Fort Dix, N.J.,v.UNITED STATES ex rel. SAMUELS. No. 59. Argued Nov. 21, 1946. Decided Dec. 23, 1946. Mr.Irving S. Shapiro, of Washington, D.C., for petitioner. Mr. Meyer Kreeger, of New York City, for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Samuels registered under the Selective Training and Service Act of 1940,1 as amended, and thereafter claimed exemption from military service under § 5(d) of the Act. That exemption includes not only regular or duly ordained ministers of religion but also 'Students who are preparing for the ministry in theological or divinity schools recognized as such for more than one year prior' to the Act. He was classified I—A and inducted into the Army. Thereafter he filed a petition for a writ of habeas corpus in the District Court, seeking release from military custody on the ground that he was entitled to an exemption under § 5(d) of the Act and that his classification as I—A was unlawful. There was a return and a hearing, and the District Court ordered the writ dismissed. On appeal the Circuit Court of Appeals, in reliance on United States ex rel. Levy v. Cain, 2 Cir., 149 F.2d 338, reversed and remanded the cause to the District Court with directions to 'discharge' Samuels 'From military custoday, without prejudice to further lawful proceedings under the Selective Service Act'. United States ex rel. Samuels v. Pearson, 3 Cir., 151 F.2d 801, 802. 2 The case is here on a petition for a writ of certiorari which we granted in order to resolve the conflict between the decision below and United States ex rel. Goodman v. Hearn, 153 F.2d 186, in the Fifth Circuit Court of Appeals. 3 First. A question of mootness lies at the threshold of the case presented here. We are advised that after remand of the cause the District Court ordered the release of Samuels and that he was thereupon unconditionally released from military custody. Samuels contends that the case is moot since he is no longer in custody of the military or of any one else but is free to come and go as he pleases. 4 Under our decisions the case would be moot if the writ of habeas corpus had been denied below and, pending disposition of the petition here, Samuels had received a discharge from the army. Zimmerman v. Walker, 319 U.S. 744, 63 S.Ct. 1027, 87 L.Ed. 1700. And see Weber v. Squier, 315 U.S. 810, 62 S.Ct. 800, 86 L.Ed. 1209; Tornello v. Hudspeth, 318 U.S. 792, 63 S.Ct. 990, 87 L.Ed. 1158. That situation, like the case of a prisoner who, pending an appeal from denial of a writ of habeas corpus, is granted bail, Johnson v. Hoy, 227 U.S. 245, 33 S.Ct. 240, 57 L.Ed. 497; Wales v. Whitney, 114 U.S. 564, 572—574, 5 S.Ct. 1050, 1053, 1054, 29 L.Ed. 277, would present no existing controversy. Habeas corpus is the means of making a judicial 'Inquiry into the cause of restraint of liberty.' R.S. § 752, 28 U.S.C. § 452, 28 U.S.C.A. § 452. As stated in McNally v. Hill, 293 U.S. 131, 137, 55 S.Ct. 24, 27, 79 L.Ed. 238, 'There is no warrant in either the statute or the writ for its use to invoke judicial determination of questions which c uld not affect the lawfulness of the custody and detention'. If the custody or restraint of liberty is terminated without use of the writ, the case is finished. Different considerations are brought into play if custody is ended through the writ itself. 5 Our rules recognize the beneficent function of the writ, Bowen v. Johnston, 306 U.S. 19, 26, 27, 59 S.Ct. 442, 445, 446, 83 L.Ed. 455; People ex rel. Sabatino v. Jennings, 246 N.Y. 258, 158 N.E. 613, 63 A.L.R. 14582 by providing that a prisoner to whom the writ has been granted may, pending appeal, be enlarged on a recognizance. Rule 45, 28 U.S.C.A. following section 354. The fact that he has been so enlarged does not render the appeal of the custodian moot. Carr v. Zaja, 283 U.S. 52, 53, 51 S.Ct. 360, 75 L.Ed. 836.3 In such a case the release is obtained through the assertion of judicial power. It is the propriety of the exercise of that power which is in issue in the appellate court, whether the prisoner is discharged or remanded to custody. Though the writ has been granted and the prisoner released, the appellate court by what it does is not rendering an opinion and issuing an order which cannot affect the litigants in the case before it. Cf. St. Pierre v. United States, 319 U.S. 41, 42, 63 S.Ct. 910, 911, 87 L.Ed. 1199, and cases cited. Affirmance makes the prisoner's release final and unconditional. Reversal undoes what the habeas corpus court did and makes lawful a resumption of the custody. Knewel v. Egan, 268 U.S. 442, 448, 45 S.Ct. 522, 525, 69 L.Ed. 1036; Haddox v. Richardson, 4 Cir., 168 F. 635; James v. Amrine, 157 Kan. 397, 140 P.2d 362; State ex rel. Bond v. Langum, 135 Minn. 320, 160 N.W. 858. 6 Second. On the merits the case involves primarily the use by the Selective Service System in New York City of advisory panels on theological classifications. Under the Act the President is authorized to establish 'Civilian local boards, civilian appeal boards, and such other agencies, including agencies of appeal, as may be necessary to carry out the provisions of this Act.' Section 10(a)(2), 57 Stat. 597, 598, 50 U.S.C.App.Supp. III, § 310(a)(2), 50 U.S.C.A.Appendix, § 310(a)(2). With exceptions not material here, the President is authorized to delegate to the Director of Selective Service any authority vested in him under the Act. Section 10(b), 57 Stat. 597, 598, 50 U.S.C.App.Supp. III, § 310(b), 50 U.S.C.A.Appendix, § 310(b). And the Director may redelegate that authority. Id. The administration of the system in each State is delegated under the regulations to a state director. Sections 603.11, 603.12, 6 Fed.Reg. 6827. In New York City, however, a city director has been appointed who performs within that area the functions of the state director. Section 603.12—1, 8 Fed.Reg. 3514. The city director supervises the local boards and boards of appeal in New York City. He may require a local board to reopen and consider anew the classification of a registrant. Section 626.2(b), 9 Fed.Reg. 11619, § 626.2—1, 10 Fed.Reg. 9210. He may appeal to a board of appeal any determination of a local board. Section 627.1, 8 Fed.Reg. 16720, 10 Fed.Reg. 9210. He may require a board of appeal to reconsider its decision, s 627.61, 8 Fed.Reg. 6017, or appeal from it to the President. Section 628.1, 7 Fed.Reg. 10521. 7 It appears that the city director, in aid of these functions, established theological panels. It was thought d sirable to give the selective service personnel the benefit of the advice of those familiar with the educational practices of various religious groups so that Selective Service might exercise a more informed judgment in evaluating claims to classifications in IV—D. Accordingly, theological panels were constituted, one of which consisted of prominent laymen and rabbis of the Jewish faith, who gave advisory opinions on those who sought a IV—D classification on the grounds that they were either rabbis or students preparing for the ministry in the Jewish religion. The members of the panel were volunteers, as permitted by the regulations. Section 602.2, 6 Fed.Reg. 6826. And pursuant to the regulations each took the oath of office. Section 602.4(a), 6 Fed.Reg. 6826. 8 Samuels registered under the Act in February, 1942. In May and July, 1942, he filed with his local board questionnaires stating that he had had two years of high school education; that he was a student at the Mesifta Theological Seminary preparing for the rabbinate; that since 1940 his regular occupation was that of a clerk; that for the past two years he had been employed by a textile company; and that the job for which he was best fitted was that of a spiritual leader and a teacher of Hebrew or rabbinical duties. The local board was advised by the seminary that Samuels had attended there since he was six years old, that he had finished the eight year elementary course and the four year prerabbinical course, that he had been admitted to the rabbinical division in 1937, that he left the school in 1939 to seek employment, that he returned to the evening school in September, 1941, and that he was transferred to the day session in July, 1942, which as later appeared, was a few days before the school closed for the summer. 9 In August, 1942, the local board classified him IV—D. Section 622.44(a), 6 Fed.Reg. 6607, 6766. In May, 1944, he was given a physical examination and found acceptable for military service. Thereafter the city director requested that he appear before the theological panel in respect to his claim to a IV—D classification. He appeared before the panel in June, 1944, stating inter alia, that he expected to graduate from the seminary in 1945, that ill health caused him to leave the school in 1939, that between 1940 and 1942 he worked as a clerk, and that he returned to the seminary as a full time student at about the time he filed his selective service questionnaire. 10 The panel reported that the seminary which Samuels attended was not preparing men exclusively for the rabbinate, that orthodox tradition encouraged advanced study of the subjects in which students for the ministry were trained, and that students ultimately intending to enter business or a profession or some non-rabbinic activity in the field of religion may be enrolled in the same classes as those preparing for the rabbinate. The panel stated that it therefore seemed essential to determine in each case what the registrant had in mind in pursuing his course of study; that to make that determination the character of the seminary, the sincerity of the registrant's declared purpose, his demeanor, and the impression as to his candor and honesty should be considered. It concluded that Samuels was not 'preparing in good faith for a career of service in the practicing rabbinate.' Its recommendation and the transcript of the hearing before it were sent to the city director who forwarded them to the local board with a request that Samuels' classification be reopened and with the statement that 'while the Local Board should give careful consideration to the recommendation of the advisory panel, the responsibility of determining the registrant's classification must rest with the Local Board itself, or the appropriate agency of appeal.' 11 The local board reclassified Samuels I—A in August, 1944. He submitted additional evidence and requested a hearing. One was had in September, 1944 and another in October, 1944. There is no § owing that the recommendation of the panel or the transcript of the hearing before it was kept from Samuels. They were not marked confidential in the file. The local board, indeed, allowed Samuels to correct alleged inaccuracies in the transcript. The local board ordered him continued in I—A and on appeal, the board of appeal also classified him as I—A. A few days later Samuels filed additional information with the local board and requested that his classification be reopened. Another hearing was held, Samuels being present. He advised the board that he had appeared of his own volition before a committee representing the Union of Orthodox Rabbis (but not connected with the selective service system) and that the committee concluded he was a student preparing in good faith for the ministry. What facts that committee may have acted upon do not appear. In any event, the local board denied Samuels' request to reopen the classification by a divided vote; and shortly thereafter he was inducted into the army. 12 Congress made the decisions of the local boards and of the boards of appeal 'final', except as appeals from them may be authorized, § 10(a)(2), withholding from the courts the customary power of review of administrative action. See Estep v. United States, 327 U.S. 114, 66 S.Ct. 423. 13 It is elementary that habeas corpus may not be used as a writ of error. United States ex rel. Tisi v. Tod, 264 U.S. 131, 44 S.Ct. 260, 68 L.Ed. 590; Woolsey v. Best, 299 U.S. 1, 57 S.Ct. 2, 81 L.Ed. 3. The function of habeas corpus is exhausted when it is ascertained that the agency under whose order the petitioner is being held had jurisdiction to act. If the writ is to issue, mere error in the proceeding which resulted in the detention is not sufficient. United States ex rel. Tisi v. Tod, supra. Deprivation of petitioner of basic and fundamental procedural safeguards, an assertion of power to act beyond the authority granted the agency, and action without evidence to support its order, are familiar examples of the showing which is necessary. See Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461, 146 A.L.R. 357; Bridges v. Wixon, 326 U.S. 135, 149, 65 S.Ct. 1443, 1450, 89 L.Ed. 2103. But it is not enough to show that the decision was wrong, United States ex rel. Tisi v. Tod, supra, or that incompetent evidence was admitted and considered. United States ex rel. Vajtauer v. Commissioner, 273 U.S. 103, 47 S.Ct. 302, 71 L.Ed. 560. If it cannot be said that there were procedural irregularities of such a nature or magnitude as to render the hearing unfair, Bridges v. Wixon, supra, at page 156, of 326 U.S., at page 1453 of 65 S.Ct., 89 L.Ed. 2103, or that there was no evidence to support the order, Vajtauer v. Commissioner, supra, the inquiry is at an end. 14 We do not think that the use of the theological panel per se infected the whole administrative proceeding and rendered it so unfair as to be nugatory. The task of the local boards in evaluating claims to exemption is almost certain to raise perplexing problems, especially in large centers where the status and activities of registrants are not so well known in the community. The local board will frequently have to make inquiries on their own. And when it comes to exemptions claimed under § 5(d), the variety of religious faiths and the differing educational practices of the churches or of sects within one faith may create difficult questions for the boards. 15 We agree with the court in United States ex rel. Goodman v. Hearn, supra, at page 188 of 153 F.2d, that advice from well-informed members of the faith in question may 'Both help and speed just classification'. Congress wrote into the Act a comparable procedure for the handling of claims for exemption by conscientious objectors. Where such claims are denied by the local board and appealed, they are referred to the Department of Justice for a hearing and an advisory report. Section 5(g). But the fact that there is no specific statutory provision for the creation of theological panels does not make their use improper. Wise administration may call for the expert advice which they alone can offer. And we see no difference in principle if they are formally constituted and regularly used in lieu of inquiry to members of the particular faith as individual cases arise. The administrative function entrusted to the Selective Service is an enormous one. The Act contemplates an administrative organization highly decentralized so as to operate effectively at the local level. More than the director, local boards, and boards of appeal were authorized. For § 10(a)(2), as we have noted, authorized the creation of 'other agencies' as well. A theological advisory panel, serving solely in an advisory capacity, would seem to be included in that category. The information received by the board from the panel, like information from any other source, must be put in writing in the file so that the registrant may examine it, explain or correct it, or deny it.4 There is, moreover, no confidential information which can be kept from the registrant under the regulations.5 With those safeguards a truly expert panel might serve a most useful function without the administrative process being corrupted by any unfair procedure. 16 Distinct questions would be raised if a registrant of one faith were referred to a theological panel on which his faith was not represented. See United States v. Balogh, 2 Cir., 157 F.2d 939. But it has not been shown that such a condition obtained here. 17 The court in United States ex rel. Levy v. Cain, supra, at page 341 of 149 F.2d held that though the propriety of the use of a theological panel be assumed, it must be limited by two conditions: the names of the members of the panel must be disclosed to the registrant so that he may be in a position to challenge it; the advice or answers which it gives must be limited to ecclesiastical questions. 18 In the statement which the panel filed in this case the names are not disclosed. But we do not think that fact rendered the administrative proceedings invalid per se. This is not a case of a registrant being passed upon by a secret group. He appeared before them, saw them face to face, and indeed recognized one of them. There is no showing that Samuels tried to ascertain who the panel members were, either at the time or subsequently, and was denied the information. Though we assume that the regulations require the file to disclose the names and affiliations of the panel members, the mere absence of a formal disclosure is not, without more, so grave an omission as to undermine the whole administrative proceeding. 19 The question is not whether the allegations of the petition are sufficient to justify the grant of the writ or the issuance of a rule to show cause, so that the facts can be ascertained in accord with the procedure outlined in Walker v. Johnston, 312 U.S. 275, 61 S.Ct. 574, 85 L.Ed. 830. In this case there was a return to the writ, a full hearing was had, and all evidence offered was received. Samuels had the burden of showing that he was unlawfully detained. Walker v. Johnston, supra. Not every procedural error, but only those so flagrant as to result in an unfair hearing render the proceedings vulnerable in a collateral attack. United States ex. rel. Tisi v. Tod, supra, at page 133 of 264 U.S., at page 260 of 44 S.Ct., 68 L.Ed. 590; Bridges v. Wixon, supra, at pages 152—156, of 326 U.S., at pages 1451—1453 of 65 S.Ct., 89 L.Ed. 2103. On the case Samuels has made out, the most the has been shown is that t e use of the theological panel might result in a hearing so unfair as to deprive the administrative proceedings of vitality. Samuels has failed to show that in his case it had that effect. He has therefore failed to sustain the burden of proof which was on him. 20 Secrecy and anonymity are not congenial to our traditions of procedure, nor in keeping with the regulations under this Act. But as we have said, the range of inquiry in a habeas corpus proceeding is limited. We are not sitting in review of action of federal agencies over which we have the power of supervision. Cf. McNabb v. United States, 318 U.S. 332, 63 S.Ct. 608, 87 L.Ed. 819. The function of habas corpus is not to correct a practice but only to ascertain whether the procedure complained of has resulted in an unlawful detention. It is the impact of the procedure on the person seeking the writ that is crucial. Whatever potentialities of abuse a particular procedure may have, the case is at an end if the challenged proceeding cannot be said to have been so corrupted as to have made it unfair. Samuels points to possibilities of abuse. But he fails to establish prejudice in his case. 21 If, as was held in United States ex rel. Levy v. Cain, supra, the panel must be restricted to answering ecclesiastical questions, Samuels should prevail. For the panel in question not only gave the board information concerning the seminary which Samuels attended but also rendered an advisory opinion on the bona fides of his claim. The argument for restricting the panel to ecclesiastical questions is based on the thought that it is only on such subjects that the board needs specialized information, while if the board relies on a general advisory opinion of the panel, it is devolving its administrative responsibility. See United States ex rel. Levy v. Cain, supra, at pages 341, 342 of 149 F.2d. 22 It is plain that the local boards and the boards of appeal may not abdicate their duty by delegating to others the responsibility for making classifications. That is their statutory function. Section 10(a)(2). But no such case is made out in this record. The city director submitted the panel's report with the admonition that it was advisory only and that it was the board's responsibility to make the classification. The recommendation of the panel was followed. But Samuels was subsequently given not only one but two hearings before the local board and a hearing before the board of appeal. There is no indication that either board relied solely on the panel's report or considered itself bound by it. In fact both boards received additional evidence submitted by Samuels and considered it. The record does not bear out the suggestion that either board was a rubber stamp for the panel. 23 Nor do we think that the range of inquiry and recommendation of the panel was too broad. If a panel is truly expert in the field, its expertness is not necessarily limited to knowledge of the theological shools the course of training, and the educational practices and traditions. Its acquaintance with the ministry of that faith and with the norms of the profession may well give it special insight into the claims of those seeking exemption. To draw the line at questions technically ecclesiastical is to make a distinction which may be wholly arbitrary in terms of the panel's expertness. A panel might act on irrelevancies; it might usurp the functions of a board. We discover nothing of the kind here. The fact that the board follows the advice of the panel does not necessarily mean that it functions in a subservient way. The fact is that the local board and the board of appeal gave Samuels further hearings and received and considered all evidence submitted. We find no procedural error of such magnitude as to warrent an uprooting of the entire proceeding in this collateral attack upon it. 24 Nor can we say there was no evidence to support the final classification made by the board of appeal. Samuels' statement that he was best fitted to be a H brew school teacher and spiritual leader, the two year interruption in his education, his return to the day session of the seminary in the month when his selective service questionnaire was returned, and the fact that the seminary in question was apparently not preparing men exclusively for the rabbinate make questionable his claim that he was preparing in good faith for the rabbinate. A registrant might seek a theological school as a refuge for the duration of the war. Congress did not create the exemption in § 5(d) for him. There was some evidence that this was Samuels' plan; and that evidence, coupled with his demeanor and attitude, might have seemed more persuasive to the boards than it does in the cold record. Our inquiry is ended when we are unable to say that the board flouted the command of Congress in denying Samuels the exemption. 25 Reversed. 1 54 Stat. 885, 55 Stat. 211, 621, 845, 56 Stat. 386, 50 U.S.C.App., 50 U.S.C.App. Supp. I, and 50 U.S.C.App. Supp. II, § 301 et seq., 50 U.S.C.A.Appendix, § 301 et seq. Our citations of the Act and the regulations throughout the opinion refer to the provisions applicable at the times relevant here. 2 In that case Mr. Justice Cardozo, then Chief Judge of the New York Court of Appeals, said, 'It would be intolerable that a custodian adjudged to be at fault, placed by the judgment of the court in the position of a wrongdoer, should automatically, by a mere notice of appeal, prolong the term of imprisonment, and frustrate the operation of the historic writ of liberty.' 246 N.Y. at page 260, 158 N.E. at page 614. 3 It appears from the briefs in that case that after the writ had issued in the lower court the petitioner had been discharged, pending appeal, on a recognizance. 4 The regulations provide that in classifying a registrant, 'Oral information should not be considered unless it is summarized in writing and the summary placed in the registrant's file. Under no circumstances should be local board rely upon information received by a member personally unless such information is reduced to writing and placed in the registrant's file.' Section 623.2, 9 Fed.Reg. 437, 10 Fed.Reg. 8541. 5 See § 605.32(a), 9 Fed.Reg. 9190.

23

329 U.S. 338 67 S.Ct. 301 91 L.Ed. 331 GIBSONv.UNITED STATES. DODEZ v. SAME. Nos. 23 and 86. Reargued Oct. 23, 1946. Decided Dec. 23, 1946. [Syllabus from pages 338-340 intentionally omitted] Mr.Hayden Covington, of Brooklyn, N.Y., for petitioners. Mr. Irving S. Shapiro, of Washington, D.C., for respondent. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 These cases carry forward another step the sequence in decision represented by Falbo, Billings, Estep and Smith.1 Each petitioner has been convicted for violating § 11 of the Selective Training and Service Act, 54 Stat. 894, 50 U.S.C.App. § 311, 50 U.S.C.A.Appendix, § 311, Dodez for failing to report for work of national importance after being ordered to do so and Gibson for having unlawfully deserted the camp to which he had been assigned for such work.2 2 In each instance the conviction was sustained on appeal3 and certiorari was granted because of the importance of the questions presented for the administration of the Act. No. 23, 326 U.S. 708, 66 S.Ct. 96, restored to the docket for reargument before a full bench, 66 S.Ct. 677; No. 86, 328 U.S. 828, 66 S.Ct. 1017. 3 The principal issues relate to the time of completing the administrative selective process and the effect in each case of what was done in this respect upon the petitioner's right to make defense in the criminal proceedings on various grounds going to the validity of the classification. 4 In both cases tendered defenses of this character were excluded in the trial court and the exclusion was sustained on appeal. The effect was, in Gibson's case, to rule that although he had completed the administrative process by reporting to the camp, pursuant to the requirement of the Falbo decision, nevertheless his remedy if any, on account of the alleged misclassification was by habeas corpus, not by defense in the criminal cause. 8 Cir., 149 F.2d 751. In Dodez' case it was held that by refusing to report for service at the amp he had failed to exhaust his administrative remedies and therefore under the Falbo doctrine he could not question his classification in the criminal suit. 6 Cir., 154 F.2d 637.4 5 * Both petitioners are Jehovah's Witnesses. Each has claimed consistently since the time of his registration that he is a minister of religion and therefore exempt from training and service under the Act.5 Each was denied this classification (IV-D), being classified instead as a conscientious objector (IV-E).6 Administrative appeals were exhausted. Pursuant to the classifications given and the applicable statutory provisions and regulations, Dodez and Gibson were assigned to work of national importance and ordered to report for such work at designated camps. 6 Dodez refused to go to the camp. But Gibson, thinking the Falbo decision required him to report there in order to exhaust his administrative remedies, went to the camp, remained for five days, and then departed without leave. It is undisputed that he intended at no time to submit to the camp's jurisdiction or authority and that he at all times made this intent clear. Everything he did was done solely to make sure that the administrative process had been finished and with a view to avoiding the barrier Falbo encountered in his trial when he sought to question his classification. 7 Obviously the petitioners have sought to reach the same point, namely, the place at which the selective process is exhausted administratively, but have differed concerning its exact location. Dodez maintains that the point was reached, under the applicable regulations,7 when his preinduction physical examination had been given and he was found acceptable for service by the Selective Service system. This was on February 21, 1944, two months prior to the date (April 21, 1944) when he was ordered to report for work and refused to go. 8 On the other hand, Gibson argues that until the preliminaries to actual service, including physical examination, were completed at the camp, he was not foreclosed by going through with them from exercising his choice not to submit to the camp's jurisdiction, cf. Billings v. Truesdell, 321 U.S. 542, 64 S.Ct. 737, 88 L.Ed. 917, or, upon doing so, from asserting the invalidity of his classification in a criminal trial either for failing to report for service or for desertion from the camp, Cf. Estep v. United States, 327 U.S. 114, 66 S.Ct. 423; Smith v. United States, ibid. Clearly, on the facts and the issues, the question as to Dodez, like that in Falbo's case, is whether he went far enough to exhaust the administrative process; while as to Gibson it is said that he went too far, that is, beyond the point of completing that process, and that this cut off the right of defense concededly available to him at that point. II 9 If these cases were controlled in all respects by the regulations effective when Falbo's case was decided, Dodez would seem clearly to fall within the decision's proscription. The Court there said: 'Completion of the functions of the local boards and appellate agencies, important as are those functions, is not the end of the selective service process. The selectee may still be rejected at the induction center and the conscientious objector who is opposed to noncombatant duty may be rejected at the civilian public service camp. The connected series of steps into the national service which begins with registration with the local board does not end until the registrant is accepted by the army, navy or civilian public service camp. Thus a board order to report is no more than a necessary intermediate step in a united and continuous process designed to raise an army speedily and efficiently.' 320 U.S. at page 553, 64 S.Ct. at page 348, 88 L.Ed. 305. Since acceptability for service was not finally determined under the regulations then applicable until the registrant had reached camp, had there undergone or waived the specified physical examinations, and thereupon had been found acceptable,8 and since Falbo had not taken those steps, the Court held he was not entitled to question his classification and therefore sustained his conviction. 10 However, intermediate the Falbo decision and issuance of the order to Dodez to report, the regulations governing the procedure relating to selection for service were changed and in a manner which Dodez says relieved him from the necessity of going to the camp in order to complete the administrative process. The Government now concedes, we think properly,9 that Dodez is right in this view. 11 It is not necessary to review in detail the regulations which were governing in Falbo's case, since they are not controlling in either of the present ones. Although it is now argued that the Court misconceived their effect,10 we need only to note that it was within the registrant's power to secure a physical examination by the camp physician by indicating a change in his physical condition, it could not be known in advance in any case whether he would demand it, and until this was determined it could not be known finally and irrevocably whether he would be 'accepted for work of national importance.'11 The decision therefore correctly ruled that 'the conscientious objector who is opposed to noncombatant duty may be rejected at the civilian public service camp' and that the board's order to report there for service was no more than a necessary intermediate step' in the continuous selective process, which was not ended until the last possibility for rejection had been exhausted. Under those regulations there was no final and conclusive acceptance for service until after those procedures at the camp were c mpleted. 12 It was exactly in this respect, however, that the changes made in the regulations immediately after the Falbo decision12 and shortly prior to issuance of Dodez' order to report, together with still others made later but prior to the order to Gibson, were effective. The changes were extensive and important. The altered regulations are lengthy. We therefore give a summary in the margin, noting the more important differences between those applicable to Dodez and those in effect as to Gibson.13 13 It is of some importance to note that the changes affecting both registrants were made in consequence of the enactment of § 5 of Public Law 197, 78th Congress, approved December 5, 1943, 57 Stat. 596, 599, 50 U.S.C.Appendix, § 304a, 50 U.S.C.A.Appendix, § 304a. This required preinduction physical examinations to be given before the registrant was ordered to report for induction and service.14 Previously he first had been ordered to report for induction, was then given his preinduction examination by the armed forces and, on being found acceptable, was inducted at once.15 The major changes in the regulations giving effect to § 5 were made on January 10, 1944, one week aft r the Falbo decision came down, some taking effect on that date,16 others on February 2d following. These applied to Dodez. Still others not applicable to him but operative as to Gibson took effect on June 7, 1944.17 14 The changed regulations, following out the command of § 5 of Public Act 197, provided for a preinduction physical examination to be given before issuance of the order to report for induction, rather than afterward. Section 629.1 of Amendment No. 200(9 F.R. 400—442), effective January 10, 1944.18 This was the basic amendment. It applied to all registrants subject to call for service, including those classified IV—E. Moreover, by Amendment No. 210(9 F.R. 1416), effective February 2, 1944, § 653.11 of the Regulations applicable to men so classified was changed to eliminate the previously effective paragraph (c) providing for physical examination by the camp physician on indication of changed condition and consequent possible rejection at the camp. Instead the amended regulation stated simply that (a) when the 'assignee' had reported to the camp, the camp director should 'complete the Order to Report for Work of National Importance (Form 50)'; and (b) place, as specified, on the assignee's papers, 'a statement that the registrant is accepted' for work at the designated camp, stating also the date and place of acceptance; (c) the local board, 'upon receiving notice that a registrant has been accepted for work,' should not 'change his classification but shall not the fact of his acceptance' on Form 100; and (d), if the assignee failed to report when required, the camp director was to notify the Director of Selective Service.19 (Emphasis added.) The effect of the statute and the amended regulation was to place the order to report for service nearer the end of the administrative process than it had been previously, so far as concerned the power of the registrant to take action which might result in the rejection. The elimination of the provision permitting medical examination at the camp, by Amendment No. 210, removed and chance the registrant formerly had to secure rejection by demanding examination there, and left to be performed at the camp only the formal entries of 'completing the order to report' and noting the fact, time and place of 'acceptance' upon the assignee's papers, together with the duties of notifying the local board of acceptance or the Director of Selective Service of failure to report. 15 Although the amended regulations thus speak of 'completing the Order to Report' and placing on his papers 'a statement that a registrant is accepted,' we agree that these were only formal matters to be performed by camp officials, and left nothing to be done by them or by the applicant after reaching the camp which might result in his being rejected or released from the duty to remain and perform the further duties imposed on him. To construe the regulations otherwise would be to force the registrant not only to perform all requirements affording possibility of relief but also to go through with purely formal steps to be taken by camp officials offering no such possibility. Exacting this would stretch the requirement of exhausting the administrative process beyond any reason supporting it. Cf. Levers v. Anderson, 326 U.S. 219, 66 S.Ct. 72. And, as appears from Gibson's experience, by going through with those formalities Dodez would have found himself confronted with the Government's contention that he had gone too far. 16 We hold therefore, in accordance with Dodez' view and the Government's concession, that he was not required to report to the camp, under the Regulations effective when his order to report became operative, in order to complete the administrative process; and that he therefore was not foreclosed by the Falbo decision from making any defense open to him in his criminal trial under the statute or the Constitution aside from the effect of that decision. Estep v. United States, 327 U.S. 114, 66 S.Ct. 423; Smith v. United States, ibid.; cf. Billings v. Truesdell, 321 U.S. 542, 64 S.Ct. 737, 88 L.Ed. 917. 17 This view requires reversal of the judgment in No. 86 and remanding the cause to the District Court for a further trial. Dodez insists however that we should go further and determine the case finally upon the merits. He urges that the evidence properly tendered and admissible upon the excluded defenses, as well as that adduced,20 would support no other verdict than one of acquittal and that therefore the trial court should have sustained his motion to dismiss the cause.21 Accordingly he asks or a judgment here directing that such relief be given. 18 In the Estep and Smith cases, after holding that the petitioners had been wrongfully denied opportunity to defend by attacking the validity of their classifications, this Court reversed the convictions and remanded the causes for new trials, stating: 'We express no opinion on the merits of the defenses which were tendered. Since the petitioners were denied the opportunity to show that their local boards exceeded their jurisdiction, a new trial must be had in each case.' 327 U.S. at pae 125, 66 S.Ct. at page 429. Dodez' situation is identical, in this respect, with those of Estep and Smith.22 Accordingly we remand the cause, as was done in the Smith and Estep cases, for further proceedings in the trial court, without expressing opinion upon those further issues. III 19 The government urges that the conclusion we have accepted for Dodez forces the contrary result in Gibson's case No. 23. The argument, as we have pointed out, is not that Gibson fell short of exhausting the administrative process, for he clearly had done this. It is rather that he went beyond what was required for that purpose, thereby became subject to the camp's jurisdiction, and in doing this irrevocably foreclosed himself from defending against the charge of desertion on the ground that his classification was invalid. 20 The Government's position is founded upon analogy to the cases which hold that one who has been inducted into the armed forces, although wrongfully, becomes subject to military jurisdiction, is thereafter amenable to its processes,23 and can secure his release from service or military custody only by resort to habeas corpus.24 21 Applying the analog , the Government insists that when Gibson went to the camp and there went through the preliminary formalities for becoming a member, he became 'inducted' as a camp member, just as one becomes a member of the armed forces by undergoing the induction ceremony, cf. Billings v. Truesdell, supra, even though the induction is in violation of his rights. Thereafter, the argument continues, Gibson became subject to the camp's 'jurisdiction,' just as the wrongfully inducted soldier would become subject to military jurisdiction; and, like the latter, cannot raise the illegality of his induction as a defense to a charge of violating any duty imposed upon inducted members; but must seek his relief, if any, by the writ of habeas corpus. Since the Act and the regulations laid upon camp members a duty to remain and perform the further duties prescribed for them,25 Gibson's departure without leave amounted to desertion; his defense of wrongful classification is no more open to him than a defense of illegal induction would be open to a wrongfully inducted soldier violating a military order; and his remedy, if any, is to apply for release from the camp through habeas corpus. 22 The argument is supported by extensive reference to the regulations in force when Gibson was ordered to report, including the changes affecting Dodez and the others which became effective June 7, 1944, by Amendment No. 236 (9 F.R. 6207). The important changes this amendment made were two, namely: (1) to reintroduce into § 653.11, the provision applicable in Falbo's case but eliminated as to Dodez by Amendment No. 210, effective February 2, 1944,26 for medical examinations to be given at the camp to determine change in condition; and (2) to add to the preexisting requirement for the camp director's noting the fact of acceptance on the registrant's papers27 the explicit new provision that this should be done 'irrespective of the determination which is made as a result of the examination.'28 23 The Government also emphasizes two other regulations. One is § 652.12 requiring the local board to provide transportation for registrants reporting to it for transportation to the camp. The other, § 652.13, providing that a Class IV-E registrant 'after he has left the local board in accordance with § 652.12 for work of national importance under civilian direction is under the jurisdiction of the camp to which he is assigned.'29 (Emphasis added.) The short effect of § 653.11, as altered at the time of Gibson's order to report was to retain the requirements for formal entries of 'acceptance' and giving notice, at the camp, which applied to Dodez; to reintroduce the provision for physical examination there; but at the same time to nullify the possibility this presented in Falbo's case for giving relief, by providing that the camp director should note the fact of acceptance 'irrespective of the determination made as the result of' this examination. 24 Taking account of revised § 653.11 as precluding any possibility for securing administrative relief at the camp, the Government regards § 652.13 as marking the precise and crucial line for crossing from the board's jurisdiction into that of the camp, namely, at the point where the registrant begins his journey to the camp. To take this step, it says, is equivalent to the oath in the induction ceremony prescribed for men entering the armed forces, cf. Billings v. Truesdell, supra; and produces the same consequences for foreclosing the defense of illegal classification, regardless of intention to submit to the camp's jurisdiction, indeed in spite of Gibson's unwavering manifestation of intention not to submit.30 25 Much of the argument was devoted to whether, on the basis of the Government's analogy, § 652.13 could be taken to fix the end of the 'interval of choice,' cf. Billings v. Truesdell, supra, in view of the constantly changing character of the regulations, the absence of any prescribed induction ceremony such as the Billings case involved, and the consequent difficulty confronting one seeking to comply with the Falbo decision in ascertaining the exact location of such a line.31 We do not find it necessary to consider the conflicting contentions in this respect, or therefore to scrutinize the regulations with a view to locating such a point. More fundamental considerations are controlling. 26 We have said that the Government's argument is founded entirely upon analogy, because no case has ruled that one who becomes subject to the 'jurisdiction' of a work camp under the Selective Service procedure thereby forfeits his right to defend against a charge of desertion or other breach of duty, on the ground that his classification was invalid. Nor has it been held that his only recourse for release from the camp is by way of habeas corpus. Furthermore, we think there are compelling reasons why the analogy does not hold true. 27 In the first place, there are obvious and important differences between the two situations which it is sought to connect by the claimed resemblance. Not the least is that in the one instance the person concerned crosses the vast gulf between civil and military jurisdiction, with all the attendant consequences for change in status and rights, whereas in the other no such chasm is traversed. The alleged transfer of 'jurisdiction' is only from one civilian agency to another, both branches of the Selective Service System, and there is none at all from the authority of the civilian courts as agencies for the enforcement of obligations imposed by the law. There is in fact no change in 'jurisdiction' whatsoever, except in the sense that from the time he becomes a camp member the registrant's duties are different and his orders come through different channels of the same agency. 28 Unlike the man 'actually inducted,' the person classified IV E remains a civilian; his duties are not military in character; he is not subject to military discipline or authority; and for violation of duties or orders he cannot be tried by court martial or military tribunal. On the contrary the Selective Service Act expressly provides the same civil penalties and mode of trial for violating duties arising when he enters the camp as for those arising before that time.32 29 There is therefore no such profound change in rights, duties and status as occurs when one crosses the line between civil and military jurisdiction by being 'actually inducted' under the rule of Billings v. Truesdell, supra. It was this change and the consequences it entailed together with the statute's command that no one should be tried by military or naval court martial in any case arising under the Act until he had been actually inducted,33 which we there held to require placing the line precisely, not only for exhausting administrative remedies under the Falbo rule, but also for marking the point of actual induction at which the registrant's right ends to choose between going forward into the service and incurring the civil liability for breach of that duty. 30 The person classified as conscientious objector is never confronted with that choice. He is relived by the Act from any duty to perform military service. He is not threatend with induction. He is in fact farther removed from military status or jurisdiction after he is finally assigned to civilian public service of national importance, and for this reason is rejected for military service, than he was before that time. His choice is not between going into service and taking the civil penalty laid for violating that duty. It is between performing civilian service under civilian authority and incurring the civil penalty for refusing to do so. 31 Moreover, in the case of one entering the armed forces, the loss of civil rights, including those of recourse to the civil courts other than by way of habeas corpus,34 results altogether by virtue of the change from civilian to military status. The reasons underlying those rulings do not apply in the case of one who does not undergo that change, remains at all times a civilian, subject only to civilian duties and to civil penalties for violating them. There is not the same necessity or compulsion in such a case for bringing about forfeiture of civilian rights, including remedies for questioning the validity of the order the registrant is charged with violating. That compulsion arises from the necessity for preventing interruption of military processes by intrusion of the civil courts beyond the essential minimum of keeping open the habeas corpus channel to show that the military authority has exceeded its jurisdiction in dealing with the individual.35 It is on this foundation that the forfeiture of other civil remedies is held to take place. 32 But there is no such necessity, or therefore any such foundation for forfeiture, in the case of one classified as a conscientious objector and assigned for work of national importance. Serious as are the consequences of his refusal to perform that work, dealing with such breaches of duty by the civil courts does not involve, in the remotest sense, interruption or interference by civilian authority with military processes or jurisdiction. Entirely wanting therefore is any such foundation for forfeiture of civil rights as exists in the case of one inducted into the armed services. Without such a foundation the analogy dissolves and with it the asserted forfeiture. 33 This becomes even more clear when it is recalled that one basis for the forfeiture, which the Government has maintained, is that habeas corpus is available for the person classified IV—E and wrongfully denied classification and exemption as a minister of religion. This remedy, it was asserted originally, is adequate and exclusive, and therefore should be held to foreclose resort to other forms of relief. 34 But here again the asserted analogy fails. It has been clearly established that the remedy by way of habeas corpus is open to the wrongfully inducted member of the armed forces to secure his release.36 But at the argument it was conceded that neither the camp director nor other officials of the Selective Service system are authorized to use force to arrest or restrain one who refuses to remain in the camp. And this, it was also admitted, would make doubtful the availability of relief by way of habeas corpus.37 Indeed it might well be urged that the remedy is not available for one charged with violation of any duty, whether failure to report to the camp, to reamin there, or to perform other obligations, since the only compulsion laid upon such a person by the Act or otherwise is the force of the legal command plus the provision for criminal penalty in case of disobedience. 35 We need not decide this question, however, and we express no opinion upon it. For it is enough to destroy the analogy the Government seeks to draw that the remedy by habeas corpus is an uncertain one. Should it be found unavailable and at the same time we should rule that petitioner's defense could not be made in the criminal proceeding, he would be left entirely without remedy, a result consistent neither with our decision in the cases of Estep and Smith, supra, nor with the statute. No more, we think, is it consistent with the Act or those rulings to foreclose the right of defense upon the basis of uncertainty whether the habeas corpus remedy might be had. 36 Finally, Congress has provided expressly for enforcing the duty to report to the camp for work and duties arising thereafter through the criminal proceedings and penalties prescribed by § 11. In its view these were adequate for the purpose. Nothing in the section or the statute, in the light of our prior decisions, can be taken to indicate that Congress intended persons charged with violating such duties to be deprived of their rights of defense on the ground of invalid classification, either absolutely should haveas corpus prove unavailable or contingently depending upon how the doubt concerning that remedy's availability might be resolved. The Government concedes that Congress intended some remedy to be available. We know of no way by which this can be assured, in such a case as Gibson's, otherwise than by permitting the defense to be raised in the criminal trial. 37 The analogy failing, for both of the reasons we have stated, by which it is sought to confine the remedy to habeas corpus, we think the defense has been left open for presentation in this case and should have been allowed. Estep v. United States, 327 U.S. 114, 66 S.Ct. 423; Smith v. United States, ibid.38 38 Gibson, like Dodez, and for similar reasons, insists that we should dispose of the case upon the merits, by examining and sustaining his defense. The same course should be followed for Gibson in this respect as was directed for Dodez. 39 We express no opinion concerning whether a different result might follow for one in Gibson's position if he should remain at the camp for a substantially longer period and then depart without leave.39 40 The question raised concerning venue has been determined adversely to Gibson's contention by our decision in United States v. Anderson, 328 U.S. 699, 66 S.Ct. 1213. 41 The judgments are reversed and the causes are remanded to the District Courts from which they came, for further proceedings consistent with this opinion. 42 Mr. Justice MURPHY joins in the opinion of the Court for the reasons stated therein and for the additional reasons set forth in his dissenting opinion in Falbo v. United States, 320 U.S. 549, 555, 64 S.Ct. 346, 349, 88 L.Ed. 305, and in his concurring opinion in Estep v. United States, 327 U.S. 114, 125, 66 S.Ct. 423, 429. 43 Reversed and remanded. 1 Falbo v. United States, 320 U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305; Billings v. Truesdell, 321 U.S. 542, 64 S.Ct. 737, 88 L.Ed. 917; Estep v. United States, 327 U.S. 114, 66 S.Ct. 423; Smith v. United States, ibid. 2 Section 11 provides, in part: 'Any person charged as herein provided with the duty of carrying out any of the provisions of this Act, or the rules or regulations made or directions given thereunder, who shall knowingly fail or neglect to perform such duty, * * * shall, upon conviction in the district court of the United States having jurisdiction thereof, be punished by imprisonment for not more than five years or a fine of not more than $10,000, or by both such fine and imprisonment * * *.' Section 652.11(a) of the Regulations imposes the duty on persons classified IV—E to comply with the order to report for work of national importance; and by § 653.12 assignees are required to report to the camp to which they are assigned and to remain therein until released or transferred elsewhere by proper authority, except when on authorized missions or leave. 3 8 Cir., 149 F.2d 751; 6 Cir., 154 F.2d 637. 4 Apparently in both cases the important changes in the applicable regulations made after the Falbo decision were not called to the attention of the trial courts or the Circuit Courts of Appeals. 5 The exemption is provided by § 5(d) of the Act, 54 Stat. 885, 888, 50 U.S.C.A.Appendix, § 305(d), as follows: 'Regular or duly ordained ministers of religion, and students who are preparing for the ministry in theological or divinity schools recognized as such for more than one year prior to the date of enactment of this Act, shall be exempt from training and service (but not from registration) under this Act.' 6 Pursuant to § 5(g) of the Act, which provides that persons so classified shall be assigned to noncombatant service or, if conscientiously opposed to this, then to 'work of national importance under civilian direction.' 7 See text Part II infra at note 19; also note 13. 8 At that time § 653.11(c) of the Selective Service Regulations provided: 'If the assignee indicates that his physical condition has changed since his final type physical examination for registrants in Class IV—E, the camp physician shall examine him with reference thereto. If the assignee is not accepted for work of national importance, the Camp Director will indicate the reason therefor, and the assignee, pending instructions from the Director of Selective Service will be retained in the camp or hospitalized when necessary.' Cf. note 10. This provision, effective by Amendment No. 40 on March 16, 1942 (7 F.R. 2093), was eliminated entirely by Amendment No. 210 (9 F.R. 1416), effective February 2, 1944, a little more than two months prior to the date specified for Dodez to report for work, namely, April 21, 1944; but was restored in modified form on June 7, 1944, by Amendment No. 236 (9 F.R. 6207), nearly two months before Gibson was ordered to report on August 21 of that year. 9 A confession of error on the part of the United States 'does not relieve this Court of the performance of the judicial function. The considered judgment of the law enforcement officers that reversible error has been committed is entitled to great weight, but our judicial obligations compel us to examine independently the errors confessed.' Young v. United States, 315 U.S. 257, 258, 259, 62 S.Ct. 510, 511, 86 L.Ed. 832. 10 The contention is that § 653.11(c) of the Regulations as it then stood, see note 8, provided for physical examination at the camp and possible rejection there only if the registrant on reporting indicated a change in his physical condition and that this was effective only as to persons sustaining such a change, not to others, of whom Falbo was one. The argument assumes that the registrant's actual condition, not the possibility that a change might occur and be found in any case, was controlling not only to determine the outcome of the examination, but to foreclose the possibility that change might be 'indicated' and, in that event, final determination of acceptability would be made after the examination. 11 The Regulation clearly contemplated that upon receipt of such instructions from the Director of Selective Service, the registrant might be rejected or released. 12 The decision was rendered January 3, 1944. The basic changes in the regulations were made January 10, 1944. See text infra at notes 13—17. 13 After a registrant has been classified IV—E he is given a preinduction physical examination. Reg. §§ 629.1, 629.2. If found acceptable for service he is issued a certificate of fitness. Reg. § 629.32. Thereafter the local board notifies the Director of Selective Service that the registrant is available for assignment to work of national importance, Reg. § 652.1, and such an assignment is sent to the local board. Upon receipt thereof, the local board issues to the registrant an order to report for work of national importance commanding him to report at a designated time and place, Reg. § 652.12. When the registrant reports, transportation to a camp for work of national importance is furnished, Reg. § 652.12. Thereafter he 'is under the jurisdiction of the camp to which he is assigned.' The local board then can take no further steps with regard to such registrant without instructions from the Director of Selective Service, but should report any information to the Director of Selective Service which might affect the registrant's status, Reg. § 652.13. Upon arrival at the camp the registrant (now called assignee in the regulations) is given a physical examination, although at the time the case of Dodez arose specific provision for such an examination was not made in the regulations. See note 8. It was merely provided that 'the camp director shall, on the bottom of page 4 of the Original and First Copy of the Report of Physical Examination and Induction (Form 221), place a statement that a registrant is accepted for work of national importance at the civilian public service camp to which the registrant has been assigned.' Reg. § 653.11(b). However, this regulation subsequently was amended in the form applicable to the case of Gibson. See note 28 infra. 14 The statute, in so far as is now material, provided: 'Any registrant within the categories herein defined when it appears that his induction will shortly occur shall, upon request, be ordered by his local board in accordance with schedules authorized by the Secretary of War, the Secretary of the Navy, and the Director of Selective Service, to any regularly established induction station for a preinduction physical examination, subject to reexaminations. 'The commanding officer of such induction station where such physical examination is conducted under this provision shall issue to the registrant a certificate showing his physical fitness or lack thereof, and this examination shall be accepted by the local board, subject to periodic reexamination. Those registrants who are classified as I—A at the time of such physical examination and who are found physically qualified for military service as a result thereof, shall remain so classified and report for induction in regular order.' 15 Compare the procedure outlined in Billings v. Truesdell, 321 U.S. 542, 64 S.Ct. 737, 88 L.Ed. 917. 16 See notes 18, 19, infra, and text for the principal changes. 17 These are noted specifically infra at note 28 and text. 18 Pertinently the basic regulation provided: 'Every registrant before he is ordered to report for induction, shall be given a preinduction physical examination under the provisions of this part unless; (1) he signs a Request for Immediate Induction (Form 219), or (2) he is delinquent. * * *' 19 Because § 653.11 as changed by Amendment No. 210 is crucial in Dodez' case, the exact language is quoted: '(a) When the assignee has reported to camp, the camp director shall complete the Order to Report for Work of National Importance (Form 50). Four copies of the completed Order to Report for Work of National Importance (Form 50) shall be sent to the Director of Selective Service; one copy will be retained by the camp director. The Director of Selective Service will forward two copies of the Order to Report for Work of National Importance (Form 50) to the appropriate State Director of Selective Service, who will retain one copy for his files and mail the other copy to the local board for filing in the registrant's Cover Sheet (Form 53). '(b) The camp director shall, on the bottom of page 4 of the Original and First Copy of the Report of Physical Examination and Induction (Form 221), place a statement that a registrant is accepted for work of national importance at the civilian public service camp to which the registrant has been assigned. The statement shall specify the date and place of such acceptance and shall be signed by the camp director who shall retain the First Copy of the Report of Physical Examination and Induction (Form 221) and shall forward the Original to the Director of Selective Service. '(c) Upon receiving notice that a registrant has been accepted for work of national importance, the local board shall not change his classification but shall note the fact of his acceptance for such work in the Classification Record (Form 100). '(d) In the event an assignee does not report to the camp at the time prescribed in his Order to Report for Work of National Importance (Form 50) or pursuant to the instructions of the local board, the camp director will report such fact to the Director of Selective Service.' (Emphasis added.) 20 The trial court permitted Dodez to introduce de novo evidence intended to show that as of the time of the trial he was a minister. But the court, over objection, declined to allow this evidence to go to the jury. 21 The question was also raised by motion for a directed verdict, which was overruled. 22 In case each the tendered defenses were substantially two, namely, (1) that a full and fair hearing had been denied in the selective service proceedings, particularly before the local board; and (2) that the undisputed evidence would sustain no other conclusion than that the registrant was a minister of religion. In each case also evidence was tendered and excluded in the trial court to sustain the first of these defenses. Appropriate determination of that defense would require not only reception and consideration of evidence properly tendered upon the issue, but also in consequence thereof determination of issues of fact, including credibility and inferential conclusions, properly to be made in the trial court rather than by an appellate tribunal. Since issues of credibility also may be involved in determining whether the evidence would support no other conclusion than that the registrant was a minister, that question too is more appropriately determinable in the first instance in the trial court. Moreover, it is not certain that another trial will be had or that the identical issues will be presented if one is held. 23 See, e.g., In re Morrissey, 137 U.S. 157, 11 S.Ct. 57, 34 L.Ed. 644; In re Miller, 5 Cir., 114 F. 838; United States v. Reaves, 5 Cir., 126 F. 127; In re Carver, C.C., 142 F. 623; In re Scott, 6 Cir., 144 F. 79; Moore v. United States, 5 Cir., 159 F. 701; Dillingham v. Booker, 4 Cir., 163 F. 696, 18 L.R.A.,N.S., 956, 16 Ann.Cas. 127; United States ex rel. Laikund v. Williford, 2 Cir., 220 F. 291; Ex parte Romano, D.C., 251 F. 762; Ex parte Tinkoff, D.C., 254 F. 912; Ex parte Kerekes, D.C., 274 F. 870. But cf. Ver Mehren v. Sirmyer, 8 Cir., 36 F.2d 876; Ex parte Beck, D.C., 245 F. 967. Cf. Kurtz v. Moffitt, 115 U.S. 487, 6 S.Ct. 148, 29 L.Ed. 458. 24 See In re Grimely, 137 U.S. 147, 11 S.Ct. 54, 34 L.Ed. 636; Stingle's Case, Fed. Cas. No. 13,458; United States ex rel. Turner v. Wright, Fed. Cas. No. 16,778. See also cases cited in note 23. 25 See note 2. 26 See text at notes, 18, 19. Under § 653.11, as reintroduced, the physical examination at the camp was given to all 'assignees,' regardless of whether they indicated a change in physical condition. Cf. note 8. 27 Cf. note 19, § 653.11(b). 28 The alterations made in § 653.11 by Amendment No. 236 will appear from comparing the text of the section prior to the amendment, see note 19, with the following quoted portions, following the amendment: '(b) As soon as possible after the assignee has reported to camp, the camp physician shall give him a physical examination and shall determine whether there has been any change in the assignee's physical or mental condition since his preinduction physical examination. If a camp physician is not available, the camp director, to the extent that he is capable of doing so, shall, by observing and questioning the assignee, make such determination. The camp physician or the camp director, as the case may be, shall, on the bottom of page 4 of the Original and First Copy of the Report of Physical Examination and Induction (Form 221), make a record of such determination. '(c) Irrespective of the determination which is made as a result of the examination of an assignee made under the provisions of paragraph (b) of this section, the camp director shall, on the bottom of page 4 of the Original and First Copy of the Report of Physical Examination and Induction (Form 221), place a statement that a registrant is accepted for work of national importance at the civilian public service camp to which the registrant has been assigned. The statement shall specify the date and place of such acceptance and shall be signed by the camp director who shall retain the First Copy of the Report of Physical Examination and Induction (Form 221) and shall forward the Original to the Director of Selective Service.' (Emphasis added.) The reintroduced provision of § 653.11 became subsection (b) of the amended section and the former subsection (b) became subsection (c) with the added initial provision, ' rrespective of the determination * * *,' etc. 29 The regulation, § 652.13, reads as follows: 'A registrant in Class IV—E who has reported for work of national importance pursuant to this part shall be retained in Class IV—E by the local board. Such registrant after he has left the local board in accordance with § 652.12 for work of national importance under civilian direction is under the jurisdiction of the camp to which he is assigned. The local board shall take no further steps with regard to such registrant without instructions from the Director of Selective Service, but should report any information to the Director of Selective Service which might affect the registrant's status.' (Emphasis added.) 7 F.R. 113. Section 652.13 was adopted December 24, 1941, became effective February 1, 1942, and therefore was in effect as to Falbo as well as to Estep, Smith, Dodez and Gibson. 30 The Government does not urge that Gibson waived his rights by submitting to 'indaction,' in the sense of voluntarily surrendering them; it is rather that he acted at his peril in taking steps beyond those required to complete the administrative remedial process, even though he mistakenly thought them necessary for that purpose. The argument is essentially one of forfeiture rather than of waiver. The facts would sustain no implication of intention to submit to 'induction' or to surrender any rights. 31 It is Gibson's position that had he not gone to the civilian public service camp and subjected himself to the physical examination given by the camp physician, see note 29, the courts might subsequently have held that in a prosecution under § 11 he was foreclosed by the Falbo doctrine from making the defense that his classification was illegal. He says further that the regulations applicable to Falbo and those applicable to him were so similar that no reasonable person reading them could have determined that under the latter it was not necessary to undergo the physical examination given at the camp in order to complete the administrative process. Indeed, he asserts that in some ways the later regulations were more compelling than those applicable to Falbo, since at the time Falbo was ordered to report the physical examination was required only for those who indicated a change in their physical condition, whereas when he was ordered to report all assignees were required to be given physical examinations. Cf. notes 8, 26. 32 See § 11, note 2 supra. 33 Section 11 of the Selective Training and Service Act reads in part: 'No person shall be tried by any military or naval court martial in any case arising under this Act unless such person had been actually inducted for the training and service prescribed under this Act or unless he is subject to trial by court martial under laws in force prior to the enactment of this Act.' It was held in the Billings case that in view of the leg slative history Congress could not be presumed 'to have restored by the second 'unless' clause in § 11 what it took away by the first 'unless' clause.' Section 11 rather indicated 'a purpose to vest in the civil courts exclusive jurisdiction over all violations of the Act prior to actual induction.' 321 U.S. at page 547, 64 S.Ct. at page 741, 88 L.Ed. 917. 34 See notes 23, 24, supra, and text. 35 Ibid. 36 Billings v. Truesdell, 321 U.S. 542, 64 S.Ct. 737, 88 L.Ed. 917; and see the authorities cited in note 24, supra. 37 Cf. Wales v. Whitney, 114 U.S. 564, 5 S.Ct. 1050, 29 L.Ed. 277; Stallings v. Splain, 253 U.S. 339, 40 S.Ct. 537, 64 L.Ed 940; McNally v. Hill, 293 U.S. 131, 137, 138, 55 S.Ct. 24, 26, 27, 79 L.Ed. 238; Weber v. Squier, 315 U.S. 810, 62 S.Ct. 800, 86 L.Ed. 1209; Tornello v. Hudspeth, 318 U.S. 792, 63 S.Ct. 990, 87 L.Ed. 1158; Zimmerman v. Walker, 319 U.S. 744, 63 S.Ct. 1027, 87 L.Ed. 1700; United States ex rel. Innes v. Crystal, 319 U.S. 755, 63 S.Ct. 1164, 87 L.Ed. 1708; United States ex rel. Lynn v. Downer, 322 U.S. 756, 64 S.Ct. 1263, 88 L.Ed. 1585; Baker v. Hunter, 323 U.S. 740, 65 S.Ct. 44, 89 L.Ed. 593. 38 In this case, as in the Estep and Smith cases, the United States in a criminal prosecution is asking judicial enforcement of a draft board's command or order. In the Estep case, though the Act provided that the order of the draft board should be 'final,' limited judicial review was permitted. Section 11 of the Selective Service and Training Act does not distinguish between one order of a board and another. Provided that he has exhausted his administrative remedies, the registrant who has not been actually inducted into the armed forces may in defense to a criminal prosecution attack a board's order as arbitrary and illegal. 39 See note 30.

23

329 U.S. 362 67 S.Ct. 340 91 L.Ed. 348 PEOPLE OF STATE OF ILLINOIS ex rel. GORDON, Director of Labor,v.CAMPBELL, Collector of Internal Revenue. No. 35. Reargued Nov. 19, 1946. Decided Dec. 23, 1946. [Syllabus from pages 362-364 intentionally omitted] Mr.Albert E. Hallett, of Chicago, Ill., for petitioner. Mr. J. Louis Monarch, of Washington, D.C., for respondent. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 This case was companion to People of State of Illinois ex rel. Gordon v. United States, 328 U.S. 8, 66 S.Ct. 841, decided last term, but brings for settlement other problems raised by a conflict of claims between the United States and the State of Illinois. The conflict concerns whether one or the other claimant is entitled to priority of payment from assets of a common debtor. The Illinois Supreme Court dealt with both cases in a single opinion. 391 Ill. 29, 62 N.E.2d 537. Certiorari was granted in each. 327 U.S. 771, 66 S.Ct. 683; 327 U.S. 772, 66 S.Ct. 683. On the same day that People of State of Illinois ex rel. Gordon v. United States, supra, was decided this case was restored to the docket and assigned for reargument before a full bench, People of State of Illinois ex rel. Gordon v. Campbell, 66 S.Ct. 957, because of the presence of the questions not determined by that decision. 2 The controversy arose on June 29, 1942, when the Director of Labor of Illinois brought suit in the Circuit Court of Cook County, Illinois, to enforce against the Chicago Waste and Textile Company a statutory lien for unemployment compensation contributions due the state. Associated Agencies, Inc.,1 was a creditor of the Chicago Waste and Textile Company. In his complaint the Director alleged that Associated Agencies had obtained a judgment against its debtor in the Municipal Court of Chicago and that execution had issued on this judgment June 3, 1942, but that the interest of Associated Agencies was subordinate to that of the lien sought to be foreclosed. This, 'for the reason that the execution upon said judgment was issued long after notice of the lien of the Director of Labor was recorded with the Recorder of Deeds.'2 The Director alleged further upon information and belief that the Chicago Waste and Textile Company was insolvent and that 'the personal property subject to the lien herein being foreclosed, is scant secu ity for the debt due the Director of Labor * * * and that unless a receiver be appointed for all of said property, pending a full and complete hearing upon the issues herein, the plaintiff will suffer financial loss and said property will be wasted.' 3 Granting the immediate relief requested, the Circuit Court enjoined all creditors of the Chicago Waste and Textile Company from interfering with the property of the company, whether by judicial action3 or otherwise, and also appointed a receiver 'for the property of the Chicago Waste and Textile Company.' 4 Subsequently respondent, the Collector of Internal Revenue for the First District of Illinois, filed claims on behalf of the United States amounting to $1,954.07 plus interest. Of this amount, $522.91 was for federal insurance contribution taxes and $1,431.16 was for federal unemployment taxes. Of the federal insurance contribution taxes, $229.91 represented employees' taxes, see Helvering v. Davis, 301 U.S. 619, 57 S.Ct. 904, 81 L.Ed. 1307, 109 A.L.R. 1319, collected by the employer under statutory withholding provisions. Internal Revenue Code §§ 1400, 1401, 26 U.S.C.A. Int.Rev.Code, §§ 1400, 1401. The Collector also filed an intervening petition, alleging that the debtor was insolvent and asking that the claims of the United States be allowed as claims entitled to priority of payment immediately after costs of administration and before payment of other creditors. The Director of Labor answered, denying that the claims of the United States were entitled to priority over the claims of Illinois. 5 The receiver realized $677.81 from sale of the debtor's property and this amount was deposited with the clerk of the Circuit Court. A hearing was held, and the court ordered that ninety per cent of the funds on deposit be given to the Director of Labor and the other ten per cent to the United States. The Collector appealed to the Appellate Court for the First District. On motion of the appellee, the cause was transferred to the Supreme Court of Illinois on jurisdictional grounds. 6 The state Supreme Court held that the United States was entitled to priority over the State of Illinois as to its claim for federal insurance contribution taxes.4 Whether it was correct to award this priority is the issue we now have to decide. 7 People of State of Illinois ex rel. Gordon v. United States, 328 U.S. 8, 66 S.Ct. 841, held that in circumstances which called into application Rev.Stat. § 3466, 31 U.S.C. § 191, 31 U.S.C.A. § 191, the claims of the United States for federal insurance contributions taxes under Title 8 of the Social Security Act, 49 Stat. 620, 636, 42 U.S.C.A. § 1001 et seq., and for federal unemployment compensation taxes under Title 9 of the Social Security Act, 49 Stat. at page 639, 42 U.S.C.A. § 1101 et seq., had priority over claims of Illinois for taxes under its Unemployment Compensation Act.5 That decision is controlling, of course, upon the same feature of this case, although the federal insurance contributions taxes claimed by the United States arise under the 1939 am ndments of the Social Security Act, rather than, as in the case last term, under the original act itself. Compare §§ 801, 802, 804, 807(c) of the original Social Security Act, 49 Stat. 620, 42 U.S.C.A. §§ 1001, 1002, 1004, 1007(c), with §§ 1400, 1401, 1410, and 1430 of the Internal Revenue Code, 53 Stat. 175 as amended by 53 Stat. 1381, 26 U.S.C.A. Int.Rev.Code, §§ 1400, 1401, 1410, 1430. 8 * But the state urges that § 3466 does not apply in the facts of this case. This argument, as well as another, that the lien of the state was so specific and perfected as to defeat the priority, if any, of the United States under Rev.Stat. § 3466, must be met before the case can be affirmed on the authority of People of State of Illinois ex rel. Gordon v. United States, supra. Rev.Stat. § 3466 provides: 9 'Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied; and the priority established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed, or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed.' 10 The fifth act of bankruptcy, which is the one on which the Government relies as having brought § 3466 into operation, consists of a person's6 having, 11 '(5) while insolvent or unable to pay his debts as they mature, procured, permitted, or suffered voluntarily or involuntarily the appointment of a receiver or trustee to take charge of his property.' 52 Stat. 844, 11 U.S.C. § 21, sub. a, 11 U.S.C.A. § 21, sub. a. 12 The state contends, first, that the receiver appointed at its instance was not a receiver within the meaning of this provision and, second, that the Chicago Waste and Textile Company was not shown by the record to be insolvent. 13 This Court has noted that the view has been expressed that to satisfy the fifth act of bankruptcy 'the receivership must be general, as contrasted with a receivership incidental to the enforcement of a lien.' Duparquet Huot & Moneuse Co. v. Evans, 297 U.S. 216, 224, 56 S.Ct. 412, 416, 80 L.Ed. 591.7 It has not determined the correctness of that view, Emil v. Hanley, 318 U.S. 515, 521, note 5, 63 S.Ct. 687, 690, 8 L.Ed. 954, nor need we do so now. For, though the receiver was appointed at the instance of a secured creditor, as in United States v. State of Texas, 314 U.S. 480, 483, 484, 62 S.Ct. 350, (351), 352, 86 L.Ed. 356, 'any limitations upon the operation of § 3466 (with) might otherwise have flowed from this circumstance * * * were removed by the subsequent character of the proceeding.' The receiver was placed in control of all the assets of the Chicago Waste and Textile Company, and all of the assets were liquidated. At least one party other than the secured creditor which had instituted the proceeding, namely, the United States, was allowed to intervene and was heard. 'We think that realities require us to treat the proceeding as a general equity receivership within the scope of § 3466.' United States v. State of Texas, supra. 14 Moreover, it is questionable whether the fact of insolvency is properly contestable by the State of Illinois. The receiver was appointed upon the allegations of its complaint, which included insolvency, and the state admitted in its answer to the Government's intervening petition that the debtor was insolvent. Although ordinarily the doctrine of estoppel or that part of it which precludes inconsistent positions in judicial proceedings is not applied to states,8 in the present litigation Illinois is in the position of any lien creditor. 15 It would seem therefore that in these circumstances the state should be held estopped to contest insolvency. But in any event the record demonstrates that the debtor was insolvent at the time of the appointment of the receiver, for when its property was liquidated there was not enough to satisfy the claims of the two contesting creditors at the bar. 16 Thus, the fifth act of bankruptcy was committed and in consequence the United States has the benefit of the priority given it by Rev.Stat. § 3466. We therefore turn to the argument of the state that the specificity of its lien defeated this priority. II 17 The United States was given the priority now incorporated in Rev.Stat. § 3466, in 1797, 1 Stat. 515.9 See also the discussion in Price v. United States, 269 U.S. 492, 500, 501, 46 S.Ct. 180, 181, 70 L.Ed. 373. Yet the Court has never decided whether the priority is overcome by a fully perfected and specific lien. See Rogee, The Differences in the Priority of the United States in Bankruptcy and in Equity Receiverships (1929) 41 Harv.L.Rev. 251, 267-270. The question, however, has been reserved many times in express terms. See Conard v. Atlantic Insurance Co., 1 Pet. 386, 442, 7 L.Ed. 189; Brent v. Bank of Washington, 10 Pet. 596, 611, 612, 9 L.Ed. 547; Spokane County v. United States, 279 U.S. 80, 95, 49 S.Ct. 321, 325, 73 L.Ed. 621; People of State of New York v. Maclay, 288 U.S. 290, 294, 53 S.Ct. 323, 324, 77 L.Ed. 754; United States v. State of Texas, 314 U.S. 480, 485, 486, 62 S.Ct. 350, 352, 353, 86 L.Ed. 356. United States v. Waddill, Holland & Flinn Co., 323 U.S. 353, 355, 65 S.Ct. 304, 305, 89 L.Ed. 294.10 And again we need not decide it, for we are of the opinion that the Illinois lien was not sufficiently specific or perfected, in the purview of controlling decisions, to defeat the Government's priority. 18 The effect and operation of a lien in relation to the claim of priority by the United States under Rev.Stat. § 3466 is always a federal question. 'The priority given the United States cannot be impaired or superseded by state law.' United States v. State of Oklahoma, 261 U.S. 253, 260, 43 S.Ct. 295, 298, 67 L.Ed. 638. Hence a state court's characterization of a lien as specific and perfected is not conclusive. United States v. Waddill, Holland & Flinn Co., 323 U.S. 353, 357, 65 S.Ct. 304, 306, 89 L.Ed. 294. The state characterization, though entitled to weight, is always subject to reexamination by this Court. 19 On the other hand, if the state court itself characterizes the lien as inchoate, this characterization is practically conclusive. 'Whatever might have been the effect of more completed procedure in the perfecting of the liens under the law of the state, upon the priority of the United States herein, the attitude of the state court relieves us of consideration of it.' Spokane County v. United States, 279 U.S. 80, 95, 49 S.Ct. 321, 325, 73 L.Ed. 621; cf. United States v. Knott, 298 U.S. 544, 56 S.Ct. 902, 80 L.Ed. 1321, 104 A.L.R. 741. 20 In this case the United States argues that the Illinois Supreme Court judged the lien of the state inchoate and that therefore we may affirm its judgment on this basis. Illinois, however, disputes this reading. It states that the Illinois court did not consider the nature of the lien in relation to the facts presented by this case, but merely determined that under the facts of People of State of Illinois ex rel. Gordon v. United States, supra, the lien had not become choate. We can hardly accept this view in the face of the judgment rendered and the opinion's statement of the facts of this case at the outset, together with the later explicit reference to it in holding the lien not of a sort to defeat the federal priority. But we do not stop to analyze the opinion of the Supreme Court of Illinois in detail. For it is clear, quite apart from the opinion, that the lien was not so specific and perfected as to defeat the priority of the United States, if that is at all possible. 21 The statute under which the Illinois lien arises is set out in the margin.11 The state asserts that the lien became specific and perfected when notice of lien had been filed and recorded12 and when the receiver had been appointed. In its view, upon appointment of the receiver 'all substantial aids to the enforcement of the state's line had been utilized.' 22 With this conclusion we do not agree. It is true that the filing of notice of lien determined the amount of the lien, though the state may have computed wrongly the amount of taxes owed it.13 See United States v. Waddill, Holland & Flinn Co., 323 U.S. at pages 357, 358, 65 S.Ct. at pages 306, 307, 89 L.Ed. 294. But it is not enough that the amount of the lien be known. The lien must attach to specific property of the debtor. This the Illinois lien had not done at the time the receiver was appointed.14 Indeed, as was stated at the argument, not only was the property not in the hands of the bailiff, but so far as appears the amount or type of property belonging to the debtor was not known to the state. 23 Under the Illinois law, where it is sought to foreclose a lien for unemployment compensation taxes it is not necessary for the Director in his complaint to describe the property to which said lien has attached.15 On the contrary by express provision, 24 '* * * it shall be the duty of the employer against whom such petition has been filed to file in said proceedings, a full and complete schedule, under oath, of all personal property and rights thereto which he owned at the time the contributions, upon which the lien sought to be foreclosed is based, become due, or which he subsequently acquired, indicating upon such schedule the property so owned by such employer which was, or is used by such employer in connection with his trade, occupation, profession or business, and if such employer shall so fail to do after having been so ordered by the court, he may be punished as in other cases of contempt of court.' Jones Ill.Stat.Ann. (1944) § 45.154(e), Smith-Hurd Stats. c. 48, § 243(e). (Emphasis added.) 25 Not until the debtor has filed the required schedules16 would the state know the amount of property in the debtor's possession or, more important, the property to which the lien attached. For the lien attaches only to personal property used by the employer 'in connection with his trade, occupation, profession or business. * * *' 26 The appointment of a receiver, then, was only an initial step in the perfecti n of the lien. It, together with the injunction, protected whatever rights in the property the state might have. But it was not a final assertion or attachment of rights to specific property, as is, for example, the enforcement of a judgment by execution and levy. Conard v. Atlantic Ins. Co., 1 Pet. 386, 443, 444, 7 L.Ed. 189. 27 The state has not relied merely upon the recording of the notices of lien but has rested on this together with the receiver's appointment as accomplishing the required specificity and perfection. But now it is said the filing of the notices alone achieved this result. Neither view is correct. Both have been repudiated by repeated decisions of this Court, th latest being United States v. Waddill, Holland & Flinn Co., supra. 28 It has never been sufficient to show merely a general lien, effective to protect the lienor against others than the Government, but contingently on taking subsequent steps either for giving public notice of the lien or for enforcing it.17 Conard v. Atlantic Ins. Co., 1 Pet. 386, 444, 7 L.Ed. 189; United States v. Waddill, Holland & Flinn Co., supra. The federal priority is not destroyed by state recording acts any more than by state statutes creating or otherwise affecting liens, if the lien as recorded or otherwise executed does not have the required degree of specificity and perfection. Under the decisions the test is not, and cannot be, simply whether by his taking further steps, the lienor's rights will be enforced against others than the Government. 29 The long established rule requires that the lien must be definite, and not merely ascertainable in the future by taking further steps, in at least three respects as of the crucial time. These are: (1) the identity of the lienor, United States v. Knott, 298 U.S. 544, 549, 551, 56 S.Ct. 902, 905, 80 L.Ed. 1321, 104 A.L.R. 741; (2) the amount of the lien, United States v. Waddill, Holland & Flinn Co., 323 U.S. 353, at page 357, 358, 65 S.Ct. 304, at page 307, 89 L.Ed. 294; and (3) the property to which it attaches, United States v. Waddill, Holland & Flinn Co., supra; United States v. State of Texas, supra; People of State of New York v. Maclay, supra. It is not enough that the lienor has power to bring these elements, or any of them, down from broad generality to the earth of specific identity. 30 In this case the identity of the lienor was made certain, before the Government's priority attached, both by the statute and by the notices of lien. The latter also fixed the amounts of the liens, though miscalculated. But neither the notices of lien nor the appointment of the receiver made definite and certain the property, as we have shown. 31 Here, as in United States v. State of Texas, 314 U.S. at page 487, 62 S.Ct. at page 353, 86 L.Ed. 356, 'property 'devoted to or used in his business * * *' is neither specific nor constant.' As in United States v. Waddill, Holland & Finn Co., 323 U.S. at page 359, 65 S.Ct. at page 307, 89 L.Ed. 294, the goods subject to the lien had not 'severed themselves from the general and free assets of the tenant (owner) from which the claims of the United States were entitled to priority of payment.' Here, as in that and other cases, there was 'Merely as a caveat of a more perfect lien to come,' People of State of New York v. Maclay, 288 U.S. at page 294, 53 S.Ct. at page 324, 77 L.Ed. 754, whether tested by state law, 323 U.S. at page 357, 65 S.Ct. at page 306, 89 L.Ed. 294, or by perfection 'as a matter of actual fact, regardless of how complete it (the lien) may have been as a matter of state law.' Id., 323 U.S. 358, 65 S.Ct. 307, 89 L.Ed. 294. The state has acquired neither title nor possession, Thelusson v. Smith, 2 Wheat. 396, 4 L.Ed. 271; People of State of New York v. Maclay, 288 U.S. at page 290, 53 S.Ct. 323, 77 L.Ed. 754, since the receiver's possession was that of the court, not of the state; and did not sever the property from the debtor's general assets as of the crucial date. 32 To permit the recording of the notices or the receiver's appointment, or both, in circumstances like these, to overcome the Government's priority would be in substance to overrule the numerous decisions cited in which liens no less 'specific and perfected' have been held impotent for that purpose. It would open the door, too, we think, to substantial nullification of the Government's priority. For then this could be accomplished simply by recorded notices of lien, disclosing claims to property not segregated from the debtor's general estate; designated only by general words of classification, including after acquired property as here; and ascertainable definitively only by further procedures. Congress alone should make such a change, if it should be made at all. The judgment is affirmed.18 33 Affirmed. 34 Mr. Justice REED, dissenting. 35 In my opinion the notices of lien caused to be duly recorded by Illinois on April 3, May 8 and May 20, 1942, with the Recorder of Deeds of Cook County, Illinois perfected and made specific the state's claim under its unemployment compensation statute. These notices named the creditor and gave his precise address. They stated the amount of the claim and asserted a lien for the aggregate sum upon all the personal property owned and used by the lienee in connection with its business. Under any view of chattel lien law, such a legally recorded instrument would create a lien in the lienor on the personal property owned and used by the taxpayer at his place of business superior to the rights of general creditors or subsequent innocent purchasers for value. This is true by statute in Illinois. Jones Ill.Stat.Ann. (1944) § 45.154(b) (1), Smith-Hurd Stats. c. 48, § 243(b)(1), Unemployment Compensation Act of Illinois. 36 The Court deems that the lien attaches to specific and ascertainable property of the taxpayer only when the taxpayer files his schedule of property in proceedings to enforce the lien.1 I deem the recorded notice as the incident that consummates the lien upon the specific and ascertainable property. The enforcement proceedings after that recordation are only an enforcement of a lien already fixed upon the specific property adequately described in the recorded notice. 37 The Court suggests that the ruling in United States v. State of Texas, 314 U.S. 480, 62 S.Ct. 350, 353, 86 L.Ed. 356, that the statutory lien on 'property 'devoted to or used in his business" is not a specific and fixed lien entitled to priority over the United States, is persuasive that similar words in the Illinois statute are not specific and constant. But in the Texas case, no steps had been taken to fix the amount of the lien on the property devoted to the business, at page 487 of 314 U.S., at page 353 of 62 S.Ct., 86 L.Ed. 356. Of course, therefore, the lien could not be fixed and certain. This final step to perfect the lien had been taken in the present case. 38 As the Court concludes no specific lien attaches to ascertainable property. I content myself with adding, as to the respective priorities of the United States and a lienor with a specific lien on ascertainable property, that in my opinion such a lienor has priority for his lien despite Rev.Stat. § 3466. See Thelusson v. Smith, 2 Wheat. 396, 424, 4 L.Ed. 271; Conard v. Atlantic Insurance Co., 1 Pet. 386, 441, 7 L.Ed. 189; United States v. Waddill, Holland & Flinn Co., 323 U.S. 353, 355, 65 S.Ct. 304, 305, 89 L.Ed. 294. 39 Mr. Justice JACKSON joins in this dissent. 1 Associated Agencies was made a defendant in the suit brought by the Director of Labor. 2 As exhibits to the Director's complaint three notices of lien were filed, one for $225.51, one for $303.29, and one for $259.65. Although these aggregate $788.45, the lien sought to be foreclosed was for $767.29. See note 12. 3 The property of the Chicago Waste and Textile Company was to be sold at public auction at the behest of Associated Agencies. The injunction prevented this sale. 4 This did not exhaust the fund, and the court awarded the balance to the Director of Labor, instead of to the United States in part payment of its claim for federal unemployment taxes. 391 Ill. 29, 32, 34, 62 N.E.2d 537. See also United States v. Spencer, D.C., 65 F.Supp. 763. The United States has not petitioned for certiorari, and therefore the correctness of this disposition of the balance of the fund is not now in controversy. 5 Jones Ill.Stat.Ann. (1944) §§ 45.128—45.161, Smith-Hurd Stats. c. 48, § 217 et seq. The argument of the state in that case was that, since Title 9 contained 'provisions intended to induce states to set up sound unemployment compensation in accordance with Congressionally prescribed standards' and 'to this end' permitted the states 'to build up their own funds by collection from employers within the state of 90% of the tax those employers would otherwise have to pay to the federal government,' (328 U.S. 10, 66 S.Ct. 842) it was Congress' intention to give states priority over the United States for their unemployment compensation claims. This argument was applicable, it may be noted, only to federal unemployment compensation taxes and not to federal insurance contributions taxes which are the only ones involved in this case, since as to federal insurance contributions taxes there are no provisions for federal-state cooperation as there are in Title 9. Compare Helvering v. Davis, 301 U.S. 619, 57 S.Ct. 904, 81 L.Ed. 1307, 109 A.L.R. 1319, with Steward Machine Co. v. Davis, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A.L.R. 1293. See also Rivard v. Bijou Furniture Co., 68 R.I. 358, 361, 27 A.2d 853. 6 The Bankruptcy Act uses the term 'person,' 11 U.S.C. § 21, sub. a, 11 U.S.C.A. § 21, sub. a, but the Act defines 'persons' as including 'corporations, except where otherwise specified, and officers, partnerships, and women * * *.' 52 Stat. 841, 11 U.S.C. § 1(23), 11 U.S.C.A. § 1(23). 7 Since decision of the Evans case, the fifth act of bankruptcy has been amended to include appointment of a receiver when there is insolvency in the equity sense as well as in the bankruptcy sense. See 1 Collier on Bankruptcy (14th ed.) 475. But under the amended statute the same view has been expressed. Elfast v. Lamb, 2 Cir., 111 F.2d 434, 436. 8 See Note (1946) 59 Harv.L.Rev. 1132, 1136. 9 There are minor differences in phraseology between 1 Stat. 515 and Rev.Stat. § 3466, which 'did not work any change in the purpose or meaning * * *.' Price v. United States, 269 U.S. 492, 501, 46 S.Ct. 180, 181, 70 L.Ed. 373. 10 The statement in United States v. Knott, 298 U.S. 544, 551, 56 S.Ct. 902, 905, 80 L.Ed. 1321, 104 A.L.R. 741, that 'such an interest (an in hoate general lien created by the laws of Florida) lacks the characteristics of a specific perfected lien which alone bars the priority of the United States' was not intended to settle the problem and may be taken to have been made with reference to the early mortgage lien cases discussed and distinguished in United States v. State of Texas, 314 U.S. at pages 484, 485, 62 S.Ct. 350, 352, 86 L.Ed. 356, and People of State of New York v. Maclay, 288 U.S. at pages 293, 294, 53 S.Ct. at page 324, 77 L.Ed. 754. 11 'A lien is hereby created in favor of the Director upon all the personal property or rights thereto owned or thereafter acquired by any employer and used by him in connection with his trade, occupation, profession or business, from whom contributions, interest, or penalties are or may hereafter become due. Such lien shall be for a sum equal to the amount at any time due from such employer to the Districtor on account of contributions, interest and penalties thereon. Such lien shall attach to such property at the time such contributions, interest or penalties became, or shall hereafter become, due. In all cases where a report setting forth the amount of such contributions has been filed with the Districtor, no action to enforce such lien shall be brought after three years from the date of the filing of such report and in all other cases no action to enforce such lien shall be brought after three years from the date that the determination and assessment of the Director made pursuant to the provisions of this Act became final.' Jones Ill.Stat.Ann. (1944) § 45.154(a), Smith-Hurd Stats. c. 48, § 243(a). (Emphasis added.) See also note 2. 12 'Such lien shall be invalid only as to any innocent purchaser for value of stock in trade of any employer in the usual course of such employer's business, and shall be invalid as to any innocent purchaser for value of any of the other assets to which such lien has attached, unless notice thereof has been filed by the Director in the office of the Recorder of Deeds of the county within which the property subject to the lien is situated. * * *.' Jones Ill.Stat.Ann. (1944) § 45.154(b)(1), Smith-Hurd Stats. c. 48, § 243(b)(1), See note 2. 13 Cf. note 2. 14 The priority of the United States attaches upon appointment of the receiver. United States v. State of Oklahoma, 261 U.S. 253, 260, 43 S.Ct. 295, 297, 67 L.Ed. 638; Spokane County v. United States, 279 U.S. 93, 49 S.Ct. 321, 324, 73 L.Ed. 621. 15 Jones Ill.Stat.Ann. (1944) § 45.154(e), Smith-Hurd Stats. c. 48, § 243(e), provides for enforcement of the lien by judicial proceedings for foreclosure. The section states: 'In all such cases, it shall not be necessary that said petition describe the property to which said lien has attached'; and continues with the further language quoted in the text. 16 In his complaint the Director of Labor prayed, 'that an order be entered by this Honorable Court commanding that the defendant, Chicago Waste & Textile Co., a corporation, file within a short day to be fixed by the Court, a full and complete schedule under oath, of all personal property and rights thereto, which it owned on the 1st day of May, 1941, or thereafter acquired, and to indicate upon such schedule the property so owned by it which was or is used by it in connection with its trade, occupation, profession or business.' 17 See the authorities cited in the text at the beginning of Part II of this opinion. 18 As we affirm the judgment of the ground that the United States under Rev.Stat. § 3466 has priority over Illinois as to all federal insurance contributions taxes owing it, we do not consider the argument that even if this general priority did not exist, the United States would be entitled to the amount of the fund which represents employees' taxes. 1 Jones Ill.Stat.Ann. (1944) § 45.154(e), Smith-Hurd Stats. c. 48, § 243(e): 'Foreclosure of Lien. In addition and as an alternative to any other remedy provided by this Act, or by the laws of the State of Illinois the Director may enforce the lien herein created by petition in the name of the People of the State of Illinois to the Circuit Court of the county wherein the property subject to the lien is situated, praying that the lien which has attached to said property, be foreclosed and the aforesaid property be sold in the same manner as in cases of foreclosure of mortgages upon personal property in courts of record. In all such cases, it shall not be necessary that said petition describe the property to which said lien has attached and it shall be the duty of the employer against whom such petition has been filed to file in said proceedings, a full and complete schedule, under oath, of all personal property and rights thereto which he owned at the time the contributions, upon which the lien sought to be foreclosed in (is) based, become due, or which he subsequently acquired, indicating upon such schedule the property so owned by such employer which was, or is used by such employer in connection with his trade, occupation, profession or business, and if such employer shall so fail to do after having been so ordered by he court, he may be punished as in other cases of contempt of court.'

1112

329 U.S. 379 67 S.Ct. 332 91 L.Ed. 359 UNITED STATESv.SHERIDAN. No. 53. Argued Nov. 12, 13, 1946. Decided Dec. 23, 1946. Rehearing Denied Feb. 3, 1947. See 329 U.S. 834, 67 S.Ct. 628. Leon Ulman, of Washington, D.C., for petitioner. John H. Pickering, of Washington, D.C., for respondent. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 Sheridan was indicted on three counts for having violated § 3 of the National Stolen Property Act, as amended, 48 Stat. 795, 53 Stat. 1178, 18 U.S.C. §§ 413—419, 18 U.S.C.A. §§ 413—419. A jury found him guilty on all counts.1 On the authority of Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88, 157 A.L.R. 406, the Circuit Court of Appeals for the Sixth Circuit reversed the conviction, 152 F.2d 57. Because of doubt as to the applicability of the Kann case, we granted certiorari.2 328 U.S. 829, 66 S.Ct. 1020. 2 Each count charged that Sheridan with fraudulent intent, caused the transportation in interstate commerce of a specified forged check, knowing it to have been forged. The proof3 offered to support these counts showed that on July 19, 1943, in Jackson, Michigan, Sheridan cashed three checks, receiving for them either cash or cash and hotel service or goods. Two, which were made the basis of counts one and two, were drawn on a bank in Cape Girardeau, Missouri, were payable to the order of 'P.H.D. Sheridan,' and purported to be drawn by 'U.S.E.F.C. 14A, A. J. Davis, Commissioner. As will be seen, it is not necessary to consider the third count, involving the other check. 3 From the endorsements it was clear that each check had been honored by banks at Jackson, Michigan. They forwarded the two checks drawn on the Missouri bank to it for payment. Both were marked 'no account' and returned to the forwarding bank. An agent of the Federal Bureau of Investigation testified that his office had conducted an investigation in Washington, D.C., and that the United States Department of Commerce had no agent 'U.S.E.F.C. 14A,' nor one 'A. J. Davis, Commissioner.' 4 Sheridan was sentenced to five years' imprisonment on each count, the sentences to run concurrently. Hence, if the conviction on any is valid, it is unnecessary to consider the convictions on the other two. Hirabayashi v. United States, 320 U.S. 81, 85, 63 S.Ct. 1375, 1378, 87 L.Ed. 1774; Pinkerton v. United States, 328 U.S. 640, n. 1, 66 S.Ct. 1180. Accordingly, for the purposes of this decision it may be taken that only the convictions on counts one and two are in issue.4 5 * The pertinent part of amended § 3 is set out in the margin.5 Whether or not Sheridan's situation is within the intended coverage depends upon the answer to be given to two questions, namely: (1) Did he cause to be transported in interstate commerce any forged security;6 (2) if so, did he do this 'with unlawful or fraudulent intent'? It is in these respects that the section's meaning must be determined. 6 It is not questioned that the checks were 'securities,' that they were 'forged,' or that they were transported in interstate commerce.7 It is urged, however, that Sheridan did not 'cause' the transportation, since his objective was attained when he cashed the checks and what happened to them later was of no consequence to him or his plan. Hence it is concluded that he can be said to have 'caused' the transportation only in the sense that it would not have occurred if he had not cashed the checks. This 'but for' relation is considered insufficient since the statute is thought not simply to forbid use of interstate commerce for transportation of forged securities without more; but to out-law such use only when it contributes to or is an essential part of carrying out the intended specific fraud. 7 The second contention, though stated differently, comes substantially to the same thing. It is that, upon the assumption Sheridan may be held to have 'caused' the transportation, still he did not do so with the requisite 'unalwful or fraudulent intent,' namely, to aid in completing the fraud. These views are bolstered by strong reliance on the Kann decision. 8 The Government answers with essentially two arguments. One is drawn primarily from the embodiment of amended § 3 in the National Stolen Property Act. It is shortly that the offense takes color and character from the other offenses with which it is associated in the context of § 3. Broadly, therefore the Government says that the section as amended excludes forged securities from interstate transportation just as it does stolen goods,8 money or securities, counterfeited securities and counterfeiting tools, or for that matter just as diseased cattle, lottery tickets, adulterated foods, etc., are excluded under various statutes related to the National Stolen Property Act.9 More narrowly the Government argues that the transportation here necessarily aided or contributed to the perpetration of the fraud, if not by enabling respondent to secure possession originally of its fruits, then by giving him the necessary interval to make his escape; and thus to avoid either prosecution or restitution of the amount which early detection would make probable. 9 As an entirely fresh matter we should have difficulty in avoiding the force of the Government's views. The setting of the offense in amended § 3, together with the complete absence of anything in the legislative history to indicate that causing interstate transportation of forged securities was designed to be treated differently from causing the transportation of stolen goods, counterfeited securities, counterfeiting tools, etc., indicates plainly that transporting all these articles is to be treated in the same manner and, moreover, not in the limited sense for which respondent argues. 10 Congress had in mind preventing further frauds or the completion of frauds partially executed. But it also contemplated coming to the aid of the states in detecting and punishing criminals whose offenses are complete under state law, but who utilize the channels of interstate commerce to make a successful get away and thus make the state's detecting and punitive processes impotent.10 This was indeed one of the most effective ways of preventing further frauds as well as irrevocable completion of partially executed ones. In the light of this purpose, we do not believe that Congress intended to restrict the prohibited transportation of stolen goods, securities and money, or of counterfeited securities and counterfeiting tools, to situations where it would be effective to complete a specific fraud, in the sense of enabling the defrauder to secure possession initially of what he seeks. The intent was more general. 11 It is true that amended § 3 forbids the interstate transportation of forged and counterfeited securities, and forging and counterfeiting tools, 'With unlawful or fraudulent intent,' while the earlier proscribed transportation of stolen goods, securities and money is not required in terms to be done with such an intent, but only with knowledge that they have been stolen. This difference would seem to be entirely procedural, not substantive in character.11 But, in any event, it is not controlling here. For the question remains whether the Kann case requires us to hold that 'with unlawful or fraudulent intent' must be taken as restricting the forbidden transportation to cases where that element aids in originally securing the fruits of the fraud. II 12 That case held that one alleged to be party to a fraudulent scheme could not be convicted under § 215 of the Criminal Code, 18 U.S.C. § 338, 18 U.S.C.A. § 338, for using the mails 'for the purpose of executing such scheme' by proving that he or his associates cashed checks, receiving the proceeds at forwarding banks, which in turn mailed them to the drawee banks for collection, the checks being neither forged nor dishonored by the banks on which they were drawn. We think the case is distinguishable both on the statutes applied and on the facts. In order that comparison may be exact, we set forth the applicable wording of the two sections. 13 Section 215 of the Criminal Code, involved in the Kann case, is as follows: 'Whoever, having devised * * * any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, * * * shall, for the purpose of executing such scheme or artifice or attempting so to do, place, or cause to be placed, any letter * * * in any post office, or * * * cause to be delivered by mail according to the direction thereon * * * any such letter, * * * shall be fined not more than $1,000, or imprisoned not more than five years, or both.' (Emphasis added.) 14 Amended § 3 of the Stolen Property Act reads pertinently, except for its important contextual coloring:12 '* * * whoever with unlawful or fraudulent intent shall transport or cause to be transported in interstate * * * commerce any falsely made, forged, altered, or counterfeited securities, knowing the same to have been falsely made, forged, altered, or counterfeited * * * shall be punished by a fine of not more than $10,000 or by imprisonment for not more than ten years, or both * * *.' (Emphasis added.) Under § 215 the express requireme t is that the mailing or causing to be delivered by mail shall be 'for the purpose of executing such scheme or artifice or attempting so to do.' There is no such explicit requirement in amended § 3. The wording there is that the interstate transportation shall be done 'with unlawful or fraudulent intent.' This different wording and the difference in the contextual settings of the proscriptions have meaning, we think, to make their effects distinct. We emphasize at the outset that amended § 3 is part of a scheme of federal-state cooperation in apprehending and punishing criminals, while § 215 deals only with a distinctly federal crime. 15 The language of amended § 3 is broader and less specific than that of § 215. The word 'unlawful' in the former is not to be ignored. Nor is it to be rendered meaningless by identifying it with 'fraudulent,' more especially if the latter is to be endowed with the restrictive connotation, not expressly stated, of 'for the purpose of executing such scheme.' The word 'unlawful' has no such narrow meaning. Literally it is broad enough to include any unlawful purpose, such as to aid in concealing what has been done and thus in avoiding prosecution and restoration. 16 Moreover, in the Kann setting, the quoted wording now sought to be read into amended § 3 was restricted to significance in relation to getting the proceeds of the checks irrevocably, and the subsequent mailing was held to have no significant influence in producing that effect or, therefore, upon completing the scheme;13 or, moreover, toward concealing the crime. 17 Whether or not in those circumstances the mailing had concealing effects, the situation in this respect was very different from the one now presented. The checks there were not forged or altered. Here they were. There the checks were honored by the drawees after the mailing. Here they were dishonored after the transportation. There the payee—indorsers knew they would not be. In that case the mailing was much less likely to produce disclosure than was the transportation in this one. Accordingly the irrevocable completion of the scheme was much less affected by the mailing than it was by the transportation here. So also with any concealing effect of the transportation and, therefore, with any unlawful or fraudulent intent concerning it. 18 Indeed the Kann opinion recognized that in other circumstances a different result might be called for, even under the explicit and restricted purposive requirement of § 215. For in putting aside the cases sustaining convictions where use of the mails was 'a means of concealment so that further frauds which are part of the scheme may be perpetrated,'14 the Court said: 'In these the mailing has ordinarily had a much closer relation to further fraudulent conduct than has the mere clearing of a check, although it is conceivable that this alone, in some settings, would be enough.' 323 U.S. at page 95, 65 S.Ct. at page 151, 89 L.Ed. 88, 157 A.L.R. 406. 19 The Court was not dealing with the transmission of a forged check, certain to be dishonored after the mailing or transportation, or therefore with a situation in which the forbidden transmission was either so likely to result in disclosure of the crime or so obviously intended to provide an interval for escape before that disclosure would be made.15 We cannot say that in circumstances such as are now here the same result would have been reached in applying § 215, in view of these differences and the express reservation made for other situations involving greater possibilities for concealment. 20 This is enough to distinguish the Kann case. But we think, in addition, we would be altogether unjustified to rewrite the words 'with unlawful or fraudulent intent' to mean 'for the purpose of executing such scheme or artifice' in the sense of aiding to secure possession of the proceeds of the checks irrevocably, which was the meaning given that phrase in the Kann decision. Apart from the absence here of irrevocability in the legal sense, to do this would be to disregard what we think was Congress' clear purpose to make amended § 3, like the section in its original form, a means of apprehension and of punishment substantially, though not strictly in the legal sense, for past crimes of the sort specified in situations where interstate commerce was used as a method of defeating the state's exercise of those functions. 21 We cannot thus tear the transportation of forged checks from its setting and give it the distinct status, with reference to intent, as compared with the other forbidden transportations, which we think would result from respondent's reading. In amending § 3 Congress was extending the federal law enforcement arm to reach primarily the larger dealers in forged and counterfeited securities.16 Not only forged checks, but forged or counterfeited bonds and coupons, as well as other forms of securities, and the instruments with which these are made, were the target. The legislative history shows that the purpose was to bring operators in these false securities into substantially the same reach of federal power as applied to others dealing in stolen goods, securities and money.17 In one respect the object was to make their apprehension and conviction more easy, for the $5,000 minimum in value was intentionally omitted. The amendment was thus an extension, not a contraction of the preexisting provisions. 22 The purpose however was not to reach persons innocently, but knowingly, transporting the forbidden articles. Hence it was necessary to introduce safeguarding language. This was done by inserting 'with unlawful or fraudulent intent.' Broad as this was, it was sufficient for the purpose of excluding innocent transportation. We do not think it was also intended to safeguard the counterfeiter or professional forger, simply because the transportation alleged and proved does not aid him initially in securing the possession of the proceeds of his fraudulent dispositions. To take this view would nullify much of the amendment's intended effectiveness. 23 Nor can we treat forged checks differently from other securities, either because they are forged or because the forgery is done by 'little fellows' who perhaps were not the primary aim of the congressional fire. The statute expressly includes checks.18 It makes no distinction between large and small operators. There is no room for implying such a distinction in view of the absence of the $5,000 limitation with respect to the transportation of forged checks. Whether or not Congress had in mind primarily such small scale transactions as Sheridan's, his operation was covered literally and we think purposively. Had this not been intended, appropriate exception could easily have been made. 24 If it is assumed that the evidence supports the conclusions on which the case has come here,19 Sheridan perpetrated three frauds, including two forgeries, in one day. Forgery, thus repeated, is not amateurish, though the amounts obtained are small. Notoriously the crime done once becomes habitual. And forgers are notoriously itinerant. Drawing the check upon an out-of-state bank, knowing it must be sent there for presentation, is an obviously facile way to delay and often to defeat apprehension, conviction and restoration of the illgo ten gain. There are sound reasons therefore why Congress would wish not to exclude such persons, among them the very case with which they may escape the state's grasp. 25 A word will dispose of the idea that Sheridan did not 'cause' the transportation. Certainly he knew the checks would have to be sent to the Missouri bank for collection. Given the proven forgery and uttering, no other conclusion would be possible. Necessarily, too, it would follow he intended the paying bank to send the checks there for that purpose. He knew they must cross state lines to be presented. One who induces another to do exactly what he intends, and does so by defrauding him, hardly can be held not to 'cause' what is so done. The Kann case itself is authority for the Government on this point, in fact goes farther than is necessary here. For, as respected the same contention there advanced, the opinion said: '* * * we think it is a fair inference that those defendants who drew, or those who cashed, the checks believed that the banks which took them would mail them to the banks on which they were drawn, and assuming petitioner participated in the scheme, their knowledge was his knowledge.' 323 U.S. at page 93, 65 S.Ct. at page 150, 89 L.Ed. 88, 157 A.L.R. 406. The statement was in answer to argument that Kann had not 'caused' the mailing. III 26 Since the Circuit Court of Appeals reversed the conviction on all counts on its view that the Kann case was controlling, it did not discuss respondent's other contentions. These are renewed here. They are, first, that the evidence was insufficient to support the verdict; and, second, that certain testimony was inadmissible including that of the federal agent to the effect that the Department of Commerce had no agency 'U.S.E.F.C. 14A' nor one 'A. J. Davis, Commissioner.' On the facts the two contentions are closely related.20 27 We express no opinion as to the admissibility of the evidence. It is desirable that the litigants and this Court, if the case is again before us, have the benefit of the views of the Circuit Court of Appeals. See United States v. Ballard, 322 U.S. 78, 88, 64 S.Ct. 882, 887, 88 L.Ed. 1148. However, with respect to the first contention, upon the assumption that the record, as stipulated, correctly sets forth the evidence introduced by the Government and also that all the evidence was admissible, it follows from our discussion of the statute that the evidence was sufficient to send the case to the jury. The jury properly could have inferred that respondent had forged the checks in question;21 that he therefore had knowledge of their spurious character; and, furthermore, that the checks were negotiated and caused to be transported with unlawful or fraudulent intent. 28 However, counsel assigned here for respondent calls our attention to the fact that the instructions given and the rulings on instructions requested do not appear in the record. He suggests that, if the cause should be remanded to the Circuit Court of Appeals for further proceedings, it would be appropriate for us to suggest to that court in the remand that it exercise its powers to secure a complete bill of exceptions, including the instructions given and all pertinent rulings in connection therewith. 29 That course has been followed in unusual circumstances. See Miller v. United States, 317 U.S. 192, 199, 200, 63 S.Ct. 187, 191, 87 L.Ed. 179; Helwig v. United States, 328 U.S. 820, 66 S.Ct. 1336. Such circumstances are presented on this record. Respondent defended himself at the trial. He did not have counsel on the appeal. The case is here in forma pauperis, and it is stated in his brief that 'respondent is now confined in a Michigan state prison is without funds and is unable to employ counsel of his own choice.' Since the decision in Miller v. United States, supra, the Federal Rules of Criminal Procedure have taken effect22 and expressly provide that they shall govern all proceedings pending at the effective date 'so far as just and practicable.'23 Rule 59. Bills of exception are abolished.24 Since the record contains a statement of the evidence, apparently the only serious deficiency is the in matters relating to the instructions, noted above. In these circumstances we think taking any corrective action, in this respect or otherwise, in the interest of seeing that substantial justice is done, well may be left to the judgment of the Court of Appeals. 30 The judgment is reversed and the cause is remanded to that court for further proceedings in conformity with this opinion. 31 The CHIEF JUSTICE and Mr. Justice DOUGLAS dissent. 1 The record states that respondent 'having been fully informed of his constitutional right to counsel, and having been asked whether he desired counsel assigned * * * stated he did not desire the assistance of counsel.' 2 Since certiorari was granted Clarke v. Sanford, 156 F.2d 115, has been decided by the Fifth Circuit. It appears to be in conflict with the case at bar. See also Tolle v. Sanford, D.C., 58 F.Supp. 695. 3 The proceedings at trial were not stenographically reported. Hence the parties prepared a statement of evidence from memory and from notes made during the course of the trial, and stipulated that it 'substantially sets forth the testimony and evidence' presented by the Government. Upon approval of the District Court, the statement was made part of the record. 4 Count two is identical in effect with count one for the purpose of the argument made here. Count 3, however, involves a check signed by respondent in his own name as maker, and the Government—apparently of the view that such a check is not 'altered' or 'counterfeited'—states: 'It is not clear that such a check is falsely made or forged within the general law.' 5 The pertinent text of § 3 is as follows: 'Whoever shall transport or cause to be transported in interstate or foreign commerce any goods, wares, or merchandise, securities, or money, of the value of $5,000 or more theretofore stolen, feloniously converted, or taken feloniously by fraud or with intent to steal or purloin, knowing the same to have been so stolen, feloniously converted, or taken, or whoever with unlawful or fraudulent intent shall transport or cause to be transported in interstate or foreign commerce any falsely made, forged, altered, or counterfeited securities, knowing the same to have been falsely made, forged, altered, or counterfeited, or whoever with unlawful or fraudulent intent shall transport, or cause to be transported in interstate or foreign commerce, any bed piece, bed plate, roll, plate, die, seal, stone, type, or other tool, implement, or thing used or fitted to be used in falsely making, forging, altering, or counterfeiting any security, or any part thereof, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than ten years, or both * * *.' 48 Stat. 794, 795, as amended by 53 Stat. 1178. (Emphasis added.) 6 The Act, § 2(b), defines the term 'securities' as including checks. 7 The sufficiency of the evidence to prove the fact of forgery is challenged, principal contentions, it is conceded cf. Part III, but for the purposes of the arguendo. 8 See Hearings before the Committee on the Judiciary on H.R. 10287, 70th Cong., 1st Sess.; H.Rep. 2528, 70th Cong., 2d Sess.; H.Rep. 1462, 73d Cong., 2d Sess.; S.Rep. 538, 73d Cong., 2d Sess.; H.Rep. 1599, 73d Cong., 2d Sess.; H.Rep. 422, 76th Cong., 1st Sess.; S.Rep. 674, 76th Cong., 1st Sess. See note 5 for pertinent text of § 3. 9 The National Stolen Property Act is said to be modeled after the National Motor Vehicle Theft Act, 41 Stat. 324, 18 U.S.C.A. § 408. H.Rep. 2528, 70th Cong., 2d Sess., 4; H.Rep. 1462, 73d Cong., 2d Sess., 2. See also the Animal Industry Act of 1884, 23 Stat. 31; the Act for the Suppression of Lottery Traffic of 1895, 28 Stat. 963; the Pure Food and Drug Act of 1906, 34 Stat. 768, 21 U.S.C.A. § 1 et seq.; the White Slave Traffic Act of 1910, 36 Stat. 825, 18 U.S.C.A. § 397 et seq.; the Webb-Kenyon Act of 1913, 37 Stat. 699, 27 U.S.C.A. § 122. 10 See H.Rep. 2528, 70th Cong., 2d Sess., 2: 'Most of the States have laws covering the underlying principle of this proposed legislation, but it must be remembered that the jurisdiction of the State court does not reach into all of the States, especially when the matter of producing witnesses and bringing to court the proof is concerned.' See also Hearings before the Committee on the Judiciary on H.R. 10287, supra note 8, passim. 11 One who knowingly transports stolen goods would do so for one of three sorts of objects, namely: (1) to dispose of them or use them unlawfully; (2) to aid in concealing the theft, thus avoiding prosecution for himself or another; or (3) for some purpose wholly innocent, such as to turn them over to the police or the rightful owner. In the first two instances there would be inherent in the act 'unlawful intent' or 'fraudulent intent,' though proof of this might not be required apart from the proof of knowledge and absence of any showing of innocent purpose. Congress obviously did not intend to make criminal such an instance as the third. However, proof of the innocent intent might be required as matter of defense, the other elements being made out. In other words, it may well be doubted that adding the requirement 'With unlawful or fraudulent intent' in the amended part of the section added anything to the substantive crime; for its effect is apparently only to require the state to allege and prove the unlawful or fraudulent intent, rather than to require the defendant to allege and prove his innocent purpose. 12 See note 5. 13 It was as to this conclusion that four members of the Court dissented. 323 U.S. at page 95, 65 S.Ct. at page 151, 89 L.Ed. 88, 157 A.L.R. 406. 14 United States v. Lowe, 7 Cir., 115 F.2d 596; Dunham v. United States, 5 Cir., 125 F.2d 895; United States v. Riedel, 7 Cir., 126 F.2d 81. 15 The discovery of the scheme resulted from an examination of the allegedly defrauded corporation's books by a Government exam ner, not as here from return of the checks unpaid by the forwarding bank. 16 See the letter from the Attorney General to Senator Ashurst, Chairman of the Senate Committee on the Judiciary, set out in S.Rep. 674, 76th Cong., 1st Sess., 2. 17 Ibid. 18 See note 6. 19 See Part III. 20 It is argued that excluding the evidence regarded as inadmissible would render the remaining evidence insufficient. 21 That is, the checks which form the basis of counts 1 and 2. We express no opinion concerning the check on which count 3 was based. See note 4. 22 18 U.S.C. following § 687, 18 U.S.C.A. following section 687, effective March 21, 1946. 23 In this case the indictment was filed on October 27, 1944; the jury verdict and judgment were filed on November 30, 1944; the judgment of the Circuit Court of Appeals was entered on November 19, 1945; and a Government petition for rehearing was denied on February 28, 1946. Certiorari was granted on May 13, 1946. 24 See Rule 39(c) and the note prepared under the direction of the Advisory Committee on Rules for Criminal Procedure. 'The new rule supersedes Rule VII, VIII, and IX of the Criminal Appeals Rules of 1933, 292 U.S. 661. One of the results of the change is the abolition of bills of exception.' S.Doc. 175, 79th Cong., 2d Sess., 62, 63.

01

329 U.S. 394 67 S.Ct. 416 91 L.Ed. 374 EDWARD KATZINGER CO.v.CHICAGO METALLIC MFG. CO. (two cases). Nos. 70 and 71. Argued Nov. 14, 15, 1946. Decided Jan. 6, 1947. Rehearing Denied Feb. 17, 1947. See 330 U.S. 853, 67 S.Ct. 768. Mr.Charles J. Merriam, of Chicago, Ill., for petitioner. Mr. Max Zabel, of Chicago, Ill., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 The question here is whether the defendant, in a suit to recover royalties only under a terminated patent license agreement containing price-fixing provisions, can challenge the validity of the patent despite a covenant in the license contract that he would not do so. 2 The petitioner, Edward Katzinger Company, and the respondent, Chicago Metallic Mfg. Company, make and sell tin baking pans. The undenied testimony was that Metallic sold its pans over a large part of the United States, probably in every state in the country. Katzinger became owner of Jackson patent No. 2,077,757 on a certain type of pan.1 Metallic, accused of infringing, entered into a licensing contract under which, upon payment of stipulated royalties, it was authorized to manufacture and sell pans made in accordance with the claimed invention. Section 3 and 11 of the license contract, set out below,2 provided that Metallic, like all other licensees, should sell these pans at prices fixed by Katzinger. Royalties were to be computed on the basis of 'net sales' of articles 'made in accordance with any of the patents or applications under this license.' Section 14 provided that if Metallic elected to terminate the contract, without ceasing to manufacture the pans Metallic should 'be estopped from denying the validity of said patent * * * and be deemed an infringer thereof.' Metallic maintained the patentee-fixed prices and paid royalties on pans deemed by it to be covered by the patent.3 3 A controversy later arose as to whether certain types of pans manufactured by Metallic were covered. Declining to pay royalties on this type of pan, Metallic gave notice of terminatio of the contract and initiated this action for a declaratory judgment praying that the court declare that the patent was invalid for want of invention and that the controversial pans were not covered by, and did not infringe, any of Katzinger's patents. Katzinger in an answer and counterclaim alleged, so far as material here, that the patent covered all the Metallic pans, that Metallic was estopped to challenge validity of the patent by § 14 of the contract, and that Metallic either owed royalties or was liable for infringement. It prayed, among other things, for an accounting for unpaid royalties which were to be computed at 2.5% to 5% of the sales price which was governed by the minimum price list attached to the license.4 In the alternative it prayed that Metallic be required to account for profits and damages as an infringer. The District Court held that Metallic was estopped to challenge the validity of the patents, and, treating them as valid, found that the patent claims did cover all the pans. Accordingly, it ordered an accounting to determine royalties due for the period prior to termination of the license contract, and for infringement damages thereafter. 4 Relying upon our decision in Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165, the Circuit Court of Appeals reversed. It held that the agreement to fix prices was inseparably connected with the agreement to pay royalties; that if the patent was invalid, the price-fixing provision violated the federal anti-trust laws; that conflict of the price-fixing provision with the anti-trust laws would make the agreement to pay royalties unenforceable; and that the District Court had erred in barring Metallic from challenging the patent's validity as a predicate to establishing the illegality and consequent unenforceability of the royalty covenant. The cause was remanded to the District Court to pass upon validity of the patent. 7 Cir., 139 F.2d 291. That Court then held the patent invalid and rendered judgment for Metallic. The Circuit Court of Appeals affirmed. 7 Cir., 153 F.2d 149. We granted certiorari because of a conflicting decision in Westinghouse Electric & Mfg. Co. v. MacGregor, 350 Pa. 333, 38 A.2d 244. The Pennsylvania Supreme Court in the MacGregor case ruled that price-fixing provisions in a license agreement such as the one before us were severable from the agreement to pay royalties, and read our Sola case as though it were a holding that a licensee was estopped to challenge a patent's validity except in cases where a licensor sought affirmative relief to enforce price-fixing provisions of a license. 5 We need not consider whether under the ruling of Bement & Son v. National Harrow Co., 186 U.S. 70, 87, 91, 22 S.Ct. 747, 753, 755, 46 L.Ed. 1058, these price-fixing provisions would be lawful if the patent were valid. The question here is entirely different. Nor need we, as it has been suggested, discuss this Court's opinions in Kinsman v. Parkhurst, 18 How. 289, 15 L.Ed. 385, and United States v. Harvey Steel Co., 196 U.S. 310, 25 S.Ct. 240, 49 L.Ed. 492, which were concerned with particular circumstances there involved. In the Sola case (317 U.S. 173, 63 S.Ct. 173) we declined to examine these prior decision, holding that neither of them was relevant because 'No price-fixing stipulation was involved in the license contract' at issue in those cases. So here, it would be inappropriate to reexamine those decisions now. Under what other circumstances a federal rule of estoppel might be applied is a question which can be met when particular facts present it. 6 The Sola case reaffirmed past decisions holding that price-fixing agreements such as those here involved are unenforceable because of violations of the Sherman Act, 15 U.S.C.A. §§ 1—7, 15 note, save as they may be within the protection of a lawful p tent. That case held further that local rules of estoppel cannot screen such agreements from court scrutiny, and that federal courts must, in the public interest, keep the way open for the challenge of patents which are utilized for price-fixing of interstate goods. It is true that the licensor there not only sought a recovery of royalties, but prayed generally for an injunction to require observance of all the provisions of the license agreement, one of which provisions was for price-fixing. But that the chief object of that suit was to recover royalties and not to require observance of the price-fixing provisions is indicated by the fact that, while breaches of other covenants of the contract were alleged in the petition, and specific prayers for their observance were included, there was no charge that the licensee had breached the price-fixing covenant and there was no specific prayer to require observance of it. Nor did this Court indicate that the patent would have been immune from challenge had the licensor sued for royalties only. This would have permitted a licensor to be protected on an illegal contract merely because he chose one remedy rather than another on the same substantive issue. If we had intended to draw such a fine line, it is hard to believe that such a careful writer as the late Chief Justice would have failed to indicate in the opinion of the mandate of the Court in the Sola case that on remand the trial court, while permitting challenge of the patent to defeat the injunction, must treat the price-fixing provision as severable, and forbid challenge for the purpose of defeating the claim for recovery of royalties.5 That decision, instead of resting on such a narrow procedural base, was firmly grounded upon the broad public interest in freeing our competitive economy from the trade restraints which might be imposed by price-fixing agreements stemming from narrow or invalid patents. Sola Electric Co. v. Jefferson Electric Co., supra, 317 U.S. at page 177, 63 S.Ct. at page 174, 87 L.Ed. 165. 7 In Scott Paper Co. v. Marcalue Mfg. Co., 326 U.S. 249, 66 S.Ct. 101, it was held that even an assignor who had sold a patent issued to itself was free to challenge the validity of the patent and thereby defeat an action for infringement by showing that the invention had been described in an expired patent. In thus emphasizing the necessity of protecting our competitive economy by keeping open the way for interested persons to challenge the validity of patents which might be shown to be invalid, the Court was but stating an often expressed policy that 'It is the public interest which is dominant in the patent system,' Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661, 665, 64 S.Ct. 268, 271, 88 L.Ed. 376, and that the right to challenge 'is not only a private right to the individual, but it is founded on public policy, which is promoted by his making the defense, and contravened by his refusal to make it.' Pope Mfg. Co. v. Gormully, 144 U.S. 224, 235, 12 S.Ct. 632, 636, 36 L.Ed. 14.6 8 If the question of severability, urged by the petitioner here, were a new one, we should again arrive at the conclusion we reached in the Sola case. Metallic's obligation to pay the royalties and its agreement to sell at prices fixed by Katzinger constituted an integrated consideration for the license grant. Consequently, when one part of the consideration is unenforceable because in violation of law, its integrated companion must go with it. See Hazelton v. Sheckels, 202 U.S. 71, 78, 26 S.Ct. 567, 50 L.Ed. 939, 6 Ann.Cas. 217. Moreover, solicitude for the interest of the public fostered by freedom from invalid patents and from restraints of trade, which has been manifest by the line of decisions of which the Scott Paper Co. and Sola cases are two of the latest examples, requires that there should be no departure from the guiding principles they announced. 9 The royalties here claimed accrued, if they accrued at all, prior to the time the license agreement terminated. Consequently, the fact of subsequent termination does not free the promise to pay royalties from the taint of the price-fixing provision. Nor does the fact, if it be a fact, that Metallic itself suggested the price-fixing provision, bar Metallic's challenge to the patent's validity. For the contract was still illegal, whoever suggested it, so that there is no less reason for leaving the way open to challenge the patent as a service to the public interest than if Katzinger had suggested price-fixing. Finally, Metallic's specific contract not to challenge the validity of Katzinger's patent can no more override congressional policy than can an implied estoppel. See Scott Paper Co. v. Marcalus Mfg. Co., supra, 326 U.S. at page 257, 66 S.Ct. at page 105, and cases cited. 10 Affirmed. 1 Other patents, originally in suit, are not involved in this case. 2 '3. Licensor agrees that while this agreement remains in force and effect, if it permits others under license or other agreement to manufacture or sell articles or devices embodying or made in accordance with any of the patents or applications hereinbefore described, upon terms more favorable than those granted the Licensee hereunder, the Licensor shall immediately notify the Licensee hereunder and grant the same terms to the Licensee. '11. Licensor reserves the right to establish a minimum sales price for the articles or products which Licensee is licensed to manufacture hereunder and to modify or change such minimum prices from time to time during the life of this agreement. The Licensor, as well as Licensee and any other person, persons or corporation licensed by Licensor, shall not, with the consent of Licensor, sell or offer for sale, or otherwise dispose of any of the licensed devices or products below said minimum sales price, or on more favorable terms of sale than those set forth in any such scale or prices so established by Licensor, contemporaneously with the execution and delivery of this license agreement, Licensee has received from Licensor a schedule of minimum prices, effective as of the date hereof, below which none of the products or devices made under this license shall be sold. Licensor reserves the right, upon thirty (30) days' notice in writing given by Licensor to Licensee, to change said minimum prices from time to time during the life hereof. On such articles or devices made and sold by Licensee as to which Licensor shall have failed or neglected to establish a minimum sales price, the royalty shall likewise be computed on the net sales price received by Licensee from its customers. Licensee or its duly authorized representatives shall have access from time to time to he books of account of Licensor during ordinary business hours for the purpose of determining whether or not Licensor has complied with the provisions of this paragraph.' 3 Of course it is the unlawful agreement, whether it is executed or not, which violates the anti-trust laws. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; American Tobacco Co. v. United States, 328 U.S. 781, 809, 66 S.Ct. 1125, 1139. In the cases here the parties stipulated that 'in pursuance of this license agreement Metallic did, for a period of two years, more or less, exercise the license therein given by making certain tinware products, maintaining minimum prices and paying therefor applicable royalties.' While the court originally made findings to the effect that Metallic did not attempt to carry out the price fixing agreement and was willing to have it removed from the contract, these findings were expressly vacated on remand. 4 The schedule of minimum prices incorporated by reference into the license agreement was set out as an exhibit in Katzinger's counterclaim. 5 The cases cited in the Sola decision rejected contentions that the offending price fixing provisions should be considered severable from the rest of the contract and therefore enforceable. See e.g., E. Bement v. National Harrow Co., 186 U.S. 70, 88, 22 S.Ct. 747, 754, 46 L.Ed. 1058; Continental Wall Paper Co. v. Louis Voight & Sons Co., 212 U.S. 227, 230, 266, 29 S.Ct. 280, 294, 53 L.Ed. 486. That this Court's attention was called in the Sola case to this question is shown by examination of the brief filed here for Sola which cited decisions of this Court to support a contention that the provisions for royalties and price-fixing were inseparable and that royalties must be denied if the price-fixing provision were illegal. Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488, 788, 62 S.Ct. 402, 86 L.Ed. 363; Loud v. Pomona Land & Water Co., 153 U.S. 564, 576, 14 S.Ct. 928, 931, 38 L.Ed. 822; Williams v. Bank of United States, 2 Pet. 96, 7 L.Ed. 360. 6 See Morton Salt Co. v. G.S. Suppiger Co., supra, 314 U.S. at page 492, 62 S.Ct. 405, 86 L.Ed. 363.

78

329 U.S. 441 67 S.Ct. 411 91 L.Ed. 408 BOARD OF GOVERNORS OF FEDERAL RESERVE SYSTEM et al.v.AGNEW et al. No. 66. Argued Dec. 10, 1946. Decided Jan. 6, 1947. Mr.J. Leonard Townsend, of Washington, D.C., for petitioners. Mr. Hugh H. Obear, of Washington, D.C., for respondents. [Argument of Counsel from page 442 intentionally omitted] Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case, here on certiorari to the Court of Appeals of the District of Columbia, presents important problems under § 30 and § 32 of the Banking Act of 1933, 48 Stat. 162, 193, as amended, 49 Stat. 704, 709, 12 U.S.C. §§ 77, 78, 12 U.S.C.A. §§ 77, 78. 2 Section 30 of the Act provides that the Comptroller of the Currency, whenever he is of the opinion that a director or officer of a national bank has violated any law relating to the bank, shall warn him to discontinue the violation and, if the violation continues, may certify the facts to the Board of Governors of the Federal Reserve System. The Board is granted power to order that the director or officer be removed from office if it finds after notice and a reasonable opportunity to be heard that he has continued to violate the law.1 3 Section 32 of the Act prohibits, inter alia, any partner or employee of any partnership 'primarily engaged in the issue, flotation, underwriting, public sale, or distribution, at wholesale or retail, or through syndicate participation, of stocks, bonds, or other similar securities' from serving at the same time as an officer, director, or employee of a member bank.2 4 Pursuant to the procedure outlined in § 30 the Board ordered respondents removed from office as directors of the Paterson National Bank on the ground that they were employees of a firm 'primarily engaged' in underwriting within the meaning of § 32. Respondents brought suit in the District Court for the District of Columbia to review the action of the Board or to enjoin its action. The District Court dismissed the complaint. The Court of Appeals reversed by a divided vote, holding that the Board exceeded its authority and that an injunction should issue. 153 F.2d 785. 5 First. The Board contends that the removal orders of the Board made under § 30 are not subject to judicial review in the absence of a charge of fraud. It relies on the absence of an express right of review and on the nature of the federal bank supervisory scheme of which § 30 is an integral part. Cf. Adams v. Nagle, 303 U.S. 532, 58 S.Ct. 687, 82 L.Ed. 999; Switchmen's Union of North America v. National Mediation Board, 320 U.S. 297, 64 S.Ct. 95, 88 L.Ed. 61; Estep v. United States, 327 U.S. 114, 66 S.Ct. 423. A majority of the Court, however, is of the opinion that the determination of the extent of the authority granted the Board to issue removal orders under § 30 of the Act is subject to judicial review and that the District Court is authorized to enjoin the removal if the Board transcends its bounds and acts beyond the limits of its statutory grant of authority. See American School of Magnetic Healing v. McAnnulty, 187 U.S. 94, 23 S.Ct. 33, 47 L.Ed. 90; Philadelphia Co. v. Stimson, 223 U.S. 605, 620, 32 S.Ct. 340, 344, 56 L.Ed. 570; Stark v. Wickard, 321 U.S. 288, 309, 310, 64 S.Ct. 559, 570, 571, 88 L.Ed. 733. That being decided, it seems plain that the claim to the office of director is such a personal one as warrants judicial consideration of the controversy. Cf. columbia Broadcasting System v. United States, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563; Stark v. Wickard, supra, 321 U.S. at page 305, 64 S.Ct. at page 568, 88 L.Ed. 733. 6 Second. We come then to the merits. Respondents for a number of years have been directors of the Paterson National Bank, a national banking association and a member of the Federal Reserve System. Since 1941 they have been employed by Eastman, Dillon & Co., a partnership, which holds itself out as being 'Underwriters, Distributors, Dealers and Brokers in Industrial, Railroad, Public Utility and Municipal Securities.' During the fiscal year ending February 28, 1943, its gross income from the underwriting field3 was 26 per cent of its gross income from all sources, while its gross income from the brokerage business was 42 per cent of its gross income from all sources. The same percentages for the fiscal year ending February 29, 1944, were 32 per cent and 47 per cent respectively; and for the period from March 1, 1944, to July 31, 1944, 39 per cent and 40 per cent respectively. Of the total number of transactions, as well as the total market value of the securities bought and sold by the firm as broker and as dealer for an indefinite period prior to September 20, 1943, about 15 per cent were in the underwriting field. The firm is active in the underwriting field, getting what business it can. In 1943 it ranked ninth among 94 leading investment bankers in the country with respect to its total participations in underwritings of bonds. For a time during 1943 it ranked first among the underwriters of the country. Apart from municipals and rails, its participation in underwritings during 1943 amounted to $14,657,000. Since October, 1941, respondents have done no business with the bank other than a strictly commission business with its customers. Nor has the firm done business with the bank since the fall of 1941. 7 These are the essential facts found by the Board. 8 On the basis of these facts the Board concluded that during the times relevant here Eastman, Dillon & Co. was 'primarily engaged' in the underwriting business and that respondents, being employees of the firm, were disqualified from serving as directors of the bank. 9 The Court of Appeals concluded that when applied to a single subject 'primary' means first, chief, or principal; that a firm is not 'primarily engaged' in underwriting when underwriting is not by any standard its chief or principal business. Since this firm's underwriting business did not by any quantitative test exceed 50 per cent of its total business, the court held that it was not 'primarily engaged' in the underwriting busine § within the meaning of § 32 of the Act. 10 We take a different view. It is true that 'primary' when applied to a single subject often means first, chief, or principal. But that is not always the case. For other accepted and common meanings of 'primarily' are 'essentially' (Oxford English Dictionary) or 'fundamentally' (Webster's New International). An activity or function may be 'primary' in that sense if it is substantial. If the underwriting business of a firm is substantial, the firm is engaged in the underwriting business in a primary way though by any quantitative test underwriting may not be its chief or principal activity. On the facts in this record we would find it hard to say that underwriting was not one primary activity of the firm and brokerage another. If 'primarily' is not used in the sense we suggest then the firm is not 'primarily engaged' in any line of business though it specializes in at least two and does a substantial amount of each. One might as well say that a professional man is not 'primarily engaged' in his profession though he holds himself out to serve all comers and devotes substantial time to the practice but makes the greater share of his income on the stock market. 11 That is the construction given the Act by the Board. And it is, we think, not only permissible but also more consonant with the legislative purpose than the construction which the Court of Appeals adopted. Firms which do underwriting also engage in numerous other activities. The Board indeed observed that if one was not 'primarily engaged' in underwriting unless by some quantitative test it was his principal activity, they § 32 would apply to no one. Moreover, the evil at which the section was aimed is not one likely to emerge only when the firm with which a bank director is connected has an underwriting business which exceeds 50 per cent of its total business. Section 32 is directed to the probability or likelihood, based on the experience of the 1920's that a bank director interested in the underwriting business may use his influence in the bank to involve it or its customers in securities which his underwriting house has in its portfolio or has committed itself to take. That likelihood or probability does not depend on whether the firm's underwriting business exceeds 50 per cent of its total business. It might, of course, exist whatever the proportion of the underwriting business. But Congress did not go the whole way; it drew the line where the need was thought to be the greatest. And the line between substantial and unsubstantial seems to us to be the one indicated by the words 'primarily engaged.' 12 There is other intrinsic evidence in the Banking Act of 1933 to support our conclusion. Section 20 of the Act, 12 U.S.C.A. § 377, outlaws affiliation4 of a member bank with an organization 'engaged principally' in the underwriting business. Section 19, 12 U.S.C.A. § 61, provides control over bank holding companies. In order to vote its stock in controlled banks a bank holding company must show that it does not own, control, or have any interest in, and is not participating in the management or direction of any organization 'engaged principally' in the underwriting business. On the other hand, when Congress came to deal with the practice of underwriters taking checking deposits, it used language different from what it used either in §§ 19 and 20 on the one hand or in § 32 on the other. By § 21, 12 U.S.C.A. § 378, it prohibited any organization 'engaged' in the underwriting business 'to engage at the same time to any extent whatever' in the business of receiving checking deposits. Thus within the same Act we find Congress dealing with several types of underwriting firms—those 'engaged' in underwriting, those 'primarily engaged' in underwriting, those 'engaged principally' in underwriting. The inference seems reasonable to us that Congress by the words it chose marked a distinction which we should not obliterate by reading 'pr marily' to mean 'principally'. 13 The Court of Appeals laid some stress on the fact that Congress did not abolish the bank offiliate system but only those underwriter affiliates which were under the control of a member bank or which were under a common control with it.5 Section 20. Since Congress made majority control critical under § 20, it was thought that under § 32 a firm was not 'primarily engaged' in underwriting unless underwriting constituted a majority of its business. But the two situations are not comparable. In § 32 Congress was not dealing with the problem of control of underwriters by banks or vice versa. The prohibited nexus is in no way dependent on the presence or absence of control, nor would it be made so even if 'primarily engaged' in underwriting were construed to mean principally engaged in that business. Section 32 was designed, as we have said, to remove tempting opportunities from the management and personnel of member banks. In no realistic sense do those opportunities disappear merely because the underwriting activities of the outside firm with which the officer, director, or employee is connected happens to fall below 51 per cent. Fifty-one per cent, which is relevant in terms of control, is irrelevant here. The fact then that Congress did not abolish underwriter affiliates serves as no guide in determining whether 'primarily engaged' in underwriting as used in § 32 means principally engaged or substantially engaged in that business. 14 Section 32 is not concerned, of course, with any showing that the director in question has in fact been derelict in his duties or has in any way breached his fiduciary obligation to the bank. It is a preventive or prophylactic measure. The fact that respondents have been scrupulous in their relationships to the bank is therefore immaterial. 15 There is a suggestion that if 'primarily' does not mean principally but merely connotes substantiality, § 32 constitutes an unlawful delegation of authority to the Board. But we think it plain under our decisions that if substantiality is the statutory guide, the limits of administrative action are sufficiently definite or ascertainable so as to survive challenge on the grounds of unconstitutionality. Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 397—400, 60 S.Ct. 907, 914—916, 84 L.Ed. 1263; Opp Cotton Mills v. Administrator, 312 U.S. 126, 142—146, 657, 61 S.Ct. 524, 531—533, 85 L.Ed. 624; Yakus v. United States, 321 U.S. 414, 424—428, 64 S.Ct. 660, 667—669, 88 L.Ed. 834; Bowles v. Willingham, 321 U.S. 503, 512—516, 64 S.Ct. 641, 646—648, 88 L.Ed. 892. 16 Reversed. 17 Mr. Justice RUTLEDGE, concurring. 18 If the question presented on the merits is reviewable judicially, in my opinion it is only for abuse of discretion by the Board of Governors. Not only because Congress has committed the system's operation to their hands, but also because the system itself is a highly specialized and technical one, requiring expert and coordinated management in all its phases, I think their judgment should be conclusive upon any matter which, like this one, is open to reasonable difference of opinion. Their specialized experience gives them an advantage judges cannot possibly have, not only in dealing with the problems raised for their discretion by the system's working, but also in ascertaining the meaning Congress had in mind in prescribing the standards by which they should administer it. Accordingly their judgment in such matters should be overturned only where there is no reasonable basis to sustain it or where they exercise it in a manner which clearly exceeds their statutory authority. 19 In this case I cannot say that either of these things has occurred. The Board made its etermination after the required statutory hearing on notice. 48 Stat. 162, 193, 12 U.S.C. § 77, 12 U.S.C.A. § 77. The consideration given was full and thorough, including detailed findings of fact and conclusions of law, followed by a carefully written opinion.1 The Board concluded that 'primarily' in § 32 does not mean 'first in volume in comparison with any other business or businesses in which it (the employer) engages,'2 but means rather as 'a matter of primary importance,' like 'primary' colors or planets or as the word is used in the phrase 'the primary causes of a war.' This view it found not only supported by accepted dictionary meaning but also in conformity with Congress' intent as established by the legislative history. In a further ground which we must take as reflecting its specialized experience, the Board stated: 'To say that a securities firm ranking ninth among the leading investment bankers of the country with respect to its total participations in underwritings of bonds, and for a period ranking first, should be held to be beyond the scope of the statute is to say that Congress enacted a statute with the intention that it would apply to no one.' 20 I cannot say that the Board's conclusion, in the light of those groundings, is wanting either for warrant in law or for reasonable basis in fact. The considerations stated in the Court's opinion and in the dissenting opinion filed in the Court of Appeals, 153 F.2d 785, 795, as well as by the Board itself, confirm this view. I think it important not only for this case but for like ones which may arise in the future, perhaps as a result of this decision, to make clear that my concurrence in the Court's disposition of the case is based upon the ground I have set forth, and not upon independent judicial determination of the question presented on the merits. I do not think this Court or any other should undertake to reconsider, as an independent judgment, the Board's determination upon that question or similar ones likely to arise, if the Board was not without basis in fact for its judgment and does not clearly transgress a statutory mandate. More than has been shown here would be required to cause me to believe that the Board has exceeded its power in either respect. 21 Mr. Justice FRANKFURTER joins in this opinion. 1 Section 30 also provides: 'That such order and findings of fact upon which it is based shall not be made public or disclosed to anyone except the director or officer involved and the directors of the bank involved, otherwise than in connection with proceedings for a violation of this section. Any such director or officer removed from office as herein provided who thereafter participates in any manner in the management of such bank shall be fined not more than $5,000, or imprisoned for not more than five years, or both, in the discretion of the court.' 2 Not material here is an exception 'in limited classes of cases in which the Board of Governors of the Federal Reserve System may allow such service by general regulations when in the judgment of the said Board it would not unduly influence the investment policies of such member bank or the advice it gives its customers regarding investments.' § 32. 3 The issue, flotation, underwriting, public sale or distribution, at wholesale or retail or through syndicate participation, of stocks, bonds or other similar securities. The firm does not deal in United States Government bonds. 4 Defined in § 2(b), 12 U.S.C.A. § 221a(b), as direct or indirect ownership or control of more than 50 per cent of the voting stock of the organization in question, common ownership or control of 50 per cent or more of such voting stock, or a majority of common directors. 5 See note 4, supra. 1 The opinion is not reported, pursuant to the statutory prohibition, 12 U.S.C. § 77, 12 U.S.C.A. § 77, which is effective except in connection with proceedings for enforcement. 2 Under such a view, in cases involving different facts the question would become judicial whether 'primarily' means more than half of (1) the gross volume of business done; (2) the gross profit; (3) the net profit, where some but not all these factors as relating to one phase of the total activities carried on amounts to more than half the gross. Such discriminations would seem to be clearly within the Board's power to determine in the first instance. If so, it is difficult to see why that power does not include the determination made here.

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329 U.S. 433 67 S.Ct. 439 91 L.Ed. 402 STEELEv.GENERAL MILLS, Inc. No. 79. Argued Dec. 18, 1946. Decided Jan. 6, 1947. Rehearing Denied Feb. 3, 1947. See 329 U.S. 834, 67 S.Ct. 628. Mr.Cecil A. Morgan, of Fort Worth, Tex., for petitioner. Mr. Alfred McKnight, of Fort Worth, Tex., for respondent. Mr. Elton M. Hyder, Jr., of Austin, Tex., for State of Texas, amicus curiae. Mr. Justice BLACK delivered the opinion of the Court. 1 Petitioner and respondent entered into a written contract under which the petitioner was to transport goods for respondent by truck entirely within the State of Texas at 'such rates, charges, or tariffs as may be fixed by the Railroad Commission of the State of Texas.' Based on that contract petitioner applied to the Commission for a permit to operate as a contract carrier pursuant to rules of the Railroad Commission promulgated under Texas law which grants regulatory power over transportation to that Commission. Article 911b, §§ 1 to 22b, Rev.Stat. of Tex. Petitioner's application stated that 'the tariff to be charged for the service proposed will be that as promulgated by the Railroad Commission of Texas.' After notice and hearing, at which petitioner and a representative of respondent testified, the Commission made an order which stated that 'After carefully considering the evidence, the laws and its own rules and regulations,' the Commission was of the opinion that 'the character of business proposed to be done by the applicant strictly conforms with the definition of a contract carrier.' The order directed that petitioner be granted a permit, which was later issued, to transport goods for respondent in Texas, but directed attention to the fact that the Commission's 'tariffs and orders prescribed as a minimum rate to be charged by contract carriers the rate prescribed for common motor carriers.' Later, pursuant to a prearrangement, the parties entered a supplemental agreement concerning which the Railroad Commission was kept uninformed, in accordance with which respondent actually paid petitioner for carriage of its goods less than the rates prescribed for common motor carriers. About three and a half years later the petitioner filed this suit, of which the District Court had jurisdiction by reason of diversity of citizenship, to recover the full rate fixed by prior general orders of the Commission prescribing common carrier rates as provided in the contract. 2 The respondent's answer admitted that it had paid less than the tariff rate fixed in prior general orders, but denied legal liability to pay that rate on several grounds. It denied that respondent's rates were governed by the Commission's prior general rate orders or by the special order granting petitioner a permit as a contract carrier. It also claimed that a State two-year statute of limitations barred recovery for part of the amount claimed. It further alleged that petitioner had led respondent to believe that his type of transportation was not subject to regulation by the Railroad Commission, and that no prior general or special orders had fixed petitioner's transportation rates. In reliance upon the petitioner's representations, respondent alleged, it had entered into the supplemental agreement to pay less than the tariff rate here claimed. Respondent pleaded that by this conduct petitioner was estopped from claiming that the Commission had power to or had fixed a rate for petitioner's transportation, or from predicating his cause of action upon the Commission's tariffs. 3 The District Court rejected all of respondent's contentions. Citing Texas statutes, court decisions, and the Commission's practices, the District Court held that the cause of action was not barred by the statute of limitations; that the Commission's prior general rate orders governed the charges to be fixed by contract carriers such as petitioner; that Texas law barred respondent from any collateral attack on the validity of the orders; that had the rate fixing orders been directly attacked, as authorized by law, they would have been held valid; that shippers and carriers could not by private agreements defeat the State's statutory purpose to require payments of uniform transportation rates; that the original agreement to pay the Commission-fixed rate was valid, and the supplemental agreement to pay less than that rate was void; and that, under Texas law, petitioner was not estopped to rely on the Commission's tariff in order to recover the full tariff rate. Accordingly, the District Court directed the jury to return a verdict for petitioner for the balance due it under the Commission rate, and a judgment for the petitioner was entered on that verdict.1 4 The Circuit Court of Appeals, one judge dissenting, reversed. General Mills v. Steele, 5 Cir., 154 F.2d 367. The majority concluded that petitioner should not recover because the agreement to pay less than the full rates was a subterfuge, that neither party had any intention of living up to the agr ement and that their conduct amounted to a fraud upon the Railroad Commission, 'contrary to good morals and that (it) tended to interfere with the purity of the administration of the law, such as puts both parties in pari delicto with no right to seek advantage of recovery * * *' on the 'spurious' contract. The dissenting judge did not agree that the records showed a deliberate purpose to evade the statutes. He further thought that under controlling Texas law and policy the doctrine of pari delicto could not be applied so as to have the goods of a Texas shipper hauled in Texas at a less rate than the others were compelled to pay by law. All the judges agreed, however, that the agreement to pay less than the Commission-fixed rates was void. 5 On petitioner's motion for rehearing the State Attorney General intervened. He contended that the court's decision ran counter to the State's long-established policy against discriminatory transportation rate-cutting, and that if the judgment stood, it would impair the integrity of the State's regulatory system, a primary purpose of which was, he argued, to assure uniform rates to all shippers for substantially the same transportation service. In its opinion denying rehearing, the court reaffirmed its former holding and stated that this was 'a suit by one party in particeps criminis, against another in like situation under a fully executed contract, whereon it was sought to penalize to the extent of $37,000 and to reward the prime offender in like amount.' Whether the Circuit Court of Appeals' judgment does undermine the transportation policy of Texas is a question of such importance that we granted certiorari to review the case. 328 U.S. 830, 66 S.Ct. 1341. 6 The District Court specifically held that no part of the claim sued on was barred by the Texas statute of limitations and the Circuit Court of Appeals did not discuss the question. Article 5526 of the Revised Statutes of Texas, on which respondent relies, by its language applies only to actions for debts not 'evidenced by a contract in writing.' The contract here sued on was 'in writing.' Respondent has cited no Texas decisions which have considered this statute to be a bar to suits on contracts such as the one here involved. We cannot say that the District Court sitting in Texas erred in holding that no part of the claim was barred by Article 5526. See Texarkana & Ft. S. Ry. Co., et al. v. Houston Gas & Fuel Co., 121 Tex. 594, 51 S.W.2d 284. 7 Nor can we say that the District Court and the Circuit Court of Appeals erred in interpreting Texas law to render the supplemental agreement between petitioner and respondent designed to circumvent payment of Commission-fixed rates void and unenforceable. The District Court's holdings that the Commission's rate fixing orders applied to petitioner's business, that they were not subject under Texas law to the collateral attack here made, and that petitioner could not carry respondent's goods at less than the rates fixed were well buttressed by state statutes and court decisions.2 No arguments here made by respondent or state decisions on which it relies refute the District Court's reasoning or conclusion. The Circuit Court of Appeals has not disagreed with this holding of the District Court sitting in Texas. Under these circumstances we shall leave undisturbed the interpretation placed upon purely local law by a Texas federal judge. MacGregor v. State Mutual Life Assurance Co., 315 U.S. 280, 62 S.Ct. 607, 86 L.Ed. 864; Henderson Co. v. Thompson, 300 U.S. 258, 266, 57 S.Ct. 447, 451, 81 L.Ed. 632; Thompson v. Consolidated Gas Utilities Corporation, 300 U.S. 55, 74—75, 57 S.Ct. 364, 373, 374, 81 L.Ed. 510. Therefore we can proceed to consider whether the Circuit Court erred in holding that respondent could escape payment of the Commission-fixed rates by application of the doctrine of pari delicto. 8 Respondent does not refute what the Texas courts have frequently decided, that agreements by railroads to cut charges to below tariff rates are unlawful and that no doctrine of estoppel or pari delicto can be invoked to defeat payment of the full tariff rate. In Texas & N.O.R. Co. v. Yates, 139 Tex. 89, 93, 161 S.W.2d 1050, 1052. The Texas court said, 'In a word the purpose of our statutes as they relate to intrastate freight rates, is in every essential respect the same as that of the Federal statutes which we had under consideration in Houston & T.C.R. Co. v. Johnson, Tex.Com.App., 41 S.W.2d 14, 83 A.L.R. 241.' Just as 49 U.S.C. § 41(3), 49 U.S.C.A. § 41(3), prohibits rebate and similar devices which might undermine interstate transportation rate systems, so Art. 1690b, § 1 of the Penal Code of Texas makes it unlawful for motor carriers to charge less than commission-fixed rates, and Art. 1687 makes it unlawful for railroads to engage in the same practice. No Texas decisions referred to by the Circuit Court of Appeals or by the respondent here indicate that the State's public policy is any different or less effective in protecting the integrity of motor carrier rates than railroad rates. The Texas motor carrier legislation was designed to be a part of a state transportation regulatory system applicable alike to all lines of transportation which represents a 'studied effort * * * to prevent, through regulation, unfair, discriminatory, or destructive competition between such authorized carriers as would ultimately impair their usefulness.' Texas & P. Ry. Co. v. Railroad Commission, Tex.Civ.App., 138 S.W.2d 927, 930, 931 rev'd on other grounds, 138 Tex. 148, 157 S.W.2d 622. Cf. Stephenson v. Binford, 287 U.S. 251, 272-273, 53 S.Ct. 181, 187, 77 L.Ed. 288, 87 A.L.R. 721. 9 Under Texas law the payment of commission-fixed carrier rates is not merely a private obligation between shippers and carriers. The duty to pay is a public one, Houston & T.C.R. Co. v. Johnson, Tex.Com.App., 41 S.W.2d 14, 83 A.L.R. 241. And, as said in the Yates case, supra, with reference to a railroad, no carrier can 'by means of estoppel 'or by any other device' escape the performance of this public duty.' While the doctrine of pari delicto might be applied in Texas to some types of contracts so as to defeat recovery, see Wright v. Wight & Wight, Tex.Civ.App., 229 S.W. 881, we are satisfied that the Circuit Court of Appeals erred in holding that Texas courts would apply it in this case. Application of the doctrine of pari delicto in this proceeding, therefore, where the federal court has jurisdiction by reason of diversity, would result in applying a rule of law in the federal courts different from the rule we believe has been applicable in the state courts. Such a result cannot be approved. Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743, 162 A.L.R. 719. 10 The judgment of the Circuit Court of Appeals is reversed and that of the District Court is affirmed. It is so ordered. 11 Reversed. 1 The court permitted respondent to offer evidence intended to show that the petitioner's contract carriage was neither in competition with common carriers nor substantially the same type of services as common carriers performed. This evidence was offered to support respondent's contention that the Commission was without jurisdiction to fix petitioner's rates because, as respondent urged, § 6 aa. of the State motor carrier law limited its power to fix contract carrier rates to motor carriers that did compete with or perform substantially the same services as common carriers. These two questions were submitted to the jury and they made special findings on the issues in respondent's favor. The district court later directed the jury to find for petitioner despite these findings, holding, as set out in the opinion, that the Commission's orders were valid and beyond collateral attack in this case. 2 The District Court cited the following authorities to support its position: Art. 911b, Rev.Stat. of Tex.; Gene al Order No. 1, R.R.Comm. of Tex., Aug. 22, 1931; Texas Steel Co. v. Ft. Worth & Denver C. Ry. Co., 120 Tex. 597, 40 S.W.2d 78; Greer v. Railroad Commission of Texas, Tex.Civ.App., 117 S.W.2d 142; St. Louis, I.M. & S.R. Co. v. Landa & Storey, Tex.Civ.App., 187 S.W. 358; Railroad Commission of Texas v. Uvalde Construction Co., Tex.Civ.App., 49 S.W.2d 1113; Alpha Petroleum Co. v. Terrell, 122 Tex. 257, 59 S.W.2d 364; Mingus v. Wadley, 115 Tex. 551, 285 S.W. 1084. It also cited the following federal cases: Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424; United Fuel Gas Co. v. Railroad Commission of Kentucky, 278 U.S. 300, 49 S.Ct. 150, 73 L.Ed. 390.

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329 U.S. 402 67 S.Ct. 421 91 L.Ed. 380 MacGREGORv.WESTINGHOUSE ELECTRIC & MFG. CO. No. 28. Reargued Nov. 14, 15, 1946. Decided Jan. 6, 1947. Rehearing Denied Feb. 17, 1947. See 330 U.S. 853, 67 S.Ct. 768. On Rehearing. Mr.William B. Jaspert, of Pittsburgh, Pa., for petitioner. Mr. Jo. Baily Brown, of Pittsburgh, Pa., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 This case, like that of Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394, 67 S.Ct. 416, this day decided, involves the right of a patent licensee to defend a suit for royalties only under a licensing agreement which contains a price-fixing provision. Certain subsidiary questions are also raised. 2 Westinghouse Electric & Manufacturing Company owned Jones' Patent No. 1,651,709. The invention claimed was a brazing 'solder comprising copper and phosphorous as the main and essential constituents.' Westinghouse sued MacGregor for infringement. The litigation was settled, and MacGregor took a license from Westinghouse authorizing MacGregor to make, use, and sell solder containing the constituents described in Westinghouse's patent claim. MacGregor agreed to pay 10% royalties on the net selling price of the solder. Sections 5 and 6 of the license agreement. Set out below,1 required MacGregor to sell the solder for no less than the price Westinghouse charged its own customers. MacGregor paid royalties on solder he made and sold which contained only phosphorous and copper. Later he began to make and sell solders composed of phosphorous, copper, and tin, or phosphorous, copper, and silver. For a time he paid royalties on these. But he also applied for and obtained patents on these two latter solders which added tin and silver respectively to the phosphorous-copper combination.2 MacGregor then declined to pay royalties on these solders on the ground that they were not covered by Westinghouse's patent. Westinghouse brought this suit for an accounting and payment of unpaid royalties in a Pennsylvania State court. MacGregor filed an answer denying liability and a counterclaim. His answer asserted that the solders which were described in his patents were not covered by Westinghouse's patent. He alleged that the effort of Westinghouse to make him pay royalties on these solders constituted an unlawful exercise of Westinghouse's patent monopoly and that Westinghouse should not be allowed to recover in the courts for this reason. In a counterclaim, he maintained that by inadvertence and mistake he had paid royalties on solders covered by his own patents. He charged that if the Westinghouse patent should be construed to cover these latter solders, it was invalid. He further contended that the price-fixing provision was a violation of the Sherman Act, 15 U.S.C.A. §§ 1—7, 15 note, and the Clayton Act, 15 U.S.C.A. § 12 et seq., and constituted an unlawful use of Westinghouse's patent monopoly which rendered the whole license agreement illegal.3 In his counterclaim MacGregor asked, not only for judgment for refund of the royalties alleged to have been inadvertently paid, but also for damages on account of the illegal restraint imposed upon him by the agreement. 3 The State trial court declined to consider the validity of the patent, holding that it was presumed to be valid, and that MacGregor as a licensee had no right to challenge it. Assuming the patent and all the claims in it to be valid on this theory, the State court found the claims broad enough in scope to cover all the solders manufactured and sold by MacGregor. The trial court did not give a like presumption to the validity of the patents issued to MacGregor, but held that the solders covered by those patents infringed the presumptively valid patents of Westinghouse.4 The State supreme court affirmed. 350 Pa. 333, 38 A.2d 244. It agreed with the trial court that MacGregor was estopped to attack the validity of Westinghouse's patent. It recognized that there could be no estoppel in the present case under our decision in Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165, but for its interpretation of the Sola decision as applying only to suits in which the licensee sought affirmative relief to enforce compliance with the price-fixing provision. Since no such relief was asked in this case, the State supreme court felt that there was no existing controversy which involved the price-fixing provision—that the questions of their effect and validity were 'moot.' Thus it assumed, as did the petitioner in E. Katzinger Co. v. Chicago Metallic Mfg. Co., supra, that a royalty agreement was severable from price-fixing covenants. For the reasons stated in today's Katzinger opinion we hold that the covenant to pay royalties was not severable from the covenant to sell at fixed prices. Since MacGregor invoked federal law to sustain his challenge to the validity of the patent, the alleged misuse of the patent, and the price-fixing covenant, his contentions raised federal questions not governed by state estoppel or contract severability rules. Sola Electric Co. v. Jefferson Electric Co., supra, 317 U.S. at pages 176, 177, 63 S.Ct. at pages 173, 174, 87 L.Ed. 165; Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 66 S.Ct. 101. Accordingly, we hold as a matter of federal law that the State supreme court was wrong in affirming the judgment in this cause on the ground that the licensee, MacGregor, was estopped to offer proof of his allegation of invalidity. This error will require, as the State court anticipated, that the cause be remanded for a new trial to determine the validity of Westinghouse's patent. For we do not think that the present state of this record justifies acceptance of MacGregor's contention that we should now pass on validity of the patent. If it be determined on remand that the patent is invalid, there is no question but that, as MacGregor contends, the price-fixing agreement violates the anti-trust laws. E. Katzinger Co. v. Chicago Metallic Mfg. Co., supra; Sola Electric Co. v. Jefferson Electric Co., supra, 317 U.S. at page 175, 63 S.Ct. at page 173, 87 L.Ed. 165; Scott Paper Co. v. Marcalus Co., supra. 4 But there are alternative federal questions raised here by MacGregor upon which decision might turn even though Westinghouse's patent be held valid. MacGregor pleaded that the price-fixing agreement so effectively wiped out all competition to Westinghouse in the manufacture and sale of these solders that the whole license contract should be held illegal as a violation of the Sherman and Clayton Acts. MacGregor also contended that the license contract should be held unenforceable in the courts on the ground that Westinghouse had attempted to use it to extend the patent's scope beyond its lawful coverage. But since the cause must again be tried in the State court we shall not pass on either of these contentions at this time. 5 The judgment is reversed and the case r manded to the Supreme Court of Pennsylvania for proceedings not inconsistent with this opinion. 6 Reversed and remanded. 7 Mr. Justice FRANKFURTER, with whom concur Mr. Justice REED, Mr. Justice JACKSON and Mr. Justice BURTON, dissenting. 8 The Court deems the issues in these cases to be controlled by our decision in Sola Electric Co. v. Jefferson Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165. Such is not my understanding of the Sola decision. These cases cannot be property decided, I believe, without consideration of one of the oldest doctrines of the patent law, namely, that a licensee cannot challenge the validity of the patent though everyone else may. 9 (1) Ninety years ago this Court unanimously announced the doctrine that a licensee under a patent is estopped from challenging the validity of that patent. Kinsman v. Parkhurst, 18 How. 289, 15 L.Ed. 385. The case may perhaps be explained, or even explained away. But the rule it expressed had become so much part of our law that fifty years later the Court deemed it unnecessary to discuss it and unanimously applied it even against the United States as licensee. United States v. Harvey Steel Co., 196 U.S. 310, 25 S.Ct. 240, 49 L.Ed. 492. It is significant that the licensee in that case, while vigorously contesting its liability upon the particular facts, conceded that the doctrine of estoppel was law 'as a general proposition'. 10 (2) Before those cases and since, in all English-speaking jurisdictions, in the courts of England, of the Dominions and of the various States, as well as in the lower federal courts, where most patent litigation originates and stops, a weighty body of cases affirmed and applied that doctrine with rare unanimity.1 This Court has never questioned the rule.2 The principle has withstood judicial scrutiny for nearly a century. 11 (3) Nor has the operation of the rule revealed inroads upon the public interest so as to stir efforts for its abrogation or restriction by Congress. Patent policy has been frequently reconsidered, and some rules formulated by courts were eliminated or modified. yet in none of the four major patent statutes nor in any of the other numerous amendatory enactments was attempt made to abolish or limit estoppel in favor of the licensor.3 The Patent Office, charged by Congress with supervision of the patent system and the source of many suggestion enacted into law, has never included among its proposals recommendation to alter that doctrine. 12 (4) Not until 1942, apparently, was legislative correction invoked, and even then only partially. Several bills were introduced to permit contest of the validity of a patent in anti-trust suits. See S. 2730, ug. 20, 1942; H.R. 7713, Oct. 15, 1942; H.R. 109, Jan. 6, 1943; H.R. 1371, Jan. 20, 1943. Only in the latest bills to be introduced is it proposed that 'In any proceeding involving a violation of the anti-trust laws or involving a patent or any interest therein, a party shall be entitled to show the invalidity or the limited scope of any patent or patent rights involved.' H.R. 3874, Dec. 18, 1943; H.R. 97, Jan. 3, 1945; H.R. 3462, June 13, 1945; S. 2482, July 26, 1946. Not one of these bills has yet reached the floor of Congress. 13 (5) If ever a doctrine has established itself as part of our law to be respected by the judiciary this is it. If it is to be changed, Congress is there to change it. Perhaps Congress will see fit to reexamine the doctrine in all its ramifications in the light of its history and the experience under it, and with due regard to all factors relevant to our patent system. We cannot do that. We can only adhere to the doctrine or overrule it. Until Congress does undo a principle so embedded in our law, we should leave it where we find it. 14 (6) But in any event, if we are to wipe out so settled a phase of our law it should be done explicitly, not cryptically. In my judgment the Sola decision does not give adequate support for the Court's opinion. The cases before us necessarily involve the estoppel doctrine and cannot be disposed of without appearing to overrule a settled course of decision. 15 (7) No doubt the Sola case, like these two, arose out of a claim for royalties under a patent license. But that there was a claim for royalties was hardly mentioned in the Court's opinion in the Sola case. The sole issue to which our attention was directed was a prayer that the licensee be enjoined from breach of his promise to abide by the prices fixed by the licensor for the sale of articles manufactured under the patent. Ever since the decision in Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 31 S.Ct. 376, 55 L.Ed. 502, this Court, as a matter of judicial policy reflected in legislation, has denied enforcement of agreements not to sell goods below a fixed price. And so this Court has been on the alert not to allow an exception to what is a Congressional as well as a judicial policy unless the basis for it is clean and clear. 16 The precise issue which we decided in the Sola case is not a matter for inference or conjecture. It was explicitly defined and delimited. 'The question for our decision', the late Chief Justice wrote, 'is whether a patent licensee, by virtue of his license agreement, is estopped to challenge a price-fixing clause in the agreement by showing that the patent is invalid, and that the price restriction is accordingly unlawful because not protected by the patent monopoly.' 317 U.S. at page 173, 63 S.Ct. at page 172, 87 L.Ed. 165. That was the issue in the Sola case. It was not whether a licensee may challenge the validity of a patent when sued for royalties. It was not whether a provision for price-fixing undermined rights under estoppel against a licensee. It was whether the licensor could show the special dispensation pertaining to the holder of a valid patent, which entitles him to fix the price of a commodity manufactured under his patent, although such a pricing agreement would be unenforceable in the generality of cases. What was sought and what was denied in Sola was the active benefit of a price-fixing clause. 17 (8) In the cases before us price-fixing is not in issue.4 We are not asked to allow the licensor to have the benefit of a practice available only under a valid patent. To grant relief here will not, unlike the Sola case, approve a practice prima facie in restraint of trade. What we here have to decide is whether we shall allow the licensee to repudiate an agreement for the payment of money made in an arm's length transaction. For nearly a hundred years this Court has uniformly answered that question by using the legal shorthand of estoppel. 18 (9) But if all the cases which have recognized and applied the doctrine of estoppel have been reduced, as apparently they have been, to derelicts, they should not be allowed to remain as obstructions on the stream of law. And not merely out of regard for the proper administration of law. The matter has practical consequences for all whose concern is patents. It is not questioned that a price-fixing clause in a license to manufacture under a valid patent falls outside the interdict of the anti-trust acts. E. Bement & Sons v. National Harrow Co., 186 U.S. 70, 22 S.Ct. 747, 46 L.Ed. 1058.5 The power to fix the price of patented articles is part of the patent grant. It is a mode of maintaining the integrity of a patent and as such is sanctioned by public policy. All that the Sola case held, and the only thing it held, was that a valid patent is indispensable to this right to fix prices. 19 But whether an inventor has a valid patent is a matter of increasing uncertainty. Hitherto, under the estoppel doctrine, a patentee could be assured that he would not have to litigate the validity of his patent with those to whom he grants license rights under it. Under the present decision, he cannot have this assurance of freedom from litigation if, under reasonable belief that he has a valid patent, he inserts a price-fixing clause in the license, even though afterwards he merely asks for royalties. 20 What matters is not merely that a patentee must now choose between two safeguards of his patent grant. In the Sola case the licensor asked for the enforcement of a pricing agreement. Here the price-fixing agreement is not brought into question and the patentee stands on his estoppel. This important difference is disregarded, the Sola case is deemed controlling, and the estoppel is left to fend for itself as a legal stray. By its silence, as by its reasoning in applying the Sola case, the decision will engender natural doubts as to the continuing validity of the estoppel doctrine even in those cases where no pricing agreement had ever existed. The result is that all future arrangements between licensor and licensee are overhung by a cloud of doubt as to what one who believes that he holds a valid patent should do in granting licenses under it. 21 If he insists on a price agreement to help maintain the integrity of his business, he runs the risk of losing his royalties since the mere existence of the price-fixing clause (which is all we have here) may find him entirely in the cold if it should turn out that the patent is not sustained. So long as the estoppel doctrine as such stands unrejected, the patentee may, therefore, prefer to forgo price-fixing and be satisfied with the bird in the hand in reliance on estoppel. But the upshot of the present decision is that the Court creates an unfair uncertainty as to the continued vitality of the historic estoppel doctine. The result is that the patentee who forgoes his right to maintain prices in order to make certain that he can at least collect his patent royalties without the cost and uncertainty of litigation, may find himself caught in the optimism of his belief as to the vitality of the estoppel doctrine unembarrassed by any price-fixing provision. For he may have given up what he might otherwise assert as a patentee to make sure that he can in any event have what estoppel would give him. It would seem fair to pronounce now that the doctrine of estoppel has or has not survived so that those who deem themselves holders of patent rights might not suffer because they assumed that the Court would preserve that which by no intimation it purports to jettison. 22 (10) The problem before the Court can be treated as though it was the same as that in the Sola case only if a distinction with a difference makes no difference. It is one thing to refuse to enforce a contract restraining trade by price fixing unless positive justification is shown in the form of a valid patent. It is quite another to use the excuse of an inoperative price-fixing clause to allow a licensee to escape his otherwise valid promise to pay roaylties.6 Nowhere in the Sola case did the Court intimate that the decision rested upon the importance to the public economy of allowing challenge to the validity of a patent by those particular members of the public who in a fair bargain had agreed not to do so. In fact, the doctrine of estoppel, flowing from Kinsman v. Parkhurst and applied in United States v. harvey Steel Co., was explicitly noted only to be put to one side because 'Here a different question is presented.' 317 U.S. at page 175, 63 S.Ct. at page 173, 87 L.Ed. 165. It was again put aside in Altvater v. Freeman, 319 U.S. 359, 364, 63 S.Ct. 1115, 1118, 87 L.Ed. 1450.7 The question which those cases did not have to meet should now be met otherwise than by disregard. The Court's essential reasoning would apply equally where the license never attempted to fix prices. If a doctrine that was vital law for more than ninety years will be found to have now been deprived of life, we ought at least to give it decent public burial. 1 '5. Westinghouse grants this license on the express condition that the prices, terms and conditions of sale for use or sale in the United States of America, its territories and possessions of brazing solders embodying the invention covered by said Letters Patent and so long as such brazing solders continue to be covered by said patent, shall be no more favorable to the customer than those which from time to time Westinghouse established and maintains for its own sales of similar or competing brazing solders under such patent to such or other similarly situated customer purchasing in like quantities. MacGregor shall be notified of all such prices, terms and conditions of sale fixed by Westinghouse. 'The prices terms and conditions of sale of Westinghouse may be changed by Westinghouse from time to time, notice being given MacGregor, but not less than five days' notice shall be given before any such change shall go into effect. '6. It is agreed that it shall be regarded as an evasion of this agreement amounting to a breach thereof for MacGregor to reduce Westinghouse's sale price or alter Westinghouse's selling terms and conditions of sale directly or indirectly either through its own organization, its agents or others by any device, subterfuge or evasion or by any means whatever or to make the prices lower or the terms or conditions more favorable than those set forth by Westinghouse.' 2 Copper, phosphorous and tin solder is Patent No. 2,125,680; Copper, phosphorous and silver solder is Patent No. 2,162,627. 3 The agreement to fix prices, if unlawful at all, was so whether it was executed or not. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; American Tobacco Co. v. United States, 328 U.S. 781, 810, 66 S.Ct. 1125, 1139. But this agreement by MacGregor to sell at fixed prices was no mere token, for the trial court found that on July 11, 1940, Westinghouse called MacGregor's attention to his obligation to observe user and distributor prices, and that on October 23, 1940, Westinghouse, through one of its attorneys, wrote MacGregor's attorney that 'if MacGregor sells direct to the user he should conform to the user prices established, and when he sells direct to the dealer, he should conform to the dealer prices established.' The oral testimony of Westinghouse's representatives construed the contract as requiring MacGregor to maintain the prices. Moreover, the record before us shows that MacGregor positively testified that he had maintained the Westinghouse prices on the copper-phosphorous combination because he considered himself bound to do so under the license contract. 4 Since the case is to be remanded for trial of the validity of the patent, we find it unnecessary to consider the propriety in any event of indulging a presumption of validity in favor of Westinghouse's patent without giving a presumption of a patentable difference to those of MacGregor. See Miller v. Eagle Manufacturing Co., 151 U.S. 186, 208, 14 S.Ct. 310, 319, 38 L.Ed. 121. 1 The early cases are collected in Strong v. Carver Cotton Gin Co., 197 Mass. 53, 83 N.E. 328, 14 L.R.A.,N.S., 274, 14 Ann.Cas. 1184. Note also the unanimity among the authors of treatises. Amdur, Patent Law and Practice 598; Ellis, Patent Assignments and Licenses § 692 et seq.; 2 Frost, Patent Law and Practice 201; Moulton, Patents 244; Rivise and Caesar, Patentability and Validity § 10; 2 Robinson, Patents § 820; 2 Walker, Patents (Deller's ed.) § 383. And see the cases cited, especially in Walker, Patents, supra. 2 Cf. Eureka Co. v. Bailey Co., 11 Wall. 488, 492, 20 L.Ed. 209; Eclipse Bicycle Co. v. Farrow, 199 U.S. 581, 587, 26 S.Ct. 150, 152, 50 L.Ed. 317. 3 See Patent Act of 1790, 1 Stat. 109; Patent Act of 1793, 1 Stat. 318; Patent Act of 1836, 5 Stat. 117; Patent Act of 1870, 16 Stat. 198. See also the subsequent minor enactments, summarized, J.Pat.Off.Soc., July 1936, pp. 103—22. And see 1 Walker, Patents (Deller's ed.) Appendix. 4 'In the in tant case the court has not been requested either directly or indirectly to require MacGregor to maintain Westinghouse prices. By his own testimony he has not maintained them. The price-fixing clause is not in issue. It is raised merely as a defense to a suit for accounting and payment of accrued royalties.' Discussion of findings by trial court in the MacGregor case. As to the Katzinger case the District Court opinion found that 'no price fixing by the respondent has been proved by the patitioner. . . . At no time did the respondent attempt to carry it out and the respondent was at all times willing to have same removed from the contract.' Further a specific finding of fact was that 'Respondent was always willing to eliminate the price fixing provisions of the license agreement, and these provisions terminated ipso facto upon termination of the license by petitioner.' It was on the basis of the facts so found by the District Court that the Circuit Court of Appeals held, when the estoppel issue was before it, that the mere persence of a price-fixing clause in the licensing agreement, whatever its setting and however inoperative, precluded estoppel against the licensee. 7 Cir., 139 F.2d 291. With the estoppel issue thus eliminated, the case was returned to the District Court to pass on the validity of the patent. Inasmuch as the Circuit Court of Appeals had found that the District Court had erred in its decree enforcing estoppel, the previous findings regarding estoppel became irrelevant and fell with the reversed decree. These findings, however, did not cease to be part of the record before the Circuit Court of Appeals on the first appeal. It is that decision, with the record on which it is based, that is now before us. If the Circuit Court of Appeals had enforced estoppel, the decree of the District Court and the findings on which it is based would not have been vacated. The findings that were before the Circuit Court of Appeals on the first appeal are now before us on review of that court's decision. The license agreement provided for royalties based on a percentage of the net sales. The amount of the net sales was not fixed by agreement except insofar as certain scheduled articles called for a minimum price. The record does not show the prices at which the sales were made. Not only that, the claim of the licensee was that the articles for which royalties were claimed were outside the license. Plainly such articles were not included on the minimum price schedule and could not have been sold according to the scheduled price list. The claim for royalties, therefore, was not a claim for royalties at fixed prices. 5 Upon full consideration the principle of the Bement case was reaffirmed and applied in United States v. General Electric Co., 272 U.S. 476, 47 S.Ct. 192, 71 L.Ed. 362. The latter case in turn was cited with approval in Carbice Corp. of America v. American Patents Corp., 283 U.S. 27, 31, 51 S.Ct. 334, 335, 75 L.Ed. 819. It is relevant to note that Mr. Justice Brandeis joined in the General Electric opinion and himself wrote the Carbice opinion. No member of this Court has been more resourceful y alert to protect the public interest from undue extension of the patent monopoly while at the same time observing the rights which Congress has seen fit to confer by the patent grant. 6 The considerations that determine the granting of a license on payment of royalties are distinct from those that underlie an additional clause for price-fixing. They are not interdependent in fact and were not so treated by the parties; no artificial notion regarding consideration requires that they be treated as interdependent. On lesser considerations of policy than have guided the course of patent law, this Court has refused to treat separate provisions of a contract as integrated. See Philadelphia, Wilmington & Baltimore Railroad Co. v. Howard, 13 How. 307, 339, 14 L.Ed. 157; Pollak v. Brush Electric Association, 128 U.S. 446, 455, 9 S.Ct. 119, 121, 32 L.Ed. 474. 7 Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 66 S.Ct. 101, went on the ground that an earlier expired patent had put the device in question into the public domain.

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329 U.S. 416 67 S.Ct. 444 91 L.Ed. 390 INTERNATIONAL HARVESTER CO.v.EVATT, Tax Com'r of Ohio. No. 75. Argued Dec. 12, 1946. Decided Jan. 6, 1947. Rehearing Denied Feb. 3, 1947. See 329 U.S. 834, 67 S.Ct. 628. On Appeal from the Supreme Court of the State of Ohio. Messrs. Joseph J. Daniels, of Indianapolis, Ind., and Edward R. Lewis, of Chicago, Ill., for appellant. Mr. A. A. Wendt, of Columbus, Ohio, for appellee. Mr. Justice BLACK delivered the opinion of the Court. 1 The Supreme Court of Ohio affirmed a decision of that State's Board of Tax Appeals fixing the amount owed by appellant for its State corporation franchise tax for the years 1935 to 1940, inclusive. 146 Ohio St. 58, 64 N.E.2d 53. In affirming, the Ohio court rejected appellant's contention that the controlling tax act, §§ 5495—5499, Ohio Gen.Code, as applied to appellant, was in violation of the Due Process clause of the Fourteenth Amendment and the Commerce clause of the Federal Constitution. Art. 1, § 8, cl. 3. The case is here on appeal under 28 U.S.C. § 344, 28 U.S.C.A. § 344. Appellant repeats its arguments as to invalidity of the tax, but only as to the years 1937 to 1940, inclusive. 2 Section 5495 of the Ohio Gen.Code provides that each foreign corporation authorized to do business in the State must pay a tax or fee for the 'privilege of doing business' or 'owning or using a part or all of its capital or property' or 'holding a certificate * * * authorizing it to do business in this state'. It is not denied that appellant owed a franchise tax under this section for it held a certificate to do business in Ohio during all the years in question. It also owned and operated two large factories at Springfield, Ohio, which produced millions of dollars worth of goods. And it operated four branch selling establishments associated with four warehouses, and fourteen retail stores, all located at various places in Ohio, which stored and sold goods produced at the Ohio factory. 3 But appellant also owns and operates sixteen factories, nearly a hundred selling agencies, and numerous retail stores in other states. Goods produced at its Ohio factories are not only sold in Ohio, but in addition, are shipped for storage to out-of-Ohio warehouses to be sold by out-of-Ohio selling agencies to out-of-Ohio customers. Some are shipped directly to our-of-Ohio customers on orders from out-of-Ohio selling agencies. Conversely, goods manufactured by appellant out-of-Ohio are shipped to its Ohio warehouses, and sold by its Ohio selling agencies to Ohio customers. Appellant's claim is that the amount of the tax assessed against it has been determined in such manner that a part of it is for sales made outside Ohio and another part for interstate sales. These consequences result, appellant argues, from the formula used by Ohio in determining the amount and value of Ohio manufacturing and sales, as distinguished from interstate and out-of-state sales. 4 The tax is computed under the Ohio statute in the following manner: Section 5498 prescribes the formula used in determining what part of a taxpayer's total capital stock represents business and property conducted and located in Ohio. To determine this, the total value of issued capital stock1 is divided in half. One half is then multiplied by a fraction, the numerator of which is the value of all the taxpayer's Ohio property, and the denominator of which is the total value of all its property wherever owned. The other half is multiplied by another fraction whose numerator is the total value of the 'business done' in the State and whose denominator is country-wide business. Addition of these two products gives the tax base, which, when multiplied by the tax rate of 1/10 of 1%, produces the amount of the franchise tax. 5 In the 'business done' numerator the State included as a part of Ohio business an amount equal to the sales proceeds of a large part of the goods manufactured at appellant's Ohio plants, no matter where the goods had been sold or delivered.2 A part of the measure of the tax is consequently an amount equal to the sales price of Ohio-manufactured goods sold and delivered to customers in other states. Appellant contends that the State has thus taxed sales made outside of Ohio in violation of the Due Process clause. A complete answer to this due process contention is that Ohio did not tax these sales. Its statute imposed the franchise tax for the privilege of doing business in Ohio for profit. The State supreme court construed the statute as imposing the tax on corporations for engaging in business such as that in which taxpayer engaged. One branch of that business was manufacturing. It has long been established that a state can tax the business of manufacturing. The fact that it chose to measure the amount of such a tax by the value of the goods the factory has produced, whether of the current or a past year does not transform the tax on manufacturers to something else. American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084; Hope Natural Gas Co. v. Hall, 274 U.S. 284, 288, 289, 47 S.Ct. 639, 640, 71 L.Ed. 1049; Utah Power & Light Co. v. Pfost, 286 U.S. 165, 189, 190, 52 S.Ct. 548, 555, 76 L.Ed. 1038; Wallace v. Hines, 253 U.S. 66, 69, 40 S.Ct. 435, 436, 64 L.Ed. 782; Freeman v. Hewit, 329 U.S. 249, 67 S.Ct. 274, 277. See also J. D. Adams Mfg. Co. v. Storen, 304 U.S. 307, 313, 314, 58 S.Ct. 913, 916, 917, 82 L.Ed. 1365, 117 A.L.R. 429, and cases cited in notes 14 and 15. 6 In the Ohio 'business done' numerator, we assume the State also included sales made by Ohio branches to Ohio customers of goods manufactured and delivered to these Ohio customers from out-of-Ohio factories.3 Appellant's business practice was to conduct and account for its sales agencies' activities separately and distinctly from its factory operations. The State followed this distinction. It treated the sales agencies as conducting one type of business and the factories another. Thus it measured the value of the Ohio sales agencies' business by the total amount of the preceding year's Ohio sales of goods manufactured outside of Ohio as well as those manufactured in Ohio. Here again, appellant's contention that this resulted in taxing out-of-state or interstate transactions or sales in violation of the Due Process clause is wholly without substance. The Ohio sales agencies' business and their sales to Ohio customers were intrastate activities. International Harvester Co. v. Department of Treasury of State of Indiana et al., 322 U.S. 340, 64 S.Ct. 1019, 88 L.Ed. 1313. What effect inclusion of this element in the 'business done' numerator would have were these transactions not intrastate is a question we need not now decide. 7 What we have said disposes of the only grounds urged to support the due process contention. It also answers most of the argument made against the Ohio statute on the ground that its application to appellant unduly burdens interstate commerce and therefore violates the commerce clause. Of course, the commerce clause does not bar a state from imposing a tax based on the value of the privilege to do an intrastate business merely because it also does an interstate business. Ford Motor Co. v. Beauchamp, 308 U.S. 331, 336, 60 S.Ct. 273, 276, 84 L.Ed. 304. Nor does the fact that a computation such as that under Ohio's law includes receipts from interstate sales affect the validity of a fair apportionment. See e.g., ump Hairpin Mfg. Co. v. Emmerson, 258 U.S. 290, 42 S.Ct. 305, 66 L.Ed. 622; Underwood Typewriter Co. v. Chamberlain, 254 U.S. 113, 41 S.Ct. 45, 65 L.Ed. 165; American Mfg. Co. v. City of St. Louis, supra; International Shoe Co. v. Shartel, 279 U.S. 429, 433, 49 S.Ct. 380, 382, 73 L.Ed. 781; Western Cartridge Co. v. Emmerson, 281 U.S. 511, 50 S.Ct. 383, 74 L.Ed. 1004. And here, it clearly appears from the background of Ohio's tax legislation that the whole purpose of the State formula was to arrive, without undue complication, at a fair conclusion as to what was the value of the intrastate business for which its franchise was granted. In October, 1924 this Court struck down Ohio's then corporation franchise tax on the ground that it did not make an apportionment between local and interstate business so as to confine its tax to local business only. The tax was also held to be in violation of the Equal Protection clause. Air-Way Electric Appliance Corporation v. Day, 266 U.S. 71, 45 S.Ct. 12, 69 L.Ed. 169. In April 1925, the legislature of Ohio passed a new act expressly to cure the defects this Court had found in the old law.4 111 Ohio Laws 471. That 1925 Act, as slightly amended,5 is the law under which the present apportionment was made. 8 Plainly Ohio sought to tax only what she was entitled to tax, and there is nothing about application of the formula in this case that indicates a potentially unfair result under any circumstances. It is not even contended here that the amount of these taxes could be considered to bear an unjust or improper relation to the value of the privilege of doing business in Ohio if the legislature had imposed a flat franchise tax of the same amounts for the respective years which application of this formula has produced. See Hump Hairpin Mfg. Co. v. Emmerson, supra, 258 U.S. at page 296, 42 S.Ct. at page 307, 66 L.Ed. 622. Furthermore, this Court has long realized the practical impossibility of a state's achieving a perfect apportionment of expansive, complex business activities such as those of appellant, and has declared that 'rough approximation rather than precision' is sufficient. Illinois Central Ry. Co. v. State of Minnesota, 309 U.S. 157, 161, 60 S.Ct. 419, 422, 84 L.Ed. 670. Unless a palpably dirproportionate result comes from an apportionment, a result which makes it patent that the tax is levied upon interstate commerce rather than upon an intrastate privilege, this Court has not been willing to nullify honest state efforts to make apportionments. See cases collected in opinion of Mr. Chief Justice Stone, dissenting, Northwest Airlines v. State of Minnesota, 322 U.S. 292, 325, 64 S.Ct. 950, 967, 88 L.Ed. 1283, 153 A.L.R. 245. A state's tax law is not to be nullified merely because the result is achieved through a formula which includes consideration of interstate and out-of-state transactions in their relation to the intrastate privilege. Since it has not been demonstrated that the apportionment here achieves an unfair result, cf. Hans Rees' Sons, Inc. v. State of North Carolina, ex rel. Maxwell, 283 U.S. 123, 134, 135, 51 S.Ct. 385, 389, 75 L.Ed. 879, and since it is assessed only against the privilege of doing local Ohio business of manufacturing and selling, we do not come to the question, argued by appellant, of possible multiplication of this tax by reason of its imposition by other states. None of them can tax the privilege of operating factories and sales agencies in Ohio. 9 Affirmed. 10 Mr. Justice RUTLEDGE, concurring. 11 I concur in the opinion and judgment of the Court. But I desire to add that, in the due process phase of the case, I find no basis for conclusion that any of the transactions included in the measure of the tax was so lacking in substantial fact connections with Ohio as to preclude the state's use of them, cf. McLeod, v. J. E. Dilworth Co., 322 U.S. 327, 64 S.Ct. 1023, 88 L.Ed. 1304, dissenting opinion 322 U.S. at pages 352—357, 64 S.Ct. at pages 1032—1034, 88 L.Ed. 1319, if indeed a limitation of this sort were material to an apportionment found on the whole to be fairly made. For the rest, as the Court holds, the apportionment clearly is valid. 1 Section 5498 also sets out in some detail the factors to be considered, and those not to be considered, in calculating the total value of a taxpayer's issued and outstanding stock. These provisions are not here at issue. 2 Rule 275, Tax Commissioner of Ohio, Oct. 13, 1939, exempted from the computation all goods manufactured by appellant in Ohio, but shipped to appellant's out-of-Ohio warehouses before sale. 3 The State contends here that it did not include in the 'business-done' numerator an amount equal to the proceeds from sales by Ohio branches to Ohio customers of goods which were shipped to the Ohio customers from factories outside Ohio. Appellant insists that it did. We need not resolve this controversy, for we think the result is the same whichever view is taken. 4 In vetoing the bill which became the law, on grounds not here relevant, the Governor of Ohio said: 'The Supreme Court decision, of course made it necessary for you to devise a basis for the levy of the tax other than on the authorized capital stock. You have seen fit to embody in the pending measure an asset value or total net worth basis for the assessment of the tax on domestic corporations as well.' Ohio House Journal 1925, Vol. III, 874. The bill was passed over his veto. 5 112 Ohio Laws 410 (1927); 113 Ohio Laws 637 (1929); 114 Ohio Laws 714 (1931); 115 Ohio Laws 589 (1933).

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329 U.S. 424 67 S.Ct. 435 91 L.Ed. 396 UNITED STATES et al.v.SEATRAIN LINES, Inc. No. 61. Argued Dec. 9, 1946. Decided Jan. 6, 1947. Appeal from the District Court of the United States for the District of Delaware. Mr.Edward M. Reidy, of Washington, D.C., for appellants. Mr. Wilbur LaRoe, Jr., of Washington, D.C., for appellee. Mr. Justice BLACK delivered the opinion of the Court. 1 Seatrain is and long has been a common carrier of goods by water. Its harbor facilities and vessels have been constructed to enable it to perform a distinctive type of water carriage. Loaded railroad cars can be hoisted and transported in its vessels, thereby eliminating such things as trouble, time and breakage, said to be incident to loading and unloading goods from railroad cars. See United States v. Pennsylvania R.R., 323 U.S. 612, 65 S.Ct. 471, 89 L.Ed. 499. Seatrain vessels also have tank space for carriage of liquid cargoes in bulk.1 2 Part III of the Interstate Commerce Act, 54 Stat. 929, 49 U.S.C. § 901 et seq., 49 U.S.C.A. § 901 et seq., subjected water carriers to the jurisdiction of the Interstate Commerce Commission. Section 309(a) of that Act, 49 U.S.C.A. § 909(a), required them to obtain certificates of public convenience and necessity from the Commission. The same section contains a proviso commonly referred to as the grandfather clause. It provides that any water carrier, with an exception not here material, which was in bona fide operation as a common carrier by water on January 1, 1940, shall be entitled o a certificate to continue operations over the route or routes which it had been serving previous to that date without determination by the Commission of the question of public convenience and necessity. 3 May 28, 1941, Seatrain filed two applications with the Commission to obtain certificates for two different routes, one of which it had operated since 1932, and another which it had begun to operate in 1940 shortly after passage of the water carrier provisions. Seatrain's application described its operation on each route as that of a 'common carrier by water of commodities generally.' After due notice had been given to all interested parties, Division 4 of the Commission conducted investigations, satisfied itself as to the right of Seatrain to be granted both applications under the provisions of the Act, made appropriate findings, and concluded that Seatrain was entitled to engage in transportation on both the routes as 'a common carrier by water of commodities generally.' A single certificate to carry 'commodities generally between the ports of New York, New Orleans, and Texas City, by way of the Atlantic Ocean and the Gulf of Mexico' was accordingly issued to Seatrain. By its terms it became effective August 10, 1942, subject 'to such terms, conditions, and limitations as are now or may hereafter be, attached to the exercise of such authority by the Commission.' 4 A year and a half later, January 27, 1944, the Commission, on its own motion, ordered that the proceedings be reopened for the purpose of determining whether the 1942 certificate should not be modified so as to deprive Seatrain of the right to carry commodities generally. Seatrain appeared and moved to vacate and rescind the Commission's order to reopen the proceedings on the ground that the Commission was without statutory authority to make the alteration proposed. Seatrain's motion was rejected. At the subsequent hearing on the proposed modification, Seatrain declined to offer evidence, resting its case entirely on the Commission's lack of authority to reconsider and alter the original certificate. After argument, the Commission entered an order canceling the former certificate and directing that a different one be issued. 260 I.C.C. 430. The proposed new certificate in effect deprived Seatrain of the right to carry goods generally between the ports it served, and limited it to operations only 'as a common carrier by the 'Seatrain' type of vessel, in interstate or foreign commerce, in the transportation of liquid cargoes and bulks; of empty railroad cars; and of property loaded in freight cars received from and delivered to rail carriers and transported without transfer from freight cars between the ports of New York, N.Y., New Orleans, Louisiana, and Texas City, Texas.' 5 Seatrain then brought this action before a three-judge District Court under 28 U.S.C. §§ 41(28), 47, 28 U.S.C.A. §§ 41(28), 47, to set aside the Commission's order. The District Court set aside the order on the ground that the Commission had exceeded its statutory authority in reopening the proceeding and altering the certificate. The District Court further held that even if the Commission would have had power under different circumstances to alter a certificate, it should not have done so in this case where, as the Court found from evidence before it but which had not been before the Commission, Seatrain had expended large sums of money in reliance upon the complete validity of its certificate. 64 F.Supp. 156. We need not consider the Commission's objection to the District Court's admission of evidence not heard by the Commission since we agree with the District Court that the Commission was without authority to cancel this certificate. 6 In altering Seatrain's certificate, the Commission held that a certificate authorizing the carriage of 'commodities generally' does not embrace the right to carry loaded or unloaded railroad cars; that consequently the original certificate granted Seatrain actually deprived it f any future right to carry railroad cars its chief business; that issuance of the original certificate to carry commodities generally was consequently an inadvertent error patent on the face of the record which the Commission has the right and power to change at any time the matter comes to its attention. But Seatrain argues that, far from restoring the right to which it was entitled under the original proceedings, the new order actually results in a drastic limitation on the nature of the equipment and service Seatrain is privileged to employ in loading and carrying freight, and could bar delivery or receipt of freight to or from any consignees except railroads. 7 We need not determine the Commission's statutory power to correct clerical mistakes, since we are persuaded from Seatrain's applications for its certificates, from the information supplied to the Commission indicating that Seatrain had long transported goods of all kinds loaded in freight cars to consignees other than railroads, from the findings of the Commission, and from the course of the earlier decisions of the Commission regarding Seatrain, that the issuance of the original certificate was not an 'inadvertent' error which the Commission's subsequent action was intended to correct. For all these indicate that prior to and at the time of the issuance of the Seatrain certificate it was the understanding of Seatrain and the Commission that its transportation of 'commodities generally' included carriage of freight cars and that carriage of freight cars would not exclude carriage of commodities generally. Moreover, the Seatrain application was not reopened for consideration by the Commission until its decision in Foss Launch & Tug Co., 260 I.C.C. 103, decided December 18, 1943. There the Commission pointedly ruled for the first time that a certificate to carry 'commodities generally' did not authorize water carriage of loaded or unloaded freight cars—so-called 'car-ferry service.' Thus it seems apparent that the Seatrain proceedings were reopened not to correct a mere clerical error, but to execute the new policy announced in the Foss case. This conclusion is supported by the fact that in prior proceedings involving Seatrain, the Commission had rejected the contention that Seatrain's vessels could be classed as 'car ferries,' and had concluded that they were ocean going water carriers.2 8 Since the proceedings apparently were not reopened to correct a mere clerical error but were more likely an effort to revoke or modify substantially Seatrain's original certificate under the new policy announced in the Foss case, the question remains whether the Act authorizes such alterations. The water carrier provisions are part of the general pattern of the Interstate Commerce Act which grants the Commission power to regulate railroads and motor carriers as well as water carriers.3 The Commission is authorized to issue certificates to all three types of carriers. But it is specifically empowered to revoke only the certificates of motor carriers. Section 212(a), Part II, Interstate Commerce Act, 49 Stat. 555, 49 U.S.C. § 312(a), 49 U.S.C.A. § 312(a). In fact, when the water carrier provisions were pending in Congress, the Commission's spokesman, Commissioner Eastman, seems specifically to have requested the Congress to include no power to revoke a certificate. The Commissioner explained that while the power to revoke motor carriers' certificates was essential as an effective means of enforcement of the motor carrier section, it was not necessary to use such sanctions in the regulation of water carriers.4 It is contended nonetheless that the Commission has greater power to revoke water carrier certificates, where Congress granted no specific authority at a l, than to cancel and revoke motor carrier certificates where specific but limited authority was granted. But in ruling upon its power to revoke motor carrier certificates, the Commission itself has held that unless it can find a reason to revoke a motor carrier's certificate, which reason is specifically set out in § 212(a), it cannot revoke such a certificate under its general statutory power to alter orders previously made. Smith Bros. Revocation of Order, 33 M.C.C. 465. 9 It is argued, however, that this proceeding does not effect a partial revocation of Seatrain's certificate, but is merely an exercise of the Commission's statutory power under § 309(d) to fix 'terms, conditions, and limitations' for water carrier certificate holders. Whether the Commission could, under this authority, have imposed a restriction in an original certificate as to the type of service a water carrier could utilize to serve its shippers best is by no means free from doubt. Yet the alleged authority to alter a certificate after it has been finally granted so as to limit the type of service is certainly no greater than the Commission's authority to limit the type of service when issuing the original certificate. It is of some significance that § 208, 49 U.S.C.A. § 308, which prescribes the authority of the Commission in granting certificates to motor carriers authorizes the Commission to 'specify the service to be rendered' by those carriers. But § 309 which empowers the Commission to grant certificates to water carriers does not authorize the Commission to specify 'the service to be rendered.' Furthermore, § 309(d) relating to water carrier certificates specifically provides 'That no terms, conditions, or limitations shall restrict the right of the carrier to add to its equipment, facilities, or service within the scope of such certificate, as the development of the business and the demands of the public shall require * * *'. The language of this section would seem to preclude the Commission from attaching terms and conditions to a certificate which would deprive the public of the best type of service which could be rendered between ports by a water carrier. In view of this difference between the statutory authority of the Commission to prescribe the service of water carriers and of motor carriers, our decisions relating to the Commission's power as to motor carriers in this respect5 are not controlling as to the Commission's power to regulate the details of the service of water carriers. We can find no authority for alteration of Seatrain's certificate from the Commission's power to fix 'terms and conditions.' 10 Nor do we think that the Commission's ruling was justified by the language of § 315(c), 49 U.S.C.A. § 915(c), which authorizes it to 'suspend, modify, or set aside its orders under this part upon such notice and in such manner as it shall deem proper.' That the word 'order', as here used, was intended to describe something different from the word 'certificate' used in other places, is clearly shown by the way both these words are used in the Act. Section 309 describes the certificate, the method of obtaining it, and its scope and effect, but it nowhere refers to the word 'order.' Section 315 of the Act, having specific reference to orders, and which in subsection (c), here relied on, authorizes suspension, alteration, or modification of orders, nowhere mentions the word 'certificate.'6 It is clear that the 'orders' referred to in 315(c) are formal commands of the Commission relating to its procedure and the rates, fares, practices, and like things coming within its authority. But as the Commission has said, as to motor carrier certificates, while the procedural 'orders' antecedent to a water carrier certificate can be modified from time to time, the certificate marks the end of that proceeding.7 The certificate, when finally granted, and the time fixed for rehearing it has passed, is not subject to revocation in whole or in part except as specifically authorized by Congress. Consequently, the Commission was without authority to revoke Seatrain's certificate. That certificate, properly interpreted, authorized it to carry commodities generally, including freight cars on the routes for which the certificate originally issued. The judgment of the District Court is affirmed. 11 Affirmed. 12 Mr. Justice RUTLEDGE concurs in the result. 1 For a description of Seatrain equipment, see Investigation of Seatrain Lines, Inc., 195 I.C.C. 215, 218—222. 2 See Investigation of Seatrain Lines, Inc., supra; Seatrain Lines, Inc. v. Akron C. & Y. Ry., 226 I.C.C. 7; Hoboken Manufacturers R.R. v. Abilene & So. Ry. Co., 248 I.C.C. 109, but see Commissioner Patterson dissenting, id. at 120. 3 24 Stat. 379, as amended, 49 U.S.C. § 1 et seq., 49 U.S.C.A. § 1 et seq. (railroads); 49 Stat. 543, 54 Stat. 919, 49 U.S.C. § 301 et seq., 49 U.S.C.A. § 301 et seq. (motor carriers); 54 Stat. 929, 49 U.S.C. § 901 et seq., 49 U.S.C.A. § 901 et seq. (water carriers). 4 Commissioner Eastman, Chairman of the Commission's Legislative Committee, reporting to the Senate Committee on Interstate and Foreign Commerce on S. 2009 on January 29, 1940, stated, 'This bill leaves section 212(a) unchanged and has no corresponding provision in the new part III. While there is room for argument we are inclined to believe that provision for the revocation or suspension of water-carrier certificates is not essential if adequate penalty provisions are provided for violation of part III. Revocation or suspension, in the case of motor carriers, is believed to be the most effective means of enforcement since there are so many such carriers and the operations of the great majority are so small, that enforcement through penal actions in courts presents many practical difficulties, but this is not true of water carriers.' 5 Chicago, St. P., M. & O. Ry. v. U.S., 322 U.S. 1, 64 S.Ct. 842, 88 L.Ed. 1093; Crescent Express Lines v. U.S., 320 U.S. 401, 64 S.Ct. 167, 88 L.Ed. 127: Noble v. U.S., 319 U.S. 88, 63 S.Ct. 950, 87 L.Ed. 1277. See also Smith Bros. Revocation of Certific te, 33 M.C.C. 465; Quaker City Bus Co., 38 M.C.C. 603. 6 And §§ 316 and 317 of the Act, 49 U.S.C.A. §§ 916, 917, pointedly treat an order as one thing and a certificate as another. 7 See Smith Bros. Revocation of Certificate, supra, Quaker City Bus Co., supra.

78

329 U.S. 495 67 S.Ct. 385 91 L.Ed. 451 HICKMANv.TAYLOR et al. No. 47. Argued Nov. 13, 1946. Decided Jan. 13, 1947. [Syllabus from pages 495-497 intentionally omitted] Mr.Abraham E. Freedman, of Philadelphia, Pa., for petitioner. Messrs. William I. Radner, of Washington, D.C., and Samuel B. Fortenbaugh, Jr., of Philadelphia, Pa., for respondents. Mr. Justice MURPHY delivered the opinion of the Court. 1 This case presents an important problem under the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, as to the extent to which a party may inquire into oral and written statements of witnesses, or other information, secured by an adverse party's counsel in the course of preparation for possible litigation after a claim has arisen. Examination into a person's files and records, including those resulting from the professional activities of an attorney, must be judged with care. It is not without reason that various safeguards have been established to preclude unwarranted excursions into the privacy of a man's work. At the same time, public policy supports reasonable and necessary inquiries. Properly to balance these competing interests is a delicate and difficult task. 2 On February 7, 1943, the tug 'J. M. Taylor' sank while engaged in helping to tow a car float of the Baltimore & Ohio Railroad across the Delaware River at Philadelphia. The accident was apparently unusual in nature, the cause of it still being unknown. Five of the nine crew members were drowned. Three days later the tug owners and the underwriters employed a law firm, of which responden Fortenbaugh is a member, to defend them against potential suits by representatives of the deceased crew members and to sue the railroad for damages to the tug. 3 A public hearing was held on March 4, 1943, before the United States Steamboat Inspectors, at which the four survivors were examined. This testimony was recorded and made available to all interested parties. Shortly thereafter, Fortenbaugh privately interviewed the survivors and took statements from them with an eye toward the anticipated litigation; the survivors signed these statements on March 29. Fortenbaugh also interviewed other persons believed to have some information relating to the accident and in some cases he made memoranda of what they told him. At the time when Fortenbaugh secured the statements of the survivors, representatives of two of the deceased crew members had been in communication with him. Ultimately claims were presented by representatives of all five of the deceased; four of the claims, however, were settled without litigation. The fifth claimant, petitioner herein, brought suit in a federal court under the Jones Act on November 26, 1943, naming as defendants the two tug owners, individually and as partners, and the railroad. 4 One year later, petitioner filed 39 interrogatories directed to the tug owners. The 38th interrogatory read: 'State whether any statements of the members of the crews of the Tugs 'J. M. Taylor' and 'Philadelphia' or of any other vessel were taken in connection with the towing of the car float and the sinking of the Tug 'John M. Taylor'. 5 Attach hereto exact copies of all such statements if in writing, and if oral, set forth in detail the exact provisions of any such oral statements or reports.' 6 Supplemental interrogatories asked whether any oral or written statements, records, reports or other memoranda had been made concerning any matter relative to the towing operation, the sinking of the tug, the salvaging and repair of the tug, and the death of the deceased. If the answer was in the affirmative, the tug owners were then requested to set forth the nature of all such records, reports, statements or other memoranda. 7 The tug owners, through Fortenbaugh, answered all of the interrogatories except No. 38 and the supplemental ones just described. While admitting that statements of the survivors had been taken, they declined to summarize or set forth the contents. They did so on the ground that such requests called 'for privileged matter obtained in preparation for litigation' and constituted 'an attempt to obtain indirectly counsel's private files.' It was claimed that answering these requests 'would involve practically turning over not only the complete files, but also the telephone records and, almost, the thoughts of counsel.' 8 In connection with the hearing on these objections, Fortenbaugh made a written statement and gave an informal oral deposition explaining the circumstances under which he had taken the statements. But he was not expressly asked in the deposition to produce the statements. The District Court for the Eastern District of Pennsylvania, sitting en banc, held that the requested matters were not privileged. 4 F.R.D. 479. The court then decreed that the tug owners and Fortenbaugh, as counsel and agent for the tug owners forthwith 'Answer Plaintiff's 38th interrogatory and supplemental interrogatories; produce all written statements of witnesses obtained by Mr. Fortenbaugh, as counsel and agent for Defendants; state in substance any fact concerning this case which Defendants learned through oral statements made by witnesses to Mr. Fortenbaugh whether or not included in his private memoranda and produce Mr. Fortenbaugh's memoranda containing statements of fact by witnesses or to submit these memoranda to the Court for determination of those portions which should be revealed to Plaintiff.' Upon their refusal, the court adjudged them in contempt and ordered them imprisoned until they complied. 9 The Third Circuit Court of Appeals, also sitting en banc, reversed the judgment of the District Court. 153 F.2d 212. It held that the information here sought was part of the 'work product of the lawyer' and hence privileged from discovery under the Federal Rules of Civil Procedure. The importance of the problem, which has engendered a great divergence of views among district courts,1 led us to grant certiorari. 328 U.S. 876, 66 S.Ct. 1337. 10 The pre-trial deposition-discovery mechanism established by Rules 26 to 37 is one of the most significant innovations of the Federal Rules of Civil Procedure. Under the prior federal practice, the pre-trial functions of notice-giving issue-formulation and fact-revelation were performed primarily and inadequately by the pleadings.2 Inquiry into the issues and the facts before trial was narrowly confined and was often cumbersome in method.3 The new rules, however, restrict the pleadings to the task of general notice-giving and invest the deposition-discovery process with a vital role in the preparation for trial. The various instruments of discovery now serve (1) as a device, along with the pre-trial hearing under Rule 16, to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts, or information as to the existence or whereabouts of facts, relative to those issues. Thus civil trials in the federal courts no longer need be carried on in the dark. The way is now clear, consistent with recognized privileges, for the parties to obtain the fullest possible knowledge of the issues and facts before trial.4 11 There is an initial question as to which of the deposition-discovery rules is involved in this case. Petitioner, in filing his interrogatories, thought that he was proceeding under Rule 33. That rule provides that a party may serve upon any adverse party written interrogatories to be answered by the party served.5 The District Court proceeded on the same assumption in its opinion, although its order to produce and its contempt order stated that both Rules 33 and 34 were involved. Rule 34 establishes a procedure whereby, upon motion of any party showing good cause therefor and upon notice to all other parties, the court may order any party to produce and permit the inspection and copying or photographing of any designated documents, etc., not privileged, which constitute or contain evidence material to any matter involved in the action and which are in his possession, custody or control.6 12 The Circuit Court of Appeals, however, felt that Rule 26 was the crucial one. Petitioner, it said, was proceeding by interrogatories and, in connection with those interrogatories, wanted copies of memoranda and statements secured from witnesses. While the court believed that Rule 33 was involved, at least as to the defending tug owners, it stated that this rule could not be used as the basis for condemning Fortenbaugh's failure to disclose or produce the memoranda and statements, since the rule applies only to interrogatories addressed to adverse parties, not to their agents or counsel. And Rule 34 was said to be inapplicable since petitioner was not trying to see an original document and to copy or photograph it, within the scope of that rule. The court then concluded that Rule 26 must be the one really involved. That provides that the testimony of any person, whether a party or not, may be taken by any party by deposition upon oral examination or written interrogatories for the purpose of discovery or for use as evidence; and that the deponent may be examined regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether relating to the claim or defense of the examining party or of any other party, including the existence, description, nature, custody, condition and location of any books, documents or other tangible things.7 13 The matter is not without difficulty in light of the events that transpired below. We believe, however, that petitioner was proceeding primarily under Rule 33. He addressed simple interrogatories solely to the individual tug owners, the adverse parties, as contemplated by that rule. He did not, and could not under Rule 33, address such interrogatories to their counsel, Fortenbaugh. Nor did he direct these interrogatories either to the tug owners or to Fortenbaugh by way of deposition; Rule 26 thus could not come into operation. And it does not appear from the record that petitioner filed a motion under Rule 34 for a court order directing the producetion of the documents in question. Indeed, such an order could not have been entered as to Fortenbaugh since Rule 34, like Rule 33, is limited to parties to the proceeding, thereby excluding their counsel or agents. 14 Thus to the extent that petitioner was seeking the production of the memoranda and statements gathered by Fortenbaugh in the course of his activities as counsel, petitioner misconceived his remedy. Rule 33 did not permit him to obtain such memoranda and statements as dejuncts to the interrogatories addressed to the individual tug owners. A party clearly cannot refuse to answer interrogatories on the ground that the information sought is solely within the knowledge of his attorney. But that is not this case. Here production was sought of documents prepared by a party's attorney after the claim has arisen. Rule 33 does not make provision for such production, even when sought in connection with permissible interrogatories. Moreover, since petitioner was also foreclosed from securing them through an order under Rule 34, his only recourse was to take Fortenbaugh's deposition under Rule 26 and to attempt to force Fortenbaugh to produce the materials by use of a subpoena duces tecum in accordance with Rule 45. Holtzoff, 'Instruments of Discovery under the Federal Rules of Civil Procedure,' 41 Mich.L.Rev. 205, 220. But despite petitioner's faulty choice of action, the District Court entered an order, apparently under Rule 34, commanding the tug owners and Fortenbaugh, as their agent and counsel, to produce the materials in question. Their refusal led to the anomalous result of holding the tug owners in contempt for failure to produce that which was in the possession of their counsel and of holding Fortenbaugh in contempt for failure to produce that which he could not be compelled to produce under either Rule 33 or Rule 34. 15 But under the circumstances we deem it unnecessary and unwise to rest our decision upon this procedural irregularity, an irregularity which is not strongly urged upon us and which was disregarded in the two courts below. It matters little at this later stage whether Fortenbaugh fails to answer interrogatories filed under Rule 26 or under Rule 33 or whether he refuses to produce the memoranda and statements pursuant to a subpoena under Rule 45 or a court order under Rule 34. The deposition-discovery rules create integrated procedural devices. And the basic question at stake is whether any of those devices may be used to inquire into materials collected by an adverse party's counsel in the course of preparation for possible litigation. The fact that the petitioner may have used the wrong method does not destroy the main thrust of his attempt. Nor does it relieve us of the responsibility of dealing with the problem raised by that attempt. It would be inconsistent with the liberal atmosphere surrounding these rules to insist that petitioner now go through the empty formality of pursuing the right procedural device only to reestablish precisely the same basic problem now confronting us. We do not mean to say, however, that there may not be situations in which the failure to proceed in accordance with a specific rule would be important or decisive. But in the present circumstances, for the purposes of this decision, the procedural irregularity is not material. Having noted the proper procedure, we may accordingly turn our attention to the substance of the underlying problem. 16 In urging that he has a right to inquire into the materials secured and prepared by Fortenbaugh, petitioner emphasizes that the deposition-discovery portions of the Federal Rules of Civil Procedure are designed to enable the parties to discover the true facts and to compel their disclosure wherever they may be found. It is said that inquiry may be made under these rules, epitomized by Rule 26, as to any relevant matter which is not privileged; and since the discovery provisions are to be applied as broadly and liberally as possible, the privilege limitation must be restricted to its narrowest bounds. On the premise that the attorney-client privilege is the one involved in this case, petitioner argues that it must be strictly confined to confidential communications made by a client to his attorney. And since the materials here in issue were secured by Fortenbaugh from third persons rather than from his clients, the tug owners, the conclusion is reached that these materials are proper subjects for discovery under Rule 26. 17 As additional support for this result, petitioner claims that to prohibit discovery under these circumstances would give a corporate defendant a tremendous advantage in a suit by an individual plaintiff. Thus in a suit by an injured employee against a railroad or in a suit by an insured person against an insurance company the corporate defendant could pull a dark veil of secrecy over all the petinent facts it can collect after the claim arises merely on the assertion that such facts were gathered by its large staff of attorneys and claim agents. At the same time, the individual plaintiff, who often has direct knowledge of the matter in issue and has no counsel until some time after his claim arises could be compelled to disclose all the intimate details of his case. By endowing with immunity from disclosure all that a lawyer discovers in the course of his duties, it is said, the rights of individual litigants in such cases are drained of vitality and the lawsuit becomes more of a battle of deception than a search for truth. 18 But framing the problem in terms of assisting individual plaintiffs in their suits against corporate defendants is unsatisfactory. Discovery concededly may work to the disadvantage as well as to the advantage of individual plaintiffs. Discovery, in other words, is not a one-way proposition. It is available in all types of cases at the behest of any party, individual or corporate, plaintiff or defendant. The problem thus far transcends the situation confronting this petitioner. And we must view that problem in light of the limitless situations where the particular kind of discovery sought by petitioner might be used. 19 We agree, of course, that the deposition-discovery rules are to be accorded a broad and liberal treatment. No longer can the time-honored cry of 'fishing expedition' serve to preclude a party from inquiring into the facts underlying his opponent's case.8 Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession. The deposition-discovery procedure simply advances the stage at which the disclosure can be compelled from the time of trial to the period preceding it, thus reducing the possibility of surprise. But discovery, like all matters of procedure, has ultimate and necessary boundaries. As indicated by Rules 30(b) and (d) and 31(d), limitations inevitably arise when it can be shown that the examination is being conducted in bad aith or in such a manner as to annoy, embarrass or oppress the person subject to the inquiry. And as Rule 26(b) provides, further limitations come into existence when the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege. 20 We also agree that the memoranda, statements and mental impressions in issue in this case fall outside the scope of the attorney-client privilege and hence are not protected from discovery on that basis. It is unnecessary here to delineate the content and scope of that privilege as recognized in the federal courts. For present purposes, it suffices to note that the protective cloak of this privilege does not extend to information which an attorney secures from a witness while acting for his client in anticipation of litigation. Nor does this privilege concern the memoranda, briefs, communications and other writings prepared by counsel for his own use in prosecuting his client's case; and it is equally unrelated to writings which reflect an attorney's mental impressions, conclusions, opinions or legal theories. 21 But the impropriety of invoking that privilege does not provide an answer to the problem before us. Petitioner has made more than an ordinary request for relevant, non-privileged facts in the possession of his adversaries or their counsel. He has sought discovery as of right of oral and written statements of witnesses whose identity is well known and whose availability to petitioner appears unimpaired. He has sought production of these matters after making the most searching inquiries of his opponents as to the circumstances surrounding the fatal accident, which inquiries were sworn to have been answered to the best of their information and belief. Interrogatories were directed toward all the events prior to, during and subsequent to the sinking of the tug. Full and honest answers to such broad inquiries would necessarily have included all pertinent information gleaned by Fortenbaugh through his interviews with the witnesses. Petitioner makes no suggestion, and we cannot assume, that the tug owners or Fortenbaugh were incomplete or dishonest in the framing of their answers. In addition, petitioner was free to examine the public testimony of the witnesses taken before the United States Steamboat Inspectors. We are thus dealing with an attempt to secure the production of written statements and mental impressions contained in the files and the mind of the attorney Fortenbaugh without any showing of necessity or any indication or claim that denial of such production would unduly prejudice the preparation of petitioner's case or cause him any hardship or injustice. For aught that appears, the essence of what petitioner seeks either has been revealed to him already through the interrogatories or is readily available to him direct from the witnesses for the asking. 22 The District Court, after hearing objections to petitioner's request, commanded Fortenbaugh to produce all written statements of witnesses and to state in substance any facts learned through oral statements of witnesses to him. Fortenbaugh was to submit any memoranda he had made of the oral statements so that the court might determine what portions should be revealed to petitioner. All of this was ordered without any showing by petitioner, or any requirement that he make a proper showing, of the necessity for the production of any of this material or any demonstration that denial of production would cause hardship or injustice. The court simply ordered production on the theory that the facts sought were material and were not privileged as constituting attorney-client communications. 23 In our opinion, neither Rule 26 nor any oth r rule dealing with discovery contemplates production under such circumstances. That is not because the subject matter is privileged or irrelevant, as those concepts are used in these rules.9 Here is simply an attempt, without purported necessity or justification, to secure written statements, private memoranda and personal recollections prepared or formed by an adverse party's counsel in the course of his legal duties. As such, it falls outside the arena of discovery and contravenes the public policy underlying the orderly prosecution and defense of legal claims. Not even the most liberal of discovery theories can justify unwarranted inquiries into the files and the mental impressions of an attorney. 24 Historically, a lawyer is an officer of the court and is bound to work for the advancement of justice while faithfully protecting the rightful interests of his clients. In performing his various duties, however, it is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel. Proper preparation of a client's case demands that he assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue and needless interference. That is the historical and the necessary way in which lawyers act within the framework of our system of jurisprudence to promote justice and to protect their clients' interests. This work is reflected, of course, in interviews, statements, memoranda, correspondence, briefs, mental impressions, personal beliefs, and countless other tangible and intangible ways—aptly though roughly termed by the Circuit Court of Appeals in this case (153 F.2d 212, 223) as the 'Work product of the lawyer.' Were such materials open to opposing counsel on mere demand, much of what is now put down in writing would remain unwritten. An attorney's thoughts, heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advice and in the preparation of cases for trial. The effect on the legal profession would be demoralizing. And the interests of the clients and the cause of justice would be poorly served. 25 We do not mean to say that all written materials obtained or prepared by an adversary's counsel with an eye toward litigation are necessarily free from discovery in all cases. Where relevant and non-privileged facts remain hidden in an attorney's file and where production of those facts is essentia to the preparation of one's case, discovery may properly be had. Such written statements and documents might, under certain circumstances, be admissible in evidence or give clues as to the existence or location of relevant facts. Or they might be useful for purposes of impeachment or corroboration. And production might be justified where the witnesses are no longer available or can be reached only with difficulty. Were production of written statements and documents to be precluded under such circumstances, the liberal ideals of the deposition-discovery portions of the Federal Rules of Civil Procedure would be stripped of much of their meaning. But the general policy against invading the privacy of an attorney's course of preparation is so well recognized and so essential to an orderly working of our system of legal procedure that a burden rests on the one who would invade that privacy to establish adequate reasons to justify production through a subpoena or court order. That burden, we believe, is necessarily implicit in the rules as now constituted.10 26 Rule 30(b), as presently written, gives the trial judge the requisite discretion to make a judgment as to whether discovery should be allowed as to written statements secured from witnesses. But in the instant case there was no room for that discretion to operate in favor of the petitioner. No attempt was made to establish any reason why Fortenbaugh should be forced to produce the written statements. There was only a naked, general demand for these materials as of right and a finding by the District Court that no recognizable privilege was involved. That was insufficient to justify discovery under these circumstances and the court should have sustained the refusal of the tug owners and Fortenbaugh to produce. 27 But as to oral statements made by witnesses to Fortenbaugh, whether presently in the form of his mental impressions or memoranda, we do not believe that any showing of necessity can be made under the circumstances of this case so as to justify production. Under ordinary conditions, forcing an attorney to repeat or write out all that witnesses have told him and to deliver the account to his adversary gives rise to grave dangers of inaccuracy and untrustworthiness. No legitimate purpose is served by such production. The practice forces the attorney to testify as to what he remembers or what he saw fit to write down regarding witnesses' remarks. Such testimony could not qualify as evidence; and to use it for impeachment or corroborative purposes would make the attorney much less an officer of the court and much more an ordinary witness. The standards of the profession would thereby suffer. 28 Denial of production of this nature does not mean that any material, non-privileged facts can be hidden from the petitioner in this case. He need not be unduly hindered in the preparation of his case, in the discovery of facts or in his anticipation of his opponents' position. Searching interrogatories directed to Fortenbaugh and the tug owners, production of written documents and statements upon a proper showing and direct interviews with the witnesses themselves all serve to reveal the facts in Fortenbaugh's possession to the fullest possible extent consistent with public policy. Petitioner's counsel frankly admits that he wants the oral statements only to help prepare himself to examine witnesses and to make sure that he has overlooked nothing. That is insufficient under the circumstances to permit him an exception to the policy underlying the privacy of Fortenbaugh's professional activities. If there should be a rare situation justifying production of these matters, petitioner's case is not of that type. 29 We fully appreciate the w de-spread controversy among the members of the legal profession over the problem raised by this case.11 It is a problem that rests on what has been one of the most hazy frontiers of the discovery process. But until some rule or statute definitely prescribes otherwise, we are not justified in permitting discovery in a situation of this nature as a matter of unqualified right. When Rule 26 and the other discovery rules were adopted, this Court and the members of the bar in general certainly did not believe or contemplate that all the files and mental processes of lawyers were thereby opened to the free scrutiny of their adversaries. And we refuse to interpret the rules at this time so as to reach so harsh and unwarranted a result. 30 We therefore affirm the judgment of the Circuit Court of Appeals. 31 Affirmed. 32 Mr. Justice JACKSON, concurring. 33 The narrow question in this case concerns only one of thirty-nine interrogatories which defendants and their counsel refused to answer. As there was persistence in refusal after the court ordered them to answer it, counsel and clients were committed to jail by the district court until they should purge themselves of contempt. 34 The interrogatory asked whether statements were taken from the crews of the tugs involved in the accident, or of any other vessel, and demanded 'Attach hereto exact copies of all such statements if in writing, and if oral, set forth in detail the exact provisions of any such oral statements or reports.' The question is simply whether such a demand is authorized by the rules relating to various aspects of 'discovery'. 35 The primary effect of the practice advocated here would be on the legal profession itself. But it too often is overlooked that the lawyer and the law office are indispensable parts of our administration of justice. Law-abiding people can go nowhere else to learn the ever changing and constantly multiplying rules by which they must behave and to obtain redress for their wrongs. The welfare and tone of the legal profession is therefore of prime consequence to society, which would feel the consequences of such a practice as petitioner urges secondarily but certainly. 36 'Discovery' is one of the working tools of the legal profession. It traces back to the equity bill of discovery in English Chancery practice and seems to have had a forerunner in Continental practice. See Ragland, Discovery Before Trial (1932) 13-16. Since 1848 when the draftsmen of New York's Code of Procedure recognized the importance of a better system of discovery, the impetus to extend and expand discovery, as well as the opposition to it, has come from within the Bar itself. It happens in this case that it is the plaintiff's attorney who demands such unprecedented latitude of discovery and, strangely enough, amicus briefs in his support have been filed by several labor unions representing plaintiffs as a class. It is the history of the movement for broader discovery, however, that in actual experience the chief opposition to its extension has come from lawyers who specialize in representing plaintiffs because defendants have made liberal use of it to force plaintiffs to disclose their cases in advance. See Report of the Commission on the Administration of Justice in New York State (1934) 330, 331; Ragland, Discovery Before Trial (1932) 35, 36. Discovery is a two-edged sword and we cannot decide this problem on any doctrine of extending help to one class of litigants. 37 It seems clear and long has been recognized that discovery should provide a party access to anything that is evidence in his case. Cf. Report of Commission on the Administration of Justice in New York State (1934) 41, 42. It seems equally clear that discovery should not nullify the privilege of confidential communication between attorney and client. But those principles give us no real assistance here because what is being sought is neither evidence nor is it a privileged communication between attorney and client. 38 To consider first the most extreme aspect of the requirement in litigation here, we find it calls upon counsel, if he has had any conversations with any of the crews of the vessels in question or of any other, to 'set forth in detail the exact provision of any such oral statements or reports.' Thus the demand is not for the production of a transcript in existence but calls for the creation of a written statement not in being. But the statement by counsel of what a witness told him is not evidence when written plaintiff could not introduce it to prove his case. What, then, is the purpose sought to be served by demanding this of adverse counsel? 39 Counsel for the petitioner candidly said on argument that he wanted this information to help prepare himself to examine witnesses, to make sure he overlooked nothing. He bases his claim to it in his brief on the view that the Rules were to do away with the old situation where a law suit developed into 'a battle of wits between counsel.' But a common law trial is and always should be an adversary proceeding. Discovery was hardly intended to enable a learned profession to perform its functions either without wits or on wits borrowed from the adversary. 40 The real purpose and the probable effect of the practice ordered by the district court would be to put trials on a level even lower than a 'battle of wits.' I can conceive of no practice more demoralizing to the Bar than to require a lawyer to write out and deliver to his adversary an account of what witnesses have told him. Even if his recollection were perfect, the statement would be his language permeated with his inferences. Every one who has tried it knows that it is almost impossible so fairly to record the expressions and emphasis of a witness that when he testifies in the environment of the court and under the influence of the leading question there will not be departures in some respects. Whenever the testimony of the witness would differ from the 'exact' statement the lawyer had delivered, the lawyer's statement would be whipped out to impeach the witness. Counsel producing his adversary's 'inexact' statement could lose nothing by saying, 'Here is a contradiction, gentlemen of the jury. I do not know whether it is my adversary or his witness who is not telling the truth, but one is not.' Of course, if this practice were adopted, that scene would be repeated over and over again. The lawyer who delivers such statements often would find himself branded a deceiver afraid to take the stand to support his own version of the witness's conversation with him, or else he will have to go on the stand to defend his own credibility—perhaps against that of his chief witness, or possibly even his client. 41 Every lawyer dislikes to take the witness stand and will do so only for grave reasons. This is partly because it is not his role; he is almost invariably a poor witness. But he steps out of professional character to do it. He regrets it; the profession discourages it. But the practice advocated here is one which would force him to be a witness, not as to what he has seen or done but as to other witnesses' stories, and not because he wants to do so but in self-defense. 42 And what is the lawyer to do who has interviewed one whom he believes to be a biased, lying or hostile witness to get his unfavorable statements and know what to meet? He must record and deliver such statements even though he would not vouch for the credibility of the witness by calling him. Perhaps the other side would not want to call him either, but the attorney is open to the charge of suppressi g evidence at the trial if he fails to call such a hostile witness even though he never regarded him as reliable or truthful. 43 Having been supplied the names of the witnesses, petitioner's lawyer gives no reason why he cannot interview them himself. If an employee-witness refuses to tell his story, he, too, may be examined under the Rules. He may be compelled on discovery as fully as on the trial to disclose his version of the facts. But that is his own disclosure—it can be used to impeach him if he contradicts it and such a deposition is not useful to promote an unseemly disagreement between the witness and the counsel in the case. 44 It is true that the literal language of the Rules would admit of an interpretation that would sustain the district court's order. So the literal language of the Act of Congress which makes 'Any writing or record * * * made as a memorandum or record of any * * * occurrence, or event,' 28 U.S.C.A. § 695, admissible as evidence, would have allowed the railroad company to put its engineer's accident statements in evidence. Cf. Palmer v. Hoffman, 318 U.S. 109, 111, 63 S.Ct. 477, 479, 87 L.Ed. 645, 144 A.L.R. 719. But all such procedural measures have a background of custom and practice which was assumed by those who wrote and should be by those who apply them. We reviewed the background of the Act and the consequences on the trial of negligence cases of allowing railroads and others to put in their statements and thus to shield the crew from cross-examination. We said, 'Such a major change which opens wide the door to avoidance of cross-examination should not be left to implication.' 318 U.S. at page 114, 63 S.Ct. at page 481. We pointed out that there, as here, the 'several hundred years of history behind the Act * * * indicate the nature of the reforms which it was designed to effect.' 318 U.S. at page 115, 63 S.Ct. at page 481. We refused to apply it beyond that point. We should follow the same course of reasoning here. Certainly nothing in the tradition or practice of discovery up to the time of these Rules would have suggested that they would authorize such a practice as here proposed. 45 The question remains as to signed statements or those written by witnesses. Such statements are not evidence for the defendant. Palmer v. Hoffman, 318 U.S. 109, 63 S.Ct. 477. Nor should I think they ordinarily could be evidence for the plaintiff. But such a statement might be useful for impeachment of the witness who signed it, if he is called and if he departs from the statement. There might be circumstances, too, where impossibility or difficulty of access to the witness or his refusal to respond to requests for information or other facts would show that the interests of justice require that such statements be made available. Production of such statements are governed by Rule 34 and on 'Showing good cause therefor' the court may order their inspection, copying or photographing. No such application has here been made; the demand is made on the basis of right, not on showing of cause. 46 I agree to the affirmance of the judgment of the Circuit Court of Appeals which reversed the district court. 47 Mr. Justice FRANKFURTER joins in this opinion. 1 See cases collected by Advisory Committee on Rules for Civil Procedure in its Report of Proposed Amendments (June, 1946), pp. 40—47; 5 F.R.D. 433, 457—460. See also 2 Moore's Federal Practice (1945 Cum.Supp.), § 26.12, pp. 155—159; Holtzoff, 'Instruments of Discovery under Federal Rules of Civil Procedure,' 41 Mich.L.Rev. 205, 210—212; Pike and Willis, 'Federal Discovery in Operation,' 7 Univ. of Chicago L.Rev. 297, 301—307. 2 'The great weakness of pleading as a means for developing and presenting issues of fact for trial lay in its total lack of any means for testing the factual basis for the pleader's allegations and denials.' Sunderland, 'The Theory and Practice of Pre-Trial Procedure,' 36 Mich.L.Rev. 215, 216. See also Ragland, Discovery Before Trial (1932), ch. I. 3 2 Moore's Federal Proctice (1938), § 26.02, pp. 2445, 2455. 4 Pike and Willis, 'The New Federal Deposition-Discovery Procedure,' 38 Col.L.Rev. 1179, 1436; Pike, 'The New Federal Deposition-Discovery Procedure and the Rules of Evidence,' 34 Ill.L.Rev. 1. 5 Rule 33 reads: 'Any party may serve upon any adverse party written interrogatories to be answered by the party served or, if the party served is a public or private corporation or a partnership or association, by any officer thereof competent to testify in its behalf. The interrogatories shall be answered separately and fully in writing under oath. The answers shall be signed by the person making them; and the party upon whom the interrogatories have been served shall serve a copy of the answers on the party submitting the interrogatories within 15 days after the delivery of the interrogatories, unless the court, on motion and notice and for good cause shown, enlarges or shortens the time. Objections to any interrogatories may be presented to the court within 10 days after service thereof, with notice as in case of a motion; and answers shall be deferred until the objections are determined, which shall be at as early a time as is practicable. No party may, without leave of court, serve more than one set of interrogatories to be answered by the same party.' 6 Rule 34 provides: 'Upon motion of any party showing good cause therefor and upon notice to all other parties, the court in which an action is pending may (1) order any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, letters, photographs, objects, or tangible things, not privileged, which constitute or contain evidence material to any matter involved in the action and which are in his possession, custody, or control; or (2) order any party to permit entry upon designated land or other property in his possession or control for the purpose of inspecting, measuring, surveying, or photographing the property or any designated relevant object or operation thereon. The order shall specify the time, place, and manner of making the inspection and taking the copies and photographs and may prescribe such terms and conditions as are just.' 7 The relevant portions of Rule 26 provide as follows: '(a) When Depositions May be Taken. By leave of court after jurisdiction has been obtained over any defendant or over property which is the subject of the action or without such leave after an answer has been served, the testimony of any person, whether a party or not, may be taken at the instance of any party by deposition upon oral examination or written interrogatories for the purpose of discovery or for use as evidence in the action or for both purposes. The attendance of witnesses may be compelled by the use of subpoena as provided in Rule 45. Depositions shall be taken only in accordance with these rules. The deposition of a person confined in prison may be taken only by leave of court on such terms as the court prescribes. (b) Scope of Examination. Unless otherwise ordered by the court as provided by Rule 30(b) or (d), the deponent may be examined regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether relating t the claim or defense of the examining party or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts.' 8 'One of the chief arguments against the 'fishing expedition' objection is the idea that discovery is mutual—that while a party may have to disclose his case, he can at the same time tie his opponent down to a definite position.' Pike and Willis, 'Federal Discovery in Operation,' 7 Univ. of Chicago L.Rev. 297, 303. 9 The English courts have developed the concept of privilege to include all documents prepared by or for counsel with a view to litigation. 'All documents which are called into existence for the purpose—but not necessarily the sole purpose—of assisting the deponent or his legal advisers in any actual or anticipated litigation are privileged from production. * * * Thus all proofs, briefs, draft pleadings, etc., are privileged; but not counsel's indorsement on the outside of his brief * * *, nor any deposition or notes of evidence given publicly in open Court. * * * So are all papers prepared by any agent of the party bona fide for the use of his solicitor for the purposes of the action, whether in fact so used or not. * * * Reports by a company's servant, if made in the ordinary course of routine, are not privileged, even though it is desirable that the solicitor should have them and they are subsequently sent to him; but if the solicitor has requested that such documents shall always be prepared for his use and this was one of the reasons why they were prepared, they need not by disclosed.' Odgers on Pleading and Practice (12th ed., 1939), p. 264. See Order 31, rule 1, of the Rules of the Supreme Court, 1883, set forth in The Annual Practice, 1945, p. 519, and the discussion following that rule. For a compilation of the English cases on the matter see 8 Wigmore on Evidence (3d ed., 1940), § 2319, pp. 618—622, notes. 10 Rule 34 is explicit in its requirements that a party show good cause before obtaining a court order directing another party to produce documents. See Report of Proposed Amendments by Advisory Committee on Rules for Civil Procedure (June, 1946); 5 F.R.D. 433. 11 See Report of Proposed Amendments by Advisory Committee on Rules for Civil Procedure (June, 1946), pp. 44—47; 5 F.R.D. 433, 459, 460; Discovery Procedure Symposium before the 1946 Conference of the Third United States Circuit Court of Appeals, 5 F.R.D. 403; Armstrong, 'Report of the Advisory Committee on Federal Rules of Civil Procedure Recommending Amendments,' 5 F.R.D. 339, 353—357.

45

329 U.S. 459 67 S.Ct. 374 91 L.Ed. 422 STATE OF LOUISIANA ex rel. FRANCISv.RESWEBER, Sheriff, et al. No. 142. Argued Nov. 18, 1946. Decided Jan. 13, 1947. Rehearing Denied Feb. 10, 1947. See 330 U.S. 853, 67 S.Ct. 673. Mr.James Skelly Wright, of New Orleans, La., for petitioner. Messrs. Michael E. Culligan, of New Orleans, La., and L. O. Pecot, of Franklin, La., for respondents. Mr. Justice REED announced the judgment of the Court in an opinion in which The CHIEF JUSTICE, Mr. Justice BLACK and Mr. Justice JACKSON join. 1 This writ of certiorari brings before this Court a unique situation. The petitioner, Willie Francis, is a colored citizen of Louisiana. He was duly convicted of murder and in September, 1945, sentenced to be electrocuted for the crime. Upon a proper death warrant, Francis was prepared for execution and on May 3, 1946, pursuant to the warrant, was placed in the official electric chair of the State of Louisiana in the presence of the authorized witnesses. The executioner threw the switch but, presumably because of some mechanical difficulty, death did not result. He was thereupon removed from the chair and returned to prison where he now is. A new death warrant was issued by the Governor of Louisiana, fixing the execution for May 9, 1946. 2 Applications to the Supreme Court of he state were filed for writs of certiorari, mandamus, prohibition and habeas corpus, directed to the appropriate officials in the state. Execution of the sentence was stayed. By the applications petitioner claimed the protection of the due process clause of the Fourteenth Amendment on the ground that an execution under the circumstances detailed would deny due process to him because of the double jeopardy provision of the Fifth Amendment and the cruel and unusual punishment provision of the Eighth Amendment.1 These federal constitutional protections, petitioner claimed, would be denied because he had once gone through the difficult preparation for execution and had once received through his body a current of electricity intended to cause death. The Supreme Court of Louisiana denied the applications on the ground of a lack of any basis for judicial relief. That is, the state court concluded there was no violation of state or national law alleged in the various applications. It spoke of the fact that no 'current of sufficient intensity to cause death' passed through petitioner's body. It referred specifically to the fact that the applications of petitioner invoked the provisions of the Louisiana Constitution against cruel and inhuman punishments and putting one in jeopardy of life or liberty twice for the same offense. We granted certiorari on a petition, setting forth the aforementioned contentions, to consider the alleged violations of rights under the Federal Constitution in the unusual circumstances of this case. State of Louisiana ex rel. Francis v. Resweber, 328 U.S. 833, 66 S.Ct. 1382. For matters of state law, the opinion and order of the Supreme Court of Louisiana are binding on this Court. Hebert v. State of Louisiana, 272 U.S. 312, 317, 47 S.Ct. 103, 104, 71 L.Ed. 270, 48 A.L.R. 1102. So far as we are aware, this case is without precedent in any court. 3 To determine whether or not the execution of the petitioner may fairly take place after the experience through which he passed, we shall examine the circumstances under the assumption, but without so deciding, that violation of the principles of the Fifth and Eighth Amendments, as to double jeopardy and cruel and unusual punishment, would be violative of the due process clause of the Fourteenth Amendment.2 As nothing has been brought to our attention to suggest the contrary, we must and do assume that the state officials carried out their duties under the death warrant in a careful and humane manner. Accidents happen for which no man is to blame. We turn to the question as to whether the proposed enforcement of the criminal law of the state is offensive to any constitutional requirements to which reference has been made. 4 First. Our minds rebel against permitting the same sovereignty to punish an accused twice for the same offense. Ex parte Lange, 18 Wall. 163, 168, 175, 21 L.Ed. 872; In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500. Compare United States v. Lanza, 260 U.S. 377, 382, 43 S.Ct. 141, 142, 67 L.Ed. 314. But where the accused successfully seeks review of a conviction, there is no double jeopardy upon a new trial. United States v. Ball, 163 U.S. 662, 672, 16 S.Ct. 1192, 1195, 41 L.Ed. 300. See People v. Trezza, 128 N.Y. 529, 535, 28 N.E. 533, 534. Even where a state obtains a new trial after conviction because of errors, while an accused may be placed on trial a second time, it is not the sort of hardship to the ac used that is forbidden by the Fourteenth Amendment. Palko v. State of Connecticut, supra, 302 U.S. at page 328, 58 S.Ct. at page 153, 82 L.Ed. 288.3 As this is a prosecution under state law, so far as double jeopardy is concerned, the Palko case is decisive. For we see no difference from a constitutional point of view between a new trial for error of law at the instance of the state that results in a death sentence instead of imprisonment for life and an execution that follows a failure of equipment. When an accident, with no suggestion of malevolence, prevents the consummation of a sentence, the state's subsequent course in the administration of its criminal law is not affected on that account by any requirement of due process under the Fourteenth Amendment. We find no double jeopardy here which can be said to amount to a denial of federal due process in the proposed execution. 5 Second. We find nothing in what took place here which amounts to cruel and unusual punishment in the constitutional sense. The case before us does not call for an examination into any punishments except that of death. See Weems v. United States, 217 U.S. 349, 30 S.Ct. 544, 54 L.Ed. 793, 19 Ann.Cas. 705. The traditional humanity of modern Anglo-American law forbids the infliction of unnecessary pain in the execution of the death sentence. Prohibition against the wanton infliction of pain has come into our law from the Bill of Rights of 1688. The identical words appear in our Eighth Amendment. The Fourteenth would prohibit by its due process clause execution by a state in a cruel manner.4 6 Petitioner's suggestion is that because he once underwent the psychological strain of preparation for electrocution, now to require him to undergo this preparation again subjects him to a lingering or cruel and unusual punishment. Even the fact that petitioner has already been subjected to a current of electricity does not make his subsequent execution any more cruel in the constitutional sense than any other execution. The cruelty against which the Constitution protects a convicted man is cruelty inherent in the method of punishment, not the necessary suffering involved in any method employed to extinguish life humanely. The fact that an unforeseeable accident prevented the prompt consummation of the sentence cannot, it seems to us, add an element of cruelty to a subsequent execution. There is no purpose to inflict unnecessary pain nor any unnecessary pain involved in the proposed execution. The situation of the unfortunate victim of this accident is just as though h had suffered the identical amount of mental anguish and physical pain in any other occurrence, such as, for example, a fire in the cell block. We cannot agree that the hardship imposed upon the petitioner rises to that level of hardship denounced as denial of due process because of cruelty. 7 Third. The Supreme Court of Louisiana also rejected petitioner's contention that death inflicted after his prior sufferings would deny him the equal protection of the laws, guaranteed by the Fourteenth Amendment. This suggestion in so far as it differs from the due process argument is based on the idea that execution, after an attempt at execution has failed, would be a more severe punishment than is imposed upon others guilty of a like offense. That is, since others do not go through the strain of preparation for execution a second time or have not experienced a nonlethal current in a prior attempt at execution, as petitioner did, to compel petitioner to submit to execution after these prior experiences denies to him equal protection. Equal protection does not protect a prisoner against even illegal acts of officers in charge of him, much less against accidents during his detention for execution. See Lisenba v. People of State of California, 314 U.S. 219, 226, 62 S.Ct. 280, 285, 86 L.Ed. 166. Laws cannot prevent accidents nor can a law equally protect all against them. So long as the law applies to all alike, the requirements of equal protection are met. We have no right to assume that Louisiana singled out Francis for a treatment other than that which has been or would generally be applied. 8 Fourth. There is a suggestion in the brief that the original trial itself was so unfair to the petitioner as to justify a reversal of the judgment of conviction and a new trial. Petitioner's claim in his brief is that he was inadequately represented by counsel. The record of the original trial presented to us shows the warrant for arrest, the indictment, the appointment of counsel and the minute entries of trial, selection of jury, verdict and sentence. There is nothing in any of these papers to show any violation of petitioner's constitutional rights. See Carter v. People of State of Illinois, 329 U.S. 173, 67 S.Ct. 216. Review is sought here because of a denial of due process of law that would be brought about by execution of petitioner after failure of the first effort to electrocute him. Nothing is before us upon which a ruling can be predicated as to alleged denial of federal constitutional rights during petitioner's trial. On this record, we see nothing upon which we could conclude that the constitutional rights of petitioner were infringed. 9 Affirmed. 10 Mr. Justice FRANKFURTER, concurring. 11 When four members of the Court find that a State has denied to a person the due process which the Fourteenth Amendment safeguards, it seems to me important to be explicit regarding the criteria by which the State's duty of obedience to the Constitution must be judged. Particularly is this so when life is at stake. 12 Until July 28, 1868, when the Fourteenth Amendment was ratified, the Constitution of the United States left the States free to carry out their own notions of criminal justice, except insofar as they were limited by Article I, § 10 of the Constitution which declares: 'No State shall * * * pass any Bill of Attainder, (or) ex post facto Law * * *'. The Fourteenth Amendment placed no specific restraints upon the States in the formulation or the administration of their criminal law. It restricted the freedom of the States generally, so that States thereafter could not 'abridge the privileges or immunities of citizens of the United States,' or 'deprive any person of life, liberty, or property, without due process of law', or 'deny to any person within its jurisdiction the equal protection of the laws'. 13 These are broad, inexplicit clauses of the Constitution, unlike specific provisions of the first eight amendments formulated by the Founders to guard against re urrence of well-defined historic grievances. But broad as these clauses are, they are not generalities of empty vagueness. They are circumscribed partly by history and partly by the problems of government, large and dynamic though they be, with which they are concerned. The 'privileges or immunities of citizens of the United States' concern the dual citizenship under our federal system. The safeguards of 'due process of law' and 'the equal protection of the laws' summarize the meaning of the struggle for freedom of English-speaking peoples. They run back to Magna Carta but contemplate no less advances in the conceptions of justice and freedom by a progressive society. See the classic language of Mr. Justice Matthews in Hurtado v. People of State of California, 110 U.S. 516, 530, 531, 4 S.Ct. 111, 118, 28 L.Ed. 232. 14 When, shortly after its adoption, the Fourteenth Amendment came before this Court for construction, it was urged that the 'privileges or immunities of citizens of the United States' which were not to be abridged by any State were the privileges and immunities which citizens theretofore enjoyed under the Constitution. If that view had prevailed, the Privileges or Immunities Clause of the Fourteenth Amendment would have placed upon the States the limitations which the specific articles of the first eight amendments had theretofore placed upon the agencies of the national government. After the fullest consideration that view was rejected. The rejection has the authority that comes from contemporaneous knowledge of the purposes of the Fourteenth Amendment. See Slaughter-House Cases, 16 Wall. 36, 67, 68, 21 L.Ed. 394; Davidson v. City of New Orleans, 96 U.S. 97, 6 Otto 97, 24 L.Ed. 616. The notion that the Privileges or Immunities Clause of the Fourteenth Amendment absorbed, as it is called, the provisions of the Bill of Rights that limit the Federal Government has never been given countenance by this Court. 15 Not until recently was it suggested that the Due Process Clause of the Fourteenth Amendment was merely a compendious reference to the Bill of Rights whereby the States were now restricted in devising and enforcing their penal code precisely as is the Federal Government by the first eight amendments. On this view, the States would be confined in the enforcement of their criminal codes by those views for safeguarding the rights of the individual which were deemed necessary in the eighteenth century. Some of these safeguards have perduring validity. Some grew out of transient experience or formulated remedies which time might well improve. The Fourteenth Amendment did not mean to imprison the States into the limited experience of the eighteenth century. It did mean to withdraw from the States the right to act in ways that are offensive to a decent respect for the dignity of man, and heedless of his freedom. 16 These are very broad terms by which to accommodate freedom and authority. As has been suggested from time to time, they may be too large to serve as the basis for adjudication, in that they allow much room for individual notions of policy. That is not our concern. The fact is that the duty of such adjudication on a basis no less narrow has been committed to this Court. 17 In an impressive body of decisions this Court has decided that the Due Process Clause of the Fourteenth Amendment expresses a demand for civilized standards which are not defined by the specifically enumerated guarantees of the Bill of Rights. They neither contain the particularities of the first eight amendments nor are they confined to them. That due process of law has its own independent function has been illustrated in numerous decisions, and has been expounded in the opinions of the Court which have canvassed the matter most thoroughly. See Hurtado v. People of State of California, supra; Twining v. State of New Jersey, 211 U.S. 78, 29 S.Ct. 14, 53 L.Ed. 97; Snyder v. Commonwealth of Massachusetts, 291 U.S. 97, 54 S.Ct. 330, 78 L.Ed. 674, 90 A.L.R. 575; Palko . State of Connecticut, 302 U.S. 319, 58 S.Ct. 149, 82 L.Ed. 288. Insofar as due process under the Fourteenth Amendment requires the States to observe any of the immunities 'that are valid as against the federal government by force of the specific pledges of particular amendments' it does so because they 'have been found to be implicit in the concept of ordered liberty, and thus, through the Fourteenth Amendment, become valid as against the states.' Palko v. State of Connecticut, supra, 302 U.S. at pages 324, 325, 58 S.Ct. at page 151, 152, 82 L.Ed. 288. 18 The Federal Bill of Rights requires that prosecutions for federal crimes be initiated by a grand jury and tried by a petty jury; it protects an accused from being a witness against himself. The States are free to consult their own conceptions of policy in dispensing with the grand jury, in modifying or abolishing the petty jury, in withholding the privilege against self-crimination. See Maxwell v. Dow, 176 U.S. 581, 20 S.Ct. 448, 44 L.Ed. 597; Twining v. State of New Jersey, supra; Snyder v. Commonwealth of Massachusetts, supra; Palko v. State of Connecticut, supra, 302 U.S. at pages 323, 324, 58 S.Ct. at page 151, 82 L.Ed. 288; cf. Feldman v. United States, 322 U.S. 487, 64 S.Ct. 1082, 88 L.Ed. 1408, 154 A.L.R. 982. In short, the Due Process Clause of the Fourteenth Amendment did not withdraw the freedom of a State to enforce its own notions of fairness in the administration of criminal justice unless as it was put for the Court by Mr. Justice Cardozo, 'in so doing it offends some principle of justice so rooted in the traditions and conscience of our people as to be ranked as fundamental'. Snyder v. Commonwealth of Massachusetts, supra, 291 U.S. at page 105, 54 S.Ct. at page 332, 78 L.Ed. 674, 90 A.L.R. 575. 19 A State may offend such a principle of justice by brutal subjection of an individual to successive retrials on a charge on which he has been acquitted. Such conduct by a State might be a denial of due process, but not because the protection against double jeopardy in a federal prosecution against which the Fifth Amendment safeguards limits a State. For the disputations that are engendered by technical aspects of double jeopardy as enshrined in the Fifth Amendment, see the majority and dissenting opinions in Ex parte Lange, 18 Wall. 163, 21 L.Ed. 872, and In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500. Again, a State may be found to deny a person due process by treating even one guilty of crime in a manner that violates standards of decency more or less universally accepted though not when it treats him by a mode about which opinion is fairly divided. But the penological policy of a State is not to be tested by the scope of the Eighth Amendment and is not involved in the controversy which is necessarily evoked by that Amendment as to the historic meaning of 'cruel and unusual punishment'. See Weems v. United States, 217 U.S. 349, 30 S.Ct. 544, 546, 54 L.Ed. 793, 19 Ann.Cas. 705, and particularly the dissenting opinion of White and Holmes, JJ. 20 Once we are explicit in stating the problem before us in terms defined by an unbroken series of decisions, we cannot escape acknowledging that it involves the application of standards of fairness and justice very broadly conceived. They are not the application of merely personal standards but the impersonal standards of society which alone judges, as the organs of Law, are empowered to enforce. When the standards for judicial judgment are not narrower than 'immutable principles of justice, which inhere in the very idea of free government', Holden v. Hardy, 169 U.S. 366, 389, 18 S.Ct. 383, 387, 42 L.Ed. 780, 'fundamental principles of liberty and justice which lie at the base of all our civil and political institutions', Hebert v. State of Louisiana, 272 U.S. 312, 316, 47 S.Ct. 103, 104, 71 L.Ed. 270, 48 A.L.R. 1102, 'immunities * * * implicit in the concept of ordered liberty', Palko v. State of Connecticut, supra, 302 U.S. at pages 324, 325, 58 S.Ct. at page 151, 82 L.Ed. 288, great tolerance toward a State's conduct is demanded of this Court. Such were recently stated to be 'the controlling principles'. See Mr. Chief Justice Stone in Malinski v. New York, 324 U.S. 401, 438, 65 S.Ct. 781, 799, 89 L.Ed. 1029, in connection with the concurring opinion in that case, ibid., 324 U.S. at pages 412, 416, 417, 65 S.Ct. at pages 788, 789, 89 L.Ed. 1029. 21 I cannot bring myself to believe that for Louisiana to leave to executive clemency, rather than to require, mitigation of a sentence of death duly pronounced upon conviction for murder because a first attempt to carry it out was an innocent misadventure, offends a principle of justice 'Rooted in the traditions and conscience of our people'. See Snyder v. Commonwealth of Massachusetts, supra, 291 U.S. at page 105, 54 S.Ct. at page 332, 78 L.Ed. 674, 90 A.L.R. 575. Short of the compulsion of such a principle, this Court must abstain from interference with State action no matter how strong one's personal feeling of revulsion against a State's insistence on its pound of flesh. One must be on guard against finding in personal disapproval a reflection of more or less prevailing condemnation. Strongly drawn as I am to some of the sentiments expressed by my brother Burton, I cannot rid myself of the conviction that were I to hold that Louisiana would transgress the Due Process Clause if the State were allowed, in the precise circumstances before us, to carry out the death sentence, I would be enforcing my private view rather than that consensus of society's opinion which, for purposes of due process, is the standard enjoined by the Constitution. 22 The fact that I reach this conclusion does not mean that a hypothetical situation, which assumes a series of abortive attempts at electrocution or even a single, cruelly willful attempt, would not raise different questions. When the Fourteenth Amendment first came here for application the Court abstained from venturing even a tentative definition of due process. With wise forethought it indicated that what may be found within or without the Due Process Clause must inevitably be left to 'the gradual process of judicial inclusion and exclusion, as the cases presented for decision shall require, with the reasoning on which such decisions may be founded.' Davidson v. City of New Orleans, supra, 96 U.S. at page 104, 6 Otto at page 104, 24 L.Ed. 616. This is another way of saying that these are matters which depend on 'differences of degree. The whole law does so as soon as it is civilized.' Holmes, J., in LeRoy Fibre Co. v. Chicago, Milwaukee & St. P. Ry., 232 U.S. 340, 354, 34 S.Ct. 415, 418, 58 L.Ed. 631. Especially is this so as to questions arising under the Due Process Clause. A finding that in this case the State of Louisiana has not gone beyond its powers is for me not the starting point for abstractly logical extension. Since I cannot say that it would be 'repugnant to the conscience of mankind', Palko v. State of Connecticut, supra, 302 U.S. at page 323, 58 S.Ct. at page 151, 82 L.Ed. 288, for Louisiana to exercise the power on which she here stands, I cannot say that the Constitution withholds it. 23 Mr. Justice BURTON, with whom Mr. Justice DOUGLAS, Mr. Justice MURPHY and Mr. Justice RUTLEDGE concur, dissenting. 24 Under circumstances unique in judicial history, the relator asks this Court to stay his execution on the ground that it will violate the due process of law guaranteed to him by the Constitution of the United States. We believe that the unusual facts before us require that the judgment of the Supreme Court of Louisiana be vacated and that this cause be remanded for further proceedings not inconsistent with this opinion. Those proceedings should include the determination of certain material facts not previously determined, including the extent, if any, to which electric current was applied to the relator during his attempted electrocution on May 3, 1946. Where life is to be taken, there must be no avoidable error of law or uncertainty of fact. 25 The relator's execution was ordered by the Governor of Louisiana to take place May 3, 1946. Of the proceedings on that day, the Supreme Court of Louisiana has said: 26 '* * * between the Hours of 12:00 o'clock noon and 3:00 o'clock p.m., Willie Francis was strapped in the electric chair and an attempt was made to electrocute him, but, because of some defect in the apparatus devised and used for electrocutions, the contrivance failed to function, and after an unsuccessful attempt to electrocute Francis he was removed from the chair.' 27 Of the same proceedings, the State's brief says: 28 'Through a latent electrical defect, the attempt to electrocute Francis failed, the State contending no current whatsoever reached Francis' body, the relator contending a current of electricity did pass through his body; but in any event, Willie Francis was not put to death.' 29 On May 8, the death warrant was canceled, and the relator's execution has been stayed pending completion of these proceedings. The Governor proposes to issue another death warrant for the relator's electrocution and the relator now asks this Court to prevent it for the reason that, under the present unique circumstances, his electrocution will be so cruel and unusual as to violate the due process clause of the Fourteenth Amendment to the Constitution of the United States. 30 That Amendment provides: 'nor shall any State deprive any person of life, liberty, or property, without due process of law; * * *.' When this was adopted in 1868, there long had been imbedded deeply in the standards of this nation a revulsion against subjecting guilty persons to torture culminating in death. Preconstitutional American history reeked with cruel punishment to such an extent that, in 1791, the Eighth Amendment to the Constitution of the United States expressly imposed upon federal agencies a mandate that 'Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.' Louisiana and many other states have adopted like constitutional provisions. See Section 12 of Article I of the Constitution of Louisiana (1921). 31 The capital case before us presents an instance of the violation of constitutional due process that is more clear than would be presented by many lesser punishments prohibited by the Eighth Amendment or its state counterparts. Taking human life by unnecessarily cruel means shocks the most fundamental instincts of civilized man. If should not be possible under the constitutional procedure of a self-governing people. Abhorrence of the cruelty of ancient forms of capital punishment has increased steadily until, today, some states have prohibited capital punishment altogether. It is unthinkable that any state legislature in modern times would enact a statute expressly authorizing capital punishment by repeated applications of an electric current separated by intervals of days or hours until finally death shall result. The Legislature of Louisiana did not do so. The Supreme Court of Louisiana did not say that it did. The Supreme Court of Louisiana said merely that the pending petitions for relief in this case presented an executive rather than a judical question and, by that mistake of law, it precluded itself from discussing the constitutional issue before us. 32 In determining whether the proposed procedure is unconstitutional, we must measure it against a lawful electrocution. The contrast is that between instantaneous death and death by installments—caused by electric shocks administered after one or more intervening periods of complete consciousness of the victim. Electrocution, when instantaneous, can be inflicted by a state in conformity with due process of law. In re Kemmler, 136 U.S. 436, 10 S.Ct. 930, 34 L.Ed. 519. The Supreme Court of Louisiana has held that electrocution, in the manner prescribed in its statute, is more humane than hanging. State ex rel. Pierre v. Jones, 200 La. 808, 9 So.2d 42 certiorari denied 317 U.S. 633, 63 S.Ct. 64, 87 L.Ed. 510. See also, Malloy v. State of South Carolina, 237 U.S. 180, 35 S.Ct. 507, 59 L.Ed. 905. 33 The all-important consideration is that the execution shall be so instantaneous and substantially painless that the punishment shall be reduced, as nearly as possible, to no more than that of death itself. Electrocution has been approved only in a form that eliminates suffering. 34 The Louisiana statute makes this clear. It provides that: 35 'Every sentence of death imposed in this State shall be by electrocution; that is, causing to pass through the body of the person convicted a current of electricity of sufficient intensity to cause death, and the application and continuance of such current through the body of the person convicted until such person is dead * * *.' La. Code of Criminal Procedure (1928), Act No. 2 of 1928, Art. 569, as amended by § 1, Act No. 14, 1940. 36 It does not provide for electrocution by interrupted or repeated applications of electric current at intervals of several days or even minutes. It does not provide for the application of electric current of an intensity less than that sufficient to cause death. It prescribes expressly and solely for the application of a current of sufficient intensity to cause death and for the continuance of that application until death results. Prescribing capital punishment, it should be construed strictly. There can be no implied provision for a second, third or multiple application of the current. There is no statutory or judicial precedent upholding a delayed process of electrocution. 37 These considerations were emphasized in In re Kemmler, supra, when an early New York statute authorizing electrocution was attacked as violative of the due process clause of the Fourteenth Amendment because prescribing a cruel and unusual punishment. In upholding that statute, this Court stressed the fact that the electric current was to cause instantaneous death. Like the Louisiana statute before us, that statute called expressly for the continued application of a sufficient electric current to cause death. It was the resulting 'instantaneous' and 'painless' death that was referred to as 'humane.' 38 After quoting the New York County and Supreme Courts, this Court quoted the New York Court of Appeals, People ex rel. Kemmler v. Durston, 119 N.Y. 569, at page 579, 24 N.E. 6, at page 9, 7 L.R.A. 715, 16 Am.St.Rep. 859, as follows: 39 "We have examined this testimony and can find but little in it to warrant the belief that this new mode of execution is cruel, within the meaning of the constitution, though it is certainly unusual. On the contrary, we agree with the court below that it removes every reasonable doubt that the application of electricity to the vital parts of the human body, under such conditions and in the manner contemplated by the statute, must result in instantaneous, and consequently in painless, death." (Italics supplied.) In re Kemmler, supra, 136 U.S. at pages 443, 444, 10 S.Ct. at page 932, 34 L.Ed. 519. 40 Finally, speaking for itself, this Court said: 41 'Punishments are cruel when they involve torture or a lingering death; but the punishment of death is not cruel within the meaning of that word as used in the constitution. It implies there something inhuman and barbarous—something more than the mere extinguishment of life.' (Italics supplied.) Id., 136 U.S. at page 447, 10 S.Ct. at page 933, 34 L.Ed. 519. 42 If the state officials deliberately and intentionally had placed the relator in the electric chair five times and, each time, had applied electric current to his body in a manner not sufficient, until the final time, to kill him, such a form of torture would rival that of burning at the stake. Although the failure of the first attempt, in the present case, was unintended, the reapplication of the electric current will be intentional. How many deliberate and intentional reapplications of electric current does it take to produce a cruel, nusual and unconstitutional punishment? While five applications would be more cruel and unusual than one, the uniqueness of the present case demonstrates that, today, two separated applications are sufficiently 'cruel and unusual' to be prohibited. If five attempts would be 'cruel and unusual,' it would be difficult to draw the line between two, three, four and five. It is not difficult, however, as we here contend, to draw the line between the one continuous application prescribed by statute and any other application of the current. 43 Lack of intent that the first application be less than fatal is not material. The intent of the executioner cannot lessen the torture or excuse the result. It was the statutory duty of the state officials to make sure that there was no failure. The procedure in this case contrasts with common knowledge of precautions generally taken elsewhere to insure against failure of electrocutions. The high standard of care generally taken evidences the significance properly attached to the unconditional requirement of a single continued application of the current until death results. In remanding this case, we are giving careful recognition to the law of Louisiana. Neither the Legislature nor the Supreme Court of Louisiana has expressed approval of electrocution other than by one continuous application of a lethal current. 44 Executive clemency provides a common means of avoiding unconstitutional or otherwise questionable executions. When, however, the unconstitutionality of proposed executive procedure is brought before this Court, as in this case, we should apply the constitutional protection. In this case, final recourse is had to the high trusteeship vested in this Court by the people of the United States over the constitutional process by which their own lives may be taken. 45 In determining whether a case of cruel and unusual punishment constitutes a violation of due process of law, each case must turn upon its particular facts. The record in this case is not limited to an instance where a prisoner was placed in the electric chair and released before being subjected to the electric current. It presents more that a case of mental anguish, however severe such a case might be. The petition to the Supreme Court of Louisiana expressly states that a current of electricity was caused to pass through the body of the relator. This allegation was denied in the answer and no evidence was presented by either side. The Supreme Court of Louisiana thereupon undertook to decide the case on the pleadings. It said: 46 'Our conclusion is that the complaint made by the relator is a matter over which the courts have no authority. Inasmuch as the proceedings had in the district court, up to and including the pronouncing of the sentence of death, were entirely regular, we have no authority to set aside the sentence and release the relator from the sheriff's custody.'1 47 This statement assumed that the relief sought in the Supreme Court of Louisiana was only a review of the judicial proceedings in the lower state courts prior to the passing f sentence upon the relator on September 14, 1945. On the contrary, the issue raised there and here primarily concerns the action of state officials on and after May 3, 1946, in connection with their past and proposed attempts to electrocute the relator. This issue properly presents a federal constitutional question based on the impending deprivation of the life of the relator by executive officials of the State of Louisiana in a manner alleged to be a violation of the due process of law guaranteed by the Fourteenth Amendment. The refusal of the writs necessarily denied the constitutional protection prayed for. In ruling against the relator on the pleadings, in the absence of further evidence, the Supreme Court of Louisiana must be taken to have acted upon the allegations of fact most favorable to the relator. The petition contains the unequivocal allegation that the official electrocutioner 'turned on the switch and a current of electricity was caused to pass through the body of relator, all in the presence of official witnesses.' This allegation must be read in the light of the Louisiana statute which authorized the electrocutioner to apply to the body of the relator only such an electric current as was of 'sufficient intensity to cause death.' On that record, denial of relief means that the proposed repeated, and at least second, application to the relator of an electric current sufficient to cause death is not, under present circumstances, a cruel and unusual punishment violative of due process of law. It exceeds any punishment prescribed by law. There is no precedent for it. What then is it, if it be not cruel, unusual and unlawful? In spite of the constitutional issue thus raised, the Supreme Court of Louisiana treated it as an executive question not subject to judicial review. We believe that if the facts are as alleged by the relator the proposed action is unconstitutional. We believe also that the Supreme Court of Louisiana should provide for the determination of the facts and then proceed in a manner not inconsistent with this opinion. 48 That counsel for both sides recognize the materiality of what occurred on May 3, 1946, is demonstrated by the affidavits and the transcript of testimony which they took from available public records and called to the attention of this Court by publication of them in connection with their respective briefs in this Court. Excerpts from those public records, printed in the margin, indicate the conflict of testimony which should be resolved.2 49 The remand of this cause to the Supreme Court of Louisiana in the manner indicated does not mean that the relator necessarily is entitled to a complete release. It means merely that the courts of Louisiana must examine the facts both as to the actual nature of the punishment already inflicted and that proposed to be inflicted and, if the proposed punishment amounts to a violation of due process of law under the Constitution of the United States, then the State must find some means of disposing of this case that will not violate that Constitution. 50 For the reasons stated, we are unable to concur in the judgment of this Court which affirms the judgment below. 1 Fifth Amendment: '* * * Nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; * * *' Eighth Amendment: 'Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.' 2 See Twining v. State of New Jersey, 211 U.S. 78, 99, 29 S.Ct. 14, 19, 53 L.Ed. 97; Palko v. State of Connecticut, 302 U.S. 319, 324, 58 S.Ct. 149, 151, 82 L.Ed. 288; In re Kemmler, 136 U.S. 436, 445, 10 S.Ct. 930, 933, 34 L.Ed. 519; Collins v. Johnston, 237 U.S. 502, 510, 35 S.Ct. 649, 653, 59 L.Ed. 1071. 3 See Kepner v. United States, 195 U.S. 100, 129, 24 S.Ct. 797, 804, 49 L.Ed. 114, 1 Ann.Cas. 655; cf. United States v. Ball, 163 U.S. 662, 666—670, 16 S.Ct. 1192, 1193—1195, 41 L.Ed. 300. 4 This Court said of a similar clause embodied in the constitution of New York, In re Kemmler, 136 U.S. 436, 446, 10 S.Ct. 930, 933, 34 L.Ed. 519: '* * * but the language in question, as used in the constitution of the State of New York was intended particularly to operate upon the legislature of the state, to whose control the punishment of crime was almost wholly confided. So that, if the punishment prescribed for an offense against the laws of the state were manifestly cruel and unusual as burning at the stake, crucifixion, breaking on the wheel, or the like, it would be the duty of the courts to adjudge such penalties to be within the constitutional prohibition.' It added, 136 U.S. at page 447, 10 S.Ct. at page 933, 34 L.Ed. 519: 'Punishments are cruel when they involve torture or a lingering death; but the punishment of death is not cruel within the meaning of that word as used in the constitution. It implies there something inhuman and barbarous,—something more than the mere extinguishment of life.' Louisiana has the same humane provision in its constitution. Louisiana Constitution, Art. 1, § 12. The Kemmler case denied that electrocution infringed the federal constitutional rights of a convicted criminal sentenced to execution. 1 That court, in discussing the pleadings, also said: 'In this latter answer or opposition it is admitted that the attempt was made to electrocute Willie Francis on May 3, 1946, in obedience of the death warrant, but it is averred that through some latent electrical defect in the apparatus, no electric current reached the body of Willie Francis and for that reason the sentence of death was not carried out. We have no other evidence, of course, as to whether an electric current did reach the body of Willie Francis. The important fact, however, is that a current of sufficient intensity to cause death, as required by the statute on the subject and by the death warrant, did not pass through the body of Willie Francis.' This means that, as long as the relator did not die, the court apparently regarded the carrying out of the death sentence as a purely executive function not subject to judicial review. 2 The following excerpts are from copies of affidavits printed as appendices to the brief on behalf of the petitioner. The official witnesses named were persons charged by statute with the duty of making a signed report or 'proces verbal' reciting the manner and date of the execution to be filed with the clerk of the court in which the sentence was imposed. La.Code of Criminal Procedure (1928), Act No. 2 of 1928, Art. 571. The statements refer to what happened after the relator had been strapped into the electric chair and a hood placed before his eyes. 'Then the electrocutioner turned on the switch and when he did Willie Francis' lips puffed out and he groaned and jumped so that the chair came off the floor. Apparently the switch was turned on twice and then the condemned man yelled: 'Take it off. Let me breath." Affidavit of official witness Harold Resweber, dated May 23, 1946. 'I saw the electrocutioner turn on the switch and I saw his lips puff out and swell, his body tensed and stretched. I heard the one in charge yell to the man outside for more juice when he saw that Willie Francis was not dying and the one on the outside yelled back he was giving him all he had. Then Willie Francis cried out 'Take it off. Let me breath.' Then they took the hood from his eyes and unstrapped him. 'This boy really got a shock when they turned that machine on.' Affidavit of official witness Ignace Doucet, dated May 30, 1946. 'After he was strapped to the chair the § eriff of St. Martin Parish asked him if he had anything to say about anything and he said nothing. Then the hood was placed before his eyes. Then the officials in charge of the electrocution were adjusting the mechanisms and when the needle of the meter registered to a certain point on the dial, the electrocutioner pulled down on the switch and at the same time said: 'Goodby Willie'. At that very moment, Willie Francis' lips puffer out and his body squirmed and tensed and he jumped so that the chair rocked on the floor. Then the condemned man said: 'Take it off. Let me breath.' Then the switch was turned off. Then some of the men left and a few minutes after the Sheriff of St. Martin Parish, Mr. E. L. Resweber, came in and announced that the governor had granted the condemned man a reprieve.' Affidavit of official chaplain Reverend Maurice L. Rousseve, dated May 25, 1946. Attached to the brief on behalf of the respondents there was submitted a copy of the transcript of testimony taken before the Louisiana Pardon Board on May 31, 1946, in support of the relator's application for executive clemency which was denied June 1, 1946. This transcript includes testimony of those who were in charge of the electrical equipment on May 3, to the effect that no electric current reached the body of the relator and that his flesh did not show electrical burns. It also included a statement by the sheriff of a neighboring parish, who accompanied the relator from the chair, that the relator told him on leaving the chair that the electric current had 'tickled him.' These public records were not in existence and therefore not before the Supreme Court of Louisiana when it rendered its decision on May 15, 1946.

01

329 U.S. 482 67 S.Ct. 428 91 L.Ed. 436 ANDERSONv.YUNGKAU et al. No. 87. Argued Dec. 19, 20, 1946. Decided Jan. 13, 1947. Mr. Robert S. Marx, of Cincinnati, Ohio, for petitioner. Mr. LeWright Browning, of Ashland, Ky., for respondents. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 These are seven cases in which petitioner sued to recover stock assessments from shareholders of the Banco Kentucky Co. They were started in 1936 in the Eastern District of Kentucky and were stayed by agreement while the principal case upon which these depended, Anderson v. Abbott, 321 U.S. 349, 64 S.Ct. 531, 88 L.Ed. 793, 151 A.L.R. 1146, wended its way through the courts. In the latter case we sustained the liability of the shareholders of Banco for the stock assessment. That was in 1944. During the time Anderson v. Abbott was being litigated, the shareholders involved in the present litigation died and respondents became executors of their estates. Through no lack of diligence,1 petitioner failed to learn of these facts until more than two years later. Upon learning of them he promptly moved to revive the actions against the representatives of the decedents. The District Court, following Anderson v. Brady, D.C., 1 F.R.D. 589, denied the motions for revivor and granted motions of the executors to dismiss. The Circuit Court of Appeals affirmed by a divided vote. Anderson v. Yungkau, 6 Cir., 153 F.2d 685. The case is here on a petition for a writ of certiorari which we granted because the case presented an important problem in the construction of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.2 2 The case involves a reconciliation of Rule 25(a) and Rule 6(b). So far as material here, Rule 25(a) provides: 3 'If a party dies and the claim is not thereby extinguished, the court within 2 years after the death may order substitution of the proper parties. If substitution is not so made, the action shall be dismissed as to the deceased party.' And the relevant part of Rule 6(b) reads: 4 'When by these rules or by a notice given thereunder or by order of court an act is required or allowed o be done at or within a specified time, the court for cause shown may, at any time in its discretion * * * (2) upon motion permit the act to be done after the expiration of the specified period where the failure to act was the result of excusable neglect; but it may not enlarge the period for taking any action under Rule 59, except as stated in subdivision (c) thereof, or the period for taking an appeal as provided by law.' 5 It is said that since by Rule 25(a) substitution may be made within two years after the death of a party, substitution is, within the meaning of Rule 6(b), an act 'allowed' to be done 'within a specified time' which the court may on a showing of 'excusable neglect' permit to be done after the two year period. That argument is reinforced by reliance on the provision in Rule 6(b) which grants but two exceptions to the power of enlargement of time. Since Rule 25(a) is not included in the exceptions, it is argued that the time allowed by that rule may be enlarged under Rule 6(b). And it is pointed out that the facts of the present cases establish that the failure of the receiver to act within the two year period was the result of 'excusable neglect',3 thus giving the District Court discretion to allow the substitution under Rule 6(b). 6 We agree, however, with the Circuit Court of Appeals. Rule 25(a) is based in part on 42 Stat. 352, 28 U.S.C.A. § 778, which limited the power of substitution to two years from the death of a party.4 And even within that two year period substitution could not be made unless the executor or administrator was served 'Before final settlement and distribution of the estate.' That statute, like other statutes of limitations, was a statute of repose. It was designed to keep short the time within which actions might be revived so that the closing and distribution of estates might not be interminably delayed.5 That policy is reflected in Rule 25(a). Even within the two year period substitution is not a matter of right; the court 'may' order substitution but it is under no duty to do so. Under the Rule, as under the statute, the settlement and distribution of the estate might be so far advanced as to warrant a denial of the motion for substitution within the two year period. In contrast to the discretion of the court to order substitution within the two year period is the provisions of Rule 25(a) that if substitution is not made within that time the action 'Shall be dismissed' as to the deceased. The word 'shall' is ordinarily 'The language of command'. Escoe v. Zerbst, 295 U.S. 490, 493, 55 S.Ct. 818, 819, 820, 79 L.Ed. 1566. And when the same Rule uses both 'may' and 'shall', the normal inference is that each is used in its usual sense—the one act being permissive, the other mandatory. See United States ex rel. Siegel v. Thoman, 156 U.S. 353, 360, 15 S.Ct. 378, 380, 39 L.Ed. 450. 7 Thus, as stated by the Circuit Court of Appeals, Rule 25(a) operates both as a statute of limitations upon revivor and as a mandate to the court to dismiss an action not revived within the two year period. Rule 6(b) relates to acts required or allowed to be done by parties to an action and permits the court to afford relief to a party for his failure to act within the prescribed time limits. There would be more force in petitioner's argument if Rule 25(a) had, without more, set a two year period within which substitution might be made. But Rule 25(a) does not stop there. It directs the court to dismiss the action if substitution has not been made within that time. That is action required of the court, not of a party. And Rule 6(b) should not be construed to override an express direction of action to be taken by the court. See Wallace v. United States, 2 Cir., 142 F.2d 240, 244. 8 Reaso § of policy support this construction. It is, to be sure, stipulated that in five of the present cases the estate is 'still open and undistributed'; in one it is 'still open'; in another it has been distributed. At least where an estate is ready to be closed or where there has already been a distribution, revivor may work unfairness and be disruptive of orderly and expeditious administration of estates. But it is not enough to say that if Rule 6(b) and Rule 25(a) are construed to permit substitution after the two year period, the court need not allow it where unfairness or prejudice would result. For the normal policy of a statute of limitations is to close the door—finally, not qualifiedly or conditionally. The federal law embodied in Rule 25(a) has a direct impact on the probate of estates in the state courts. It should not be construed to be more disruptive of prompt and orderly probate administration in those courts than its language makes necessary. 9 Affirmed. 10 The CHIEF JUSTICE and Mr. Justice REED took no part in the consideration or decision of this case. 11 Mr. Justice RUTLEDGE, dissenting. Rule 25(a) provides: 12 'If a party dies and the claim is not thereby extinguished, the court within 2 years after the death may order substitution of the proper parties. If substitution is not so made, the action shall be dismissed as to the deceased party. * * *.' 13 I agree that the rule confers discretion to order substitution of parties, hence in appropriate circumstances to refuse to do so and thereupon to dismiss the action. But I do not think the discretion ends with the two-year period.1 The rule is not worded to require this and ascribing such a construction to it brings it into collision with the express terms and the policy of Rule 6(b). The difference made by expiration of the period is not to convert the rule's command for dismissal from a discretionary to a mandatory one. It is merely to narrow the conditions under which the discretionary power shall be exercised.2 14 I find no basis for thinking that the time limitation prescribed by the first sentence of Rule 25(a) was intended to be treated differently than any other prescribed by the Rules, except those concerning which they expressly forbid enlargement. The committee which drafted the Rules was highly competent, spent years in exacting preparation, and was thoroughly cognizant of what it intended to propose concerning time limitations. Meticulous attention was given to them. By count the index shows 134 references to provisions relating to time for taking various actions. 15 The committee knew their volume and variety. It was conscious also of the many difficulties and injustices which had arisen by virtue of rigid time limitations, whether laid by statute, rule of court, or judicial decision.3 The deliberately chosen policy was to do away with those rigidities and to substitute sound discretionary limitations, except as otherwise expressly directed.4 This policy was stated clearly, fully and I think accurately in the Rules themselves by the addition of Rule 6, of which subdivision (b) is expressly applicable here. 16 By this unambiguous declaration it was provided that 'the court for cause shown may, at any time in its discretion * * * (2) upon motion permit the act to be done after the expiration of the specified period where the failure to act was the result of excusable neglect.'5 This was applicable in any situation 'when by these rules or by a notice given thereunder or by order of court an act is required or allowed to be done at or within a specified period,' with two and only two exceptions. These were to forbid enlarging the time for taking any action under Rule 59, except as stated in subdivision (c) thereof, and the period for taking appeal. Rule 73. The forbidden enlargements under Rule 59 involve matters concerning the granting of new trials. 17 In those two respects and in them alone the time limitation was made, and was intended to be, 'jurisdictional.' For the rest the courts were to exercise discretion. It is to be emphasized that the limits of discretion fixed for enlarging time after the prescribed periods were narrowed by requiring that enlargement be made, if at all, only upon motion and only upon showing that the failure to act within time was due to excusable neglect.6 Those limitations were applicable here, in my opinion, and admittedly they were satisfied. 18 Rule 6, including subdivisions (b) and (c), was thus a general and a carefully drawn declaration of paramount policy for the application of limitations of time. It made no distinction between rules governing ctions to be taken by the parties and actions to be taken by the courts.7 It made no exceptions other than the two expressly set forth. This Court approved the rule as drawn and Congress allowed it to become law without modification. To assume or to rule that additional exceptions were intended is to assume that the committee, the Court and Congress overlooked others which should have been stated in Rule 6(b) or did not intend the declared policy of that section to be effective fully according to its terms. I am unable to accept either conclusion. If we may make an additional exception forbidding enlargement of time in cases covered by Rule 25(a) in the face of the express provision of Rule 6(b), there is no reason why others may not also be made, and thus the salutary policy of Rule 6(b) be defeated.8 19 The considerations of policy said to support the decision would be grounds either for the district court's consideration in determining whether to deny enlargement in the exercise of its discretion or for amendment of Rule 6(b) so as to exclude such cases as this.9 They are not a basis in my opinion for changing that rule by interpretation or for opening the door to further restrictive amendments of Rule 6(b) in this respect by that process. If this is to be done, it should be by the prescribed rule-making procedure. Indeed the Advisory Committee, in the recently proposed amendments to the rule, has recommended that Rule 25(a) be rephrased so as to eliminate any question that the rule has the meaning ascribed to it in this opinion. And its note appended to the recommendation states that the purpose is to guard against injustices likely to result from a flat two-year limitation.10 In my opinion the committee's action and the reasons given for it confirm, rather than disavow, the section's originally intended meaning. 20 This case is an illustration of the kinds of injustice the committee sought to avoid. And the considerations of policy are not altogether one-sided. The effect of the decision in such a case as this is not only to throw an admittedly impossible burden upon the party seeking without neglect to enforce his cause of action. It is also to throw upon other parties, equally helpless, a heavier burden of financial loss, whether by depriving them of rightful recovery or by forcing them, in some instances at least, to bear a larger share of the common responsibility.11 21 In my opinion the judgment should be reversed and the cause remanded to the District Court for the exercise of the discretion given by the Rules. 22 Mr. Justice BURTON joins in this dissent. 1 Petitioner brought actions against approximately 5,000 shareholders scattered throughout the United States and some in foreign countries. During the progress of the litigation some changed their residences. And it was stipulated that petitioner, with a limited staff, could not during this time keep up with the changes of residence or deaths of defendants. 2 Cf. Ainsworth v. Gill Glass & Fixture Co., 3 Cir., 104 F.2d 83, with Burke v. Canfield, 72 App.D.C. 127, 111 F.2d 526, and Mutual Benefit Health & Accident Ass'n v. Snyder, 6 Cir., 109 F.2d 469. 3 See note 1, supra. 4 But see Baltimore & Ohio R. Co. v. Joy, 173 U.S. 226, 19 S.Ct. 387, 43 L.Ed. 677; Winslow v. Domestic Engineering Co., D.C., 20 F.Supp. 578. 5 And see H.Rep. No. 429, 67th Cong., 1st Sess., p. 2. 1 The Notes of the Advisory Committee on the original Federal Rules state that Rule 25(a) 'is based upon Equity Rule 45, 28 U.S.C.A. § 723 Appendix (Death of Party—Revivor) and U.S.C., Title 28, § 778, 28 U.S.C.A. § 778, (Death of parties; substitution of executor or administrator).' Prior to 1921 what is now 28 U.S.C. § 778, 28 U.S.C.A. § 778, did not apply to suits in equity. Equity Rule 45, with its provision that a motion for substitution might be made within 'a reasonable time' was governing. But by 42 Stat. 352 it was provided that the revival of equity suits should be by scire facias, and a two-year statute of limitations was made applicable. See 28 U.S.C.A. § 778 and 'Compiler's note' thereafter at No. 33, 28 U.S.C.A. (1928) § 774 to End, p. 99. However, in general the Rules were intended to supersede rather than incorporate previously existing statutory or other provisions, where the wording was different; and the committee's statement that Rule 25(a) 'is based upon Equity Rule 45' as well as 28 U.S.C. § 778, 28 U.S.C.A. § 778, together with the different wording of the rule and that section, may indicate that the committee either considered Equity Rule 45 still effective, for which there seems to have been some judicial authority, see Electropure Sales Corporation v. Anglim, D.C., 21 F.Supp. 451, 452; Gaskins v. Bonfils, D.C., 4 F.Supp. 547, 550—551, or intended to adopt it in substance as the basis and effect of Rule 25(a). Had the purpose been to incorporate 28 U.S.C. § 778, 28 U.S.C.A. § 778, there would have been no necessity for changing the wording, except in relation to the scire facias procedure. See note 10 infra and text. 2 See text at note 6 infra. 3 See Rules 6(b), (c) and 60, all of which have received wide comment. See also notes 4 and 10. 4 See Proceedings of the Institute on the Federal Rules of Civil Procedure at Washington, D.C., and of the Symposium at New York City (1939) 83—84; Proceedings of the Institute on the Federal Rules of Civil Procedure at Cleveland (1938) 210—211; Hearings before the Committee on the Judiciary of the House of Representatives with Regard to the Rules of Civil Procedure for the District Courts of the United States, 75th Cong., 3d Sess., 60. 5 The rule in full is as follows: 'Rule 6(b) Enlargement. When by these rules or by a notice given thereunder or by order of court an act is required or allowed to be done at or within a specified time, the court for cause shown may, at any time in its discretion (1) with or without motion or notice, order the period enlarged if application therefor is made before the expiration of the period originally prescribed or as extended by a previous order or (2) upon motion permit the act to be done after the expiration of the specified period where the failure to act was the result of excusable neglect; but it may not enlarge the period for taking any action under Rule 59, except as stated in subdivision (c) thereof, or the period for taking an appeal as provided by law.' 6 See note 5. If Rule 25(a) constitutes in effect a statute of limitations, as the Court holds, it may be inquired whether even upon proper application made within the two-year period under Rule 6(b)(1), see note 5, the Court could enlarge the time by extension, as seems clearly contemplated by the clause 'or as extended by previous order.' 7 See note 5. The rules are replete with provisions for action to be taken within specified periods by the courts upon their own initiative as well as upon motion by the parties. Rule 6(b) is itself an illustration. Certainly it cannot be said, in view of the rule's comprehensive language, that it applies only to actions to be taken by the parties and has no application to the large number of instances in which limitations of time are imposed for action to be taken by the courts. Such a construction would bring back many of the evils the Rules were designed to avoid. It would defeat perhaps as many of the literal and intended applications of Rule 6(b) as it would preserve. Rule 6(c) is as follows: 'The period of time provided for the doing of any act or the taking of any proceeding is not affected or limited by the expiration of a term of court. The expiration of a term of court in no way affects the power of a court to do any act or take any proceeding in any civil action which has been pending before it.' 8 The Advisory Committee in its Report of Proposed Amendments to the Rules of Civil Procedure (1946) 2—6 points out that District Courts and Circuit Courts of Appeals in some cases have refused to apply Rule 6(b) to other Rules as well as Rule 25(a), see, e.g., Wallace v. United States, 2 Cir., 142 F.2d 240; Reed v. South Atlantic Steamship Co., D.C., 2 F.R.D. 475; Mutual Benefit Health & Accident Ass'n v. Snyder, 6 Cir., 109 F.2d 469; cf. Burke v. Canfield, 72 App.D.C. 127, 111 F.2d 526, though other cases have ruled the other way. See, e.g., Schram v. O'Connor, D.C., 2 F.R.D. 192; Ainsworth v. Gill Glass & Fixture Co., 3 Cir., 104 F.2d 83. 9 But see note 10 and text. 10 Report of Proposed Amendments to Rules of Civil Procedure for the District Courts of the United States (1946) 31—32. The revision of Rule 25(a) recommended by the committee reads as follows, the revised matter appearing in italics: 'If a party dies and the claim is not thereby extinguished, the court upon application made within 2 years after the death shall order substitution of the proper parties. If the appli ation is made after 2 years the court may order substitution but only upon the showing of a reasonable excuse for failure to apply within that period. If substitution is not so made, the action shall be dismissed as to the deceased party. * * *' The committee appends the following comment: 'This amendment guards against possible injustice in a case where there is some reasonable excuse for not applying for substitution within the 2-year period. It has been held that the court has no power to permit substitution after the expiration of the 2-year limit, irrespective of the circumstances. Winkelman v. General Motors Corporation, D.C., S.D.N.Y.1939, 30 F.Supp. 112; Anderson v. Brady, D.C., E.D.Ky.1941, 1 F.R.D. 589; Photometric Products Corp. v. Redtke, D.C., S.D.N.Y., 1946, 5 F.R.D. 394; Anderson v. Yungkau, 6 Cir., 1946, 153 F.2d 685, cert. granted, 1946, 328 U.S. 829, 66 S.Ct. 1025.' In its comment relating to Rule 6(b), pp. 2—3, the committee states: 'In a number of cases the effect of Rule 6(b) on the time limitations of these rules has been considered. Certainly the rule is susceptible of the interpretation that the court is given the power in its discretion to relieve a party from failure to act within the times specified in any of these other rules, with only the exceptions stated in Rule 6(b), and in some cases the rule has been so construed.' 'With regard to Rule 25(a) for substitution, it was held in Anderson v. Brady, D.C., E.D.Ky.1941, 1 F.R.D. 589; and in Anderson v. Yungkau, 6 Cir., 1946, 153 F.2d 685, cert. granted (1946) 328 U.S. 829, 66 S.Ct. 1025, that under Rule 6(b) the court had no authority to allow substitution of parties after the expiration of the limit fixed in Rule 25(a).' 11 The statutory liability of shareholders in national banking associations was created by 12 U.S.C. §§ 63, 64, 12 U.S.C.A. §§ 63, 64. By § 63 the shareholder was made 'individually responsible, equally and ratably and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares.' (Emphasis added.) By § 64 the shareholder was made 'individually responsible for all contracts, debts, and engagements of such association, each to the amount of his stock therein, at the par value thereof in addition to the amount invested in such stock.' To what extent § 64 may have modified § 63 has been disputed. See American Trust Co. v. Grut, 9 Cir., 80 F.2d 155; First Nat. Bank in Eureka, Kan., v. First Nat. Bank of Eureka, Kan., D.C., 14 F.2d 129. But in Anderson v. Abbott we said: 'It is sufficient at this time to state that the liability of the shareholders of Banco would be measured by the number of shares of stock of the Bank, whether several or only fractional, represented by each share of stock of Banco; and that the assessment liability of each share of stock of Banco would be a like proportion of the assessment liability of the shares of the Bank represented by the former.' 321 U.S. 349, 368—369, 64 S.Ct. 531, 540, 541, 88 L.Ed. 793, 151 A.L.R. 1146. And in Frank v. Giesy, 117 F.2d 122, 125, it was held that the omission in § 64 of the pro rata limitation of § 63 was intended to strengthen the position of creditors, making each shareholder's liability several and fully enforceable though others go free. In First Nat. Bank v. First Nat. Bank, supra, the shareholder made to pay was held entitled to enforce con ribution against others not proceeded against. The shareholder's liability is secondary only, McClaine v. Rankin, 197 U.S. 154, 161, 25 S.Ct. 410, 412, 49 L.Ed. 702, 3 Ann.Cas. 500; First National Bank of Boston v. Nichols, 294 Mass. 173, 181, 200 N.E. 869; and though one is not relieved either wholly or in part because others are not compelled to pay, neither is any required to pay more proportionately than is needed from the fund actually collected to discharge the bank's obligations. Bank of Ware Shoals v. Martin, D.C., 17 F.Supp. 61, 63. The liability is not a debt but is one merely assuring payment of the bank's obligations. McClaine v. Rankin, supra. The Court's decision therefore in effect cuts off any possibility shareholders forced to pay may have for reduction of the amounts of their payments either through the receiver's enforcement of the liability directly against decedent shareholders' estates or by seeking contribution from them after the two-year period. And this is done regardless of the estate's comparative ability to pay, of whether it is in an early or a late stage of administration, and of when the death occurs. Thus, in these cases, only one estate has been closed and one other is nearing that stage; but so far as appears the other five remain open and undistributed. The suits were begun in 1936. Eight years were taken up for litigation of the principal issue of liability in Anderson v. Abbott, supra. That liability having been established after so long a time, now eleven years after the suits were instituted this decision comes to nullify it in substantial part and effect. The result, in my opinion, is quite as much to make the protection afforded by these statutes turn on accidents of life and death in some instances, perhaps in many, at variance with the nature of the liability and its fair administration, as other distinctions were said in the Anderson case to make the protection turn on irrelevant accidents. 321 U.S. at page 367, 64 S.Ct. at page 540, 88 L.Ed. 793, 151 A.L.R. 1146.

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329 U.S. 520 67 S.Ct. 405 91 L.Ed. 471 ORDER OF RAILWAY CONDUCTORS OF AMERICA et al.v.SWAN et al. WILLIAMS et al. v. SAME. Nos. 63, 64. Argued Dec. 10, 11, 1946. Decided Jan. 13, 1947. Mr.V. C. Shuttleworth, of Cedar Rapids, Iowa, for petitioners. Mr. Anan Raymond, of Chicago, Ill., for respondent Railroad Yardmasters of America. Mr. Douglas F. Smith, of Chicago, Ill., for respondents Carrier Members of the First and Fourth Divisions et al. Mr. Justice MURPHY delivered the opinion of the Court. 1 Our attention here is directed to a determination of which division of the National Railroad Adjustment Board has jurisdiction over disputes involving railroad yardmasters. The four divisions of the Board and their respective jurisdictions are established by § 3, First (h), of the Railway Labor Act, as amended in 1934.1 2 Each division of the Board is composed of an equal number of representatives of carriers and of national labor organizations. The statute authorizes the carriers and the national labor organizations to select their respective representatives and to designate the division on which each such representative shall serve. § 3, First (b) and (c). The jurisdiction of the divisions relates to disputes growing out of 'grievances or out of the interpretation or application of agreements concerning rates of pay, rules, or working conditions.' § 3, First (i). Disputes involving employees in certain specifically designated crafts are assigned to each division; the Fourth Division also has a 'catch-all' jurisdiction over all disputes not assigned to one of the other three divisions. Appropriate provisions are made for hearings and for the entry of an award, to be followed by an order directed to the carrier if the award be in favor of the petitioner. In the event that the carrier fails to comply with the order, the petitioner or any person for whose benefit the order was made may seek enforcement of the order in a federal district court. § 3, First (p). In such suits, 'the findings and order of the division of the Adjustment Board shall be prima face evidence of the facts therein stated.' And the court is given power to take such action as may be appropriate to enforce or set aside the order. See Switchmen's Union N.A. v. National Mediation Board, 320 U.S. 297, 305, 64 S.Ct. 95, 99, 88 L.Ed. 61. 3 Two of the national labor organizations are he Order of Railway Conductors and the Brotherhood of Railroad Trainmen, petitioners herein. Their membership includes a small portion of the total number of railroad yardmasters in the country, approximately 20% of the total on the basis of the railroad mileage represented. Each of these organizations has one representative on the First Division and each contends that all yardmaster disputes must be heard solely by that division. But that contention is contradicted by the Railroad Yardmasters of America, a national labor organization composed almost entirely of yardmasters and claiming to represent more than 70% of all the yardmasters in the country. That organization, which is an intervenor-respondent herein, has failed to place a representative on any of the four divisions. Along with certain other organizations representing the small balance of yardmasters, it claims that yardmaster disputes lie within the exclusive jurisdiction of the Fourth Division. Various carriers with representatives on both the First and the Fourth Divisions join in that claim. 4 The result of this controversy is a stalemate so far as yardmaster disputes are concerned. The carrier and the labor members of the First Division are split evenly, the carrier members claiming that the division has no jurisdiction over these matters. The members of the Fourth Division are also evenly divided on the jurisdictional question, the labor members being of the view that yardmaster disputes are outside that division's jurisdiction. And since all the parties concede that neither the Second nor the Third Division has jurisdiction, no settlement of these disputes is possible under the present situation.2 5 The Order of Railway Conductors and the Brotherhood of Railroad Trainmen brought this action under 28 U.S.C. § 400(1), 28 U.S.C.A. § 400(1), to obtain a declaratory judgment to the effect that the First Division has sole jurisdiction over yardmaster disputes. Members of the First and Fourth Divisions were made parties defendant; and the Railroad Yardmasters of America, the Great Northern Railway Company and the Southern Pacific Company were allowed to intervene. The District Court, after a hearing, held that yardmaster disputes fall within the 'catch-all' jurisdiction of the Fourth Division. The Circuit Court of Appeals agreed. 7 Cir., 152 F.2d 325. We granted certiorari because the issue raised is one of importance in the orderly administration of the Railway Labor Act. 327 U.S. 776, 66 S.Ct. 968. 6 At the outstart it is important to note that judicial review of this matter is not precluded by the principles set forth in Switchmen's Union v. National Mediation Board, supra, and companion cases, General Committee of Adjustment v. Missouri-Kansas-Texas R. Co., 320 U.S. 323, 64 S.Ct. 146, 88 L.Ed. 76 and General Committee v. Southern Pacific Co., 320 U.S. 338, 64 S.Ct. 142, 88 L.Ed. 85. We are dealing here with something quite different from an administrative determination which Congress has made final and beyond the realm of judicial scrutiny. We are dealing with a jurisdictional frustration on an administrative level, making impossible the issuance of administrative orders which Congress explicitly has opened to review by the courts. Until that basic jurisdictional controversy is settled, the procedure contemplated by § 3 of the Railway Labor Act remains a dead letter so far as yardmasters are concerned and the statutory rights of such persons become atrophied. A declaratory judgment action is therefore appropriate to remove such an administrative stagnation. 7 In other instances, we have left of the problem of jurisdiction to be determined in the first instance by the administrative agency. Myers v. Bethlehem Shipbuilding Corporation, 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638. But here both the First and the Fourth Divisions of the Board, due to the evenly-matched membership of railroad and labor representatives, appear hopelessly divided on the jurisdictional issue, making a determination impossible. Judicial guidance at this stage is justified as long as such a condition exists. 8 The issue is primarily one of statutory interpretation. The First Division is given jurisdiction over disputes 'involving train- and yard-service employees of carriers; that is, engineers, firemen, hostlers, and outside hostler helpers, conductors, trainmen, and yard-service employees.' The Fourth Division's jurisdiction extends to disputes 'involving employees of carriers directly or indirectly engaged in transportation of passengers or property by water, and all other employees of carriers over which jurisdiction is not given to the first, second, and third divisions.' It is agreed that the only possible category under the First Division into which yardmasters might be placed is 'yard-service employees.' But if they cannot be so placed, they must necessarily fall into the 'catchall' jurisdiction of the Fourth Division. The problem thus is to determine what Congress meant when it used the term 'yard-service employees.' 9 There is no statutory definition of 'yard-service employees.' Nor is the term explained in any of the relevant legislative debates or reports; and it derives no meaning from the statutory policy or framework. Moreover, it is not in common or general usage outside of the railroad world. It is a technical term found only in railroad parlance. Evidence as to the meaning attached to it by those who are familiar with such parlance therefore becomes relevant in determining the meaning of the term as used by Congress. See O'Hara v. Luckenbach S.S. Co., 269 U.S. 364, 370, 371, 46 S.Ct. 157, 159, 160, 70 L.Ed. 313. 10 The parties, all of whom are well acquainted with railroad terminology, stipulated certain facts. It was agreed that a railroad yard is a system of tracks within defined limits over which movements of engines and cars not authorized by timetable or train order may be made, subject to prescribed signals and rules or special instructions. It was further agreed that the 'yard-service employees' or 'yardmen' working in a yard perform such functions as switching, making and breaking up trains, moving and storing cars, inspecting cars and freight, repairing cars, maintaining equipment, sending and receiving messages, keeping records and making reports. As to yardmasters, the stipulation stated: 'All such yardmen and other employees performing work in a yard are directed and supervised in their work by a yardmaster, with the aid, if necessary, of one or more assistant yardmasters. Yardmasters do not and may not perform the work of yardmen and employees in train and engine service; they may perform some clerical work, if their entire time is not taken up with the direction and supervision of yardmen and other employees working in yards. * * * In general, yardmasters run the yards, of which they are in charge, and they are responsible for conditions within the same. Necessarily, they exercise a substantial measure of individual initiative and responsibility.' 11 All of the witnesses who testified at the hearing agreed that yardmasters are functionally differ nt from other employees working in yards due to their supervisory activities and responsibilities. The evidence also indicated that yardmasters have supervision over some who work within the yards but who are not spoken of as 'yardservice employees,' such as storekeepers, section men and clerks. On the crucial point, there was substantial agreement among the witnesses that yardmasters are not commonly designated in railroad parlance as 'yard-service employees,' that term being reserved for the yardmen described in the stipulation who work under the supervision of the yardmasters.3 12 The documentary evidence submitted by the parties tends to bear out this testimony Thus numerous past awards made by the First and Fourth Divisions speak of yardmasters as distinct from yardmen or yard-service employees.4 And the Interstate Commerce Commission, in making various classifications of railroad employees, recognizes a clear distinction between yardmasters and those over whom they have supervision.5 And other documents introduced into the record and sources to which the parties have made reference either show the same distinction or are inconclusive on the matter.6 13 The District Court was therefore justified in finding as a fact that railroad usage has never included yardmasters and assistant yardmasters within the meaning of the terms 'yard-service employees' or yardmen.' That court was also correct in concluding that the history of the adjustment of disputes prior to the amendment of the present statute in 1934 affords no assistance in resolving the problem confronting us. As pointed out more fully by the Circuit Court of Appeals, 7 Cir., 152 F.2d at 327, 328, disputes involving yardmasters and disputes involving yard-service employees were previously submitted to various adjustment boards, which had been created by agreement, primarily on the basis of membership in signatory labor organizations. Jurisdiction was not then grounded, as it is now, on a craft or job classification irrespective of the labor organization representing the particular employees involved. Hence there was no occasion giving rise to a consistent and unequivocal administrative interpretation of the term 'yard-service employees' to include yard-masters—an interpretation which, had it existed, might have shed some light on the adoption of the term by Congress in 1934. 14 Petitioners also urge that the jurisdiction of the First Division over yardmaster disputes is established by the settled administrative action of that division since its creation in 1934.7 There is a serious question whether the jurisdictional issue now before us was fully considered by the division in many of the cases to which reference is made; certainly none of the awards did more than recite perfunctorily that the division had jurisdiction over the particular dispute. And none of the awards involved the Railroad Yardmasters of America, which has consistently objected to the assumption of jurisdiction by the First Division.8 But aside from those factors, the present and prolonged administrative deadlock on the jurisdictional issue destroys whatever persuasive effect these prior adjudications by the First Division may have had. The administrative action has become anything but settled. 15 Finally, petitioners point out that Congress has failed to amend § 3, First (h), so as specifically to exclude 'yardmasters and other subordinate officers' from the jurisdiction of the First Division, despite the introduction of two bills to that effect in the Senate in 1940 and 1941.9 These bills were sent to an appropriate committee, but were never reported out. It does not appear whether the bills died because they were thought to be unnecessary or undesirable. No hearings were held; no committee reports were made. Under such circumstances, the failure of Congress to amend the statute is without meaning for purposes of statutory interpretation. 16 We accordingly agree with the two courts below that yardmasters are not 'yard-service employees' within the jurisdiction of the First Division of the National Railroad Adjustment Board. Yardmaster disputes fall exclusively within the 'catch-all' jurisdiction of the Fourth Division. 17 Affirmed. 18 Mr. Justice FRANKFURTER. 19 After the fullest consideration this Court recently held in two cases that jurisdictional disputes between railroad unions subject to the Railway Labor Act are not within judicial competence. Switchmen's Union of N.A. v. National Mediation Board, 320 U.S. 297, 64 S.Ct. 95, 88 L.Ed. 61; General Committee v. Missouri-Kansas-Texas R. Co., 320 U.S. 64 S.Ct. 146, 88 L.Ed. 76. The decision in those cases derived from the fact that Congress 'had not expressly authorized judicial review' and the history, the setting, and the implications of railway labor controversies counseled against inferring judicial review. Here we have a controversy between two divisions of the National Railroad Adjustment Board as to the disputes over which they respectively have jurisdiction. This controversy, however, entails consideration of technical problems in the railroad world and consequences in construing the distribution of authority among the divisions of the Adjustment Board for which judicial review seems no more appropriate than it did to settle jurisdictional conflicts between railroad brotherhoods. Not finding any command in the statute for judicial review of this controversy, it seems to me, therefore, appropriate to leave it to the mediatory resources of the Railway Labor Act. If it be said that thus far deadlock has resulted, it does not follow that it will continue, if the Court keeps hands off. In any event, because mediatory machinery may not be effective is not a sufficient reason for judicial intervention, unless the direction of Congress is much more clear than I find it in the Railway Labor Act. This view is reinforced by the fact that the decision of the County may be no more than an advisory opinion. My doubts have not commended themselves to the Court, but since I am not alone in entertaining them it seemed to me that they should be expressed. 1 48 Stat. 1185, 1190—1191, 45 U.S.C. § 153, First (h), 45 U.S.C.A. § 153, subd. 1(h). 2 A decree was entered in the District Court in 1938 commanding the Fourth Division to hear and determine certain disputes involving yardmasters. That case arose on a petition for mandamus filed by the Railroad Yardmasters of America against the members of the Fourth Division. After issuance of summons, the members of the Fourth Division appeared and filed an answer stating that they were of the opinion that the Fourth Division did have jurisdiction. The decree was then entered with the consent of the parties to the action, but without argument and without the District Court being aware that a public question was involved and that other parties had an interest in the matter. The District Court and the Circuit Court of Appeals in the instant case held that this 1938 decree was not res judicata of the issue now presented in view of the circumstances under which it was entered. 3 Petitioners' sole witness testified: 'Yardmen are usually men who have to do with the making up and breaking up of trains, switching in the yard, and supervising the work of the yardmen, which would include, in my opinion, yardmasters and assistant yardmasters.' But his opinion as to yardmasters in this respect was based upon his understanding of the law, not upon his own use or his knowledge of the use of the term 'yard-service employees.' He explained his belief that 'every tribunal that has decided a dispute for men engaged in yard service, such as yard engineers, firemen, hostlers, hostler helpers, road conductors, trainmen and yardmen, have also decided cases for yardmasters and assistant yardmasters. Division 1, set up under, by agreement, in 1918, the very first board in existence, did that. The Western Train Service Board, upon which I served, did that, as evidenced by Board decisions submitted here as an exhibit.' This witness also stated that yardmasters 'fit more nearly in with the yard service employees than with any other class'—a recognition that yardmasters are different in fact from yard-service employees and that they do not fit precisely within that category. 4 See National Railroad Adjustment Board, First Division, Award No. 1274 (July 13, 1936), Award No. 1464 (Oct. 7, 1936), Award No. 1603 (Dec. 14, 1936), Award No. 1648 (Jan. 21, 1937), Award No. 1728 (Fed. 11, 1937), Award No. 1896 (April 15, 1937), Award No. 2065 (July 16, 1937), Award No. 2364 (Nov. 12, 1937), Award No. 4466 (Jan. 15, 1940), Award No. 4548 (Feb. 8, 1940), Award No. 4584 (Feb. 20, 1940), Award No. 5816 (June 24, 1941), Award No. 7355 (Oct. 15, 1942); Fourth Division, Award No. 67 (July 25, 1940). 5 See Ex parte No. 72 (Nov. 24, 1920); Ex parte No. 106, Six-Hour Day Investigation, 190 I.C.C. 750. The forms and classification plan to be used in reporting wage and compensation data of steam railroad employees to the United States Railroad Labor Board and the Interstate Commerce Commission place yardmasters under 'Supervisory Skilled Trades and Labor Service,' while those performing yard-service work are placed under 'Train and Engine Service.' 6 Thus the method used by the National Railroad Adjustment Board in indexing awards of the First Division does not provide any helpful guide as to the usage of 'yard-service employees' in the railroad world. 7 See cases cited in footnote 4, supra. 8 See footnote 2, supra. 9 S. 4375, 76th Cong., 3d Sess.; S. 1660, 77th Cong., 1st Sess. Both bills were introduced by Senator Smith at the request of the American Short Line Railroad Association.

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329 U.S. 452 67 S.Ct. 401 91 L.Ed. 416 JESIONOWSKIv.BOSTON & M.R.R. No. 88. Argued Dec. 16, 1946. Decided Jan. 13, 1947. Mr.Thomas C. O'Brien, of Boston, Mass., for petitioner. Mr. Francis P. Garland, of Boston, Mass., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 Petitioner brought this action for damages in the Federal District Court under the Federal Employers Liability Act, 35 Stat. 65, 53 Stat. 1404, 45 U.S.C. § 51 et seq., 45 U.S.C.A. § 51 et seq., for causing the death of her intestate. Count I alleged that 'By reason of a defect or insufficiency, due to the negligence of the defendant, in its car, track, or roadbed, the car upon which the plaintiff decedent was riding was derailed * * *,' causing the decedent to be thrown from the car and killed. Count II, without specifying any particular acts of negligence, charged generally that the derailment and decedent's death were the 'result of the negligence of the defendant.' After the evidence was in, the Court, at the request of the respondent, directed the jury to return a verdict for the respondent on the first count. Respondent's motion for directed verdict, on the second count on the ground that the evidence failed to justify a finding of negligence, and that it showed that deceased was killed as the sole result of his own negligence, was overruled. The jury rendered a verdict for petitioner and judgment was entered on it. The Circuit Court of Appeals reversed and remanded to the District Court with directions to render judgment for the respondent. 154 F.2d 703. 2 The trial court charged the jury that the burden was upon petitioner to prove by a fair preponderance of the evidence that the deceased's death was caused by respondent's negligence. It invoked the trial rule under which negligence may be inferred from unusual happenings growing out of conditions under a defendant's control. Referring to this rule under the name of res ipsa loquitur, the court charged: 'Of course if the deceased's negligence was the sole cause of the accident the plaintiff here cannot recover. And since there can be no application of the doctrine of res ipsa loquitur if other causes than the negligence of the defendant, its agents or servants, might have produced the accident, the plaintiff is bound, she has the burden, to exclude the operation of such causes by a fair preponderance of the evidence before the rule can be applied. This is so because if there are other causes than the negligence of the defendant that might have caused the accident, the defendant cannot be said o be in exclusive control—one of the prerequisites to the application of the rule here invoked.' The Circuit Court of Appeals reversed because it thought that the jury should not be permitted to draw an inference of defendant's negligence from an extraordinary accident growing out of a general set of circumstances which included activities of the injured person, even though a jury, under proper instructions, could find from the evidence that the injured person's activities did not cause the injury. The Circuit Court's limitation of the jury's province by this interpretation of a doctrine of res ipsa loquitur raised a question of importance in the trial of cases arising under federal law. We granted certiorari to consider this question. 328 U.S. 830, 66 S.Ct. 1121. 3 The testimony, so far as relevant, to point the issues may be briefly summarized. Four railroad cars were being pushed backward and eastward by an engine in order to put them on a siding north of the main track. It was the duty of deceased, a brakeman, to throw the switch before the first car reached it in order that the four cars would take the siding. There was evidence that he threw the switch and gave a signal to the engineer to back the cars. Respondent's evidence was sufficient to authorize but not to compel the jury to find that the deceased negligently threw the switch while the lead car in the backward movement straddled the switch with one set of the car wheels on one side of the switch and one on the other. If true, this could mean that the wheels east of the switch would move down the main line and the others would enter the siding when the switch was thrown and the backward movement took place, thus probably causing derailment. If the jury had believed respondent's evidence that this last car was astride the switch when it was thrown, it would have been authorized, under the court's charge, to find for the respondent. But about 75 feet east of this switch, at a point where the south rail of the siding track intersected the north rail of the main track, there was a frog. There was testimony that this frog operated with a spring mechanism, and that if the spring failed to work when the wheels passed over it, the cars might be derailed. Some other evidence tended to show that, at the time the derailment occurred, splinters and planks were thrown into the air near the frog. Other evidence tended to show that planks and splinters were found on the track. Some testimony showed that they were close to the switch, and some that they were close to the frog. There was evidence that the frog and switch had been in good condition before the derailment and after the derailment. The cars had been operated and the tracks had been used previously, so far as the evidence showed, without any similar mishap. 4 In San Juan Light & Transit Co. v. Requena, 224 U.S. 89, 98, 99, 32 S.Ct. 399, 401, 56 L.Ed. 680, this Court said: 'When a thing which causes injury, without fault of the injured person, is shown to be under the exclusive control of the defendant, and the injury is such, as in the ordinary course of things, does not occur if the one having such control uses proper care, it affords reasonable evidence, in the absence of an explanation, that the injury arose from the defendant's want of care.' Both prior to and after that case was decided, this Court has acted upon this rule in varying types of cases. Western Transportation Co. v. Downer, 11 Wall. 129, 20 L.Ed. 160; Inland & Seaboard Coasting Co. v. Tolson, 139 U.S. 551, 555, 11 S.Ct. 653, 654, 35 L.Ed. 270; Gleeson v. Virginia M.R. Co., 140 U.S. 435, 11 S.Ct. 859, 35 L.Ed. 458; Sweeney v. Erving, 228 U.S. 233, 240, 33 S.Ct. 416, 418, 57 L.Ed. 815, Ann.Cas.1914D, 905. See also Southern Railway-Carolina Division v. Bennett, 233 U.S. 80, 34 S.Ct. 566, 58 L.Ed. 860; Foltis, Inc. v. City of New York, 287 N.Y. 108, 38 N.E.2d 455, and cases collected, 153 A.L.R. 1134. The Circuit Court of Appeals thought, however, that the rule was improperly pplied in this case because the railroad instrumentalities here were not under the 'exclusive control' of the railroad; that 'The thing that caused the injury could have been Jesionowski's fault, or it could have been the railroad corporation's fault.' 154 F.2d 703, 705. 5 The court's reasoning was this: Petitioner was not entitled to have her case submitted to the jury except under the rule of res ipsa loquitur. That rule has rigidly defined prerequisites, one of which is that to apply it, the defendant must have exclusive control of all the things used in an operation which might probably have caused injury. Here the railroad did not have exclusive control of all probable causative factors since deceased had some immediate control over switching and signaling. 'Exclusive control' of all probable, causative factors, the court reasoned, means that res ipsa loquitur cannot be applied even though those non-exclusively controlled factors are clearly shown to have had no causal connection with the accident. We cannot agree. Res ipsa loquitur, thus applied, would bar juries from drawing an inference of negligence on account of unusual accidents in all operations where the injured person had himself participated in the operations, even though it was proved that his operations of the things under his control did not cause the accident. This viewpoint unduly restricts the power of juries to decide questions of fact, and in this case the jury's right to draw inferences from evidence and the sufficiency of that evidence to support a verdict are Federal questions. A conceptualistic interpretation of res ipsa loquitur has never been used by this Court to reduce the jury's power to draw inferences from facts. Such an interpretation unduly narrows the doctrine as this Court has applied it. 6 This Court said, in Sweeney v. Erving, 228 U.S. 233, 240, 33 S.Ct. 416, 418, 57 L.Ed. 815, Ann.Cas.1914D, 905, a decision which cut through the mass of verbiage built up around the doctrine of res ipsa loquitur, that 'res ipsa loquitur means that the facts of the occurrence warrant the inference of negligence, not that they compel such an inference; that they furnish circumstantial evidence of negligence where direct evidence of it may be lacking, but it is evidence to be weighed, not necessarily to be accepted as sufficient; that they call for explanation or rebuttal, not necessarily that they require; that they make a case to be decided by the jury, not that they forestall the verdict.' Thus, the question here really is not whether the application of the rule relied on fits squarely into some judicial definition, rigidly construed, but whether the circumstances were such as to justify a finding that this derailment was a result of the defendant's negligence. We hold that they were. 7 Derailments are extraordinary, not usual, happenings. When they do occur, a jury may fairly find that they occurred as a result of negligence. It is true that the jury might have found here that this accident happened as a result of the negligence of the deceased; but although the respondent offered evidence to establish this fact, it 'did not satisfy the jury.' Southern Ry.-Carolina Division v. Bennett, supra, 233 U.S. at page 86, 34 S.Ct. at page 567. With the deceased freed from any negligent conduct in connection with the switch or the signaling, we have left an accident ordinarily the result of negligence which may be attributed only to the lack of care of the railroad, the only other agency involved. Once a jury, having been appropriately instructed, finds that the employee's activities did not cause the derailment, the defendant remains as the exclusive controller of all the factors which may have caused the accident. It would run counter to common everyday experience to say that, after a finding by the jury that the throwing of the switch and the signaling did not contribute to the derailment, the jury was without authority to infer that either the negligent operation of the trai or the negligent maintenance of the instrumentalities other than the switch was the cause of the derailment. It was uncontroverted that the railroad had exclusive control of both. We think that the facts support the jury's findings both that the deceased's conduct did not cause the accident and that the railroad's negligence did. 8 Respondent also urges here, as it did in the Circuit Court of Appeals, that because the trial judge directed a verdict for it on the first count of the complaint, which charged a defect in the car, track or roadbed, the court was not justified in submitting to the jury the question of a defect in these respects under the second count. The Circuit Court held that this question was not properly raised before it because respondent had failed on appeal to make 'a concise statement' of the point as required by Rule 75(d) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. Respondent argues that the question was properly raised, though not specifically, by its general point that 'the doctrine of res ipsa loquitur is not applicable to the facts of this case.' We cannot hold that the Circuit Court erred when it refused to consider the question because of respondent's failure to comply with Rule 75(d). 9 Reversed. 10 Mr. Justice REED, Mr. Justice JACKSON and Mr. Justice BURTON would affirm on the grounds stated in the opinion of the Circuit Court of Appeals for the First Circuit.

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329 U.S. 585 67 S.Ct. 398 91 L.Ed. 521 UNITED STATESv.THAYER-WEST POINT HOTEL CO. No. 106. Argued Dec. 20, 1946. Decided Jan. 20, 1947. Mr. Oscar H. Davis, of Washington, D.C., for petitioner. Mr.E. J. Ellenwood, of New York City, for respondent. Mr. Justice MURPHY delivered the opinion of the Court. 1 The decision here turns upon the power of the Court of Claims, in light of § 177(a) of the Judicial Code,1 to include interest in its award of 'just compensation' to a lessee for the construction of a hotel and other buildings pursuant to the provisions of the Act of March 30, 1920.2 2 The act of March 30, 1920, authorizes the Secretary of War to lease land on the United States Military Reservation at West Point, N.Y., to any person for a term not exceeding 50 years upon which to erect a hotel and other necessary buildings in connection therewith. The lease is to contain such conditions, terms, reservations and covenants as may be agreed upon and is to provide 'for just compensation to the lessees for the construction of said hotel, appurtenances, and equipments, to be paid to said lessees at the termination of said lease.' 3 On October 17, 1924, the Secretary of War duly made a lease under this Act to one Williams for a period of 50 years. The lease provided, among other things, that it might be cancelled at any time by the Secretary if the lessee should fail to observe all the covenants and conditions in the lease. One of the covenants was that the lessee was to 'keep the said hotel open for business every day during the continuance of this lease, except at such times as permission to close may be given in writing by the Superintendent, U.S.M.A.' Upon a cancellation of the lease, 'just compensation' was to be paid to the lessee for the construction of the hotel, appurtenances and equipment, and title thereto was to pass at once to the United States. Similar provisions were made in connection with the termination of the lease on the expiration of the 50-year term. The lease also set forth numerous restrictions and requirements as to the operation of the hotel—such restrictions and requirements being primarily for the benefit of the Military Academy. 4 The lease was assigned to a corporation and a hotel and other buildings were subsequently erected. Through a series of events which need not be detailed here, the respondent took over the leasehold and the hotel properties in 1930 with the approval of the Superintendent of the Military Academy. Respondent began operating the hotel on January 1, 1931, and continued under the terms of the lease until March 10, 1943. 5 On January 5, 1943, respondent wrote to the Secretary of War that conditions then existing made continued operation of the hotel impossible and that to avoid a curtailment of operations or a closing down of the hotel 'the properties should be owned and operated by the Government.' It was accordingly suggested that the Secretary declare the lease forfeited upon the closing of the hotel by respondent, a default contemplated by the lease. The Secretary agreed to this proposal. The respondent then gave notice of its intention to close the hotel on the morning of March 10, 1943. The agents of the Secretary immediately took over the possession, management and operation of the hotel on March 10 and shortly thereafter the Secretary declared the lease annulled. 6 The parties were unable to agree on the amount of 'just compensation' due under the lease. Respondent then brought this suit in the Court of Claims, praying for a judgment in the sum of $1,932.000. That court found that the 'total of just compensation to the plaintiff for construction of the hotel, its appurtenances, and equipments, is therefore $867,682, as of March 10, 1943.' 64 F.Supp. 565, 568. The court then added interest at the rate of 4% per annum from March 10, 1943, to the date of payment as 'additional allowance to make compensation a just one as of the date of payment.' The sole question before us concerns the propriety of adding the 4% interest from March 10, 1943. 7 The pertinent part of § 177(a) of the Judicial Code provides that 'No interest shall be allowed on any claim up to the time of the rendition of judgment by the Court of Claims, unless upon a contract expressly stipulating for the phyment of interest, * * *.' Section 177(a) thus embodies the traditional rule that interest cannot be recovered against the United States upon unpaid accounts or claims in the absence of an express provision to the contrary in a relevant statute or contract. Tillson v. United States, 100 U.S. 43, 47, 25 L.Ed. 543; United States v. North American Transportation & Trading Co., 253 U.S. 30, 336, 40 S.Ct. 518, 521, 64 L.Ed. 935; United States v. Goltra, 312 U.S. 203, 207, 61 S.Ct. 487, 490, 85 L.Ed. 776. This rule is inapplicable, however, where the United States takes property under its power of eminent domain; in such cases it has consistently been held that the Fifth Amendment's reference to 'just compensation' entitles the property owner to receive interest from the date of the taking to the date of payment as a part of his just compensation. Seaboard Air Line Ry. Co. v. United States, 261 U.S. 299, 306, 43 S.Ct. 354, 356, 67 L.Ed. 664; Brooks-Scanlon Corporation v. United States, 265 U.S. 106, 123, 44 S.Ct. 471, 474, 68 L.Ed. 934; Phelps v. United States, 274 U.S. 341, 344, 47 S.Ct. 611, 612, 71 L.Ed. 1083. 8 Since it is clear in the instant case that the United States did not exercise its power of eminent domain and that there was no taking of the hotel properties in the legal sense, we can put to one side the eminent domain situation. There is nothing more here than an ordinary contractual relationship between the United States and the respondent. That relationship was voluntarily entered into by respondent's predecessor and was severed at respondent's suggestion. The Government's liability to pay for the construction of the hotel properties was fixed by the Act of March 30, 1920, and by the lease, not by the Constitution. The sole issue thus becomes whether there is any express provision in the Act or in the lease permitting the recovery of interest under the circumstances. Only if there is such a provision can respondent avoid the traditional rule set forth in § 177(a). 9 Respondent's claim in this respect rests upon the references in the Act and in the lease to the payment of 'just compensation' for the construction of the hotel, appurtenances and equipment. 'Just compensation,' it is said, is to be given the same meaning here as in the case of a taking under the power of eminent domain, thereby entitling respondent to the full value of the properties down to the date of payment. From this viewpoint, the Court of Claims could use interest at the rate of 4% as the measure of the value of the use of the hotel properties from the time when the Government took possession on March 10, 1943, to the time of payment and include such interest as a component part of just compensation. The conclusion is reached that the term 'just compensation,' as used in the Act and in the lease, constitutes an express provision for interest so that the bar of § 177(a) is removed. We cannot agree. 10 The fact that 'just compensation' includes interest in the eminent domain setting does not necessarily mean that the term must be given the same scope in other situations. United States v. Goltra, supra. It may or it may not imply an obligation to pay interest. For example, interest conceivably may not be contemplated where the term refers to compensatory damages for a tort or a breach of contract, or where it has reference to the price to be paid for the exchange or sale of property at a future date. Hence, in the absence of constitutional connotations, 'just compensation' is not a term of art so far as interest is concerned. The inclusion or exclusion of interest depends upon other contractual provisions, the intention of the parties and the circumstances surrounding the use of the term. 11 But in order to override the historical rule codified in § 177(a), something more is necessary than an equivocal use of the term 'just compensation.' It is not enough that the term might be construed to include the payment of interest. As § 177(a) itself indicates, there must be a provision in the contract 'expressly stipulating for the payment of interest.' That provision must be affirmative, clear-cut, unambiguous; and an unexpressed intention by the parties that the term 'just compensation' be construed to include interest is insufficient. Likewise, where a statute is relied upon to overcome the force of § 177(a), the intention of Congress to permit the rec very of interest must be expressly and specifically set forth in the statute. Tillson v. United States, supra, 100 U.S. at page 46, 25 L.Ed. 543; United States ex rel. Angarica de la Rua v. Bayard, 127 U.S. 251, 260, 8 S.Ct. 1156, 1160, 1161, 32 L.Ed. 159. Mere use of the term 'just compensation,' without more, is no substitute for an express provision for interest. 12 Here neither the Act of March 30, 1920, nor the lease under which respondent operated contains an express provision for the payment of interest, either in addition to or as a part of the 'just compensation' to be paid to respondent. If the United States had desired to provide by statute or to contract in the lease for the payment of interest, it would have been easy to have said so in express terms.3 Because it did not say so, we are led irresistibly to the conclusion that it did not intend to negative the effect of § 177(a) in this instance. Tillson v. United States, supra. 13 We therefore reverse the judgment of the Court of Claims to the extent that it includes an allowance for interest. 14 Reversed. 1 28 U.S.C. § 284(a), 28 U.S.C.A. § 284(a). 2 41 Stat. 538, 548. 3 Congress has expressly provided for the payment of interest in other instances. See Judicial Code, § 177(b), 28 U.S.C. § 284(b), 28 U.S.C.A. § 284(b); Contract Settlement Act of 1944, 58 Stat. 649, 654, § 6(f), 41 U.S.C., Supp. V. § 106(f), 41 U.S.C.A. § 106(f).

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329 U.S. 545 67 S.Ct. 451 91 L.Ed. 488 MORRISv.JONES, Director of Insurance of I linois. No. 62. Argued Dec. 9, 10, 1946. Decided Jan. 20, 1947. Rehearing Denied March 3, 1947. See 330 U.S. 854, 67 S.Ct. 858. Messrs. Ford W. Thompson and J. L. London, both of St. Louis, Mo., for appellant. Mr. Ferre C. Watkins, of Chicago, Ill., for appellee. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case presents a substantial question under the Full Faith and Credit Clause (Art. IV, § 1) of the Constitution. 2 Chicago Lloyds, an unincorporated association, was authorized by Illinois to transact an insurance business in Illinois and other States. It qualified to do business in Missouri. In 1934 petitioner sued Chicago Lloyds in a Missouri court for malicious prosecution and false arrest. In 1938, before judgment was obtained in Missouri, respondent's predecessor was appointed by an Illinois court as statutory liquidator for Chicago Lloyds. The Illinois court fixed a time for the filing of claims against Chicago Lloyds and issued an order staying suits against it. Petitioner had notice of the stay order but nevertheless continued to prosecute the Missouri suit. At the instance of the liquidator, however, counsel for Chicago Lloyds withdrew from the suit and did not defend it, stating to the Missouri court that the Illinois liquidation proceedings had vested all the property of Chicago Lloyds in the liquidator. Thereafter petitioner obtained a judgment in the Missouri court and filed an exemplified copy of it as proof of his claim in the Illinois proceedings. An order disallowing the claim was sustained by the Illinois Supreme Court against the contention that its allowance was required by the Full Faith and Credit Clause. People ex rel. Jones v. Chicago Lloyds, 391 Ill. 492, 63 N.E.2d 479. 3 The case was brought here by appeal. We postponed the question of jurisdiction to the merits. 66 S.Ct. 979. Under the rule of Roche v. McDonald, 275 U.S. 449, 450, 48 S.Ct. 142, 72 L.Ed. 365, 53 A.L.R. 1141, the question whether full faith and credit should have been given the Missouri judgment does not present a ground for appeal. But treating the jurisdictional statement as a petition for certiorari (Judicial Code § 237(c), 28 U.S.C. § 344(c), 28 U.S.C.A. § 344(c), that writ is granted; and we come to the merits of the controversy. 4 The Full Faith and Credit Clause and the statute which implements it (R.S. § 905, 28 U.S.C. § 687, 28 U.S.C.A. § 687) require the judgments of the courts of one State to be given the same faith and credit in another State as they have by law or usage in the courts of the State rendering them. The Illinois Supreme Court concluded that compliance with that mandate required that precedence be given to the Illinois decree appointing the statutory liquidator. It held that title to all the property of Chicago Lloyds, wherever located, vested in the liquidator; that the liquidator was entitled to keep and retain possession of the property to the exclusion of the process of any other court; that although Missouri might give priority to Missouri creditors in the property of the debtor located there,1 Clark v. Williard, 292 U.S. 112, 54 S.Ct. 615, 78 L.Ed. 1160, the Missouri judgment could have no priority as respects Illinois assets; that if a liquidator had been appointed in Missouri, petitioner could not have obtained his judgment, or if he had obtained it, he could not have enforced it against the property in the hands of the Missouri liquidator, see McDonald v. Pacific States Life Ins. Co., 344 Mo. 1, 124 S.W.2d 1157; and that to disallow the judgment in the Illinois proceedings is, therefore, to give it the same effect that it would have had under the same circumstances in Missouri. 5 First. We can put to one side, as irrelevant to the problem at hand, several arguments which have been pressed upon us. We are n t dealing here with any question of priority of claims against the property of the debtor. For in this proceeding petitioner is not seeking, nor is respondent denying him, anything other than the right to prove his claim in judgment form. No question of parity of treatment of creditors, or the lack thereof (see Blake v. McClung, 172 U.S. 239, 19 S.Ct. 165, 43 L.Ed. 432), is in issue. Nor is there involved in this case any challenge to the Illinois rule, which follows Relfe v. Rundle, 103 U.S. 222, 26 L.Ed. 337, that title to all the property of Chicago Lloyds, wherever located, vested in the liquidator. Nor do we have here a challenge to the possession of the liquidator either through an attempt to obtain a lien on the property or otherwise. As pointed out in Riehle v. Margolies, 279 U.S. 218, 224, 49 S.Ct. 310, 312, 73 L.Ed. 669, the distribution of assets of a debtor among creditors ordinarily has a 'two-fold aspect.' It deals 'directly with the property' when it fixes the time and manner of distribution. No one can obtain part of the assets or enforce a right to specific property in the possession of the liquidation court except upon application to it. But proof and allowance of claims are matters distinct from distribution. They do not 'deal directly with any of the property'. 'The latter function, which is spoken of as the liquidation of a claim, is strictly a proceeding in personam.' Id., 279 U.S. at page 224, 49 S.Ct. at page 313, 73 L.Ed. 669. The establishment of the existence and amount of a claim against the debtor in no way disturbs the possession of the liquidation court, in no way affects title to the property, and does not necessarily involve a determination of what priority the claim should have. And see Chicago Title & Trust Co. v. Fox Theatres Corp., 2 Cir., 69 F.2d 60, 91 A.L.R. 991. 6 One line of cases holds that where a statutory liquidator or receiver is appointed, the court taking jurisdiction of the property draws unto itself exclusive control over the proof of all claims.2 But the notion that such control over the proof of claims is necessary for the protection of the exclusive jurisdiction of the court over the property is a mistaken one. As Justice Beach of the Supreme Court of Errors of Connecticut aptly said, 'The question is simply one of the admissibility and effect of evidence; and the obligation to receive a judgment in evidence is no more derogatory to the jurisdiction in rem than the obligation to receive in evidence a promissory note or other admissible evidence of debt.' Beach, Judgment Claims in Receivership Proceedings, 30 Yale L. Journ. 674, 680. 7 Moreover, we do not have here a situation like that involved in Pendleton v. Russell, 144 U.S. 640, 12 S.Ct. 743, 36 L.Ed. 574, where it was sought to prove in a New York receivership of a dissolved corporation a judgment obtained in Tennessee after dissolution. The proof was disallowed, dissolution having operated, like death, as an abatement of the suit. No such infirmity appears to be present in the Missouri judgment; and the Illinois Supreme Court did not hold that the appointment of a liquidator f r Chicago Lloyds operated as an abatement of the suit. Nor is it sought on any other ground to bring the Missouri judgment within the exception on which Williams v. State of North Carolina, 325 U.S. 226, 65 S.Ct. 1092, 89 L.Ed. 1577, 157 A.L.R. 1366, rests, by challenging the jurisdiction of the Missouri court over either the parties or the subject matter. Nor is there any lack of privity between Chicago Lloyds and the Illinois liquidator. Cf. Ingersoll v. Coram, 211 U.S. 335, 362—364, 29 S.Ct. 92, 98, 99, 53 L.Ed. 208. There is no difference in the cause of action, cf. United States v. California Bridge & Construction Co., 245 U.S. 337, 38 S.Ct. 91, 62 L.Ed. 332, whether Chicago Lloyds or the liquidator is sued. The Missouri judgment represents a liability for acts committed by Chicago Lloyds, not for those of the liquidator. The claims for which the Illinois assets are being administered are claims against Chicago Lloyds. The Missouri judgment represents one of them. There is no more reason for discharging a liquidator from the responsibility for defending pending actions than there is for relieving a receiver of that task. Riehle v. Margolies, supra. 8 Second. 'A judgment of a court having jurisdiction of the parties and of the subject matter operates as res judicata, in the absence of fraud or collusion, even if obtained upon a default.' Riehle v. Margolies, supra, 279 U.S. at page 225, 49 S.Ct. at page 313, 73 L.Ed. 669. Such a judgment obtained in a sister State is, with exceptions not relevant here, see Williams v. State of North Carolina, 317 U.S. 287, 294, 295, 63 S.Ct. 207, 211, 87 L.Ed. 279, 143 A.L.R. 1273, entitled to full faith and credit in another State, though the underlying claim would not be enforced in the State of the forum. Christmas v. Russell, 5 Wall. 290, 18 L.Ed. 475; Fauntleroy v. Lum, 210 U.S. 230, 28 S.Ct. 641, 52 L.Ed. 1039; Roche v. McDonald, supra; Titus v. Wallick, 306 U.S. 282, 291, 59 S.Ct. 557, 562, 83 L.Ed. 653. It is no more important that the suit on this underlying claim could not have been maintained in Illinois after the liquidator had been appointed than the fact that a statute of limitations of the State of the forum might have barred it. See Christmas v. Russell, supra; Roche v. McDonald, supra. And the Missouri judgment may not be defeated by virtue of the fact that under other circumstances petitioner might not have been able to obtain it in Missouri or to have received any benefit from it there, as, for example, if a liquidator had been appointed for the debtor in Missouri prior to judgment. The full faith and credit to which a judgment is entitled is the credit which it has in the State from which it is taken, not the credit that under other circumstances and conditions it might have had. Moreover, the question whether a judgment is entitled to full faith and credit does not depend on the presence of reciprocal engagements between the States. 9 Under Missouri law petitioner's judgment was a final determination of the nature and amount of his claim. See Pitts v. Fugate, 41 Mo. 405; Central Trust Co. of Mobile v. D'Arcy, 238 Mo. 676, 142 S.W. 294; State ex rel. Robb v. Shain, 347 Mo. 928, 149 S.W.2d 812. That determination is final and conclusive in all courts. 'Because there is a full faith and credit clause a defendant may not a second time challenge the validity of the plaintiff's right which has ripened into a judgment'. Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 439, 440, 64 S.Ct. 208, 214, 88 L.Ed. 149, 150 A.L.R. 413. For the Full Faith and Credit Clause established 'throughout the federal system the salutary principle of the common law that a litigation once pursued to judgment shall be as conclusive of the rights of the parties in every other court as in that where the judgment was rendered'. Id., 320 U.S. at page 439, 64 S.Ct. at page 214, 88 L.Ed. 149, 150 A.L.R. 413. And see Riley v. New York Trust Co., 315 U.S. 343, 348, 349, 62 S.Ct. 608, 612, 86 L.Ed. 885. The nature and amount of etitioner's claim may not, therefore, be challenged or retried in the Illinois proceedings. 10 As to respondent's contention that the Illinois decree, of which petitioner had notice, should have been given full faith and credit by the Missouri court, only a word need be said. Roche v. McDonald, supra, 275 U.S. at pages 454, 455, 48 S.Ct. at page 144, 72 L.Ed. 365, 53 A.L.R. 1141, makes plain that the place to raise that defense was in the Missouri proceedings. And see Treinies v. Sunshine Mining Co., 308 U.S. 66, 77, 60 S.Ct. 44, 50, 84 L.Ed. 85. And whatever might have been the ruling on the question, the rights of the parties could have been preserved by a resort to this Court which is the final arbiter of questions arising under the Full Faith and Credit Clause. Williams v. State of North Carolina, 317 U.S. 287, 302, 63 S.Ct. 207, 215, 87 L.Ed. 279, 143 A.L.R. 1273. In any event the Missouri judgment is res judicata as to the nature and amount of petitioner's claim as against all defenses which could have been raised. Roche v. McDonald, supra; Milwaukee County v. M. E. White Co., 296 U.S. 268, 275, 56 S.Ct. 229, 233, 80 L.Ed. 220; Magnolia Petroleum Co. v. Hunt, supra, 320 U.S. at page 438, 64 S.Ct. at page 213, 88 L.Ed. 149, 150 A.L.R. 413. 11 It is finally suggested that since the Federal Bankruptcy Act provides for exclusive adjudication of claims by the bankruptcy court3 and excepts insurance companies from the Act (§ 4, 52 Stat. 840, 845, 11 U.S.C. § 22, 11 U.S.C.A. § 22; Vallely v. Northern Fire & Marine Ins. Co., 254 U.S. 348, 41 S.Ct. 116, 65 L.Ed. 297), the state liquidators of insolvent insurance companies should have the same control over the determination of claims as the bankruptcy court has. This is to argue that by reason of its police power a State may determine the method and manner of proving claims against property which is in its jurisdiction and which is being administered by its courts or administrative agencies. We have no doubt that it may do so except as such procedure collides with the federal Constitution or an Act of Congress. See Broderick v. Rosner, 294 U.S. 629, 55 S.Ct. 589, 79 L.Ed. 1100, 100 A.L.R. 1133. But where there is such a collision, the action of a State under its police power must give way by virtue of the Supremacy Clause. Article VI, Clause 2. There is such a collision here. When we look to the general statute which Congress has enacted pursuant to the Full Faith and Credit Clause, we find no exception in case of liquidations of insolvent insurance companies. The command is to give full faith and credit to every judgment of a sister State. And where there is no jurisdictional infirmity, exceptions have rarely, if ever, been read into the constitutional provision or the Act of Congress in cases involving money judgments rendered in civil suits. Magnolia Petroleum Co. v. Hunt, supra, 320 U.S. at page 438, 64 S.Ct. at page 213, 88 L.Ed. 149, 150 A.L.R. 413; Williams v. State of North Carolina, 317 U.S. 287, 294, footnote 6, 63 S.Ct. 207, 211, 87 L.Ed. 279, 143 A.L.R. 1273. 12 The function of the Full Faith and Credit Clause is to resolve controversies where state policies differ. Its need might not be so greatly felt in situations there there was no clash of interests between the States. The argument of convenience in administration is at best only another illustration of how the enforcement of a judgment of one State in another State may run counter to the latter's policies. But the answer given by Fauntleroy v. Lum, supra, is conclusive. If full faith and credit is not given in that situation, the Clause and the statute fail where their need is the greatest. The argument of convenience, moreover, proves too much. In the first place, it would often be equally appealing to in ividuals or corporations engaging in multistate activities which might well prefer to defend law suits at home. In the second place, against the convenience of the administration of assets in Illinois is the hardship on the Missouri credits if he were forced to drop his Missouri litigation, bring his witnesses to Illinois, and start all over again. But full faith and credit is a more inexorable command; its applicability does not turn on a balance of convenience as between litigants. If this were a situation where Missouri's policy would result in the dismemberment of the Illinois estate so that Illinois creditors would go begging, Illinois would have such a large interest at stake as to prevent it. See Clark v. Williard, 294 U.S. 211, 55 S.Ct. 356, 79 L.Ed. 865, 98 A.L.R. 347. But, as we have said, proof and allowance of claims are matters distinct from distribution of assets. 13 The single point of our decision is that the nature and amount of petitioner's claim has been conclusively determined by the Missouri judgment and may not be relitigated in the Illinois proceedings, it not appearing that the Missouri court lacked jurisdiction over either the parties or the subject matter. We do not suggest that petitioner by proving his claim in judgment form can gain a priority which he would not have had if he had to relitigate his claim in Illinois. And, as we have said, there is not involved in this case any rule of distribution which departs from the principle of parity as between Illinois creditors and creditors from other States. See Clark v. Williard, 294 U.S. 211, 55 S.Ct. 356, 79 L.Ed. 865, 98 A.L.R. 347; Blake v. McClung, supra. 14 Reversed. 15 Mr. Justice FRANKFURTER, with whom concur Mr. Justice BLACK and Mr. Justice RUTLEDGE, dissenting. 16 So far as they are relevant to the question before us, the facts of this case may be briefly stated. As part of its policy in regulating the insurance business, Illinois has formulated a system for liquidating the business of any Illinois insurance concern that falls below requisite standards. To that end it has provided that the title to the assets of such an Illinois concern should, upon the approval of the Illinois courts, pass to a State officer known as a liquidator. A further provision of the State law defines the procedure for enforcing claims against the assets in Illinois that have thus passed into the liquidator's hands. Claims against such assets must be proved to the satisfaction of the liquidator, subject to appropriate judicial review of his determinations. 17 It is not in question that the Illinois assets of Chicago Lloyds, an Illinois insurance concern, passed into the ownership of an Illinois liquidator in due conformity with Illinois law. Chicago Lloyds had also done business in Missouri under a Missouri license. While the Illinois assets were being administered by the Illinois liquidator, Morris, a Missouri claimant, pressed against Chicago Lloyds in a Missouri court an action for damages begun while the company was still solvent. Without substitution of the Illinois administrator or appearance by him, Morris obtained a judgment in the Missouri Court against Chicago Lloyds. Apparently, there were no assets in Missouri against which this judgment could go. Thereupon the Missouri judgment-creditor asserted a claim in the distribution of the Illinois assets on the basis of the Missouri judgment. The liquidator declined to recognize the Missouri judgment as such, maintaining that the Missouri creditor must prove his claim on its merits, precisely as did Illinois creditors. The Superior Court of Cook County sustained the liquidator and disallowed the claim based on the Missouri judgment. Disallowance was affirmed by the Supreme Court of Illinois. 391 Ill. 492, 63 N.E.2d 479. The question now here is whether in disallowing the claim based on the Missouri judgment against Chicago Lloyds, Illinois failed to give full faith and credit to the judgment of a sister State, as required by Article IV, 1 of the Constitution, and 1 Stat. 122, 2 Stat. 299, 28 U.S.C. § 687, 28 U.S.C.A. § 687. 18 We have under review a decision of the Illinois Supreme Court regarding the mode of proving claims against Illinois assets of an Illinois insurance company in liquidation in an Illinois court. The issue before us must be determined, however, as though the construction which the Illinois Supreme Court placed upon the Illinois law had been spelt out unambiguously in the legislation itself. And so the real issue is this. May Illinois provide that when an insurance concern to which Illinois has given life can, in the judgment of the State courts, no longer be allowed to conduct the insurance business in Illinois, the State may take over the local assets of such an insurance concern for fair distribution among all who have claims against the defunct concern? May the State, pursuant to such a policy, announce in advance, as a rule of fairness, that all claims not previously reduced to valid judgment, no matter how or where they arose, if they are to be paid out of assets thus administered by the State, must be proven on their merits to the satisfaction of Illinois? And may the State specify that this mode of proof apply also to out-of-State creditors so as to require such creditors to prove the merit of their claims against the Illinois assets in liquidation as though they were Illinois creditors, and preclude them from basing their claims merely on a judgment against the insurance concern, obtained after it had legally ceased to be, and after its Illinois assets had by appropriate proceedings passed into ownership of an Illinois liquidator? 19 It is safe to say that State regulation of the insurance business is as old and as pervasive as any regulatory power exercised by our States. See, e.g., Osborn v. Ozlin, 310 U.S. 53, 60 S.Ct. 758, 84 L.Ed. 1074; Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 63 S.Ct. 602, 87 L.Ed. 1722, 145 A.L.R. 1113. Not even the banking business, of which, after all, insurance is another phase, has been subjected to such continuous and extensive State surveillance. But while banking has increasingly been absorbed by federal regulation, the reverse has been true as to insurance. Indeed, after a pronouncement by this Court that insurance partakes of commerce between the States, Congress by prompt legislation delegated or relegated the regulation of insurance, with appropriate exceptions, to the diverse laws of the several States. See Prudential Insurance Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142. 20 We are concerned here solely with the situation presented by a State's exercise of its power over the liquidation of the assets of an insurance company of its own creation. It is important to remember that in this as well as in other connections rights are largely dependent on procedure. It seems, therefore, difficult to believe that when the property of a domestic insurance company within the confines of a State comes into the State's hands for the fair administration of still unliquidated claims against that property, the State may not provide a rule of parity in proving the amount of all claims which are to be paid out of the common pot. We assume, of course, that the procedure prescribed is consistent with the requirements of due process, and not in conflict with overriding federal legislation. It is not suggested that the procedure which Illinois affords does not satisfy these requirements. Standing by itself, such a rule of administration would not be beyond the authority of a State. We must assume it to be Illinois law that the power to pass upon claims against property of a defunct Illinois insurance company is lodged in the liquidator and that such power is not to be foreclosed by a judgment against the defunct concern after title passes to the liquidator. Does the Full Faith and Credit Clause cut the ground from under such a State law as to judgments obtained outside the State after the control of the company and its assets had pass d to the State? 21 Concededly, after the title to the Illinois assets of Chicago Lloyds had passed to the Illinois liquidator, it would not be open to a citizen of Illinois to obtain in the courts of Illinois, so as to serve as a basis of a claim in Lloyds Illinois assets, such a judgment as Morris, a citizen of Missouri, secured in the Missouri courts. It is thought, however, that because of Article IV, § 1, of the Constitution, Illinois could not deny such a superior right to the Missouri citizen without denying full faith and credit to the Missouri judgment. But the Full Faith and Credit Clause does not imply that a judgment validly procured in one State is automatically enforceable in another, quite regardless of the consequences of such enforcement upon that State's policy in matters peculiarly within its control. Alaska Packers Assn. v. Industrial Accident Commission of California, 294 U.S. 532, 546, 55 S.Ct. 518, 523, 79 L.Ed. 1044. The Full Faith and Credit Clause does not eat up the powers reserved to the States by the Constitution. That clause does not embody an absolutist conception of mechanical applicability. As is so often true of constitutional problems, an accommodation must be struck between different provisions of the Constitution. When rights are asserted in one State on the basis of a judgment procured in another, it frequently becomes necessary, as it does here, to define the duty of the courts of the former State in view of that State's power to regulate its own affairs. 22 The Full Faith and Credit Clause does not require a State to provide a court for enforcing every valid sister State judgment, even if its courts enforce like judgments in general. Anglo-American Provision Co. v. Davis Provision Co. No. 1, 191 U.S. 373, 24 S.Ct. 92, 48 L.Ed. 225. Again, a judgment in one State determining the validity of a will is not a judgment binding on another although it controls issues of succession in the first State. Robertson v. Pickrell, 109 U.S. 608, 3 S.Ct. 407, 27 L.Ed. 1049; Overby v. Gordon, 177 U.S. 214, 20 S.Ct. 603, 44 L.Ed. 741. Surely, the Full Faith and Credit Clause does not require a State to give an advantage to persons dwelling without, when State policy may justifiably restrict its own citizens to a particular procedure in proving claims against a State fund. But that precisely might be the result if Illinois had to accept at face value judgments obtained outside Illinois against a defunct Illinois insurance concern after the Illinois assets had passed to the Illinois liquidator. 23 Precedent and policy sustain the right of Illinois to have each claimant prove his fair share to the assets in Illinois by the same procedure. Chicago Lloyds is an Illinois entity doing business in Illinois according to conditions which Illinois had a right to fix for engaging in the insurance business in Illinois. Illinois initiated her policy for liquidating insurance companies in 1925. Lloyds was first authorized to do business in 1928, and thereafter renewed annual authority was required. Missouri gave Lloyds entry in 1932, and later renewed its authority for additional one-year periods. Thus, Illinois gave advance notice that if Chicago Lloyds should fall short of those standards of solvency and safety appropriate for an insurance concern, it will, through a liquidator, seize the Illinois assets of Chicago Lloyds for the protection of all claimants as to the merits of their claims. It warned the world that when such a situation arose claims against assets in Illinois must be proven in the manner which Illinois has here required. The authorization to do Lloyds business in Illinois created against the Lloyds assets in Illinois a sort of equitable lien, to speak freely but not too loosely, to become effective at insolvency and liquidation. To require that all claims against the estate in Illinois liquidation should be established on their merits in the Illinois proceedings may well have been deemed by Illinois the only way to protect the state against foreign judgments which the Illinois liquidator might have no adequate means of contesting. It is irrelevant whether in this or in any other particular situation the liquidator could have contested a suit outside of Illinois. Certainly nothing can turn on whether the Illinois liquidator appears specially in the foreign litigation to assert the liquidation of the company and the vesting of title to its assets in the State of Illinois. We are concerned here with the respect that is to be accorded to a judgment secured against the company by appropriate procedure in another State. Either such a judgment, obtained after the title to the Illinois assets vested in the Illinois liquidator, could be prove for the face value of the judgment, or it could not. The respect to be accorded such a judgment must turn on the control which Illinois may constitutionally exercise in the administration of Illinois property. Relevant to that issue of power is not whether in a particular suit the liquidator could have protected himself by entering as a litigant in the suit in another State. What is relevant is whether Illinois may deem that its liquidator might not be able adequately to defend the estate in liquidation in every State in which a suit might be pressed to judgment. What is relevant also is whether in such liquidation proceedings Illinois can refuse to accept at face value a judgment against an Illinois insurance company obtained after that company had ceased to exist, a judgment which the creditor would enforce against assets which passed to the State before the judgment was obtained. 24 Due regard for the relations of the States to one another, expressed by appropriate respect by one for the judicial proceedings of another, does not require that the provisions carefully established by Illinois for the proper safeguarding of these Illinois assets, should be disturbed by judgments secured outside of Illinois after the very contingency for which Illinois provided had become a reality. It would be unfair thus to subordinate the primary and predominant interest of Illinois simply because the Illinois entity was allowed to enter Missouri. Missouri like every other State, in admitting Chicago Lloyds had notice of the congenital limitations, so far as Illinois assets were concerned, under which Chicago Lloyds came into being. And so, when Missouri admitted Chicago Lloyds, it admitted an Illinois insurance concern with full knowledge of what Illinois would exact, in case trouble arose, to the extent of assets within the control of Illinois. Of course Missouri has a right to provide for its methods of administration, in case of default, as to Missouri assets. But we are not here concerned with an attempt to enforce the Missouri judgment against Missouri assets. We put to one side whether Illinois law could pass title to Missouri assets to the Illinois liquidator. See Clark v. Williard, 294 U.S. 211, 55 S.Ct. 356, 79 L.Ed. 865, 98 A.L.R. 347. We do say that it is not within the power of any other State, by admitting the Illinois entity, to effect discrimination against the citizens of Illinois in the distribution of Illinois assets that had passed to the State, for the fair distribution of which Illinois had formulated an appropriate method of proof. 25 This analysis assumes a heavier burden than the case makes necessary. It is not merely that Missouri had notice of the conditions under which Chicago Lloyds was doing business in Illinois and thereby charged all its citizens with knowledge of the limited power of Missouri to affect Illinois assets upon liquidation. The Missouri claimant had actual notice that the Illinois assets had passed to the Illinois liquidator and that he was at liberty to come into the Illinois proceedings to prove his claim. The Missouri claimant had in fact come into the Illinois proceedings and filed his claim with the Illinois liquidator before he pressed his Missouri suit to judgment. It is a strong thing to say that Illinois could not say that under these circumstances the Missouri claimant must prove his claim the way every claimant in Illinois was bound to prove his. Surely the Constitution of the United States does not bar legislation by Illinois which provides a fair sifting process for determining the amount of claims against Illinois assets of an Illinois insurance company in liquidation in an Illinois court so as to secure equality of treatment for all who assert claims against such a fund. The Full Faith and Credit Clause does not impose upon Illinois a duty to allow the face value of a judgment against the insurance company secured in Missouri after the company's assets had passed into the possession of the Illinois court in a proceeding to which the Illinois liquidator was not a party and could not have been made one. 26 The precise relation of the liquidator's legal position to the Missouri judgment, on the basis of which Morris asserts a claim against the liquidator's assets, reinforces the more general considerations. Morris had no judgment against the company when by Illinois law title to Lloyds' assets passed to the liquidator. The mere institution of the Missouri suit gave Morris no greater right to the Illinois assets of Lloyds than he had before the action was begun. By the time he obtained his judgment in Missouri, the company no longer had title to any assets in Illinois to which the judgment might attach. By unassailable Illinois law, Lloyds' assets had passed to the liquidator. These assets could be reached only by valid judgment against him. In this respect, the law of Illinois controlling the liquidation of Lloyds, as authoritatively given us by the Supreme Court of Illinois, is decisively different from what this Court found to be the law of Illinois regarding the Illinois surety company in process of dissolution in Ewen v. American Fidelity Company, 261 U.S. 322, 43 S.Ct. 371, 61 L.Ed. 677. The liquidator was not a party to the Missouri action; he had not been served; he had not appeared; he expressly denied the right of Lloyds to represent and bind the Illinois liquidation estate. The authority with which Illinois clothed its liquidator put him under a duty to contest claims which the Company might not have deemed itself under duty to contest, while on the other hand it enabled him to recognize, as the Company might not have recognized, the merit of claims otherwise than by judicial command. The liquidator, as trustee for the creditors of the extinct Illinois company, represented interests that were not the same as those represented by the extinct company when it conducted its own business. In short, the Illinois liquidator was thus a stranger to the Missouri judgment and it cannot be invoked against him in Illinois. See United States v. California Bridge & Construction Co., 245 U.S. 337, 38 S.Ct. 91, 62 L.Ed. 332; Kersh Lake Drainage Dist. v. Johnson, 309 U.S. 485, 60 S.Ct. 640, 84 L.Ed. 881, 128 A.L.R. 386. Indeed, to subject the assets of the Illinois liquidator to the claim of a judgment obtained against Lloyds in Missouri subsequent to the passage of those assets to the liquidator may well raise constitutional questions. Riley v. New York Trust Co., 315 U.S. 343, 62 S.Ct. 608, 86 L.Ed. 885; cf. Restatement, Conflict of Laws § 450, comment d. 27 It is suggested that out-of-State creditors should be saved the burden of proving their claims in Illinois. Of course that is a proper consideration, and it would be controlling, where a creditor has obtained judgment, if there were no countervailing considerations. Against the claim of out-of-State creditors must be set not merely the interests of Illinois creditors, but also the importance of a unified liquidation administration, the burden to the liquidator of defending suits anywhere in the United States, and the resulting hazards to a fair distribution of the estate. To require the face value of the Missouri judgment of the Missouri claimant to determine his share out of the Illinois fund might, of course, dilute the share in the Illinois assets that can go to legitimate Illinois claimants. Considering the primary and predominant relation of Illinois in the adjustment of these conflicting interests, considering, that is, that we are dealing with a creature of Illinois and the property of that creature within her bounds, neither the demands of fairness nor anything in the Constitution requires that the interests of the out-of-State creditors should control the Constitutional issue. The resolution of this conflict so that the out-of-State creditor must take his place with the Illinois creditors is another instance of a price to be paid for our federalism, and in this instance it is a very small price. If the situation calls for correction by a uniform regulation, Congress has the power to deal with the matter. Or the States might do so through the various devices for securing uniformity of State legislation. Illinois, in fact, has made overtures to its sister States in this regard. It has adopted the Uniform Reciprocal Liquidation Act as proposed by the Commissioners on Uniform State Laws. By this Act claims against insolvent Illinois insurance companies may be proved state'. Ill.Laws 1941, pp. 832—837, replacin ancillary proceedings in any 'reciprocal Laws 1937, pp. 788—790, Smith-Hurd Ann.Stat. c. 73, § 833.3. That Missouri has not seen fit to protect the interests of Missouri creditors by becoming a 'reciprocal state' is not the fault of Illinois. 28 A final word. It is suggested that this Court is merely deciding the finality of the Missouri judgment in Illinois, without any regard to its provability on a party with the claims of Illinois creditors in the distribution of Illinois assets. But we are not merely passing on the abstract status of the Missouri judgment. The only issue that has ever been in this case is the right of the Missouri claimant to participate in the Illinois assets on the basis of the face value of his judgment. Such was the claim made by the creditor; such was the claim disallowed by the liquidator; such was the claim rejected by the lower court, and such was the disallowance affirmed by the Supreme Court of Illinois. It has never been questioned that the thrust of the case was the opportunity of the Missouri judgment-creditor-claimant to compete with the Illinois claimants in the distribution of the estate not on the basis of the merits of his claim, but on the amount fixed by the Missouri judgment. Neither by any of the courts nor by any of the parties was any suggestion made that under Illinois law the Illinois creditors have priority to exhaust the Illinois assets. What was before that court and what is before this Court is whether a Missouri claimant may share in the distribution of a common fund not on the basis of a claim established according to a uniform procedure but on the basis of a judgment secured in Missouri subsequent to the passing of that fund to the Illinois liquidator. 29 This is not to say that the Missouri judgment is invalid. Whether recovery may be based on this judgment in Missouri, or in any other State except Illinois or even in Illinois should the assets go out of the State's hands and return to a reanimated Chicago Lloyds, are questions that do not now call for consideration. 30 The judgment should be affirmed. 1 It does not appear that there is any property of the debtor in Missouri; nor was a liquidator appointed in Missouri. 2 Attorney General v. Supreme Council, A.L.H., 196 Mass. 151, 159, 81 N.E. 966, 968 (receivership); Hackett v. Supreme Council American Legion of Honor, 206 Mass. 139, 142, 92 N.E. 133 (receivership). The Illinois rule announced in the instant case is likewise applicable in receivership proceedings. Evans v. Illinois Surety Co., 319 Ill. 105, 149 N.E. 802. Contra: Pringle v. Woolworth, 90 N.Y. 502 (receivership). The federal receivership rule permits continuance of suits in other courts at least where they were pending at the time of the appointment of the receiver. Riehle v. Margolies, supra. And see Chicago Title & Trust Co. v. Fox Theatres Corp., supra, and Dickinson v. Universal Service Stations, 9 Cir., 100 F.2d 753, 757, applying the Riehle ruling to a suit started in a state court after the receivership. For collection of cases see 96 A.L.R. 485. 3 See In re Paramount Publix Corp., 2 Cir., 85 F.2d 42, and cases collected in 106 A.L.R. pages 1121 et seq. Cf. Robinson v. Trustees of New York, N.H. & H.R. Co., 318 Mass. 121, 60 N.E.2d 593; In re Chicago & E.I. Ry. Co., 7 Cir., 121 F.2d 785.

1011

329 U.S. 539 67 S.Ct. 448 91 L.Ed. 485 PATTERSON, Secretary of War, et al.v.LAMB. No. 229. Argued Jan. 7, 1946. Decided Jan. 20, 1947. Mr. Frederick Bernays Wiener, of Providence, R.I., for petitioners. Mr.Roger Robb, of Washington, D.C., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 On October 28, 1944, respondent brought this action in the United States District Court for the District of Columbia against the then Secretary of War and Adjutant General of the Army.1 He prayed for a judgment declaring that he had served in the United States Army from November 11, 1918 (Armistice Day) until November 14, 1918, and that for this service he was entitled to a certificate of honorable discharge from the Army, instead of the certificate of 'Discharge from the Draft' which had been issued to him. He also prayed for a mandatory injunction to compel issuance to him of a certificate of honorable discharge from the Army. 2 The complainant alleged that on November 9, 1918, he received a communication from his local draft board directing him to report to the board at Davenport, Iowa, for 'immediate military service' at 9 a.m., November 11, 1918, and stating that from that day and hour he would be 'a soldier in the military service of the United States'; that he reported as ordered, and was made the leader of the drafted group there assembled which was to board a train that day for a mobilization camp at Camp Dodge, Iowa; that during the day he was told that because of the Armistice the draft call had been canceled; that he and the other draftees would not go to Camp Dodge, but could return home, still soldiers, and await further orders; that four days later he received a notice from his board that by telegraphic order of the Provost Marshal, acting under instructions of the President, all induction orders throughout the Nation had been canceled, and all registrants, who, like himself, had been inducted but not entrained, were discharged from the Army; and that cancellation of their induction orders would have the effect of the honorable discharge from the Army. He further alleged that in January, 1919, he received a certificate dated November 14, 1918, entitled 'Discharge from Draft,' accompanying which was a check for four dollars ($4.00) bearing the notation 'Final Pay'; that because of the foregoing circumstances he had always assumed that his discharge had the effect of an honorable discharge from the Army; that he had obtained certain tax exemptions from the State of Iowa on the ground that he had such a discharge, but was later authoritatively denied exemptions by reason of a decision of the State supreme court, Lamb v. Kroeger, 233 Iowa 730, 8 N.W.2d 405; that it was after this decision that he applied for and was denied an honorable discharge by the Secretary and Adjutant General. 3 The District Court sustained petitioner's motion to dismiss the complaint on the ground that it failed to state a cause of act on for which relief could be granted. Other grounds of the motion, not passed on by the District Court, were that the alleged cause of action was not justiciable, was barred by laches, and that the type of certificate to be issued draftees under the circumstances alleged was a matter solely within the discretion of the Secretary of War and not a subject for judicial review. The Court of Appeals reversed, rejecting all the grounds set up in the motion to dismiss. 154 F.2d 319. This holding not only decided important questions concerning the power of the War Department, but also upset twenty-five years of important War Department rulings and practices which have affected, and will hereafter affect, the status and claims of thousands of draftees of the First World War. This called for our review, and we granted certiorari, 329 U.S. 695, 67 S.Ct. 66. 4 Whether and to what extent the courts have power to review or control the War Department's action in fixing the type of discharge certificates issued to soldiers,2 is a question that we need not here determine; nor need we decide whether the action should have been dismissed because of laches. For we are satisfied that the War Department was within its power in granting a discharge from draft rather than the type of discharge it granted soldiers who performed military service after having become fully and finally absorbed into that service. 5 The only statute which directly bears upon 'certificates of discharge' for enlisted men, Article of War 108, set out below,3 does not particularly prescribe the types or contents of certificates authorized to be granted. But pursuant to authority granted by Congress,4 the War Department many years ago promulgated Army Regulation No. 150 which provided for three types of certificates of discharge: honorable, dishonorable, and unclassified.5 An honorable discharge was one granted to a soldier whose conduct in service had been such as to warrant his reenlistment. This regulation was well suited to fit cases of soldiers who had enlisted under ordinary conditions, had seen service and had been discharged in the course of regular Army routine. On its face, however, it shows how poorly it was adapted to fit the extraordinary circumstances bound to develop in connection with a nation-wide program for passing upon acceptances, rejections, and discharges of draftees in the course of their progress from their homes to their complete and final integration into the Army. So, after the passage of the 1917 Draft Act, 40 Stat. 76, 50 U.S.C.A.Appendix, § 201 et seq., the War Department, on January 12, 1918, issued its Circular No. 651 in which it made provision for men discharged from draft as distinguished from men discharged from the Army. This provision, in effect when respondent reported for induction, had particular, though not necessarily exclusive, reference to draftees rejected for one reason or another at mobilization camps after their induction at their local draft boards. But despite the fact that draftees became subject to military law and duty from the moment of their arrival for entrainment at the local board, Selective Service Regulation 174—176 provided that they nevertheless were not finally accepted for military service, and could be rejected after arrival at camp.6 And it was not until they had been finally accepted that they could or would be assigned to full-fledged duty as soldiers. 6 The Discharge from Draft Form No. 638, referred to in Circular No. 651, was originally prepared for draftees rejected at camp after induction 'on account of physical unfitness, dependency, etc.' Form No. 638 had been in use long prior to the respondent's rejection on the ground that the Government did not need his services after the Armistice. Had the Armistice not been declared, had respondent gone on to Camp Dodge, and had he then been rejected for any reason there, he would have received, not an honorable discharge from the Army, but a 'Discharge from Draft.' Yet we are asked to give the regulations and certificates a judicial construction, contrary to the Army's construction, whereby respondent, who got no farther than his local board, would stand in a better status than the tens of thousands of other draftees who came much closer to complete integration into the Army than he ever did. 7 An argument to support this contention is that the telegraphic order issued from Army headquarters on Armistice Day, which canceled entrainment orders for respondent and about 155,000 other draftees then ready for entrainment, provided that all of them were 'discharged from the Army.' But that same order stated that 'The issue of formal papers of discharge will be considered and determined later' and that the purpose of the telegraphic order was 'merely to cancel outstanding calls and stop the entrainment thereunder of men for the Army.' And when 'the issue of formal papers of discharge' was 'later' considered, it resulted in War Department Circular No. 111 of 1918. That circular was the follow-up of the President's Armistice Day draft cancellation order, and as foreshadowed by the Armistice Day order, this circular prescribed with definiteness the type of 'formal papers of discharge' which this respondent and others like him would later receive. It was a 'Discharge from Draft.' No statute or previous Army Regulation had provided for the extraordinary situation which developed on Armistice Day and which made it necessary for the President to halt the processing of these thousands of men and direct that they return to their homes. When this new situation arose, it was certainly within the province of the War Department to provide for its solution by, among other things, issuing to those returned home an appropriate form of certificate, whether of the honorable discharge variety, a 'discharge from the draft,' or some special form designed specifically for the occasion. Respondent was inducted into the Army and was discharged before he reached a mobilization camp for final processing. His discharge adequately indicates these facts. The law demands no more. 8 Reversed. 1 The Secretary of War and The Adjutant General against whom the action was originally instituted are no longer in office; their successors have been properly substituted as parties. 2 See Denby v. Berry, 51 App.D.C. 335, 279 F. 317; Id., 263 U.S. 29, 44 S.Ct. 74, 68 L.Ed. 148; Davis v. Woodring, 72 App.D.C. 83, 111 F.2d 523; Palmer v. United States, 72 Ct.Cl. 401; Wilbur v. United States ex rel. Kadrie, 281 U.S. 206, 59 S.Ct. 320, 74 L.Ed. 809; cf. 58 Stat. 286, 38 U.S.C.Supp. IV, § 693h, 38 U.S.C.A. § 693h. 3 'No enlisted man, lawfully inducted into the military service of the United States, shall be discharged from said service without a certificate of discharge signed by a field officer of the regiment or oth r organization to which the enlisted man belongs * * *.' 39 Stat. 619, 668. 4 18 Stat. 337, 10 U.S.C. § 16, 10 U.S.C.A. § 16; see also United States v. Eliason, 16 Pet. 291, 301, 302, 10 L.Ed. 968. 5 Paragraph 150 of the Army Regulations of 1913, corrected to April 15, 1917, was as follows: '150. Blank forms for discharge and final statements will be furnished by The Adjutant General's Department and will be retained in the personal custody of company commanders. Discharge certificates will be used in the discharge of enlisted men and for no other purpose, and will be of three classes: For honorable discharge, for discharge, and for dishonorable discharge. 'They will be used as follows: '1. The blank for honorable discharge, when the solider's conduct has been such as to warrant his reenlistment and his service has been honest and faithful. '2. The blank for dishonorable discharge, for dishonorable discharge by sentence of a court martial or a military commission. '3. The blank for discharge when the soldier is discharged except as specified under sections 1 and 2 of this paragraph (C.A.R. Nos. 14 and 34).' 6 Cf. Gibson v. United States and Dodez v. United States, 329 U.S. 338, 67 S.Ct. 301.

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329 U.S. 531 67 S.Ct. 463 91 L.Ed. 479 PARKER et al.v.FLEMING. No. 80. Argued Dec. 18, 1946. Decided Jan. 20, 1947. Judicial review of price administrator's general regulations and orders issued under Emergency Price Control Act were intended by congress to be limited to relatively few of the Millions of people who would be affected thereby, to avoid delay and difficulty in administering act with efficiency and expedition deemed necessary to accomplish broad purpose of act. Emergency Price Control Act of 1942, §§ 203(a), 204(a, b), 50 U.S.C.A.Appendix, §§ 923(a), 924(a, b). Whether person is 'subject' to order of price administrator issued under Emergency Price Control Act § as to be entitled to make protest upon which judicial review may be had, depends to some extent upon whether order immediately, substantially and adversely affects such person, as well as whether order requires or prohibits action by him. Emergency Price Control Act of 1942, § 203(a), 50 U.S.C.A.Appendix § 923(a). Apartment house tenants were immediately, substantially and adversely affected by order of Price Administrator directing issuance of certificate authorizing eviction proceedings, and hence were 'subject' to order so as to be entitled to make protest upon which judicial review could be had, whether or not administrator's regulations gave tenants vested right to remain in possession. Emergency Price Control Act of 1942, §§ 2, 4(a), 203(a), 204(a, b), 50 U.S.C.A.Appendix §§ 902, 904(a), 923(a), 924(a, b). The Emergency Price Control Act was intended in part to prevent excessive rents in the public interest, and anti-eviction regulations of price administrator promulgated pursuant to the act were specifically designed to prevent manipulative renting practices which would result in excessive rents. Emergency Price Control Act of 1942, § 2(d) as amended 50 U.S.C.A.Appendix § 902(d). Mr.Alexander Pfeiffer, of New York City, for petitioners, Mr. Carl A. Auerbach, of Washington, D.C., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 Petitioners are tenants of a New York apartment house. Their landlords applied for a certificate from the New York Area Rent Director authorizing eviction proceedings in the State courts.1 Section 6 of the Rent Regulations for New York City, issued by the Price Administrator under authority of § 2 of the Emergency Price Control Act, 56 Stat. 23, 58 Stat. 632, 50 U.S.C.App. Supp. V, § 902, 50 U.S.C.A. Appendix, § 902, prohibits landords from instituting such proceedings except under certain specific conditions not here relevant,2 or when a special certificate authorizing eviction is issued by the Area Rent Director upon his finding, for example, that failure to authorize eviction would impose 'substantial hardship' upon the landlords.3 2 In this case the Area Rent Director refused to issue the requested certificate after extensive hearings at which both the landlords and the tenants presented evidence. Denial was based on a finding that the landlords had wholly failed to meet the re ulation's conditions; that their request was part of a concerted plan to evade the Price Control Act; and that a fraud had been perpetrated against the OPA. The Regional Rent Director affirmed this ruling. On protest by the landlords, the Price Administrator reversed the ruling of the Area Director and ordered that the certificate be issued. Petitioners thereupon filed a protest of their own with the Administrator. When the Administrator dismissed this protest, they sought relief in the Emergency Court of Appeals, complaining that the Administrator's order was 'not in accordance with law' and was 'arbitrary and capricious.' On motion of the Administrator, that action was dismissed on the ground that petitioners were not 'subject to' the Administrator's order and therefore had no right to protest or have judicial review of the dismissal of their protest. Parker v. Porter, 154 F.2d 830.4 We granted certiorari because of the importance of the issue raised. 328 U.S. 828, 66 S.Ct. 1024. 3 Section 204(a) of the Emergency Price Control Act, 50 U.S.C.A.Appendix, § 924(a), provides that 'Any person who is aggrieved by the denial * * * of his protest' against an order of the Price Administrator issued under § 2 of the Act may, upon complaint to the Emergency Court of Appeals, secure a judicial review of the Administrator's denial of such 'protest.' Under § 204(b) that Court can enjoin or set aside the protested 'order' in whole or in part only if it is satisfied that the order 'Is not in accordance with law, or is arbitrary or capricious.' But § 203(a), 50 U.S.C.A.Appendix, § 203(a), denies the right to make a 'protest' upon which review may be had to all but persons who are Subject to any provision of such * * * order.' The Emergency Court of Appeals did not question that the petitioners were 'aggrieved,' within the meaning of § 204(b) by the Administrator's special order authorizing their landlord to institute legal proceedings to evict them from their apartments. See Federal Communications Commission v. Sanders Bros. Radio Station, 309 U.S. 470, 476, 477, 60 S.Ct. 693, 698, 84 L.Ed. 869. Review was denied solely on the ground that they were not 'subject to' that order within the meaning of § 203(a). 4 In deciding a case concerning review of the Administrator's order granting a special exception to one of his general regulations, we are mindful that the legislative history of the Price Control Act strongly indicates that judicial review of the Administrator's general regulations and orders was intended by Congress to be limited to relatively few of the millions of people who would be more or less affected by them. Congress did not provide for protest and judicial review of general price orders by the great mass of consumers because of an apprehension that this might cause delay and difficulty in administering the Price Control Act with the efficiency and expedition deemed necessary to accomplish its broad purpose.5 Only a few categories of persons whom the Act affected and whose protests, if reviewed would not have these consequences, were specifically permitted by the Act to protest and have general price orders affecting them judicially reviewed.6 The Administrator and the courts have adhered to this congressional policy. See e.g. Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834; Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892. 5 Procedural Regulation No. 1 of the Office of Price Administration, 7 Fed.Reg. 971, defined a person as 'subject to' a general price regulation or order, and therefore entitled to protest and obtain judicial review of it, only when such regulation or order 'prohibits or requires action by him.' The Emergency Court of Appeals sustained the regulation which contained this definition. Buka Coal Co. v. Brown, 133 F.2d 949, 952. But in other special situations not directly involving general price-fixing orders the words 'subject to' have been construed more broadly by the Administrator and the Emergency Court of Appeals. 6 Revised Procedural Regulation No. 1, 7 F.R. 8961, promulgated by the Administrator, provides that agricultural producers may protest an order which denies them a subsidy granted by Congress as one of the mechanisms of the price control program, the regulation stating that such a producer 'shall be considered to be subject to a maximum price regulation.' And in Illinois Packing Co. v. Snyder, 151 F.2d 337, the Emergency Court of Appeals held that meat packers, denied such a subsidy under regulations of the Defense Supplies Corporation promulgated under the same authority on which Office of Price Administration orders were based, were subject to and could protest against such regulations. The Court there said that: 'If anybody could be 'subject to' a provision of the subsidy regulation, complainant certainly would meet this requirement, since it claims to be excluded from the subsidy by a discriminatory and unlawful condition inserted in the subsidy regulation by Amendment No. 2. Since section 204(d) confers upon this court 'jurisdiction to determine the validity of any regulation or order issued under Section 2,' and since Amendment No. 2 is such a regulation or order, it is inadmissible to put upon the phrase 'any person subject to any provision's of a regulation under section 2 and interpretation which would make it impossible for anyone to invoke our jurisdiction in this type of case, especially one who, like complainant, is most immediately and directly prejudiced by the challenged provision of the subsidy regulation.' Illinois Packing Co. v. Snyder, supra, 151 F.2d at pages 338-339. 7 Thus it appears that the Administrator and the Emergency Court of Appeals have determined that the question of whether a person is 'subject to' the order is dependent to some extent upon whether the order immediately, substantially and adversely affects him, as well as whether the order requires or prohibits action by him. Under these standards we think the tenants here were 'subject to' the order. 8 Whether the regulations gave the tenants a 'vested right' to remain in possession is not decisive of their right to protest or obtain judicial review. However that may be, general regulations prohibited these landlords from evicting the tenants unless the Administrator granted a certificate. The Emergency Price Control Act was intended in part to prevent excessive rents in the public interest,7 and the very anti-eviction regulations under which the Administrator granted the eviction certificate here were specifically designed to prevent manipulative renting practices which would result in excessive rents.8 Those regulations have been held valid by the Emergency Court of Appeals, Taylor v. Brown, 137 F.2d 654, 662, 663, and their validity is not here challenged. If these tenants cannot 'protest' this order issued under these regulations, no one can; and if they cannot challenge it in the Emergency Court of Appeals, they cannot effectively challenge it at all. 9 We cannot say that tenants who are about to be evicted from their apartments on account of the order are not 'subject to' it. We are persuaded that these tenants would be required to act by the issuance of the certificate. They would either have to move themselves and their possessions to another abode, which might be difficult or impossible to obtain, or undertake defense of eviction proceedings in the State courts, which proceedings, but for the certificate, would have been barred by the regulation promulgated under the Act. For the same reason, it seems apparent that they would be immediately, substantially, and adversely affected by the order. 10 This situation is altogether different, in terms of administrative complications and the impact of the order on the individual, from one in which a consumer member of the public wishes to attack a general price-fixing regulation which will require him to pay higher prices, or even a tenant to pay higher rent. For this reason, the legislative history relied on by the Administrator, thought to indicate a purpose not to make such general price-fixing orders open to widespread challenge, has no relevancy here. While the scope of judicial review authorized by the Act is a limited one, Illinois Packing Co. v. Snyder, supra, 151 F.2d at page 339, we think that these tenants were entitled to have their protest considered by the Administrator and that the Emergency Court of Appeals has jurisdiction of their complaint. 11 Reversed. 12 The CHIEF JUSTICE, Mr. Justice FRANKFURTER and Mr. Justice BURTON, dissent. 1 The landlords here claimed to be purchasers of stock in a co-operative apartment corporation which stock holding entitled each of them to possession of an apartment under a proprietary lease. 2 Section 6(a) of the Rent Regulations for New York City Defense Area, 8 Fed.Reg. 13914, as amended, provides that 'no tenant shall be removed from any housing accommodation, by action to evict * * *unless:' (1) The tenant has refused to renew his lease; (2) The tenant has unreasonably refused the landlord access to the premises; (3) The tenant has violated an obligation of tenancy or is committing a nuisance; (4) Subtenants occupy the premises at the time of the expiration of the prime tenant's lease; (5) The landlord 'has an immediate compelling necessity to recover possession * * * for use and occupancy as a dwelling for himself.' 3 Section 6(b)(3) 'applies to the issuance of a certificate for occupancy of housing accommodations in a structure or premises owned by a co-operative corporation * * * by a purchaser of stock * * * in such co-operative who is entitled by reason of ownership of such stock to possession of such housing accommodations by virtue of a proprietary lease or otherwise.' The part of § 6(b)(3) ii pertinent here provides that where the co-operative was organized after February 17, 1945, or the effective date of the regulation, 'no certificate shall be issued, unless on such date the co-operative was in process of organization and the Administrator finds that substantial hardship would result from the failure to issue a certificate. * * *' 4 The original respondent here was Paul A. Porter, Price Administrator. The functions of his office have been assumed by Philip B. Fleming, Temporary Controls Administrator, who has been substituted as respondent. 5 The congressional purpose in this regard has been summarized in our previous decisions in Yakus v. United States, 321 U.S. 414, 423, 431—433, 439, 441, 64 S.Ct. 660, 666, 667, 670, 671, 674, 675, 88 L.Ed. 834 and Bowles v. Willingham, 321 U.S. 503, 513, 520—521, 64 S.Ct. 641, 646, 647, 650, 88 L.Ed. 892. 6 Section 4(a) of the Act, 50 U.S.C.A.Appendix, § 904(a), lists the classes of persons to be punished for disobedience of the provisions of a regulation or order and therefore ipso facto 'subject to ' it as sellers of commodities, buyers of commodities in the course of business and landlords. 7 Among other provisions showing that such was the purpose of the Act, § 2(d) provides in part that the Administrator may promulgate egulations or orders to 'Prohibit speculative or manipulative practices * * * or renting or leasing practices (including practices relating to recovery of the possession) * * * which in the judgment are equivalent to or likely to result in price or rent increases * * *'. 8 The landlords here claimed to be recent purchasers of stock in a cooperative ownership arrangement. Regulation 6(b), here involved, was promulgated, according to the Administrator, for the following, among other, stated reasons: 'In recent months the problem of evictions and potential evictions in connection with the sale of stock in cooperative housing corporations has reached serious proportions. Apartment houses and other multiple-unit premises are being sold to cooperative corporations. These corporations in turn sell stock in the corporation which entitles the purchaser to a 'proprietary lease' of a dwelling unit in the structure. In seeling stock in the cooperative, tenants usually are first approached. They are under heavy oressure to purchase stock because the alternative is likely to be eviction in favor of the ultimate purchaser of the stock. If the stock is not purchased by a tenant, it is then sold to another person who obtains a proprietary lease of the tenant's dwelling unit and seeks possession of that unit for personal occupancy. 'In the past cooperative housing corporations were virtually unknown in most defense-rental areas. Since rent control there has been a tendency to make more frequent use of the device and there is every indication that this will accelerate. '* * * During recent months, as the housing shortage has become more acute, the cooperative corporations or other owners of this stock have begun to sell it to purchasers who become entitled to proprietary leases.' Statement of Reasons Accompanying Amendment 17 to the Rent Regulation for Housing for the New York City Defense Rental Area.

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329 U.S. 565 67 S.Ct. 467 91 L.Ed. 504 GARDNERv.STATE OF NEW JERSEY. No. 92. Argued Dec. 20, 1946. Decided Jan. 20, 1947. Rehearing Denied Feb. 17, 1947. See 330 U.S. 853, 67 S.Ct. 768. [Syllabus from pages 565-567 intentionally omitted] Mr.James D. Carpenter, Jr., of Jersey City, N.J., for petitioner. Mr. Benjamin C. Van Tine, of Trenton, N.J., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This case, here on certiorari, presents important problems under § 77 of the Bankruptcy Act. 49 Stat. 9 1, 11 U.S.C. § 205, 11 U.S.C.A. § 205. The Central Railroad Company of New Jersey (the debtor), of which petitioner is trustee, filed its petition for reorganization in 1939 shortly after receiving notice from the Attorney General of New Jersey that he would apply to a state court for a summary judgment for unpaid taxes of the debtor and seek to sell its property in satisfaction of the judgment. The tax assessments for the years 1932 to 1939 had been extensively litigated both in the state and federal courts and the results were for the most part adverse to the debtor.1 By the end of 1939 the tax claims of the State against the debtor, exclusive of interest and penalties, exceeded $15,000,000, while the liquid assets of the debtor available to pay them were apparently less than half that amount. The reorganization court stayed suits to collect the taxes but from time to time entered orders directing the debtor to make specified installment payments on account of the taxes for various years. 2 In 1941 the New Jersey legislature passed a law designed to lessen the tax burden of railroads in the State. P.L.1941, c. 290; c. 291, N.J.S.A. 54:29A—1 et seq. This law was implemented and somewhat modified in 1942. P.L.1942, chs. 169, 241. These acts included changes in the tax rates and provided for installment payments of the full principal amount of unpaid property taxes without interest or penalties, which were due on or before December 1, 1940. The statutory settlement of the claims was conditioned on (1) the execution of installment payment plans and the payment of the first installment, and (2) a waiver of all rights to contest the legality or amount of any assessment made prior to December 1, 1941, together with written consent to the discontinuance and dismissal of all pending suits concerning such assessments. The reorganization court authorized petitioner to settle and compromise the delinquent taxes in accordance with the provisions of these acts. Petitioner undertook to comply with the statutory requirements, filing documents and payments required of a delinquent taxpayer, discontinuing litigation, and consenting to the discontinuance of pending appeals.2 The state officials—the Attorney General, Treasurer, and Comptroller—did not accept these tenders.3 Instead, the Attorney General instituted suit to enjoin the Treasurer from carrying out the provisions of the 1941 and 1942 acts. The result was a holding that the acts violated the New Jersey constitution. Wilentz v. Hendrickson, 135 N.J.Eq. 244, 38 A.2d 199. 3 Meanwhile the reorganization court set a time within which all claims against the debtor should be filed. In compliance therewith the state Comptroller filed on behalf of the State of New Jersey a claim for taxes owing it.4 The proof of claim stated that over $18,000,000 had been paid on the tax claim, leaving unpaid some $12,000,000, plus interest of over $7,700,000, plus additional interest on those sums from December 1, 1940. The proof of claim also stated that under New Jersey law the sums owed were secured by 'a lien paramount to all other liens upon all the lands and tangible property and franbchises of the company in this State'. 4 The debtor and trustee filed initial objections to the claim. They contended that the property of the debtor was grossly overvalued and that the debtor and other railroads had been intentionally and systematically discriminated against in the making of the assessments. They also objected to the interest or penalty part of the claim, contending, inter alia, that no interest accrued after the date when the debtor's petition for reorganization was filed or during the period when collection of the taxes was enjoined and the debtor was in good faith contesting their validity. Subsequently they objected to the claim on the further ground that its amount and the time allowed for its payment were governed by the terms of settlement or compromise tendered under the 1941 and 1942 acts of the New Jersey legislature. They also contended that New Jersey had no lien on the debtor's personal property. Like objections were made by a group of security holders of the debtor and by an indenture trustee. They also objected to the State's claim on the ground that no part of it other than that representing the principal amount of taxes was entitled to a lien equal or paramount to the debtor's general mortgage. 5 New Jersey, through her Attorney General, filed replies to the various objections which had been made to her claim, stating, inter alia, that the principal amount of the claim had been finally adjudicated and was lawfully owing, that the principal amount together with interest was entitled to priority under § 64 of the Bankruptcy Act, 11 U.S.C.A. § 104, and that the claim was entitled to a paramount lien on all the lands, tangible property, and franchises of the debtor. 6 Shortly after Wilentz v. Hendrickson, supra, was decided, the trustee filed with the reorganization court a petition for adjudication of New Jersey's tax claims which in substance recapitulated his earlier objections to the claim and asked for an adjudication that the settlement or compromise tendered under the 1941 and 1942 acts of New Jersey was binding; or alternatively, if it was not binding, a determination of the extent to which the claim should be allowed and the relative rights, liens and priorities of the various claimants in the debtor's assets. 7 The Attorney General of New Jersey thereupon entered a special appearance in the proceedings, claiming, inter alia, that the entertainment of the petition would constitute a prohibited suit against the State, both as respects the determination of the amount of the claim and its priority or lien. 8 The reorganization court referred New Jersey's claim to a special master to consider this additional contention of the State, as well as the previous objections to it and the State's replies thereto. 9 The special master rendered a report in 1945 in which he found (1) that the proofs of claim of New Jersey were properly filed by state officers acting in pursuance of their statutory authority; (2) that § 77 confers on the reorganization court jurisdiction over the kind of claims asserted by the State in the proceeding and that such construction of the Act is not unconstitutional; and (3) that the entire property of the debtor is in custodia legis subject to the rights of lienholders, and that the reorganization court is the proper court to determine the validity and amount of the tax claims and their lien, subject to the limitations of Arkansas Corporation Commission v. Thompson, 313 U.S. 132, 61 S.Ct. 888, 85 L.Ed. 1244, which he did not think were presently involved in the proceedings. New Jersey, through her Attorney General, filed objections to the report. The reorganization court overruled them and adopted and confirmed the report. New Jersey took an appeal to the Circuit Court of Appeals. She also filed in that court a petition for a writ of prohibition in which she challenged the rulings of the reorganization court on the same grounds. 10 The Circuit Court of Appeals treated the appeal as if all of the questions presented were covered by Arkansas Corporation Commission v. Thompson, supra. It held that the 'only matters left open' for the reorganization court were (1) mathematical error in the computation of the amount of the tax or (2) legal error in its assessment. It accordingly reversed the order of the reorganization court and dismissed the application for a writ of prohibition. 152 F.2d 408, 418. 11 First. We think, contrary to the position of New Jersey, that the reorganization court had jurisdiction over the proof and allowance of the tax claims and that the exercise of that power was not a suit against the State. Section 77 deals not only with claims of private parties but with those of public agencies as well. Section 77, sub. b, defines 'creditors' as 'all holders of claims of whatever character against the debtor or its property, whether or not such claims would otherwise constitute provable claims under this Act'. And 'claims' are defined to include 'debts, whether liquidated or unliquidated, securities (other than stock and option warrants to subscribe to stock), liens, or other interests of whatever character.' Id. And § 77, sub. c (7), provides for the prompt fixing of a reasonable time within which the 'claims of creditors' may be filed and the manner in which they may be filed and allowed. The words 'all holders of claims' have no qualification and are sufficiently broad to include public agencies as well as private parties. The 'claims' of creditors include secured and unsecured claims. We find not the slightest suggestion that Congress left out the large class of tax claims which recurringly appears in reorganizations and often assumes, as here, large proportions. They are expressly included among provable claims in § 57, sub. n, of the Bankruptcy Act, 52 Stat. 840, 867, 11 U.S.C. § 93, sub. n, 11 U.S.C.A. § 93, sub. n.5 And the sweeping, all inclusive definitions of 'claims' and 'creditors' in § 77 leave room for no exception under it. 12 When a State files a proof of claim in the reorganization court, it is using a traditional method of collecting a debt. A proof of claim is, of course, prima facie evidence of its validity. Whitney v. Dresser, 200 U.S. 532, 26 S.Ct. 316, 50 L.Ed. 584. But the bankruptcy court whose aid is sought for enforcement of an asserted claim is not bound to treat the tendered proof as conclusive. When objections are made, it is duty bound to pass on them. That process is, indeed, of basic importance in the administration of a bankruptcy estate whether the objective be liquidation or reorganization. Without that sifting process, unmeritorious or excessive claims might dilute the participation of the legitimate claimants. 13 It is traditional bankruptcy law that he who invokes the aid of the bankruptcy court by offering a proof of claim and demanding its allowance must abide the consequences of that procedure. Wiswall v. Campbell, 93 U.S. 347, 351, 23 L.Ed. 923. If the claimant is a State, the procedure of proof and allowance is not transmitted into a suit against the State because the court entertains objections to the claim. The State is seeking something from the debtor. No judgment is sought against the State. The whole process of proof, allowance, and distribution is, shortly speaking, an adjudication of interests claimed in a res. It is none the less such because the claim is rejected in toto, reduced in part, given a priority inferior to that claimed, or satisfied in some way other than payment in cash. When the State becomes the actor and files a claim against the fund it waives any immunity which it otherwise might have had respecting the adjudication of the claim. See Clark v. Barnard, 108 U.S. 436, 447, 448, 2 S.Ct. 878, 882, 883, 27 L.Ed. 780; Gunter v. Atlantic Coast Line R. Co., 200 U.S. 273, 284-289, 26 S.Ct. 252, 256-258, 50 L.Ed. 477; Missouri v. Fiske, 290 U.S. 18, 24, 25, 54 S.Ct. 18, 20, 78 L.Ed. 145. 14 The extent of the constitutional authority of the bankruptcy court in this respect was passed upon in People of State of New York v. Irving Trust Co., 288 U.S. 329, 53 S.Ct. 89, 77 L.Ed. 815. In that case the Court sustained an order of the bankruptcy court which barred a State's tax claim because not filed within the time fixed for the filing of claims. The Court stated, 288 U.S. p. 333, 53 S.Ct. 391, 'If a state desires to participate in the assets of a bankrupt, she must submit to appropriate requirements by the controlling power; otherwise, orderly and expeditious proceedings would be impossible and a fundamental purpose of the Bankruptcy Act would be frustrated.' 15 In the present circumstances there is, therefore, no collision between § 77 and the Constitution. 16 Nor can we conclude that the claim was not properly filed by the State. The state Comptroller, who filed the claim on behalf of the State, is authorized to 'Institute and direct prosecution * * * for just claims and debts due to the state'. N.J.R.S. § 52: 19 10, subd. c, N.J.S.A. And see id., § 52: 19—15. The state Attorney General, who resisted the objections made to the claim, is authorized to 'Attend generally to all matters in which the state is a party or in which its rights and interests are involved'. Id., § 52: 17—2g. The special master, whose report the reorganization court adopted, held that what these officials did in this case was in pursuance of their authority. For that conclusion he relied on the statutes which we have mentioned and the practice in other reorganization proceedings. That construction of New Jersey law made by a federal judge of the New Jersey District Court is entitled to special weight. Steele v. General Mills, 67 S.Ct. 439. We find nothing which imperaches it. To hold otherwise might, indeed, imperil the claim which New Jersey so vigorously asserts. For it appears that the time for filing claims has expired and under the rule of People of State of New York v. Irving Trust Co., supra, a filing at this late date might come too late.6 17 Second. New Jersey contends that Congress did not include a State's tax liens within the scheme of § 77 proceedings. That is but another way of saying that since the State's asserted liens attached before the reorganization petition was filed, the only property of the debtor in custodia legis was its equity after the tax liens were satisfied. 18 We do not agree with that conclusion. We partially answered the contention when we reviewed the broad, all inclusive nature of the definitions of 'creditors' and 'claims' contained in § 77, sub. b. As those definitions make plain, 'all holders of claims' include those who assert 'liens' against the property of the debtor. 19 Section 77, sub. b, moreover, gives the reorganization court broad powers over all types of liens. Thus a plan of reorganization 'Shall include provisions modifying or altering the rights of creditors generally, or of any class of them, secured or unsecured, either through the issuance of new securities of any character or otherwise'. § 77, sub. b(1). A plan of reorganization may provide for 'the sale of all or any part of the property of the debtor either subject to or free from any lien at not less than a fair upset price'. § 77, sub. b(5). (It lics added.) It may order 'the distribution of all or any assets, or the proceeds derived from the sale thereof, among those having an interest therein'. Id. Or it may provide for 'the satisfaction or modification of any liens' or 'the curing or waiver of defaults'. Id. (Italics added.) This is comprehensive language suggesting that all liens are included, not that some are beyond the reach of the court. While valid liens existing at the commencement of bankruptcy proceedings have always been preserved, it has long been a function of the bankruptcy court to ascertain their validity and extent and to determine the method of their liquidation. Whitney v. Wenman, 198 U.S. 539, 552, 25 S.Ct. 778, 781, 49 L.Ed. 1157; Isaacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 737, 738, 51 S.Ct. 270, 271, 272, 75 L.Ed. 645; Straton v. New, 283 U.S. 318, 321, 51 S.Ct. 465, 466, 75 L.Ed. 1060. Moreover, both in receivership cases, New York v. Maclay, 288 U.S. 290, 53 S.Ct. 323, 77 L.Ed. 754; United States v. State of Texas, 314 U.S. 480, 62 S.Ct. 350, 86 L.Ed. 356, and in bankruptcy cases, Van Huffel v. Harkelrode, 284 U.S. 225, 52 S.Ct. 115, 76 L.Ed. 256, 78 A.L.R. 453; New York v. Irving Trust Co., supra, the authority of the court to deal with the lien of a State has long been recognized. In reorganization cases the task of resolving disputes as to liens is a common one for the court. See Group of Institutional Investors v. Chicago, M. St. P. & P.R. Co., 318 U.S. 523, 569, 63 S.Ct. 727, 751, 87 L.Ed. 959. Indeed, before a plan of reorganization can be designed in accord with fair and equitable requirements, liens must be disentangled and their relative priorities ascertained. This problem, present in most reorganizations, is acute in the railroad field. 20 If the reorganization court lacked the power to deal with tax liens of a State, the assertion by a State of a lien would pull out chunks of an estate from the reorganization court and transfer a part of the struggle over the corpus into tax bureaus and other state tribunals. That would not only seriously impair the power of the court to administer the estate and adversely affect the power of the Interstate Commerce Commission and the court to promulgate a reorganization plan. See Ecker v. Western Pacific R. Corp., 318 U.S. 448, 466-475, 63 S.Ct. 692, 704-708, 87 L.Ed. 892; Smith v. Hoboken Railroad, Warehouse & Steamship Connecting Co., 328 U.S. 123, 66 S.Ct. 947. If would fly in the teeth of § 77, sub. a which grants the reorganization court 'Exclusive jurisdiction of the debtor and its property wherever located'. That jurisdiction is not limited to the prevention of interference with the use of the property by the trustee; it 'extends also to the adjudication of questions respecting the title.' Ex parte Baldwin, 291 U.S. 610, 616, 54 S.Ct. 551, 554, 78 L.Ed. 1020; Thompson v. Texas Mexican Ry. Co., 328 U.S. 134, 140, 66 S.Ct. 937, 942. It is the exclusive jurisdiction of the reorganization court which gives it power to preserve the railway as a unit and as a going concern and to prevent it from being divided up and dismembered piece-meal. Only in that way can continuous operation of the road be assured and a plan of reorganization be effected which not only safeguards the interests of the various claimants but is also compatible with the public interest. Continental Illinois Nat. Bank & Trust Co. v. Chicago Rock Island & Pac. Ry. Co., 294 U.S. 648, 55 S.Ct. 595, 79 L.Ed. 1110; Smith v. Hoboken Railroad, W. & S.C. Co., supra. 21 When § 77 is read against this historical background and in light of practical requirements, we cannot conceive that Congress gave the reorganization court power less replete than the sweeping language of § 77 suggests. 22 The constitutional authority of Congress to grant the bankruptcy court power to deal with the lien of a State has been settled. In Van Huffel v. Harkelrode, supra, the Court held that the bankruptcy court was constitutionally empowered to order a sale of property of a ba krupt free and clear of a lien of a State for taxes. 23 We hold that the reorganization court has jurisdiction over all of the property of the debtor including that on which New Jersey asserts a lien and that the power of the court to deal with liens extends to the lien which New Jersey claims.7 24 Third. We held in Arkansas Corporation Commission v. Thompson, supra, that the reorganization court lacked the power under § 77 to redetermine for state tax purposes the property value of a railroad where that value had already been determined in state proceedings which afforded ample protection to the railroad's rights. We adhere to that decision. Its ruling precludes redetermination by the reorganization court in this case of the valuations underlying the assessments made by the state authorities and the validity of those assessments used as the basis for the computation of the taxes. It may not therefore entertain the objections to New Jersey's claim which tender those issues. The proper tribunals where those issues may be litigated, if they are still open for any year, are the state agencies and courts and, under special circumstances, the federal courts. Township of Hillsborough, Somerset County, N.J. v. Cromwell, 326 U.S. 620, 66 S.Ct. 445. The Circuit Court of Appeals has reviewed at length the New Jersey procedure available for challenging the valuations which underlie assessments. 152 F.2d pp. 411—414. by the standards of Arkansas Corporation Commission v. Thompson, supra, that procedure is adequate, so that relitigation of the question in the reorganization proceedings would not be appropriate. 25 Fourth. The rule of Arkansas Corporation Commission v. Thompson, supra, does not, however, preclude the reorganization court from adjudicating the other issues raised by the objections to New Jersey's claim. The contrary view, which the Circuit Court of Appeals apparently took, fails to recognize historic bankruptcy powers which, as we have already pointed out,8 are part of the arsenal of authority granted the reorganization court by § 77. 26 (1) The validity and priority of one lien, whether or not claimed by a State, as against other liens, are questions for the reorganization court. Illustrating but not limiting the range of that inquiry are questions whether local law creates the lien asserted; whether it was sufficiently perfected prior to the petition for reorganization as to be good against other liens, cf. New York v. Maclay, supra; United States v. Texas, supra; whether, if it were inchoate at that time, it could be perfected subsequent to the petition, Lyford v. State of New York, 2 Cir., 140 F.2d 840; and whether the lien, though paramount, is subordinate to administration expenses or other claims under wither the general bankruptcy rule, City of New York v. Hall, 2 Cir., 139 F.2d 935, or the equity rule,9 5 Collier on Bankruptcy (14th Ed.) 77.21. See Warren v. Palmer, 310 U.S. 132, 60 S.Ct. 865, 84 L.Ed. 1118. 27 (2) The extent of the lien—to what property it applies, and whether it is restricted to realty or covers personal property or revenues as well—are also questions for the reorganization court. See Ecker v. Western Pacific R. Corp., supra, 318 U.S. pp. 489, 503, 63 S.Ct. 714, 721, 87 L.Ed. 892. 28 (3) The reorganization court may also adjudicate questions pertaining to the amount of a tax claim secured by a lien without crossing the forbidden line marked by Arkansas Corporation Commission v. Thompson, supra. There is, for example, the question whether the amount of the claim has been swollen by the inclusion of a forbidden penalty and thus to that extent does not meet the bankruptcy requirements for proof and allowance of claims. Section 57, sub. j of the Bankruptcy Act provides that debts owing a State as a 'penalty or forfeiture'10 shall not be allowed. What claims accruing before bankruptcy and sought to be proved by a State are 'penalties', People of the State of New York v. Jersawit, 263 U.S. 493, 44 S.Ct. 167, 68 L.Ed. 405, and what are not, Meilink v. Unemployment Reserves Commission, 314 U.S. 564, 62 S.Ct. 389, 86 L.Ed. 458; the applicability of s 57, sub. j to reorganizations under § 77;11 the liability of the estate for penalties incurred by the trustee in the operation of the business, Boteler v. Ingels, 308 U.S. 57, 521, 60 S.Ct. 29, 84 L.Ed. 78, 442; what interest, if any, accrues after the petition for reorganization has been filed, Vanston Bondholders Protective Committee v. Green, 329 U.S. 156, 67 S.Ct. 237, are all questions for the reorganization court. 29 (4) We noted in Case v. Los Angeles Lumber Products Co., 308 U.S. 106, 130, 60 S.Ct. 1, 14, 84 L.Ed. 110, that one useful and fitting function of a reorganization court was the compromise or settlement of claims, so that interminable litigation might be ended and the interests of expedition in promulgating a plan of reorganization served. That power, expressly included in the Bankruptcy Act12 and governed by our General Order No. 3313 is part of the broad authority granted the reorganization court by § 77.14 Through the appropriate exercise of that power, the court may authorize the trustee to compromise claims, secured or unsecured, and may approve equitable adjustments of them, and so reduce or otherwise affect the participation that the claimant, whether a State or another, may have in the res which is in custodia legis. 30 It is urged in this case that the settlement and compromise of New Jersey's tax claim which the reorganization court authorized the trustee to make under the so-called settlement acts of the New Jersey legislature of 1941 and 1942 was an appropriate exercise of that power; that the compromise was valid and binding under New Jersey law; and that even if the compromise was not valid, payments made by the trustee and the conduct of the parties have altered the claim as respects the lien, the principal amount of the claim, and the interest or penalty portion of it. New Jersey vigorously contests all and each of these contentions. 31 A phase of this controversy was before the Circuit Court of Appeals in In re Central R. Co. of New Jersey, supra. That court had before it on appeal the order of the reorganization court (entered prior to the decision in Wilentz v. Hendrickson, supra, holding the acts of 1941 and 1942 unconstitutional) which, on the basis of the compromise, allowed New Jersey's claim only in a reduced amount. The Circuit Court of Appeals held (1) that it would have been more appropriate for the reorganization court to have stayed its hand pending determination of the state litigation and (2) that in any event, it should not have passed on the constitutionality of the 1941 and 1942 acts without giving New Jersey an opportunity for a hearing and argument on the issue. This controversy is now in a different posture. New questions of local law emerge—whether Wilentz v. Hendrickson, supra, controls this case; whether a valid settlement can be made under an unconstitutional act and, if so, whether this alleged compromise was valid and effective; whether, if the settlement was no binding, the amount of the claim or the extent of the lien has been altered by the payments made during reorganization or by the conduct of the parties. 32 These points have been briefed and argued here. The difficulty is that neither the reorganization court nor the Circuit Court of Appeals passed on them. The reorganization court passed solely on a question of jurisdiction—whether it had the power to make adjudications concerning the amount of New Jersey's claim which should be allowed and the validity and extent of her lien, or whether New Jersey's sovereign immunity stood in the way of such determinations. And the Circuit Court of Appeals did not pass on these questions because it, too, was concerned solely with the question of jurisdiction. 33 These issues bristle with questions of New Jersey law on which we should not pass, even if we were to assume they are properly here, without the benefit of the views of judges who sit there and have a greater familiarity with local law and local practices than we. See Huddleston v. Dwyer, 322 U.S. 232, 237, 64 S.Ct. 1015, 1018, 88 L.Ed. 1246; Brillhart v. Excess Insurance Co., 316 U.S. 491, 497, 62 S.Ct. 1173, 1176, 86 L.Ed. 1620; City of Hammond v. Schappi Bus Line, 275 U.S. 164, 169, 48 S.Ct. 66, 68, 72 L.Ed. 218; Wilson Cypress Co. v. Del Pozo Y Marcos, 236 U.S. 635, 656, 657, 35 S.Ct. 446, 454, 59 L.Ed. 758. And for a review of the earlier cases, see dissenting opinion of Mr. Justice Brandeis in Railroad Commission of California v. Los Angeles R. Co., 280 U.S. 145, 164, 165, 50 S.Ct. 71, 76, 77, 74 L.Ed. 234. Moreover, we are now advised that there is presently pending before the Circuit Court of Appeals an appeal by the Attorney General of New Jersey from an order of the reorganization court denying leave to join the trustee as party defendant in a suit in the New Jersey courts to determine whether there was a valid settlement of the tax claims and to stay further determination of that controversy in the federal court until the state courts have passed on the question.15 If the Circuit Court of Appeals orders the application granted, cf. Thompson v. Magnolia Petroleum Co., 309 U.S. 478, 483, 60 S.Ct. 628, 630, 84 L.Ed. 876; Ex parte Baldwin, supra, 291 U.S. p. 619, 54 S.Ct. 555, 78 L.Ed. 1020, the state law phases of the controversy will be authoritatively settled. If the other course is followed, the issues can be resolved by the reorganization court on a record more adequate than the present one for purposes of review. Whatever procedure is followed it is more fitting that those more versed than we in the intricacies and niceties of New Jersey law first pass on these questions. 34 We intimate no opinion on the merits of the settlement controversy. Nor do we intimate any view on the amount of the tax claim which should be allowed or on the validity, character, priority, or extent of the lien asserted by New Jersey, or on the manner in which it should be satisfied in a plan for reorganization. We only hold that the reorganization court could properly entertain all objections to the claim except those involving the valuations underlying the assessments and the validity of those assessments. 35 On the present record we do not know all the issues that were involved in the prolonged litigation concerning the taxes for the years in question. Hence, what we have said is subject to the limitation that res judicata may have made binding on the reorganization court various questions of local law, including the amount and validity of the taxes under New Jersey law and the character and extent of the lien which that law affords them. 36 We affirm in part and reverse in part the judgment of the Circuit Court of Appeals and remand the cause to the District Court for further proceedings in conformity with this opinion. 37 So ordered. 38 Affirmed in part; reversed in part and remanded. 1 The history of the litigation is reviewed in the opinion of the Circuit Court of Appeals in this case. Application of State of New Jersey, 152 F.2d pp. 408—411. 2 Delinquencies of subsidiary companies of the debtor were also included. The 1942 Act increased the 1941 franchise tax of the debtor. The waiver authorized by the reorganization court included a waiver of the right to contest the legality of that additional assessment. 3 See In re Central R. Co. of New Jersey, 3 Cir., 136 F.2d 633, which contains a review of the facts of this episode. 4 Like claims were also filed against subsidiaries of the debtor. 5 See H. Rep. No. 1409, 75th Cong., 1st Sess., p. 13; S. Rep. No. 1916, 75th Cong., 3d Sess., pp. 5, 16. 6 See Meyer v. Fleming, 327 U.S. 161, 169, 66 S.Ct. 382, 387, footnote 18, 'Sec. 77, sub. c (7) provides that the judge 'shall promptly determine and fix a reasonable time within which the claims of creditors may be filed or evidenced and after which no claim not so filed or evidenced may participate except on order for cause shown.' This is the equity rule (5 Collier on Bankruptcy (1944) p. 537) which permits the filing of claims out of time provided the claim is equitable, the claimant is not chargeable with laches, and the assets have not been distributed (see Conklin v. United States Shipbuilding Co., C.C., 136 F. 1006, 1009, 1010; Pennsylvania Steel Co. v. New York City R. Co., 2 Cir., 198 F. 721, 740—742); and provided further that the late filing does not unduly delay the proceedings. Guaranty Trust Co. (of New York) v. Henwood, 8 Cir., 86 F.2d 347, 353 (108 A.L.R. 1020).' 7 Section 64, sub. a of the Bankruptcy Act determines the priority to which taxes owing a State are entitled and grants the bankruptcy court power to determine questions concerning 'the amount or legality of any such tax'. In Arkansas Corporation Commission v. Thompson, supra, we reserved decision on whether § 64, sub. a was applicable in reorganizations under § 77. We do not reach that question here. For § 77 alone is adequate to sustain the asserted jurisdiction of the reorganization court over all the property of the debtor. See Lyford v. City of New York, 2 Cir., 137 F.2d 782, 785, 786. 8 As stated in Isaacs v. Hobbs Tie & Timber Co., supra, 282 U.S. p. 738, 51 S.Ct. 272, 75 L.Ed. 645, 'while valid liens existing at the time of the commencement of a bankruptcy proceeding are preserved, it is solely within the power of a court of bankruptcy to ascertain their validity and amount and to decree the method of their liquidation.' 9 Section 77, sub. a provides that if the petition is approved the reorganization court 'during the pendency of the proceedings under this section and for the purposes thereof, * * * shall have and may exercise in addition to the powers conferred by this section all the powers, not inconstent with this section, which a Federal court would have had if it had appointed a receiver in equity of the property of the debtor for any purpose.' 10 Section 57, sub. j, reads in full: 'Debts owing to the United States or any State or subdivision thereof as a penalty or forfeiture shall not be allowed, except for the amount of the pecuniary loss sustained by the act, transaction, or proceeding not of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby and such interest as may have accrued thereon according to law.' 11 Section 77, sub. l, provides: 'In proceedings under this section and consistent with the provisions thereof, the jurisdiction and powers of the court, the duties of the debtor and the rights and liabilities of creditors, and of all persons with respect to the debtor and its property, shall be the same as if a voluntary petition for adjudication had been filed and a decree of adjudication had been entered on the day when the debtor's petition was filed.' 12 Section 27, 11 U.S.C.A. § 50, provides: 'The receiver or trustee may, with the approval of the court, compromise any controversy arising in the administration of the estate upon such terms as he may deem for the best interest of the estate.' 13 General Order No. 33, 11 U.S.C.A. following section 53, provides: 'Whenever a receiver, trustee or debtor in possession shall make application to the court for authority to submit to arbitration any controversy arising in the settlement of an estate, or for authority to compromise any such controversy, the application shall clearly and distinctly set forth the subject matter of the controversy, and the reasons why it is proper and for the best interest of the estate that the controversy should be settled by arbitration or compromise.' 305 U.S.App. 16. 14 See § 77, sub. l, note 11, supra, and § 77, sub. a, note 9, supra. 15 In re Central Railroad Co. of New Jersey, No. 8808. We are advised that by stipulation of the parties the case is being held in the Circuit Court of Appeals until the jurisdictional question involved in the instant case has been decided. See 163 F.2d 44.

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329 U.S. 649 67 S.Ct. 598 91 L.Ed. 572 ELLISv.UNION PAC. R. CO. No. 320. Argued Jan. 16, 17, 1947. Decided Feb. 3, 1947. Mr. George Mecham, of Omaha, Neb., for petitioner. Mr. Robert B. Hamer, of Omaha, Neb., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Petitioner was crushed between a moving railroad car and a building while working for respondent railroad as an engine foreman in charge of a switching crew. Damages for personal injuries were sought in a Nebraska state court under the Federal Employers Liability Act, 35 Stat. 65, as amended, 45 U.S.C. § 51 et seq., 45 U.S.C.A. § 51 et seq. Judgment was rendered for petitioner on a jury verdict for $10,000, but on appeal the state Supreme Court reversed for insufficiency of evidence to show negligence, and ordered the complaint dismissed. 146 Neb. 397, 19 N.W.2d 641; 22 N.W.2d 305. We granted certiorari because of an appa ent conflict between that decision and Lavender v. Kurn, 327 U.S. 645, 66 S.Ct. 740. 2 Petitioner's evidence tended to show the following: Petitioner, aged 41, had been in the employ of respondent only one year, and had a total railroad experience of two or three years. Just before sunset on March 15, 1943, he was engaged, along with other members of his crew, in backing an engine and box car around a curve on a spur track where visibility was obstructed by a building located on the inside and near the middle of the curve. He was standing on the ground on the same side as the building and to the right of the engine, and was controlling operations by hand signals to the engineer. Engine foremen frequently stand to the right of the engine, on the engineer's side of the cab. A switchman was located around the curve, out of sight of the engineer, on a loading platform at which the car was to be 'spotted'. Petitioner moved between the building and the track in an attempt to be in a central position from which he could receive signals from the switchman and relay them to the engineer. As the car moved past petitioner, it caught and pinned the upper part of his body against the wall of the building, causing serious injuries. The situation was deceptive because the overhang of the car on the curve and its tilt toward the building resulting from a higher outside rail, reduced clearance materially. In fact, the place where petitioner was standing was in the one short segment of the arc of the curve where clearance was insufficient. Petitioner was unfamiliar with the area and its hazards; if there was a sign warning of the danger, he did not see it; no effort was made to warn him personally. The nearness of the track to the building created an unsafe place for work. Though the engineer was an experienced railroad worker thoroughly familiar with this particular spur, and though it was his duty to watch petitioner continuously or stop the engine,1 he failed either to warn petitioner or to stop in time to avert the tragedy. During the operation the engineer could see the right side of petitioner and when he saw petitioner's right foot twisted on the ground, he stopped the train. 3 Respondent's evidence, on the other hand, tended to establish the following: Petitioner was inconsistent in his statements, and it actually appeared that he had worked around this spur a number of times. The clearance, once adequate, was impaired by a subsequent extension of the building over which the respondent had no control. Neither the overhang of the car nor the pitch of the curve was unusual. Respondent maintained, near the building and some eight feet above the ground, a prominent, legible sign reading 'Impaired Clearance'. It was not required or desirable that petitioner stand between the building and the track; he could equally well have performed his functions on the left, or safe, side of the engine. He did not stand where he could see the switchman, and in fact, it was not necessary for him to relay signals from the switchman since the engineer would be in a position to watch the switchman himself when the car approached the loading platform. The engineer had not worked on the ground and was not aware of the precise hazard; his distance from the petitioner (about 60 feet) and the configuration of the building were such that it was not apparent that the petitioner was in peril. That the engineer was vigilant is somewhat supported by the fact that the train was moving only one or two miles an hour and that he stopped it almost instantly, and within a distance of 12 or 14 inches, when petitioner was pinned between the car and the building. 4 From this evid nce the jury might have concluded that petitioner had a safe place to work but elected to choose a dangerous one, that any duty of warning was fully discharged by the presence of the sign, and that the engineer had not been negligent in any way. In that view of the case the accident would be an unforeseeable, freak event or one caused solely by petitioner's own negligence. On the other hand, it would not have been unreasonable for the triers of fact to have inferred that it was proper and usual procedure to work on the right side of the engine, that the hazard was not radily apparent and was almost in the nature of a trap, that while the sign was placed so as to be readily visible from a train, it was insufficient warning to a man on the ground, and that consequently petitioner was not furnished a safe place to work.2 And the jury might have thought that the engineer was negligent in failing to perceive the peril in time to avert the accident by a warning or by stopping the engine. Again, both parties might have been found negligent, in which event it would have been the duty of the jury, as the trial judge charged, to render a verdict based upon the damages caused by respondent's negligence diminished by the proportion of negligence attributable to petitioner. 45 U.S.C. § 53, 45 U.S.C.A. § 53. 5 The Act does not make the employer the insurer of the safety of his employees while they are on duty. The basis of his liability is his negligence, not the fact that injuries occur. And that negligence must be 'in whole or in part' the cause of the injury. 45 U.S.C. § 51, 45 U.S.C.A. § 51. Brady v. Southern Ry. Co., 320 U.S. 476, 484, 64 S.Ct. 232, 236, 88 L.Ed. 239. Whether those standards are satisfied is a federal question, the rights created being federal rights. Brady v. Southern Ry. Co., supra; Bailey v. Central Vermont Ry. Co., 319 U.S. 350, 63 S.Ct. 1062, 87 L.Ed. 1444. 6 The choice of conflicting versions of the way the accident happened, the decision as to which witness was telling the truth, the inferences to be drawn from uncontroverted as well as controverted facts, are questions for the jury. Tennant v. Peoria & P.U.R. Co., 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520; Lavender v. Kurn, supra. Once there is a reasonable basis in the record for concluding that there was negligence which caused the injury, it is irrelevant that fair-minded men might reach a different conclusion. For then it would be an invasion of the jury's function for an appellate court to draw contrary inferences or to conclude that a different conclusion would be more reasonable. Lavender v. Kurn, supra, 327 U.S. at page 652, 66 S.Ct. at page 743. And where, as here, the case turns on controverted facts and the credibility of witnesses, the case is peculiarly one for the Washington & Georgetown R. Co. v. McDade, 135 U.S. 554, 572, 10 S.Ct. 1044, 1049, 34 L.Ed. 235; Tiller v. Atlantic Coast Line R. Co., 318 U.S. 54, 68, 63 S.Ct. 444, 451, 87 L.Ed. 610, 143 A.L.R. 967. 7 We think the evidence raised substantial questions for the jury to determine and that there was a reasonable basis for the verdict which it returned. 8 Reversed. 1 The engineer was required to have some member of the crew in sight at all times when the engine was in motion. At the time of the accident the undisputed testimony indicated that petitioner was the only member of the crew that the engineer could see. The engineer testified that he watched petitioner continuously. 2 The duty of the carrier to furnish a safe place to work 'is not relieved by the fact that the employee's work in the place in question is fleeting or infrequent.' Bailey v. Central Vermont R. Co., supra, 319 U.S. at page 353, 63 S.Ct. at page 1064, 87 L.Ed. 1444.

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329 U.S. 637 67 S.Ct. 610 91 L.Ed. 563 TRANSPARENT-WRAP MACH. CORPORATIONv.STOKES & SMITH CO. No. 208. Argued Jan. 7, 8, 1947. Decided Feb. 3, 1947. Rehearing Denied March 3, 1947. See 330 U.S. 854, 67 S.Ct. 859. Mr. R. Morton Adams, of New York City, for petitioner. Mr. Samuel E. Darby, Jr., of New York City, for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This is a suit for a declaratory judgment (Judicial Code § 274d, 28 U.S.C. § 400, 28 U.S.C.A. § 400) and an injunction, instituted by respondent for the determination of the legality and enforceability of a provision of a patent license agreement. The District Court, whose jurisdiction was based on diversity of citizenship (Judicial Code § 24(1), 28 U.S.C. § 41(1), 28 U.S.C.A. § 41(1) entered judgment for petitioner, holding the provision valid. The Circuit Court of Appeals reversed by a divided vote, 2 Cir., 156 F.2d 198, being of the opinion that the provision in question was illegal under the line of decisions represented by Mercoid Corporation v. Mid-Continent Co., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376. The case is here on a petition for a writ of certiorari which we granted because of the public importance of the question presented and of the apparent conflict between the decision below and Allbright-Nell Co. v. Stanley Hiller Co., 72 F.2d 392, decided by the Seventh Circuit Court of Appeals. 2 Petitioner, organized in 1934, has patents on a machine which bears the trade-mark 'Transwrap'. This machine makes transparent packages, simultaneously fills them with such articles as candy, and seals them. In 1937 petitioner sold and respondent acquired the Transwrap business in the United States, Canada, and Mexico, the right to use the trade-mark 'Transwrap', and an exclusive license to manufacture and sell the Transwrap machine under the patents petitioner then owned or might acqui e. The agreement contained a formula by which royalties were to be computed and paid. The term of the agreement was ten years with an option in respondent to renew it thereafter for five year periods during the life of the patents covered by the agreement. The agreement could be terminated by petitioner on notice for specified defaults on respondent's part. The provision of the agreement around which the present controversy turns is a covenant by respondent to assign to petitioner improvement patents applicable to the machine and suitable for use in connection with it.1 3 The parties had operated under the agreement for several years when petitioner ascertained that respondent had taken out certain patents on improvements in the machine. Petitioner notified respondent that its failure to disclose and assign these improvements constituted a breach of the agreement and called on respondent to remedy the default. When that did not occur petitioner notified respondent that the agreement would be terminated on a day certain. Thereupon respondent instituted this action asking that the provisions respecting the improvement patents be declared illegal and unenforceable and that petitioner be enjoined from terminating the agreement.2 4 In a long and consistent line of cases the Court has held that an owner of a patent may not condition a license so as to tie to the use of the patent the use of other materials, processes or devices which lie outside of the monopoly of the patent. Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 37 S.Ct. 416, 61 L.Ed. 871, L.R.A.1917E, 1187, Ann.Cas.1918A, 959; Carbice Corporation v. American Patents Dev. Corporation, 283 U.S. 27, 51 S.Ct. 334, 75 L.Ed. 819; Leitch Mfg. Co. v. Barber Co., 302 U.S. 458, 58 S.Ct. 288, 82 L.Ed. 371; Morton Salt Co. v. S. S. Suppiger Co., 314 U.S. 488, 788, 62 S.Ct. 402, 86 L.Ed. 363; B. B. Chemical Co. v. Ellis, 314 U.S. 495, 62 S.Ct. 406, 86 L.Ed. 367; Mercoid Corporation v. Mid-Continent Co. supra; Mercoid Corporation v. Minneapolis Honeywell Co., 320 U.S. 680, 64 S.Ct. 278, 88 L.Ed. 396. As stated in Morton Salt Co. v. Suppiger Co., supra, 314 U.S. at page 492, 62 S.Ct. at page 405, 86 L.Ed. 363, '* * * the public policy which includes inventions within the granted monopoly excludes from it all that is not embraced in the invention. It equally forbids the use of the patent to secure an exclusive right or limited monopoly not granted by the Patent Office and which it is contrary to public policy to grant.' If such practices were tolerated, ownership of a patent would give the patentee control over unpatented articles which but for the patent he would not possess. 'If the restraint is lawful because of the patent, the patent will have been expanded by contract. That on which no patent could be obtained would be as effectively protected as if a patent had been issued. Private business would function as its own patent office and impose its own law upon its licensees.' Mercoid Corporation v. Mid-Continent Co., supra, 320 U.S. at page 667, 64 S.Ct. at page 272, 88 L.Ed. 376. The requirement that a licensee under a patent use an unpatented material or device with the patent might violate the antitrust laws but for the attempted protection of the patent. Id. The condemnation of the practice, however, does not depend on such a showing. Though control of the unpatented article or device falls short of a prohibited restraint of trade or monopoly, it will not be sanctioned. Morton Salt Co. v. S. S. Suppiger Co., supra. For it is the tendency in that direction which condemns the practice and which, if approved by a court either through enjoining infringement or enforcing the covenant, would receive a powerful impetus. Id. 5 The Circuit Court of Appeals was of the view that the principle of those cases was applicable here and rendered illegal and unenforceable the covenant to assign the improvement patents to petitioner. It stated, 156 F.2d at page 202, 'The owner of all property, by withholding it upon any other terms, may, if he can, force others to buy from him; land is the best example and every parcel of land is a monopoly. But it is precisely in this that a patent is not like other property; the patentee may not use it to force others to buy of him things outside its four corners. If the defendant gets the plaintiff's patents, it will have put itself in that position, in part at any rate, by virtue of the compulsion of its own patents.' 6 It went on to note that since all improvement patents would not expire until after expiration of petitioner's patents on the machine, the arrangement put respondent at a competitive disadvantage. For respondent would lose the negative command over the art which ownership of the improvement patents would have given it. Moreover, respondent, though able to renew the license on conditions stated in the agreement, would be irretrievably tied to it so as to be 'Forced, either to cease all efforts to patent improvements, or to keep renewing the contract in order to escape the consequences of its own ingenuity.' Id., 156 F.2d at page 203. 7 First. The first difficulty we have with the position of the Circuit Court of Appeals is that Congress has made all patents assignable and has granted the assignee the same exclusive rights as the patentee. 'Every application for patent or patent or any interest therein shall be assignable in law by an instrument in writing, and the applicant or patentee or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent or patent to the whole or any specified part of the United States.' R.S. § 4898, 35 U.S.C.Supp. V, § 47, 35 U.S.C.A. § 47. The statute does not limit the consideration which may be paid for the assignment to any species or kind of property. At least so far as the terms of the statute are concerned, we see no difference whether the consideration is services (cf. Standard Parts Co. v. Peck, 264 U.S. 52, 44 S.Ct. 239, 68 L.Ed. 560, 32 A.L.R. 1033) or cash, or the right to use another patent. 8 An improvement patent may, like a patent on a step in a process, have great strategic value. For it may, on expiration of the basic patent, be the key to a whole technology. One who holds it may therefore have a considerable competitive advantage. And one who assigns it and thereby loses negative command of the art may by reason of his assignment have suffered a real competitive handicap. For thereafter he will have to pay toll to the assignee, if he practices the invention. But the competitive handicap or disadvantage which he suffers is no greater and no less whether the consideration for the assignment be the right to use the basic patent or something else of value. That is to say, the freedom of one who assigns a patent is restricted to the same degree whether the assignment is made pursuant to a license agreement or otherwise. 9 If Congress, by whose authority patent rights are created, had allowed patents to be assigned only for a specified consideration, it would be our duty to permit no exceptions. But here Congress has made no such limitation. A patent is a species of property. It gives the patentee or his assignee the 'exclusive right to make, use, and vend the invention or discovery' for a limited period. R.S. § 4884, 35 U.S.C. § 40, 35 U.S.C.A. § 40. That is to say, it carries for the statutory period 'a right to be free from competition in the practice of the invention.' Mercoid Corporation v. Mid-Continent Co., supra, 320 U.S. at page 665, 64 S.Ct. at page 271, 88 L.Ed. 376. That exclusive right, being the essence of the patent privilege, is, for purposes of the assignment statute, of the same dignity as any other property which may be used to purchase patents. 10 Second. What we have said is not, of course, a complete answer to the position of the Circuit Court of Appeals. For the question remains whether here, as in Mercoid Corporation v. Mid-Continent Co., supra, and its predecessors, the condition in the license agreement violates some other principle of law or public policy. The fact that a patentee has the power to refuse a license does not mean that he has the power to grant a license on such conditions as he may choose. United States v. Masonite Corporation, 316 U.S. 265, 277, 62 S.Ct. 1070, 1077, 86 L.Ed. 1461. 11 As we have noted, such a power, if conceded, would enable the patentee not only to exploit the invention but to use it to acquire a monopoly not embraced in the patent. Thus, if he could require all licensees to use his unpatented materials with the patent, he would have, or stand in a strategic position to acquire, a monopoly in the unpatented materials themselves. Beyond the 'limited monopoly' granted by the patent, the methods by which a patent is exploited are 'subject to the general law'. United States v. Masonite Corporation, supra, 316 U.S. at page 277, 62 S.Ct. at page 1077, 86 L.Ed. 1461. Protection from competition in the sale of unpatented materials is not granted by either the patent law or the general law. He who uses his patent to obtain protection from competition in the sale of unpatented materials extends by contract his patent monopoly to articles as respects which the law sanctions neither monopolies nor restraints of trade. 12 It is at precisely this point that our second difficulty with the view of the Circuit Court of Appeals is found. An improvement patent, like the basic patent to which it elates, is a legalized monopoly for a limited period. The law permits both to be bought and sold. One who uses one patent to acquire another is not extending his patent monopoly to articles governed by the general law and as respects which neither monopolies nor restraints of trade are sanctioned. He is indeed using one legalized monopoly to acquire another legalized monopoly. 13 Mercoid Corporation v. Mid-Continent Co., supra, and its predecessors, by limiting a patentee to the monopoly found within the four corners of the grant, outlawed business practices which the patent law unaided by restrictive agreements did not protect. Take the case of the owner of an unpatented machine who leases it or otherwise licenses its use on condition that all improvements which the lessee or licensee patents should be assigned. He is using his property to acquire a monopoly. But the monopoly, being a patent, is a lawful one. The general law would no more make that acquisition of a patent unlawful than it would the assignment of a patent for cash. Yet a patent is a species of property;3 and if the owner of an unpatented machine could exact that condition, why may not the owner of a patented machine? 14 It is true that for some purposes the owner of a patent is under disabilities with which owners of other property are not burdened. Thus where the use of unpatented materials is tied to the use of a patent, a court will not lend its aid to enforce the agreement though control of the unpatented article falls short of a prohibitied restraint of trade or monopoly. Morton Salt Co. v. S. S. Suppiger Co., supra. There is a suggestion that the same course should be followed in this case since the tendency of the practice we have here would be in the direction of concentration of economic power that might run counter to the policy of the anti-trust laws. The difficulty is that Congress has not made illegal the acquisition of improvement patents by the owner of a basic patent. The assignment of patents is indeed sanctioned. And as we have said, there is no difference in the policy of the assignment statute whatever consideration may be used to purchase the improvement patents. And apart from violations of the anti-trust laws to which we will shortly advert, the end result is the same whether the owner of a basic patent uses a license to obtain improvement patents or uses the wealth which he accumulates by exploiting his basic patent for that purpose. In sum, a patent license may not be used coercively to exact a condition contrary to public policy. But what falls within the terms of the assignment statute is plainly not per se against the public interest. 15 It is, of course, true that the monopoly which the licensor obtains when he acquires the improvement patents extends beyond the term of his basic patent. But as we have said, that is not creating by agreement a monopoly which the law otherwise would not sanction. The grant of the improvement patent itself creates the monopoly. On the facts of the present case the effect on the public interest would seem to be the same whether the licensee or the licensor owners the improvement patents. 16 There is a suggestion that the enforcement of the condition gives the licensee less incentive to make inventions when he is bound to turn over to the licensor the products of his inventive genius. Since the primary aim of the patent laws is to promote the progress of science and the useful arts (United States v. Masonite Corporation, supra, 316 U.S. at page 278, 62 S.Ct. at pages 1077, 1078, 86 L.Ed. 1461 and cases cited), an arran ement which diminishes the incentive is said to be against the public interest. Whatever force that argument might have in other situations, it is not persuasive here. Respondent pays no additional royalty on any improvement patents which are used. By reason of the agreement any improvement patent can be put to immediate use and exploited for the account of the licensee. And that benefit continues so long as the agreement is renewed. The agreement thus serves a function of supplying a market for the improvement patents. Whether that opportunity to exploit the improvement patents would be increased but for the agreement depends on vicissitudes of business too conjectural on this record to appraise. 17 Third. We are quite aware of the possibilities of abuse in the practice of licensing a patent on condition that the licensee assign all improvement patents to the licensor. Conceivably the device could be employed with the purpose or effect of violating the anti-trust laws. He who acquires two patents acquires a double monopoly. As patents are added to patents a whole industry may be regimented. The owner of a basic patent might thus perpetuate his control over an industry long after the basic patent expired. Competitors might be eliminated and an industrial monopoly perfected and maintained.4 Through the use of patents pools or multiple licensing agreements the fruits of invention of an entire industry might be systematically funneled into the hands of the original patentee. See United Shoe Machinery Co. v. La Chapelle, 212 Mass. 467, 99 N.E. 289, Ann.Cas.1913D, 715. 18 A patent may be so used as to violate the anti-trust laws. Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 33 S.Ct. 9, 57 L.Ed. 107; United Shoe Machinery Corporation v. United States, 258 U.S. 451, 42 S.Ct. 363, 66 L.Ed. 708; Ethyl Gasoline Corporation v. United States, 309 U.S. 436, 60 S.Ct. 618, 84 L.Ed. 852; United States v. Masonite Corporation, supra. Such violations may arise through conditions in the license whereby the licensor seeks to control the conduct of the licensee by the fixing of prices (Ethyl Gasoline Corporation v. United States, supra; United States v. Masonite Corporation, supra) or by other restrictive practices. United Shoe Machinery Corporation v. United States, supra. Moreover, in the Clayton Act, 38 Stat. 730, 731, 15 U.S.C. § 14, 15 U.S.C.A. § 14, Congress made it unlawful to condition the sale or lease of one article on an agreement not to use or buy a competitor's article (whether either or both are patented), where the effect is 'to substantially lessen competition or tend to create a monopoly'. See International Business Machines Corporation v. United States, 298 U.S. 131, 56 S.Ct. 701, 80 L.Ed. 1085. Congress, however, has made no specific prohibition against conditioning a patent license on the assignment by the licensee of improvement patents. But that does not mean that the practice we have here has immunity under the anti-trust laws. Indeed, the recent case of Hartford-Empire Co. v. United States, 323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322; Id., 324 U.S. 570, 65 S.Ct. 815, 89 L.Ed. 1198, dramatically illustrates how the use of a condition or covenant in a patent license that the licensee will assign improvement patents may give rise to violations of the anti-trust laws.5 19 The District Court found no violation of the anti-trust laws in the present case. The Circuit Court of Appeals did not reach that question. Hence it, as well as any other questions which may have been preserved, are open on our remand of the cause to the Circuit Court of Appeals. 20 We only hold that the inclusion in the license of the condition requiring the licensee to assign improvement patents is not per se illegal and unenforceable. 21 Reversed. 22 Mr. Justice BLACK, Mr. Justice RUTLEDGE and Mr. Justice BURTON would affirm the judgment for the reasons set forth in the opinion of the Circuit Court of Appeals. 23 Mr. Justice MURPHY is of the view that the judgment below should be affirmed. He believes that the Court's decision in this case unduly enlarges the scope of patent monopolies and is inconsistent with the philosophy enunciated in Mercoid Corporation v. Mid-Continent Inv. Co., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376, and similar cases. 1 The relevant portions of this provision read as follows: 'If the Licensee shall discover or invent an improvement which is applicable to the Transwrap Packaging Machine and suitable for use in connection therewith and applicable to the making and closing of the package, but not to the filling nor to the contents of the package, it shall submit the same to the Licensor, which may, at its option, apply for Letters Patent covering the same. In the event of the failure of the licensor so to apply for Letters Patent covering such additional improvements, inventions or patentable ideas, the Licensee may apply for the same. In the event that such additional Letters Patent are applied for and are granted to the Licensor, they shall be deemed covered by the terms of this License Agreement and may be used by the Licensee hereunder without any further consideration, license fee or royalty as above provided. In the event that any such additional improvements are patented by the Licensee for use in connection with Transwrap Packaging Machines, (after the refusal or failure of the Licensor to apply for Patents thereon), the Licensor may, nevertheless, have the use but not the exclusive use of the same outside of the several territories covered by this License Agreement. The expenses of obtaining any such Patents shall be paid by the party applying therefor.' By another provision of the agreement, likewise challenged, it was provided that during the term of the license all improvement patents, whether secured by petitioner or by respondent, were to be included in the terms of the license without payment of an additional royalty. The petitioner, however, was to have the right to use and license the use of any such improvements outside the territories covered by the agreement. 2 Petitioner joined issue and filed a counterclaim asking that the improvement patents be assigned, that the agreement be held terminated and that respondent be enjoined from using the original or improvement patents. The District Court dismissed the complaint, declared the agreement terminated and ordered respondent to assign the petitioner the improvement patents. The Circuit Court of Appeals, on reversing, held not only that the provision for the assignment of the improvement patents was unlawful but also that petitioner was excused from any further performance because respondent had repudiated its agreement to assign those patents. It remanded the cause to the District Court to determine whether petitioner was entitled to restitution. 3 See James v. Campbell, 104 U.S. 356, 358, 26 L.Ed. 786; Hollister v. Benedict & Burnham Marine Turbine Mfg. Co., 113 U.S. 59, 67, 5 S.Ct. 717, 721, 79 L.Ed. 699; Cramp & Sons Ship & Engine Bldg. Co. v. International Curtis Co., 246 U.S. 28, 39, 40, 38 S.Ct. 271, 273, 274, 62 L.Ed. 560; United States v. Dubilier Condenser Corporation, 289 U.S. 178, 187, 53 S.Ct. 554, 557, 77 L.Ed. 1114, 85 A.L.R. 1488. 4 See Patents and Free Enterprise, Monograph No. 31, Investigation of Concentration of Economic Power, Temporary National Economic Committee, 76th Cong., 3d Sess., chs. V & VII; Wood, Patents and Antitrust Law (1941), chs. 3 & 4; Marcus, Patents, Antitrust Law and Antitrust Judgments through Hartford-Empire. (1946) 34 Georgetown L.J. 1. 5 See note 45 Col.L.Rev. 601.

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329 U.S. 599 67 S.Ct. 606 91 L.Ed. 532 ALBRECHT et al.v.UNITED STATES. LINNENBRINGER v. SAME. PITMAN et al. v. SAME. OLIVER et al. v. SAME. Q.W.S.S. REALTY & INVESTMENT CO. v. SAME. Nos. 148 to 151 and 155. Argued Jan. 8, 1947. Decided Feb. 3, 1947. Messrs. Richmond C. Coburn and Samuel M. Watson, both of St. Louis, Mo., for petitioners. Mr. Roger P. Marquis, of Washington, D.C., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 The question here is whether the Government is obligated to pay interest in connection with the following land purchase arrangements and condemnation proceedings. The Government made separate contracts with the petitioners to buy certain lands from them to be used for a public purpose. The contracts stipulated a purchase price to be paid at an indefinite future time when certain conditions had been fulfilled.1 They also granted the Government the right to immediate possession. Later the Government questioned the validity of the contracts and attempted to rescind them on the ground that by reason of fraud and other things the contract prices were grossly excessive and represented far more than the 'just compensation' required by the Fifth Amendment. It filed condemnation proceedings in District Courts under 40 Stat. 241, as amended, 50 U.S.C. § 171, 50 U.S.C.A. § 171, asking the Courts to fix 'just compensation' after hearing evidence on that subject. It also filed a declaration of taking under 46 Stat. 1421, 40 U.S.C. § 258a, 40 U.S.C.A. § 258a, at the same time depositing in the Courts sums of money, substantially less than the contract prices, which it estimated to be the true 'just compensation' for the property taken. The Courts then entered orders divesting the property owners of all title and vesting it in the Government. A companion case in which a District Court held an identical contract valid was appealed and eventually reached this Court. Prior to and pending this appeal these petitioners vigorously asserted the validity of the terms of the contracts which fixed the agreed prices for transfer of possession and title to their properties. Several years later this Court upheld the validity of the identical contract in the companion case.2 Thereupon the Government, complying with that decision, paid the full contract purchase prices into the District Courts. It prayed that the landowners' compensation be fixed as the contract price without interest. Petitioners asserted that they had a right to interest from the time of the 'taking' guaranteed by the Fifth Amendment's provision for 'just compensation.' The Government contended that the 'just compensation' provision was not applicable, and that petitioners had no right to interest because their purchase contracts did not provide for it. One District Court decided this question in favor of the Government, 60 F.Supp. 741, but two decided against it. 61 F.Supp. 199.3 The Circuit Court of Appeals held for the Government. 8 Cir., 155 F.2d 73, 77. In a case involving somewhat similar facts, United States v. Baugh, 149 F.2d 190, the Circuit Court of Appeals for the Fifth Circuit had decided against the Government. Because of the apparent conflict presented and because the question is of widespread importance, we granted certiorari. The facts and issues, so far as we deem them relevant to disposition of all the cases, are identical, and so we consider all of them together. 2 We agree with the Circuit Court of Appeals that the Government is not obligated to pay interest in these cases. It is true that in cases submitted to them for determination of 'just compensation,' courts have evolved a rule whereby an element of compensation designated as interest is sometimes allowed. Under this rule, and in the absence of an agreement of the parties fixing compensation, courts first fix the fair market value of property as of the time it is taken. The property owner, against whom there is no counterclaim, is always entitled to payment of this much. But where payment of that fair market value is deferred, it has been held that something more than fair market value is required to make the property owner whole, to afford him 'just compensation.' This additional element of compensation has been measured in terms of reasonable interest. Thus, 'just compensation' in the constitutional sense, has been held, absent a settlement between the parties, to be fair market value at the time of taking plus 'interest' from that date to the date of payment.4 3 But the method used by courts to determine 'just compensation' in an adversary proceeding where the parties have failed previously to agree on its amount is not the exclusive method for determining that question. The Fifth Amendment does not prohibit landowners and the Government from agreeing between themselves as to what is just compensation for property taken. See Danforth v. United States, 308 U.S. 271, 60 S.Ct. 231, 84 L.Ed. 240. Nor does it bar them from embodying that agreement in a contract, as was done here. And certainly where a party to such a contract stands upon its terms to enforce them for his own advantage, he cannot at the same time successfully disavow those terms so far as he conceives them to be to his disadvantage. That is precisely the position of the petitioners here. They made contracts for the transfer and possession of lands, at prices concerning which they have never complained. At the end of the prolonged litigation, the Government was barred from showing that compensations fixed by the contracts were not just, but were excessive. Having thus bound the Government to the contract prices as the measure of 'just compensation', which prices, to say the least, generously meet the Fifth Amendment's 'just compensation' requirement, they now seek to escape the burdens of these identical contract provisions. They invoke the Fifth Amendment in pursuit of something more than the compensation for which their contracts provide—contracts which they are not willing to abandon. 4 The answer to their contention is that in this posture of the cases these transactions have passed out of the range of the Fifth Amendment. For the reasoning on which interest is added to value as a part of 'just compensation' in court condemnation proceedings is not applicable to this situation. That reasoning is that when a court determines just ompensation, it first fixes bare value at the time of the taking and adds a sum to compensate for deferred payment of bare value so as to make the property owner whole as required by the Fifth Amendment. We do not think this formula fits contractual arrangements for compensation. Exactly what factor the parties consider, in addition to bare value, cannot easily be ascertained. This very group of transactions illustrates that there may be many such additional factors. For example, all the contracts here provided for immediate Government possession, though none contemplated immediate payments. We cannot know what amounts were added in the bargains to the bare market values as estimated, though unarticulated, allowances for the anticipated delays in payment. And other factors, which need not be enumerated, entered into the contract prices. These things demonstrate the inadvisability of applying a constitutional rule as to interest, specially designed to enable courts to calculate 'just compensation,' to an entirely different situation in which parties, supposedly with due regard to their own interests, bargain between themselves as to compensation. Since these petitioners have chosen to stand on their contract terms as to the amount they will receive for their property, rather than to have 'just compensation,' in the constitutional sense, fixed by the courts, we must look to those terms for the measure of their compensation, including their right to that part of compensation which courts have called interest. 5 We have not overlooked the contention that this conclusion is in conflict with our holding in Danforth v. United States, 308 U.S. 271, 60 S.Ct. 231, 84 L.Ed. 240. We do not think it is. That was also a case in which a statute authorized Government agents to purchase property, and a price had been agreed on prior to condemnation proceedings. But the asserted interest claim was there denied. The decision in that case reasserted the principle that interest in condemnation proceedings does not begin until there has been a taking. After noting the several incidents asserted to constitute a taking, we held that there was no interval between the taking of the property there and payment for it. Thus the question we have considered here was neither directly involved, raised, nor given special consideration. A further incidental distinction between that case and this is that in the Danforth case the contract did not anticipate that the taking would precede payment. 6 Turning now to the right to interest under the contracts, and apart from the contention regarding the Fifth Amendment, we find that the contracts have no provision for payment of interest. No statute authorizes the payment of interest in cases like this. In the absence of specific contract or statutory provisions no interest runs against the Government even though the Government's payment for the contract purchases be delayed. See Smyth v. United States, 302 U.S. 329, 353, 58 S.Ct. 248, 252, 82 L.Ed. 294, 114 A.L.R. 807; United States v. Thayer-West Point Hotel Co., 329 U.S. 585, 588, 67 S.Ct. 398, 399; United States v. New York Rayon Importing Co. et al., 329 U.S. 654, 659, 67 S.Ct. 601, 604. 7 There is some argument that interest should be allowed because the Declaration of Taking Act, 46 Stat.1421, 40 U.S.C. § 258a, 40 U.S.C.A. § 258a, under which condemnation proceedings were filed, authorizes payment of interest from the date property is taken. Cf. United States v. Thayer-West Point Hotel Co., supra, 329 U.S. 585, 588, 67 S.Ct. 398, 399. This provision, however, is no more than a statutory embodiment of the rule for determining constitutional 'just compensation' in the absence of a governing contract, and what we have already said is equally applicable to the claim for interest under the statute. It contains no specific provision for interest on Government contracts of purchase. And here, while the litigation was under the condemnation statute, the petitioners' reliance on the purchase price provisions of the contracts as to value took these claims for interest outside the purview of the interest provisions of the Declaration of Taking Act, and left them to be governed by the interest rules which would have applied had suit been brought by petitioners to enforce the contract terms. Petitioners were barred from receiving interest in any proceeding for the reason that their contracts contained no promise to pay interest. 8 Affirmed. 9 Mr. Justice REED and Mr. Justice DOUGLAS, dissenting. 10 'The stipulation merely had the effect of relieving the Government from having to make proof as to what was just compensation and of running the risk of having an amount fixed which might be unsatisfactory.' United States v. Baugh, 5 Cir., 149 F.2d 190, 192. The landowners' 'right to have interest is found in the Constitution and is neither found nor lost in the contract.' Id., 149 F.2d at page 193. The justness of the claim for interest in these cases is underlined by the fact that the land was taken over four years before full payment was made. The United States renounced these contracts and retained possession of the properties by the Declaration of Taking Act which by its terms, 46 Stat. 1421, 40 U.S.C. § 258a, entitled the condemnee to interest on the value from the date of taking except as to sums paid into court. After the decision in Muschany v. United States, 324 U.S. 49, 65 S.Ct. 442, 89 L.Ed. 744, the Government carried out its condemnation suits and obtained titles to these properties by condemnation. 11 In these condemnation actions the agreed price, stated in the contracts, became the 'just compensation' of the Declaration of Taking Act and by that Act interest was due for such amount as had not been deposited with the trial court when the declaration was filed. Interest for the period between the declaration and the payment of the value into the trial court should be allowed on the amount by which the sum fixed in the final decree exceeded the sum deposited with the declaration of taking. 1 The first contract condition as to payment was that it should be made upon conveyance of a good and merchantable title. The second was that if 'for any reason' the Attorney General did not approve the title, the Government could obtain a good title by condemnation proceedings in an appropriate district court in which event the agreed compensation was to be deposited in court. 2 Muschany v. United States, 324 U.S. 49, 65 S.Ct. 442, 89 L.Ed. 744. 3 Some of the petitioners claimed interest from the date the Government took possession of the lands under the contract to the date the Government deposited the full contract price. One petitioner claimed interest only from the date of the filing of the declaration of taking on the difference on that date between the sum the Government deposited as the estimated 'just compensation' and the full contract price finally deposited. Interest was awarded by the two District Courts on this latter theory only from the date of the declaration of taking. 4 Seaboard Air Line Ry. Co. v. United States, 261 U.S. 299, 306, 43 S.Ct. 354, 356, 67 L.Ed. 664; Shoshone Tribe of Indians v. United States, 299 U.S. 476, 496, 497, 57 S.Ct. 244, 251, 81 L.Ed. 360; Jacobs v. United States, 290 U.S. 13, 16, 17, 54 S.Ct. 26, 27, 28, 78 L.Ed. 142, 96 A.L.R. 1; United States v. Klamath and Moadoc Tribes, 304 U.S. 119, 123, 58 S.Ct. 799, 801, 82 L.Ed. 1219.

34

329 U.S. 654 67 S.Ct. 601 91 L.Ed. 577 UNITED STATESv.N.Y. RAYON IMPORTING CO., Inc. (No. 2), et al. N.Y. RAYON IMPORTING CO., (No. 2) et al. v. UNITED STATES. Nos. 94 and 96. Argued Jan. 8, 1947. Decided Feb. 3, 1947. Mr.Joseph M. Proskauer, of New York City, for N.Y. Rayon Importing co. Mr. Samuel D. Slade, of Washington, D.C., for the United States. Mr. Justice MURPHY delivered the opinion of the Court. 1 This case involves another impact of § 177(a) of the Judicial Code1 on the power of the Court of Claims to award interest i a judgment against the United States. 2 The N.Y. Rayon Importing Co., Inc., (Rayon #1) and the Nyrayco Importing & Converting Corporation (Nyrayco) were engaged in the importation of rayon yarn. Between 1925 and 1929 they paid customs duties on such importations which they claimed were erroneous. Prior to March 1, 1930, they filed protests with the Collector of Customs in accordance with applicable Tariff Act, 19 U.S.C.A. § 1001 et seq., provisions, which resulted in the institution of actions in the United States Customs Court. 3 On March 1, 1930, the N.Y. Rayon Importing Co., Inc., (Rayon #2) was incorporated for the purpose of acquiring all the assets and assuming all the liabilities of Rayon #1, Nyrayco and two other corporations in the rayon business. As a part of this reorganization, Rayon #1 was dissolved as of March 1, 1930, the New York Secretary of State issuing a certificate of dissolution on that date. 4 Rayon #2 was voluntarily dissolved on January 9, 1931, in accordance with New York law. Nyrayco was dissolved on December 16, 1935, by proclamation for nonpayment of New York franchise taxes. 5 In 1937, long after these three corporations were dissolved, the Customs Court rendered decisions sustaining the protests which Rayon #1 and Nyrayco had filed in connection with the duties on rayon yarn imported between 1925 and 1929. A reliquidation of the customs entries was directed. On reliquidation, the Collector of Customs ascertained that a refund of $362,482.71 was payable to Rayon #1 and $30,809.75 to Nyrayco. Checks payable to those corporations were drawn, but since the corporations had been dissolved the Collector caused the checks to be transmitted to the General Accounting Office 'for lawful disposition.' Representatives of Rayon #2 thereafter requested the General Accounting Office to deliver these checks to them; this request was denied and the Comptroller General deposited the proceeds of the checks in the Treasury in a trust fund entitled 'Outstanding Liabilities 1938', pursuant to law.2 6 Several unsuccessful attempts were made by the representives of the three dissolved corporations to obtain the money in the trust fund. First, a consent decree was entered in a declaratory judgment proceeding in the Supreme Court of the State of New York adjudicating that, as among the three dissolved corporations, Rayon #2 was the owner of these customs refunds or the proceeds thereof.3 But the General Accounting Office refused to make payment when confronted with this decree. Thereafter, on February 26, 1943, attorneys for the three dissolved corporations suggested to the Comptroller General that the money be released to Rayon #1 and Nyrayco with the consent of Rayon #2, each corporation being represented by its director or directors as trustees in liquidation. The Comptroller General rejected this proposal and stated that payment would be permitted only upon final judgment by a court of competent jurisdiction concluding the issue of ownership. He suggested that a suit be brought for this purpose in the Court of Claims. 7 Rayon #2 and its liquidating directors and trustees then brought this suit in the Court of Claims, claiming that Rayon #2 continued to exist for the purpose of collecting and distributing its assets and that it was the owner of the funds in issue. Rayon #1 and Nyrayco also brought suits in the Court of Claims; they claimed the amounts of their respective refunds and alleged that ownership remained in them. After consideration of all three claims,4 the court held that he rights of Rayon #1 and Nyrayco had been taken over by Rayon #2 and its liquidating directors and trustees, who were thus entitled to recover the amounts held in trust by the United States. D.C., 64 F.Supp. 684. As a part of its judgment, however, the Court of Claims awarded 6% interest on the total fund, such interest to run from April 19, 1941, the date of an amendment to the New York Tax Law which retroactively clarified the capacity to sue of involuntarily dissolved corporations.5 8 We issued a writ of certiorari in No. 94, on petition of the United States, to review the action of the Court of Claims in awarding such interest. At the same time, we issued a writ of certiorari, 329 U.S. 699, 67 S.Ct. 43, in No. 96 on a cross-petition of Rayon #2 and its liquidating directors and trustees urging that interest should have been allowed from the time of the issuance of the refund checks in 1937 and 1938 rather than from April 19, 1941. 9 In our opinion, § 177(a) of the Judicial Code prohibits the award of any interest under the circumstances of this case. Section 177(a) provides that 'No interest shall be allowed on any claim up to the time of the rendition of judgment by the Court of Claims, unless upon a contract expressly stipulating for the payment of interest, * * *.' As we recently pointed out in United States v. Thayer-West Point Hotel Co., 329 U.S. 585, 67 S.Ct. 398, this provision codifies the traditional rule regarding the immunity of the United States from liability for interest on unpaid accounts or claims. In other words, in the absence of constitutional requirements, interest can be recovered against the United States only if express consent to such a recovery has been given by Congress. And Congress has indicated in § 177(a) that its consent can take only two forms: (1) A specific provision for the payment of interest in a statute; (2) an express stipulation for the payment of interest in a contract duly entered into by agents of the United States. Thus there can be no consent by implication or by use of ambiguous language. Nor can an intent on the part of the framers of a statute or contract to permit the recovery of interest suffice where the intent is not translated into affirmative statutory or contractual terms. The consent necessary to waive the traditional immunity must be express, and it must be strictly construed. Tillson v. United States, 100 U.S. 43, 25 L.Ed. 543; United States v. Thayer-West Point Hotel Co., supra. 10 Tested by those standards, the award of interest in this case cannot be sustained. There is obviously no contractual stipulation involved. And the appropriation statutes which cover the refunds here in issue contain no provision whatever for the recovery of interest. Act of May 14, 1937, 50 Stat. 137, 142; Act of June 25, 1938, 52 Stat. 1114, 1149. The traditional immunity of the United States as codified in § 177(a), accordingly applies. 11 The Court of Cla ms (64 F.Supp. 684, 687), without making a reference to § 177(a), sought to justify its award of interest on what it thought 'would be right or just.' It felt that the officials of the General Accounting Office had delayed too long in determining the ownership of the refund claims and that, at the very least, they could have suggested at an earlier date that a suit in the Court of Claims was necessary. Inasmuch as it was known since the time of the Customs Court's decisions in 1937 that the money did not belong to the Government, the Court of Claims believed that it was only fair that the true owners get interest from the time when all defects and uncertainties were removed in New York as to the capacity of dissolved corporations to maintain suits or to be sued.6 12 But assuming that the equities of the situation all favor the owners of the refund claims, the Court of Claims did not thereby acquire power to carve out an implied exception to the plain words of § 177(a). Had Congress desired to permit the recovery of interest in situations where the Court of Claims felt it just or equitable, it could have so provided. The absence of such a provision is conclusive evidence that the court lacks any power of that nature. Indeed, any other conclusion would permit the Court of Claims to supply the consent which only Congress can give to the imposition of interest against the United States. 13 By the same token, if we assume that the officials of the General Accounting Office unreasonably delayed the determination of ownership of the funds, such action or inaction could not operate as a consent on the part of the United States. Tillson v. United States, supra. It has long been settled that officers of the United States possess no power through their actions to waive an immunity of the United States or to confer jurisdiction on a court in the absence of some express provision by Congress. Carr v. United States, 98 U.S. 433, 25 L.Ed. 209; Stanley v. Schwalby, 162 U.S. 255, 16 S.Ct. 754, 40 L.Ed. 960; State of Minnesota v. United States, 305 U.S. 382, 59 S.Ct. 292, 83 L.Ed. 235; United States v. Shaw, 309 U.S. 495, 60 S.Ct. 659, 84 L.Ed. 888. The same rule applies here. Only Congress can take the necessary steps to waive the immunity of the United States from liability for interest on unpaid claims. Cf. Smyth v. United States, 302 U.S. 329, 353, 58 S.Ct. 248, 252, 82 L.Ed. 294, 114 A.L.R. 807. 14 The owners of the refund claims, however, seek to avoid the effect of § 177(a) by urging that it applies only to original claims which have not previously been reduced to judgment. This proceeding, it is said, is based upon the pre-existing judgments of the Customs Court, thereby precluding the application of § 177(a). We do not pause here to inquire into the nature and effect of the decisions rendered by the Customs Court or the jurisdiction of the Court of Claims to entertain suits based upon pre-existing judgments. It is enough to note that the traditional rule embodied in § 177(a) is a complete one covering all types of claims, including those arising out of pre-existing judgments. As we have seen, any exception to that rule must be grounded upon an express provision in a statute or contract. It follows that any exception relating to pre-existing judgments must be traced to specific language in a contract or some other statute. Section 177(a) by itself warrants no such exception. Cf. 31 U.S.C. § 226, 31 U.S.C.A. § 226. 15 In this connection, the owners of the refund claims point to the Act of March 3, 1875, as amended in 1933.7 Th t Act directs the Comptroller General to withhold payment from a judgment creditor of the United States, if such creditor is indebted in turn to the United States, until the indebtedness is satisfied. The Comptroller General is to cause suit to be brought on the Government's cross debt if the judgment creditor denies the indebtedness. The Act then expressly permits 6% interest to be paid to the judgment creditor for the period of the withholding if the Government fails to win its suit and to substantiate its asserted set-off. Thus to that limited extent the Act of March 3, 1875, marks an exception to the traditional rule set forth in § 177(a). See, for example, American Potash Co. v. United States, 8 F.Supp. 717, 80 Ct.Cl. 160; Stewart & Co. v. United States, 71 Ct.Cl. 126. 16 But the inapplicability of that Act to the facts of this case is at once apparent. The Act relates solely to the situation where the Government asserts a set-off against a judgment creditor. No such set-off is here asserted; there is nothing more than a withholding of payment by the Government until an ascertainment of ownership. In fact, there is no real claim that the situation in the instant case can be fitted within the terms of the Act of March 3, 1875. There is merely an argument that the policy of that Act in providing for the payment of interest where the withholding results from an erroneous belief in the existence of a cross-indebtedness applies with equal force where the withholding results from an attempt to determine ownership of a claim. But the immunity of the United States from liability for interest is not to be waived by policy arguments of this nature. Courts lack the power to award interest against the United States on the basis of what they think is or is not sound policy. We reiterate that only express language in a statute or contract can justify the imposition of such interest. Such language is absent in this instance. 17 We accordingly reverse the judgment of the Court of Claims in No. 94 to the extent that it includes an award of interest. And since it becomes unnecessary to consider the merits of the cross-clai s, the writ of certiorari previously issued in No. 96 is dismissed. 18 So ordered. 19 Reversed in part; certiorari on the cross-petition dismissed. 1 28 U.S.C. § 284(a), 28 U.S.C.A. § 284(a). 2 Section 21 of the Act of June 26, 1934, c. 756, 48 Stat. 1235, 31 U.S.C. § 725t, 31 U.S.C.A. § 725t. 3 This non-adversary proceeding only affected rights as between Rayon #1 and Nyrayco, on the one hand, and Rayon #2 on the other. It provided the Government no protection as against the other possible claimants who were later impleaded and cited in the Court of Claims action. See footnote 4. 4 The three suits were consolidated. In all three cases, the Societe Pour Nouveaux Placements de Capitaux was impleaded as plaintiff. It filed a disclaimer of interest and the Court of Claims dismissed 'all claims of interest' which it had. Several other persons and companies were named by the United States as having possible claims, but none of them asserted any claims or filed any intervening petitions; the court dismissed 'all claims of interest' as to them. 5 April 19, 1941, was the date when the Governor of New York approved an amendment to § 203-a of the New York Tax Law, Conso.Laws, c. 60, removing all possible question whether corporations which had previously and involuntarily been dissolved under the New York Tax Law for nonpayment of franchise taxes had the right to maintain suits. This had relevance, however, only to Nyrayco. Rayon #1 and Rayon #2 were voluntarily dissolved in accordance with § 105 of the New York Stock Corporation Law, Consol.Laws, c. 59. Their right to maintain suit to collect their assets was never questioned. 6 Rayon #2 and its liquidating directors and trustees claim that the date of April 19, 1941, has no relevance whatever to the claim of Rayon #1. See footnote 5. And they claim that this date has no proper relation to the Nyrayco claim since the Government made no objection to Nyrayco's capacity to sue until several years after the decisions of the Customs Court and after checks in its name had been drawn by the Government. 7 Act of March 3, 1875, 18 Stat. 481, as amended by the Act of March 3, 1933, c. 212, Title II, § 13, 47 Stat. 1516, 31 U.S.C. § 227, 31 U.S.C.A. § 227. This provides: 'When any final judgment recovered against the United States duly allowed by legal authority shall be presented to the Comptroller General of the United States for payment, and the plaintiff therein shall be indebted to the United States in any manner, whether as principal or surety, it shall be the duty of the Comptroller General of the United States to withhold payment of an amount of such judgment equal to the debt thus due to the United States; and if such plaintiff assents to such set-off, and discharged his judgment or an amount thereof equal to said debt, the Comptroller General of the United States shall execute a discharge of the debt due from the plaintiff to the United States. But if such plaintiff denies his indebtedness to the United States, or refuses to consent to the set-off, then the Comptroller General of the United States shall withhold payment of such further amount of such judgment, as in his opinion will be sufficient to cover all legal charges and costs in prosecuting the debt of the United States to final judgment. And if such debt is not already in suit, it shall be the duty of the Comptroller General of the United States to cause legal proceedings to be immediately commenced to enforce the same, and to cause the same to be prosecuted to final judgment with all reasonable dispatch. And if in such action judgment shall be rendered against the United States, or the amount recovered for debt and costs shall be less than the amount so withheld as before provided, the balance shall then be paid over to such plaintiff by such Comptroller General of the United States with 6 per centum interest thereon for the time it has been withheld from the plaintiff.'

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329 U.S. 663 67 S.Ct. 596 91 L.Ed. 584 DE MEERLEERv.PEOPLE OF STATE OF MICHIGAN. No. 140. Argued Jan. 6, 1947. Decided Feb. 3, 1947. Mr.David W. Louisell, of Washington, D.C., for petitioner. Mr. Edmund E. Shepherd, of Detroit, Mich., for respondent. PER CURIAM. 1 In conformity with Michigan procedure, petitioner moved for leave to file a delayed motion for new trial in the court in which he had been convicted of first degree murder. Serious impairment of his constitutional rights at the arraignment and trial were asserted as grounds for the motion. The trial court denied the motion, and the Supreme Court of Michigan on appeal affirmed that ruling. 313 Mich. 548, 21 N.E.2d 849. We granted certiorari because of the importance of the constitutional issues presented. 329 U.S. 702, 67 S.Ct. 110. 2 The facts are not in dispute. On May 16, 1932, an information was filed in the Circuit Court of Lenawee County, Michigan, charging petitioner, then seventeen years of age, and one Virgil Scott with the crime of murder. On the same day, petitioner was arraigned, tried, convicted of first degree murder and sentenced to life imprisonment. The record indicates that petitioner was without legal assistance throughout all these proceedings and was never advised of his right to counsel. The court did not explain the consequences of the plea of guilty, and the record indicates considerable confusion in petitioner's mind at the time of the arraignment as to the effect of such a plea. No. evidence in petitioner's behalf was introduced at the trial and none of the State's witnesses were subjected to cross examination. 3 After reviewing the foregoing facts, the Supreme Court of Michigan determined that the record revealed no deprivation of petitioner's constitutional rights. The court indicated that it had given consideration to the case of Hawk v. Olson, 1945, 326 U.S. 271, 66 S.Ct. 116, and the authorities cited therein, but concluded that the rule of the Michigan cases was determinative. See People v. Williams, 1923, 225 Mich. 133, 195 N.W. 818. In this there was error. 4 Here a seventeen year old defendant confronted by a serious and complicated criminal charge, was hurried through unfamiliar legal proceedings without a word being said in his defense. At no time was assistance of counsel offered or mentioned to him, nor was he apprised of the consequences of his plea. Under the holdings of this Court, petitioner was deprived of rights essential to a fair hearing under the Federal Constitution. Amend. 14. Powell v. State of Alabama, 1932, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158, 84 A.L.R. 527; Williams v. Kaiser, 1945, 323 U.S. 471, 65 S.Ct. 363, 89 L.Ed. 398; Tompkins v. State of Missouri, 323 U.S. 485, 65 S.Ct. 370, 89 L.Ed. 407; White v. Ragen, 1945, 324 U.S. 760, 65 S.Ct. 978, 89 L.Ed. 1348; Hawk v. Olson, supra. See Betts v. Brady, 1942, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595. 5 Reversed.

01

329 U.S. 591 67 S.Ct. 540 91 L.Ed. 527 KRUG, Secretary of the Interior, et al.v.SANTA FE PAC. R. CO. (two cases). Nos. 97 and 98. Argued Jan. 6, 7, 1947. Decided Feb. 3, 1947. Mr Frederick Bernays Wiener, of Providence, R.I., for petitioners. Mr.Lawrence Cake, of Washington, D.C., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 In the first half of the Nineteenth Century the United States acquired a vast new area of sparsely populated lands in the South and West. Settlement and absorption of this territory into the older part of the country became a national problem which demanded for its solution a more rapid and extensive means of transportation of goods and people than was provided by wagons, stagecoaches, and waterways. The building of railroads largely provided the answer. They made it possible for the frontier homesteads and communities to be established on the lands of the new territory and yet maintain live contact with the national economy and culture. To encourage a rapid railroad building program, Congress chose to make public grants of a large proportion of the new lands to underwrite and subsidize the participation of private individuals and privately owned companies in the program.1 In this congressional program of land grants 'in aid of construction' were sown the seeds of the present lawsuit. 2 Enormous areas of public lands were granted railroads, almost equal to the acreage of the New England States, New York and Pennsylvania combined.2 Execution of the land-grant program was marked by innumerable complex and unforeseen difficulties; its course has been beset by claims and counterclaims asserted by and between settlers, railroads, and Government.3 Congress, the executive agencies, and the courts have been repeatedly called upon to help resolve these conflicting claims. The lapse of nearly a century since the program was instituted has not resolved all of the . This lawsuit requires consideration of old and recent congressional efforts to settle these persistently recurring controversies. 3 One substantial field of railroad-government controversy has been the terms of the original land-grant acts which required the railroads to carry Government goods and personnel free of tolls. By reason of judicial interpretation of these terms, as supplemented by periodic legislation,4 land-grant railroads for more than half a century immediately prior to 1940 transported for the Government at one-half of the standard commercial rates. During the depression years beginning in the late 1920's and immediately following, railroad earnings declined considerably, and a movement began to relieve the roads of their land-grant rate obligations. Studies by some Government selected agencies recommended legislation for outright repeal of the provisions for rate concessions to the Government.5 Bills to accomplish this in the 75th and 76th Congresses failed to pass6 but § 321 of the Transportation Act of 19407 provided that land-grant roads could, by compliance with specified conditions,8 collect from the Government full commercial rates, except for the transportation of military and naval freight and personnel. In brief, it required that a railroad, to qualify for full rates, must execute, within a year after passage of the Act, a release of any claim it might have 'against the United States to lands, interest in lands, compensation, or reimbursement on account of lands or interests in lands, which have been granted, claimed to have been granted, or which it is claimed should have been granted to such carrier or any * * * predecessor in interest under any grant to such carrier or such predecessor in interest as aforesaid.' (Italics supplied.) 4 Shortly after passage of this Act respondent took advantage of it, and gave the Government a release framed substantially in the words of the statute.9 Its predecessor in interest had obtained a grant to lands in Arizona and New Mexico, under an Act of 1866 containing the usual governmental rate concession terms. 14 Stat. 292, 297.10 The 1866 Act had specifically recited that if the Government, because of prior settlement of part of the granted lands by homesteaders, could not give possession to some of the lands granted to the railroad, it could select, under the direction of the Secretary of the Interior, other public lands in lieu of them as an indemnity. Respondent had large outstanding claims against the Government for these 'indemnity' lands when it signed the release and concedes that the release extinguishes these claims. 5 But it had other so-called lieu land claims against the Government which it asserts were not extinguished. The railroad urges that these claims are not covered by the Act or by the release. They, allegedly are not claims 'on account of' or 'under any grant' of lands, but rest on contractual exchanges of lands made under the Acts of 1874 and 1904. 18 Stat. 194; 33 Stat. 556. These Acts largely represented a congressional effort to settle conflicts among railroads, Government, and settlers, which arose by reason of settlement by homesteaders on railroad-granted lands after the grants had been made. Both Acts provided that where settlers had so occupied railroad-granted lands, the railroad could, upon relinquishment of its title to them, select other lands in lieu of them. The procedure for selecting the lieu lands under the 1874 and 1904 Acts was substantially identical to the original procedure provided by the Acts for selection of indemnity lands. Before the 1940 Act respondent had, under the 1874 and 1904 Acts, relinquished title to the Government to certain lands previously granted. In August 1940, and subsequently in March 1943, respondent filed applications with t e Secretary of the Interior to select its lieu lands. After the respondent signed the release, and because of it, the Secretary rejected the applications. The railroad then filed this suit in a Federal District Court for relief by injunction or by way of mandamus to require the Secretary and other interior Department officials to pass on its applications without regard to the release. The District Court dismissed the bill on the merits, holding that the statute and release barred the claims. It read the 1940 Act as defining a congressional purpose 'to wipe the slate clean of such claims by any railroad which enjoyed the benefits of the rate concessions made by the Transportation Act * * *.' Santa Fe Pac. R. Co. v. Ickes, 57 F.Supp. 984, 987. The Court of Appeals for the District of Columbia reversed, holding, as respondent urges in this Court, that the 1940 Act did not apply to the type of claims involved here. 153 F.2d 305. Importance of the question decided caused us to grant certiorari. 6 We agree with the District Court. We think, as it held, that the Secretary of the Interior's construction of the 1940 Act was clearly right. Therefore, we do not discuss the Government's contention that, since the Secretary's construction was a reasonable one, it was an allowable exercise of his discretion which should not be set aside by injunction or relief in the nature of mandamus. See Santa Fe Pac. R. Co. v. Work, 267 U.S. 511, 517, 45 S.Ct. 400, 401, 69 L.Ed. 764; cf. santa Fe Pac. R. Co. v. Lane, 244 U.S. 492, 37 S.Ct. 714, 61 L.Ed. 1275. 7 The respondent argues the case here as though the 1940 Act only applied to claims for 'lands under any grant.' The language is not so narrow. It also required railroads to surrender claims for 'compensation, or reimbursement on account of lands or interests in lands which have been granted, claimed to have been granted, or which it is claimed should have been granted * * * under any grant.' (Italics supplied.) This language in itself indicates a purpose of its draftsmen to utilize every term which could possibly be conceived to give the required release a scope so broad that it would put an end to future controversies, administrative difficulties, and claims growing out of land grants. Beyond a doubt the words 'compensation' and 'reimbursement' as ordinarily understood would describe a payment to railroads in money or in kind for the surrender of lands previously acquired by them 'under a grant.'11 If they do not have this meaning, their use in the Act would have been hardly more than surplusage. And when viewed in the context of the historical controversies and claims under the land grants, the conclusion that the 1940 Act covers claims such as respondent's seems inescapable. 8 The legislative history of the Act shows that Congress was familiar with these controversies. In 1929 it passed an Act intended to authorize and require judicial determination of land grant claims of the Northern Pacific Railroad in order finally and completely to set them at rest. 46 Stat. 41, 43 U.S.C.A. § 921 et seq. The suit authorized by that Act was tried in a Federal District Court and was pending in this Court when the 1940 Act was passed. United States v. Northern Pac. R. Co., 311 U.S. 317, 61 S.Ct. 264, 85 L.Ed. 210. Our decision in it shows the complexity and ramifications of the numerous questions involved in land grant controversies. Reference to this case was made by Government officials in urging Congress to include in the predecessors of the 1940 Act a requirement that the railroad surrender all claims arising out of land grants as a prerequisite to any Government rate concessions.12 Here, as in the 1929 Act, which applied to the claims of only one railroad, we think Congress intended to bar any future claims by all accepting railroads which arose out of any or all of the land-grant acts, in ofar as those claims arose from originally granted, indemnity or lieu lands. All the Acts here involved, the Acts of 1866, 1874, 1904 and 1940, relate to a continuous stream of inter-related transactions and controversies, all basically stemming from one thing—the land grants. We think Congress wrote finis to all these claims for all railroads which accepted the Act by executing releases. 9 Reversed. 1 For an account see Public Aids to Transportation, Section of Research, Federal Coordinator of Transportation (1940) I, 45, 46; Heaton, Land Grants, Encyc. Soc. Sciences (1935) IX, 32—35. 2 Heaton, Land Grants, supra, 35. Other sources put the figure of federal grants-in-aid at 134,303,668 acres, equivalent to 204,849 square miles or 6.93 per cent of the area of the continental United States. Seventy railroads received these grants. Public Aids to Transportation, op. cit. supra, n. 1, 13. See also Great Northern R. Co. v. United States, 315 U.S. 262, 273, 62 S.Ct. 529, 533, 86 L.Ed. 836. 3 See Public Aids to Transportation, op. cit. supra, n. 1, II, 5—56, Gates, Land Grants to Railways, Dictionary of Amer. Hist. (1940) III, 237. See also cases collected 43 U.S.C.A. §§ 888, 890, 893, 894, 900, 904. 4 See Lake Superior 3 M.R.R. v. United States, 93 U.S. 442, 23 L.Ed. 965; Atchison, T. & F.R.R. v. United States, 15 Ct.Cl. 126, 148; Cf. 18 Stat. 72, 74; 18 Stat. 452, 453, 454; 20 Stat. 377, 390; 27 Stat. 174, 180. 5 See Committee of Three: Report of March 24, 1938, H.Doc.No. 583, 75th Cong., 3d Sess., 32; Committee of Six: Report of December 23, 1938, in Hearings, House Committee on Interstate and Foreign Commerce on H.R. 2531, 76th Cong., 1st Sess., II, 260. 6 H.R. 10620, 75th Cong.; S. 3876, 75th Cong.; S. 1915 and S. 1990, 76th Cong. 7 54 Stat. 954, 49 U.S.C. § 65, 49 U.S.C.A. § 65. 8 Section 321 (b) provides that 'If any carrier by railroad * * * or any predecessor in interest, shall have received a grant of lands from the United States to aid in the construction of any part of the railroad operated by it, the provisions of law with respect to (reduced rate) compensation for such transportation shall continue to apply to such transportation as though subsection (a) of this section had not been enacted until such carrier shall file with the Secretary of the Interior, in the form and manner prescribed by him, a release of any claim it may have against the United States to lands, interest in lands, compensation, or reimbursement on account of lands or interest in lands which have been granted, claimed to have been granted, or which it is claimed should have been granted to such carrier or any such predecessor in interest under any grant to such carrier or such predecessor in interest as aforesaid. Such release must be filed within one y ar from (the date of the enactment of this Act). Nothing in this section shall be construed as requiring any such carrier to reconvey to the United States lands which have been heretofore patented or certified to it, or to prevent the issuance of patents confirming the title to such lands as the Secretary of the Interior shall find to have been heretofore sold by any such carrier to an innocent purchaser for value or as preventing the issuance of patents to lands listed or selected by such carrier, which listing or selection has heretofore been fully and finally approved by the Secretary of the Interior to the extent that the issuance of such patents may be authorized by law.' 9 'Santa Fe Pacific Railroad Company, a corporation organized and existing by virtue of an Act of Congress approved March 3, 1897 (29 Stat. 622), with office and principal place of business at New York, in the State of New York, hereby, in accordance with section 321 of Part II of Title III of the Transportation Act of 1940, and the rules and regulations issued thereunder by the Secretary of the Interior, relinquishes, remises and quitclaims to the United States of America any and all claims of whatever description to lands, interests therein, compensation or reimbursement therefor on account of lands or interests granted, claimed to have been granted, or claimed should have been granted by any act of the Congress to Santa Fe Pacific Railroad Company or to any predecessor in interest in aid of the construction of any portion of its railroad. 'This release does not embrace the rights of way or station grounds of this company, lands sold by the company to innocent purchasers for value prior to September 18, 1940, lands embraced in selections made by the company and approved by the Secretary of the Interior prior to September 18, 1940, or lands which have been patented or certified to the company or any predecessor in interest in aid of the construction of its railroad.' 10 Cf. note 4, supra. 11 See United States v. Northern Pac. R. Co., Co., 311 U.S. 317, 332, 335, 353, 354, 61 S.Ct. 264, 273, 280, 281, 85 L.Ed. 210. 12 See Hearings, Subcommittee of the Senate Committee on Interstate Commerce, S. 1915, 1990 and 2294, 76th Cong., 1st Sess., 65, 66; see also ibid., 59, 164.

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329 U.S. 607 67 S.Ct. 583 91 L.Ed. 547 INSURANCE GROUP COMMITTEE et al.v.DENVER & R.G.W.R. CO. et al. No. 690. Argued Jan. 6, 1947. Decided Feb. 3, 1947. Rehearing Denied March 3, 1947. See 330 U.S. 854, 67 S.Ct. 860. [Syllabus from pages 607-609 intentionally omitted] Messrs. George D. Gibson, of Richmond, Va., and Kenneth F. Burgess, of Chicago, Ill., for petitioners. F. C. Nicodemus, Jr., of New York City, and William V. Hodges, of Denver, Colo., for respondents. 1 Mr. Jus ice REED delivered the opinion of the Court. 2 On November 29, 1944, the District Court for the District of Colorado confirmed a plan of reorganization for the debtor, the Denver & Rio Grande Western Railroad Co., 62 F.Supp. 384, notwithstanding the rejection of the plan by holders of the General Mortgage bonds pursuant to § 77, sub. e, Bankr. Act, 11 U.S.C.A. § 205, sub. e. Upon appeal the Circuit Court of Appeals reversed the order of confirmation. 10 Cir., 150 F.2d 28. This Court granted certiorari, Reconstruction Finance Corp. v. Denver & S.L.W.R. Co., 326 U.S. 699, 66 S.Ct. 50, 51, reversed the Circuit Court and affirmed the order of confirmation. 328 U.S. 495, 66 S.Ct. 1282. The debtor consistently opposed the plan throughout those proceedings. After the opinion of this Court was filed on June 10, 1946, the debtor petitioned for a rehearing which was denied October 28, 1946. At about the same time as that of filing its petition for rehearing, it moved in the District Court (September 17, 1946) for a re- examination of the plan in the light of circumstances which had changed since the Interstate Commerce Commission's hearings on the plan in May, 1941. 254 I.C.C. 6. The debtor specified three categories of changed conditions: '(a) The decline in money rates to a level far below the rates prevailing at these dates; (b) The recent public offering by the Government and purchase by private capital for private operation of the steel plant at Geneva, near Provo, Utah, which had been constructed by the Government in the exigencies of the War at a cost in excess of $200,000,000; (c) A permanent elevation of the National income through intensified industrial activity involving for the indefinite future a greatly increased demand for railway transportation.' 3 The debtor prayed that upon re-examination the District Court set aside its order of October 25, 1943, approving the plan, and its order of November 29, 1944, confirming the plan, and refer the proceeding back to the Interstate Commerce Commission for the formulation of a new plan. After a hearing on a motion to dismiss the debtor's petition but without the introduction of evidence, the District Court dismissed the petition on October 30, 1946, on the grounds that the order of confirmation determined the rights of participation and that the District Court did not now have power to reopen the proceedings. The District Court also held that the petition failed to state a case that justified reconsideration. The debtor filed notice of appeal and requested a stay of execution of the plan on the same day; the latter motion was denied by the District Court at that time. Thereupon the debtor docketed its appeal in the Circuit Court of Appeals and applied for an order staying execution of the plan until the appeal should be considered. This application of the debtor was granted on November 2, 1946, by an order of Judge Phillips staying proceedings in the District Court to consummate the plan. A petition for certiorari to the Circuit Court was filed in this Court under Judicial Code, § 240(a), 28 U.S.C.A. § 347(a), which asked that we grant a writ of certiorari to the Circuit Court of Appeals, before judgment, and that the order of the District Court be affirmed in this Court. The grounds urged were that the action of the respondent was in violation of the mandate of this Court issued June 10, 1946, and that even if the mandate had not been violated the denial of the petition to reopen proceedings on the plan was not appealable because the petition for re-examination was in reality a petition for rehearing. Further, petitioner urged that this Court take and decide the whole case because the claim of change of circumstances was repetitious of the same claim rejected by this Court in its June, 1946, decision and that no allegations were made sufficient to justify a re-examination of the plan on account of changes in circumstances since the June decision. Because of the importance of the questions raised to the fficient administration of railroad reorganizations under the Bankruptcy Act, we granted certiorari. 329 U.S. 708, 67 S.Ct. 371. 4 We may assume, arguendo, that both this Court upon appeal from an order of confirmation in bankruptcy, and the bankruptcy court itself, after its order of confirmation has been affirmed on review, 11 U.S.C. § 205(f), 11 U.S.C.A. § 205, sub. f, may take cognizance of subsequent changes in conditions and order a plan re-examined by the Interstate Commerce Commission. On that assumption, we are of the opinion that the debtor has failed to allege the existence of changed conditions since our decision of June 10, 1946, of a kind not 'envisaged and considered by the Commission in its deliberations upon or explanations of the plan.' 328 U.S. 522, 66 S.Ct. 1296. We do not therefore think that re-examination would be justified in this case. 5 The conclusion in the foregoing paragraph removes the necessity of considering the question whether the respondent disregarded the effect of the judgment of this Court of June 10, 1946, which affirmed the orders of approval and confirmation of the plan. Likewise it disposes of any necessity to determine whether this petition in the District Court was in reality a request for a rehearing. Cf. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 247, 60 S.Ct. 811, 855, 84 L.Ed. 1129. 6 Upon the same assumption employed above, we ruled in our decision of June 10, 1946, 328 U.S. 534, 66 S.Ct. 1302, that in this reorganization no changed circumstances, up to that date, presented to us by the debtor or other respondents in that review justified a re-examination of the plan as confirmed. This ruling was binding upon the District Court and the Circuit Court of Appeals as to changed circumstances arising after the order of confirmation and prior to our decision. When matters are decided by an appellate court, its rulings, unless reversed by it or a superior court, bind the lower court. Thus a cause proceeds to final determination. While power rests in a federal court that passes an order or decision to change its position on a subsequent review in the same cause, orderly judicial action, except in unusual circumstances, requires it to refuse to permit the relitigation of matters or issues previously determined on a former review.1 7 The debtor's brief and the opinion of the Circuit Court of Appeals on the hearing of the review of the orders of approval and confirmation of the plan make clear that changed circumstances in the period between the Interstate Commerce Commission hearings in May, 1941, and our decision of June 10, 1946, of a like character with those now alleged, were relied upon by the debtor in its former effort to set aside the District Court's orders of approval and confirmation. The debtor argued on the former review, as it again argues, that the plan should not be confirmed because of the 'radical lowering for the indefinite future of money rates.' And it was emphasized at that time that capitalizing on these lower rates would permit the issuance of a greater volume of securities against earnings of the debtor, and consequently a larger allotment to presently dissatisfied creditors. Every example of railroad refinancing, listed in respondent's present brief to support by illustration the argument of falling interest rates, was listed in the brief on the last review for the same purpose. The purpose was to set forth instances of the issue of railroad securities at interest rates definitely lower than those borne by the debtor's issues. The debtor in its brief of that time also argued the beneficial effects of the 'permanent elevation of national income' upon the anticipated earnings of the debtor. Lastly, the debtor there pointed out that the 'establishment and construction of the great Geneva steel plant was certain to be revolutionary in its contribution to the earning power of the debtor * * *'. Although it did not then rely, as it does now, upon the purchase of that corporation by private capital, the argument, then as now, was that the prospective business from a great steel plant was a factor indicating higher earnings. The plant may or may not turn out to be strategically located for private low cost operation and distribution. The shift of ownership has only moderate significance. 8 In sum, the very kinds of changed circumstances which were argued here formerly as reasons for not approving and confirming the plan of reorganization were presented by the petition now under review to the District Court as reasons why that court should vacate its orders of approval and confirmation, and remand the plan to the Commission for reconsideration. The debtor argues that it only urged this Court to take judicial notice of the existence of these changed circumstances, and that our refusal to do so should not bar it from proving these changes in the District Court. Our holding was not based upon a conclusion that this Court could not take judicial notice of changes in economic conditions subsequent to approval by the Interstate Commerce Commission. We concluded that, even if weighed, the alleged changes were not of a kind which justified re-examination of the plan. 328 U.S. 534, 66 S.Ct. 1302. 9 The questions of interest rates and increased earnings from the Geneva steel plant were considered by the Commission and the District Court before the order of confirmation. The approval of the plan by the Commission on June 14, 1943, appraised economic changes subsequent to the hearings. 254 I.C.C. 349, 356, 358, 359. 10 The Commission gave consideration to the interest rates the proposed securities should bear. 328 U.S. 515, 516, 66 S.Ct. 1293. There was a forecast of available income of $6,215,423 for annual charges in a future normal year. It was thought that this would support a capitalization of $155,000,000 plus, even though more than $35,000,000 of that represented by common stock participated only in earnings above the estimated normal except as to long range advantages from capital investments and bond sinking fund payments that had the effect of increasing the value of the common stock equities. 254 I.C.C. 15,356. As appears from the tables of capitalization, annual charges and distribution of securities, 328 U.S. 502, 503, 66 S.Ct. 1286, 1287, the interest rates chosen varied with the type of security. As none of the authorized securities are alleged by the debtor to have shown values much above par, the chosen rates of return have not proven to be excessive. See note 6, infra. From the various recommendations as to the proper interest for the new first mortgage bonds, the Commission selected finally a fixed rate of three per cent and a contingent rate of an additional one per cent.2 233 I.C.C. 537, 542, 554-5; 254 I.C.C. 15,387. To guard against a drain upon the reorganized railroad if interest rates should fall, a provision appears in the plan3 for refunding the authorized first mortgage bonds at a maximum premium of 5 per cent. This gives protection to the reorganized road if not to the unpaid creditors and excluded stockholders. 11 Much the same situation exists as to the Geneva Steel Plant. A discussion occurred before the District Court on October 23, 1942, in which it was recognized that the plant would make a substantial contribution to the traffic of the road. This was the basis for further consideration before approval by the Commission on its reconsideration of the plan, 254 I.C.C. 349, 356. The effect of the existence of this plant received further consideration in the Circuit Court of Appeals, 150 F.2d 28, 34, 38, 43. 12 As we indicated above the alleged increases in the national income were briefed and decided contrary to the debtor's contention on the former review. Nothing was called to our attention in the former review to indicate that an increased level of economic activity above that in actual existence when the order of confirmation was issued had occurred beyond that anticipated by the Commission.4 Earnings available for interest depend upon costs as well as upon revenue. It might be added to this Court's comments on railroad rate increases, 328 U.S. 522, 66 S.Ct. 1297, footnote 29, that in handing down its order of December 5, 1946, granting certain increases, the Interstate Commerce Commission considered the necessity of meeting the increased costs.5 13 The Commission made no finding that the cash value of the securities allocated to the senior creditors paid them in full. To justify the change of position of creditors from fully secured to partially secured, creditors were given opportunities to participate in profits through common stock ownership with a chance at larger earnings than the Commission's forecast anticipated. We held the priority rule was satisfied by this type of allocation. This was explained by our decision on the last review. 328 U.S. 517, 66 S.Ct. 1294. The debtor has made no allegation, either in this effort for re-examination or before, that the existing cash value of the securities allotted any creditor has ever aggregated the amount of the creditor's claim against the debtor.6 We think the absence of such an allegation of itself, demonstrates that the plan is not, because of excessive interest, unfair to the debtor or those for whom it is allowed to appear. 14 Until it can be contended with some show of reasonableness that the creditors senior to the creditors and stockholders whom the debtor represents here have received more in value than the face of their claims, the debtor's insistence on a re-examination of the plan is without substantial support. See Northern Pacific Ry. Co. v. Boyd, 228 U.S. 482, 33 S.Ct. 554, 57 L.Ed. 931; Group of Institutional Investors v. Chicago, Milwaukee, St. P. & P.R. Co., 318 U.S. 523, 541, 63 S.Ct. 727, 738, 87 L.Ed. 959. 15 Not only does the debtor fail to allege any actual sales or values of the securities which would show that the creditors have received through the allotted securities payments on their claims in excess of their face but there is no allegation of a radically improved situation as to this railroad's earnings available for interest.7 Although distortions of income available for interest from varying causes do appear in the reports of the Trustees, available interest is an important figure as a basis for the consideration of capitalization. Traffic comparisons are not specifically set out.8 While the allegations of a petition for re-examination into a confirmed railroad reorganization plan need not contain allegations of the primary facts, the allegations should allege ultimate facts, such as those just referred to, sufficient to indicate the factual basis for a re-examination. The allegations of changed conditions in this petition to the District Court do not have the specificity of those which caused this Court in 1932 to direct an injunction against a Commission order of 1930 that was based on hearings that antedated the depression, beginning in 1929.9 The ruling in that case has not been extended to authorize the reopening of hearings before the Commission because of alleged changes in conditions. For cases of that type, this Court has pointed out, there must be a showing of substantial injury.10 We have approved a statement that the Atchison case rested upon exceptional facts.11 16 To open a confirmed plan of railroad reorganization, assuming the power to do so, accepted after years of consideration, requires a showing by allegation of injustice to the complaining debtor or junior creditors far stronger than any here made. Compare Pewabic Mining Co. v. Mason, 145 U.S. 349, 356, 367, 12 S.Ct. 887, 888, 892, 36 L.Ed. 732; Group of Institutional Investors v. Chicago, Milwaukee, St. P. & P.R. Co., 318 U.S. 523, 543, 63 S.Ct. 727, 739, 87 L.Ed. 959. 17 Much of what we have ritten is directed at the suggestion that there should be a plenary re-examination of reorganization proposals for the Denver & Rio Grande. As to that suggestion, we are of the opinion that the record affirmatively shows a proper basis for the valuation and allocation of securities by the Commission, 328 U.S. 502, 503, 66 S.Ct. 1286, 1287, and that the record fails to show any sound basis for a re-examination on account of changed circumstances between May, 1941, and June 10, 1946. 18 So far as the period since June 10, 1946, is concerned, there is no basis in this record or in anything judicially known to us for a conclusion that there has been a significant change in interest rates, earnings available for interest or traffic. Nor do we see that the action of Congress in passing S. 1253, on July 31, 1946, should persuade us to require a stay to await further enactments that might affect this reorganization. It was vetoed. President's Memorandum of Disapproval, August 13, 1946. Our understanding of our duties under the Railroad Reorganization Act, in the face of strong criticism of its provisions, was expressed in the former review of this plan, 328 U.S. 509, 66 S.Ct. 1290. It need not be repeated. We must continue to act under the now existing law. Whether or not changes may be made that will effect this reorganization, we do not know. It is quite understandable to us that stockholders strive to preserve the equities of their investments and that creditors should feel, in this case, that they have not recovered the value of their investment. Such convictions are to be respected. 19 The suggestion is made that there is a public interest in what persons or corporations hold in the future a controlling voice in the management of this railroad. This matter had the consideration of the Commission, 254 I.C.C. at 367 et seq. The plan adopted contains a 10 year voting trust for the new stock with Commission regulated provisions for its sale. 254 I.C.C. at 400. The record does not present any ground for concluding that the new owners will be any the less solicitous for the public welfare than those who, at present, hold the stock certificates. 20 However, nothing before or since the confirmation of this plan indicates any disregard by the Commission or the courts of the interest of operators, stockholders, the creditors or the public. When the Interstate Commerce Commission finds the value of a railroad system by any means, the correctness of the result cannot be mathematically proved or disproved. The difficulties of appraisal are multiplied by the necessity of looking into the future to estimate earnings. Earnings estimates are made with allowance for changing economic conditions. So are interest rates. All this is recognized by everyone but the Commission has found no better way to determine the allocation of new securities among the various classes of stockholders or of creditors of a railroad with their different rights. Cf. Reconstruction Finance Corporation v. Denver & Rio Grande W.R. Co., 328 U.S. 505—509, 66 S.Ct. 1288—1290. 21 The reorganization should be carried out. The order of the Circuit Judge in directing a stay of the consummation of the plan is vacated and the order of the District Judge of October 30, 1946, denying the petition is affirmed. 22 Order granting stay vacated. 23 Order denying petition affirmed. 24 Mr. Justice FRANKFURTER (dissenting). 25 Formally, this is a litigation between private litigants, creditors quarreling over their share in the capitalization of a reorganized enterprise. Intrinsically, the case concerns issues of serious public importance. Control of one of the major railroad systems of the country is at stake. Disposition of the controversy brings into play considerations of policy on which the Congress and the President have clearly expressed themselves with relevance to the problem before the Court. 26 The peculiar and controlling public aspect of the case is emphasized by the position taken by the Government. The Government frequently intervenes as amicus curice in so-called private litigation to present the dominant public aspects of such litigation. In the earlier stages of this litigation the Government was in fact a party of record. Through one of its agencies, the Reconstruction Finance Corporation, the Government is itself a creditor. When the plan for reorganization, now ordered to be carried out, was found by the Circuit Court of Appeals not 'fair and equitable', and justifiably rejected by the general bondholders whose claims constituted about one-fourth of the entire debt of the railroad, the Government here joined the present petitioners in urging reversal of that decision and approval of the plan. See 150 F.2d 28, and 328 U.S. 495, 66 S.Ct. 1282. After such reversal here, the case went back to the District Court and the present proceedings were begun for re-examination of the plan. The District Court dismissed these proceedings, but an order by the Circuit Court of Appeals stayed the execution of the plan until the court had opportunity to consider an appeal duly docketed. When a petition for certiorari was filed here to lift the case out of the Circuit Court of Appeals before it could be heard, the Government no longer asked this Court to approve the plan which it had supported here last March. Instead, the Government bowed itself out of the case. What has happened to make the Government abstain from standing on the decision which it obtained here last June? That which has happened constrains me to the view that the Denver and Rio Grande reorganization plan calls for further scrutiny, and should not, as matters now stand, be carried out. 27 What has happened since this Court rendered its decision last June? The Government, in its memorandum of abstention, states it succinctly and with candor: 'Because of the action of the Congress last Summer in passing the Bill known as S. 1253 and the reasoning of the President's Memorandum of Disapproval, dated August 13, 1946, both of which indicated disapproval of certain features of railroad reorganizations approved pursuant to the provisions of Section 77 of the Bankruptcy Act, which is the existing law, the RFC, as an agency of the United States created and existing by virtue of Congressional enactment, is not taking any position as to whether the petitions should be granted.' The decisive change in relevant circumstances, which thus caused a decisive change of position by the Government since the case was here originally, is the essential basis for the debtor-railroad's unsuccessful effort in the District Court to secure re-examination of the reorganization plan, and was presumably the basis for the order of Judge Phillips in the Circuit Court of Appeals staying proceedings in the District Court to consummate the plan. 28 This controlling change in circumstances is dismissed by the Court with the observation that 'the action of Congress in passing S. 1253 * * * was vetoed. President's Memorandum of Disapproval, August 13, 1946.' But the decisive consideration is not that the President vetoed the bill but why he vetoed it. The President left no doubt regarding the grounds of his veto. In the interest of an adequate appreciation of them the full text of his Memorandum is made part of this opinion (Appendix I). The President did not veto the bill because he disapproved its purposes. He vetoed the bill because it was too weak, in some of its provisions, for carrying out those purposes. 'By withholding my signature to this bill' wrote President Truman, 'I do not intend to indicate that I favor the pending reorganization plans. I am in agreement with those objectives of the bill which prevent undesirable control of the railroads, either immediately or within a few years, and which prevent forfeitures of securities.' He continued: 'I believe that the next Congress can pass a bill which will meet the stated objections and which will be in the best interests of the public, the railroads, the bondholders and other reditors, and the stockholders.' These are not merely the views of the President of the United States. They are the views of a President with expert knowledge of the subject, gained through years of active participation in the most elaborate investigation of railroad organizations ever conducted by a congressional committee. 29 The President's veto statement elicited a prompt response from leaders of the Conference Committee out of which the vetoed bill came. They represented both Houses and both parties. The statement deserves quotation in full: 30 'Statement of Members of Congress Regarding Further Legislation 31 'The railroad reorganization bill, S. 1253, was the culmination of over 3 years of intensive effort to save $2,000,000,000 of investments made by hundreds of thousands of stockholders and junior bondholders in railroads now in process or reorganization under section 77 of the Bankruptcy Act. Those investments will be wiped out under pending plans of reorganization unless legislation is enacted to prevent it. This bill was designed and passed by the Congress primarily for that purpose. 32 'Those who have supported this legislation will be definitely heartened by the declaration of principles contained in the President's memorandum stating why he withheld his signature from the bill. For it is clear that the broad principles announced by the President are shared by the proponents and supporters of this legislation. Broadening of the bill to meet the requirements of the President's objections can and will be drafted. Such a bill will be promptly introduced at the next session of Congress. As Congress has already overwhelmingly committed itself to such legislation and the President has declared that he, too, favors its purposes, the prompt enactment of such a measure appears certain. 33 'While this legislation was under consideration in the committees of the Senate and House, a number of courts and the Interstate Commerce Commission recognized the appropriateness of cooperating with Congress in meeting this public problem and abstained from taking steps which would have carried forward any of the pending reorganization plans under section 77. This was months before the legislation came up for a vote in either the Senate or House. Now that the legislation, both in the form in which it was reported by the respective committees of the Senate and House and in the subsequent form contained in the conference report was passed by an overwhelming vote in each Chamber and the objectives of the legislation have received the approbation of the President, it is confidently hoped that the courts and the Commission will take no steps in support or furtherance of pending reorganization plans under section 77, but will instead await action by the Congress and the President on legislation giving effect to the principles favored by both. 34 'Clyde M. Reed. 35 'James M. Tunnell. 36 'Sam Hobbs. 37 'Chauncey W. Reed. 38 'Washington, D.C., 39 'August 14, 1946.' 40 It is difficult to believe that had the President signed S. 1253 this Court would have sustained the action of the District Court in dismissing out of hand the petition for reexamination of the reorganization plan. The considerations of public policy which underlay that measure could hardly have been disregarded, for the inequities of this very reorganization plan were extensively cited in Congress as demonstrating the need for correction. This would have been so although Congress did not see fit to withdraw entirely the further jurisdiction of the District Court in these reorganization proceedings. But the grounds of the President's veto only emphasize these considerations of public policy. They should prompt a court of equity to stay its hand until further scrutiny of the plan. The bi-partisan statement of the conference leaders underwrites the President's formulation of public policy. Of course, neither the President's hopes nor the confidence of congressional leaders insures legi lation. But if the realization of the desires of the President and the expectations of bi-partisan Congressional leaders concerned with this legislation would affect, as I cannot believe it would not, the action of a court of equity when asked to enforce this reorganization plan, the Court ought not to proceed on the assumption that the legislation as outlined by the President will not be forthcoming. 41 We are dealing here not with an ordinary litigation as to which courts are exercising conventional judicial authority. The courts are carrying out the legislative mandate of Congress as to the considerations of public policy by which the role of the judiciary in railroad reorganization should be guided. The primary responsibility is lodged with an agency of Congress, the Interstate Commerce Commission. This Court's jurisdiction is at once very limited and novel. If legislation which would make it the duty of the Court to reconsider the reorganization plan now before us is really in prospect, only the most imperative public emergency should require this Court to engage in a race with the President and Congress in the disposition of questions of public policy. Cf. State of Pennsylvania v. Wheeling & Belmont Bridge Co., 13 How. 518, 14 L.Ed. 249 and 18 How. 421, 15 L.Ed. 435. 42 Moreover, Congressional intention has not been latent and conjectural since last summer. Legislation, as suggested by the President, appears to have every prospect of prompt consideration in the new Congress. In submitting a joint bi-partisan resolution (see Appendix II of this opinion) dealing with railroad reorganizations, after referring to the President's Memorandum of Disapproval and Statement of Members of Congress Regarding Further Legislation, supra, Senator Reed stated that 'preliminary discussions have already been agreed to with Members of the House, with a view to expediting this legislation in the Eightieth Congress. It is hoped that it can be taken up, in a preliminary stage, with the White House so that the greatest possible speed can be secured for the legislation to be finally enacted in the Eightieth Congress.' 43 The Court rightly assumes that neither this Court nor the District Court is concluded by what was decided here last June. Changed circumstances, of course, may require the re-examination of a plan by the Interstate Commerce Commission. First and last, this is a proceeding in equity, and until a decree consummating a plan of reorganization is finally signed it is the duty of a court of equity not to make of itself an instrument of inequity. Peculiarly is this so where the paramount interest is that of the public, though the formal litigation is carried on by private parties. In such a situation we are not restricted to the apecific claims of the formal litigants. We are not restricted to the limited specific financial factors which, in the debtor's opinion, have affected the situation since last June. The decisive issues are those posed by the Congress and the President. The real question before the Court is whether, in the light of events since its prior decision, there is a solid basis for the judgment which we are asked to enforce. To be sure, even in a court of equity a matter once adjudicated should not be relitigated even though the litigation is still open, as it always is until there is a final decree. Usually reconsideration of an interim determination because of 'changed conditions' implies new events in nature. But new understanding of old facts or hitherto unexplored relevant facts may constitute the most significant kind of change in circumstances. 44 The essence of the matter before the Court is this. We are asked to give our imprimatur to a plan of far-reaching implications to the public interest, in that it concerns the control of one of the major railroad systems of the nation. That plan was born of the confused uncertainties of the war years, after a long period of incubation and many changes. Judgment often involves prophecy, and all rophecy has an element of guesswork. But guessing can be less rather than more. How much guesswork is involved in this plan has been candidly indicated by members of the Interstate Commerce Comission. To expect a 'normal' period, in the sense of assured stability, for a good stretch ahead is doubtless to pursue a will-o'-the-wisp. But the President's message pointed to factors to which certainly no adequate attention has thus far been paid in these proceedings. 45 The President spoke of the 'evil, present in reorganizations under section 77, of permitting improper control of railroads after their reorganization:' Repeatedly he referred to this vital aspect of the public interest, the protection of which requires 'that reorganizations shall place control of railroads in persons primarily concerned with transportation for the communities served and for the nation as a whole, without any strings direct or indirect, conditional or otherwise, to institutions or others in distant financial centers.' 46 Here is certainly a matter of prime relevance in ascertaining whether this reorganization plan should be given final judicial sanction. The control of this major railroad system is to pass into the hands of the so-called insurance group in New York and its two largest lending national banks. The directions in which insurance companies have in the past exerted their power over the railroads of the country are not calculated to give confidence in future control by them. The geographical and functional remoteness of powerful financial interests in New York, in relation to a railroad system operating in Colorado and Utah, bars that single-minded attentiveness and pioneering enterprise which characterized great railroad men like Edward H. Harriman, James J. Hill and Daniel Willard. 47 Another ground of President Truman's dissatisfaction with S. 1253 was its failure to deal adequately with the 'grossly excessive interest rates now wasting the funds of the railroads in section 77 proceedings.' To be sure, the Interstate Commerce Commission was not unmindful of the present low interest levels when it approved the 1943 reorganization plan. It is safe to say, however, that the significance of the sharp drop in interest levels has recently been made more manifest and further inquiry would lay it bare. 48 Finally, the President seemed much concerned by needless forfeitures under reorganization plans. In all discussions in Congress, the plan before us was given as a conspicuous example. The avoidance of forfeitures does not involve large capitalizations. It is to be avoided in other ways, such as calling for tenders of bonds by bondholders and their purchase by court trustees at the below-par prevailing market prices. 49 On two of these important aspects of sound financing in railroad reorganizations, proper interest rates and what has been called 'the painless reorganization of the railroad debt structure', (see speech of Senator Vandenberg, August 3, 1939, 76th Cong., 1st Sess., 84 Cong.Rec. 11127), the record here is slender indeed, if not barren. 50 Here are lines of crucial public interest to which the Congress and the President have called authoritative attention since the case was last here. These are matters on which the Court should satisfy itself on its own initiative whether or not private litigants have adequately presented them. The court is not passing merely on specific issues framed by the parties or on the narrow claims on which the parties press for reconsideration. Abstractly, no one will reject what the President has called the principle that 'reorganizations must give primary consideration to the public interest.' But that public interest is the keeping of the courts. It must be safeguarded by them without regard to the manner in which those who have also private interests represent the public interest. 51 And what consideration is more compelling than that this reorganization be reexamined by the Interstate Commerce Commission in the light of the vas changes of the transforming six years since the Interstate Commerce Commission closed its record in this case, particularly in light of the scrutiny which these reorganizations have received from the Congress and the President since this Court last considered the case? There is no suggestion that the interests of the railroad, or the public that it serves, or its creditors, will suffer by the delay necessary to explore further these basic issues before turning its control over to distant financial institutions. No one has suggested that this railroad has not served the public effectively while under court control, or that it cannot continue to do so until full inquiry dissipates the heavy clouds of doubt resting over this organization. To be sure, the road has been in reorganization since 1935. But it took four years for the formulation of the first reorganization plan and another four to formulate the additional plans. What Judge Learned Hand recently said of another situation is here applicable: 'There can be considerations more imperative than the despatch of judicial business, even after delays so long as existed in this case. If the legally protected interests of any opposing parties are fully preserved it is not a good reason to deny others any reasonable chance to protect their own interests that they have been long in asserting them.' Knight v. Wertheim & Co., 2 Cir., 158 F.2d 838. Surely the protection of the public interest in the special keeping of the Court is more imperative than the despatch of judicial business, and no legally protected interest of those to whom the financial control of this road has been awarded can possibly suffer by full inquiry as to whether the paramount public interest has been properly safeguarded. APPENDIX I 52 Memorandum of Disapproval. 53 I am withholding my approval of S. 1253, entitled 'An Act to enable debtor railroad corporations, whose properties during a period of seven years have provided sufficient earnings to pay fixed charges, to effect a readjustment of their financial structures; to alter or modify their financial obligations; and for other purposes.' 54 Even though I am familiar with the deficiencies and inequities and the evils that exist under section 77 of the present Bankruptcy Act, I fear that this new bill would not accomplish the purpose for which it was intended. 55 The bill contains two sections, the first of which contemplates the prevention of bankruptcy proceedings where practicable; the second contemplates the reorganization of certain railroad carriers by the institution of proceedings under section 1 of the bill for readjustment of their financial affairs. 56 Objections which I have to the bill include the following: 57 The bill fails to direct specifically the immediate reduction of the grossly excessive interest rates now wasting the funds of the railroads in section 77 proceedings. Millions of dollars per year can be saved at once for each of the railroads in section 77 proceedings, by reducing the interest rates on their bonds and other debt down to the level of the interest rates paid by railroads not in section 77 proceedings. I reiterate a statement which I made in my message to Congress on the state of the Union which is as follows, 'low interest rates will be an important force in promoting the full production and full employment in the post-war period for which we are all striving.' 58 The bill does not adequately cure the evil, present in reorganizations under section 77, of permitting improper control of railroads after their reorganization. 59 The bill fails to provide full protection against forfeiture of securities and investments. 60 The level of fees and expenses in reorganization cases under section 77 has been excessive. This is not corrected in this bill. Affirmative provisions to curb this evil and to bring it under strict control should be included in any bill which may be enacted. 61 The bill excludes from its benefits certain railroads which should be bro ght within its provisions if it is to become law. In this regard it appears that the $50,000,000 limitation in section 2 of the bill would exclude some railroads for whose exclusion there appears to be no logical justification. 62 This bill fails to correct a serious abuse which I condemned in the course of the Senate railroad investigation. I refer to the abuse of diverting under cover of a reorganization plan, the funds of a railroad for the purchase of its own stocks in the market. 63 On the other hand, the bill does incorporate principles for which I was one of the sponsers in the Senate. I commend particularly the emphasis which the bill places on the principle that reorganizations must give primary consideration to the public interest, and to the best interests of the railroads which are being reorganized. 64 This requires among other things that reorganizations shall place control of railroads in persons primarily concerned with transportation for the communities served and for the nation as a whole, without any strings direct or indirect, conditional or otherwise, to institutions or others in distant financial centers. 65 Such regard for the public interest will also help the stockholders, whether they be railroad employees who have invested in the stocks of the companies for which they work, or ordinary investors, desirous of safeguarding their investment, but not of helping any interest to capture control of their railroad. These stockholders, whom the bill justly seeks to protect against forfeiture, can and should get such protection, but without enabling any financial interest to use such legislation to acquire control. 66 By withholding my signature to this bill I do not intend to indicate that I favor the pending reorganization plans. I am in agreement with those objectives of the bill which prevent undesirable control of the railroads, either immediately or within a few years, and which prevent forfeitures of securities. 67 I believe that the next Congress can pass a bill which will meet the stated objections and which will be in the best interests of the public, the railroads, the bondholders and other creditors, and the stockholders. Harry S. Truman 68 The White House, 69 August 13, 1946. 70 APPENDIX II. 71 (S. Res. 65, 80th Cong., 1st Sess., Jan. 22, 1947, Cong. Rec. p. 543.) 72 Whereas many railroads in the continental United States are in the hands of receivers and trustees because of insolvency proceedings brought under section 77 of the Bankruptcy Act, or through equity court procedure; and 73 Whereas the mileage of these railroads is approximately 40,000, and the investment in road and equipment amounts to several billion dollars; and 74 Whereas many of these roads entered bankruptcy in 1933, 1934, 1935, or 1936, 10 to 14 years ago, and the earnings of these roads in recent years have been sufficient to accumulate large cash amounts, and have placed such roads in a solvent position; and 75 Whereas, according to the best information available, court proceedings involving some very important railroads are in such a condition that it is difficult if not impossible to approximate the time when reorganization under section 77 will be completed, and it is feasible for a number of these roads to retire part of their indebtedness, at a discount, and to refund or extend the maturity date of the balance of their indebtedness, and it further appears desirable to discharge such railroads from bankruptcy proceedings without the necessity of drastic reorganizations under section 77; and 76 Whereas the continued holding of roads that have become solvent in trustee or receiver operation as insolvent roads, and further efforts to reorganize, under section 77, railroads which no longer need such reorganization, are contrary to the general public interest and contrary to sound public policy; and 77 Whereas the President of the United States has joined with Congress in going on record in favor of modifications of present reorganization legislati n and in favor of the principles proposed by the appropriate committees of the Senate and House of Representatives in 1946, and in favor of the principles enacted by Congress in 1946, and the President has further urged the strengthening of such proposals and the adoption of further provisions to carry out those general principles: Therefore be it 78 Resolved, That the Committee on Interstate Commerce of the Senate is authorized and directed either as a committee, or through a duly constituted subcommittee, to make an investigation of the conditions surrounding the operation and handling of said railroads by trustees and receivers through the period of receivership or trusteeship; to ascertain the extent to which there should be elimination or reduction of any of the exceptions heretofore proposed to legislation on this subject; to inquire into the causes for the failures, (a) to reduce the interest rates of railroads in receivership and bankruptcy proceedings; (b) to arrange for the reduction of the rates of interest payable by such railroads on their outstanding indebtedness; (c) to arrange for the refunding and extension of maturity dates of part or all of theindebtedness of such railroads while in the hands of the courts; (d) to call for the tender of bonds and the purchase of bonds of such railroads either at a discount or otherwise, by the receivers or trustees, out of funds in their hands; (e) to discharge such railroads from court proceedings without the necessity of being subjected to drastic reorganization under section 77 of the Bankruptcy Act; and (f) to return such railroads to their owners as promptly as possible; to investigate the fees paid trustees, receivers, counsel, bankers or bank syndicates, committees and experts, and any and all matters relating thereto, and to ascertain the methods of reducing reorganization expenses and the possibility of eliminating, by discharge of railroads without further reorganization proceedings under section 77, the necessity for any further reorganization expenses under elaborate and therefore costly reorganization proceedings; to ascertain what legislative methods can be provided to enable railroads now undergoing reorganization to obtain management local to their lines of operation and to the Communities, shippers, and passengers they serve, and to enable the owners of such railroads to secure control free from domination by interests which have not received the affirmative and express vote of the security holders subsequently to reorganization; to ascertain what voluntary methods and steps additional to those proposed in legislation adopted by the Seventy-ninth Congress on this subject will be useful in expediting the discharge of railroads from costly bankruptcy and reorganization proceedings without the necessity of drastic reorganizations under section 77, and to permit reorganization by voluntary proceedings in a businesslike manner and on a businesslike basis; to ascertain what methods and procedures, additional to those provided in legislation passed by the Seventy-ninth Congress on this subject, will be useful for the protection of railroad employees and other investors in the stocks of the railroads. The committee is directed to report to the Senate as early as practicable, with such recommendations as to changes in existing law as may be found desirable. 79 For the purposes of this resolution, the committee, or any duly authorized subcommittee thereof, is authorized to hold such hearings, to sit and act at such times and places during the sessions, recesses, and adjourned periods of the Eightieth Congress, to employ such clerical and other assistants, to require by subpena or otherwise the attendance of such witnesses and the production of such correspondence, books, papers, and documents, to administer such oaths, to take such testimony, and to make such expenditures, as it deems advisable. The cost of stenographic services to report such hearings shall not be in excess of 25 cents per 1 0 words. 1 Great Western Telegraph Co. v. Burnham, 162 U.S. 339, 344, 16 S.Ct. 850, 852, 40 L.Ed. 991; King v. State of West Virginia, 216 U.S. 92, 101, 30 S.Ct. 225, 229, 54 L.Ed. 396; Messinger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152; Wichita Royalty Co. v. City Nat. Bank of Wichita Falls, 306 U.S. 103, 106, 59 S.Ct. 420, 421, 83 L.Ed. 515. Cf. Chaffin v. Taylor, 116 U.S. 567, 572, 6 S.Ct. 518, 520, 29 L.Ed. 727. 2 The earnings contingency which authorized the payment of the prior contingent interest, as expressed in technical detail at 254 I.C.C. 393—94, was the net income less certain fixed charges. 3 254 I.C.C. 387. 4 The national income* as reported in the annual publication of the Department of Commerce, The Survey of Current Business, for the following years was, in billions: 1940...... 77.6. 1943 149.4 1941...... 96.9. 1944 160.7 1942..... 122.2. 1945 161.0 The National income as computed by the Department of Commerce is tentatively estimated at 164.0 billions for 1946; for 1947, no statement of an expected increase. See The Economic Report of the President to the Congress, of January 8, 1947, H.Doc. No. 49, 80th Cong., 1st Sess., as required under the Employment Act of 1946, 60 Stat. 23, 15 U.S.C.A. § 1021 et seq. The Dow-Jones average of the 10 first grade rails was 117.25 on June 10, 1946, but had fallen to 110.73 on December 30, 1946. The market bid for the first bonds of the reorganized debtor, when, as, and if issued was 101 on June 10, 1946, but had fallen to 89 on December 30, 1946. These latter figures are from the Commercial and Financial Chronicle, issues of June 10 and December 30, 1946. * National income is the total net income earned in production by individuals or businesses. 5 While the reports of the Commission deal with the national railroad situation rather than with individual roads, an examination of them does not indicate that the Commission intended to supply by means of the increase in rates a net railway operating income sufficient to give a rate of return on invested capital substantially higher than for normal prewar years. 264 I.C.C. 695, 722, 728; I.C.C., Ex parte No. 162, December 5, 1946, mimeographed report, p. 7. See the discussion of increased revenue and costs, mimeographed report, supra, pp. 3, 4, 5. 6 As far as they are readily available to us the ranges of the reorganized road's securities traded on a when, as and if issued basis have been as follows: 1945 1946 .......................... High Low High Low First Bonds............... 103 82 102 89 Income Bonds.............. 89 1/2 44 1/2 89...................... 50 Preferred Stock........... 75 1/2 37 Common Stock.............. 35 1/2 16 Bond ranges are from Year's End Edition of Moody's Bond Record, Vol. 14, No. 1, January 10, 1947; stock ranges are from Standard & Poor's Earnings and Ratings Stock Guide, Year's End Edition, January, 1947. The highest market bids on the securities so far this year are, so far as the figures are available to us: First Bonds............................... 89 Income Bonds.............................. 62 Preferred Stock........................... 50 Common Stock.............................. 16 1/2 From Commercial & Financial Chronicle, Editons of January 6, January 13, and January 20, 1947. 7 The annual reports of the Trustees to stockholders show the income available for interest as follows: 1942...................................... $17,044,420.39 1943...................................... 11,573,667.94 1944...................................... 8,157,880.25 1945...................................... 1,503,289.07 Dr.* In 1946 the income available for all fixed charges at the end of eleven months was $3,405,118.00. 8 Revenue freight carloading weekly report of American Association of Railroads shows car loadings for the month of December for the years 1941 to 1946 as follows: 1941........... 14,045 1944.......... 15,308 1942........... 16,915 1945.......... 12,007 1943........... 14,571 1946.......... 13,517 9 Atchison, Topeka & Santa Fe Railway Co. v. United States, 284 U.S. 248, 256, 52 S.Ct. 146, 148, 76 L.Ed. 273. 10 United States v. Northern Pacific Railway Co., 288 U.S. 490, 494, 53 S.Ct. 406, 407, 77 L.Ed. 914. 11 Interstate Commerce Commission v. City of Jersey City, 322 U.S. 503, 515, 64 S.Ct. 1129, 1135, 88 L.Ed. 1420.

78

330 U.S. 127 67 S.Ct. 544 91 L.Ed. 794 STATE OF OKLAHOMAv.UNITED STATES CIVIL SERVICE COMMISSION. No. 84. Argued Oct. 17, 18, 1946. Decided Feb. 10, 1947. [Syllabus from pages 127-129 intentionally omitted] Messrs. Mac. Q. Williamson and James W. Bounds, both of Oklahoma City., Okl., for petitioner. Mr. Ralph F. Fuchs, of Washington, D.C., for respondent. Mr. Justice REED delivered the opinion of the Court. 1 This proceeding brings to this Court* another phase of the Hatch Act, 18 U.S.C.A. § 61 et seq. The petitioner, the State of Oklahoma, objects to the enforcement by the United States Civil Service Commission of § 12(a) of the act.1 2 France Paris has been a member of the State Highway Commission of Oklahoma since January 14, 1943. He was elected chairman of the Democratic State Central Committee for Oklahoma for his third term in February 1942 and he occupied such position continuously until October 18, 1943, when he resigned. On October 12, 1943, the Civil Service Commission issued its letter of charges in the matter of France Paris and the State of Oklahoma, in which it notified Mr. Paris and Oklahoma that information which the Civil Service Commission had received warranted an investigation into an alleged improper political activity on the part of France Paris under the provisions of § 12 of the Hatch Act. The charge was that since January 14, 1943, Mr. Paris had been an officer of Oklahoma whose principal employment was and is in connection with an activity financed in whole or in part by loans and grants from a Federal agency of the United States and that during such time Mr. Paris also held a political party office, to it, the chairmanship of the State Central Committee above referred to. It later developed that no general election occurred in Oklahoma in 1943. The State Democratic Headquarters had been closed on January 4, 1943, by Mr. Paris and were later reopened during the year under the direct charge of the vicechairman of that committee, we assume prior to Mr. Paris' resignation on October 18, 1943. On June 14 the committee sponsored a 'Victory Dinner' in Oklahoma City. The trial court found as follows: 3 'This dinner was designed to provide the National Democratic Committee and the State Democratic Committee with funds to discharge a deficit incurred by their political activities and to provide funds for contemplated future activities. It also promoted the sale of war bonds and did result in the sale of approximately $14,500,000.00 in war bonds. The dinner netted the Democratic party, which was conceded to be a political party, approximately $30,000.00. The dinner was staged under the general supervision of the Governor of the state and the details were handled by a committee appointed by the Governor. W. G. Johnston was chairman of this committee. France Paris was an ex officio member of the committee and he advised with the Governor concerning the dinner and called the meeting to order and introduced the toastmaster, but he was not active in planning or arranging the dinner.' The Civil Service Commission determined that these facts constituted taking an active part in political management and in political campaigns. It considered that the violation warranted Mr. Paris' removal from the office of Highway Commissioner of Oklahoma. It ordered that notice of the aforesaid determinations be given pursuant to § 12(b) of the Hatch Act. This order foreshadowed, if Mr. Paris was not removed, a further order by the Commission under § 12(b) to the appropriate Federal agency that certain highway grants to Oklahoma should be withheld 'in an amount equal to two years compensation' of Mr. Paris. 4 Pursuant to § 12(c) of the State of Oklahoma, after having received notice of the Civil Service Commission's determination, instituted these proceedings for the review of the order in the proper district court of the United States. That court, D.C., 61 F.Supp. 355, upheld the action of the Civil Service Commission and this action was affirmed by the Circuit Court of Appeals for the Tenth Circuit. State of Oklahoma v. United States Civil Service Commission, 153 F.2d 280. Certiorari was sought and allowed because of the importance of the issues involved in the administration of justice, 328 U.S. 831, 66 S.Ct. 1342, under § 12(c), 53 Stat. 1147, as amended, 54 Stat. 767, and § 240(a) of the Judicial Code, 28 U.S.C.A. § 347(a). 5 The state contends that the judgments below are invalid for the following reasons: 6 '(1) The Hatch Political Activity Act, in so far as it attempts to regulate the internal affairs of a state, is an invasion of the sovereignty of the states in violation of the United States Constitution. It further is invalid as an unlawful delegation of power. 7 '(2) If valid, the Act applies only to 'active' participation in political management or political campaigns. Such 'active' participation is not shown to be present in this case. 8 '(3) If valid, the Act did not warrant the United States Civil Service Commission in ordering the removal of a state officer or, alternatively, the application of a penalty to the State of Oklahoma. 9 '(4) The decisions of the lower courts place an intolerable and unjustified restriction upon the right of an aggrieved person to a complete judicial review under the Hatch Political Activity Act.' 10 First. The Government's first contention is that the petitioner, the State of Oklahoma, has no standing to attack the constitutionality of § 12. It is argued that the state has no legal capacity to question the manner in which the United States limits the appropriation of funds through § 12(a); that § 12(b) is merely procedural to assure that the statutory requirem nts are observed and that § 12(c) is a safeguard against the exercise of arbitrary power by the Commission, not a permission to wage an attack on the entire arrangement.2 11 If this contention is treated as an objection to the state's capacity to bring this suit, as no objection was made until the memorandum for the respondent on the petition for certiorari, it would be out of time. A failure to object in the trial court to a party's capacity is a waiver of that defect. Parker v. Motor Boat Sales, 314 U.S. 244, 251, 62 S.Ct. 221, 225, 86 L.Ed. 184. On the other hand, if the contention is treated as meaning that no justiciable controversy as to the constitutionality of § 12(a) exists because petitioner suffers no injury which it may protect legally from the withdrawal by the United States of a portion of a grant-in-aid, the objection, as it questions judicial power to act on that point, is timely although first made in this Court.3 We think that the latter position more correctly reflects respondent's contention. The Commission urges the cases listed in note 2 above as showing that the relation between the state and federal government arising out of grants-in-aid are political and that the order of the Commission that Paris be removed was not mandatory. We therefore treat the issue as properly before us. 12 The issue is whether Oklahoma can challenge the constitutionality of § 12 on statutory review of a Commission order. Subsection (c) gives to any party aggrieved a judicial review of the Commission order. The review is on the entire record and extends to questions of fact and questions of law. The order is to be affirmed if the court determines that it is 'in accordance with law.' If the court determines the order is not in accordance with law, the proceeding is to be remanded to the Commission 'with directions either to make such determination or order as the court shall determine to be in accordance with law or to take such further proceedings as in the opinion of the court, the law requires.'4 We think the challenge can be made in these review proceedings to the constitutionality of the law upon which the order under review is predicated. 13 The activities of the Highway Commission of Oklahoma were financed in part by loans and grants from a Federal agency during all the pertinent times. This was the organization of which Paris was a member. During the period in question, January 15, 1943, to October 18, 1943, while Paris was also Chairman of the Democratic State Central Committee, the United States through allotment by federal statute contributed over $2,000,000 for the highway work of the Oklahoma Commission.5 Nothing indicates that these sums were to be received by Oklahoma otherwise than in accordance with regular statutory apportionment among the states of federal highway funds and we assume the sums were to be so received by Oklahoma. Congress may create legally enforceable rights where none before existed. Payments were not made at the unfettered inclination of a federal disbursing officer or highway agency but according to statutory standards, compliance with which entitled Oklahoma to receive her proper share of the federal appropriations for highway construction through state agencies. If it were not for § 12, Oklahoma would have been legally entitled to receive payment from the federal disbursing office of the sums, including the amount that § 12(b) authorizes the Civil Service Commission to require the disbursing or allocating federal agency to withhold from its loans or grants.6 Oklahoma had a legal right to receive federal highway funds by virtue of certain congressional enactments and under the terms therein prescribed. Violation of such a statutory right normally creates a justiciable cause of action even without a specific statutory authorization for review.7 It may be that before the payment of those funds to Oklahoma Congress could have withdrawn the grant without legal responsibility for such action either in its officers or the National Government. Perhaps, before disbursement, it could add of its own free will any additional requirements but when it erected administrative bars, that is, a condition that a part of the allotment might be withheld by action of the Commission, with judicial review of the Commission's determination, we think those bars left to Oklahoma the right to receive all federal highway funds allotted to that state, subject only to the condition that the limitation on the right to receive the funds complied with the Constitution. Issues presented by this suit, even though raised by a state, are closely akin to private wrongs.8 Either the state employee or the state may be the party aggrieved and may maintain the action for judicial review. The power to examine into the constitutionality of the conditions was given the federal courts by the grant of the authority to review the legality of the Civil Service order. Therefore when by § 12 a right of review of the Civil Service Commission's order is given to Oklahoma, we are of the opinion that the constitutionality of the statutory basis, § 12(a), of the order is open for adjudication. 14 Congress has power to fix the conditions for review of administrative orders.9 By providing for judicial review of the orders of the Civil Service Commission, Congress made Oklahoma's right to receive funds a matter of judicial cognizance. Oklahoma's right became legally enforceable. Interference with the payment of the full allotment of federal highway funds to Oklahoma made the statutory proceeding to set aside the order a case or controversy between Oklahoma and the Commission whose order Oklahoma was authorized to challenge.10 A reading of § 12 will show the special interest Oklahoma had in preventing the exercise of the Civil Service Commission's power to direct that Oklahoma's funds be withheld.11 It was named as the employer affected by § 12(a). Notices were sent to it. Funds allotted to Oklahoma were to be withheld under certain conditions. It was a 'party aggrieved.'12 When it brought this suit, under this statutory authority, Oklahoma was entitled to a judicial determination as to whether the order of the Civil Service Commission was 'in accordance with law.' Was the order within the competency of the Commission? That question of competency included the issue of the constitutionality of the basis for the order, § 12(a).13 Only if the statutory basis for an order is within constitutional limits, can it be said that the resulting order is legal. To determine that question, the statutory review must include the power to determine the constitutionality of § 12(a). 15 The cases cited by the Government as pointing toward lack of power to adjudicate the constitutionality of § 12 are inapposite. None deny to a court with jurisdiction by statute to review the legality of administrative orders the power to examine the constitutionality of the statute by virtue of which the order was entered. The authorities in note 2 above relied upon by the Government do not hold or imply a position contrary to our conclusion. In Commonwealth of Massachusetts v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078, the Commonwealth and others sought decrees to enjoin the enforcement of the Federal Maternity Act, 42 U.S.C.A. § 161 et seq. This Court denied federal jurisdiction, 262 U.S. at page 480, 43 S.Ct. at page 599, 67 L.Ed. 1078, because no burden was placed upon a state and no right infringed, 262 U.S. at page 482, 43 S.Ct., at page 598, 67 L.Ed. 1078. Perkins v. Lukens Steel Co., 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108, denied a manufacturer who desired to sell to the Government the right to question a government official's definition of 'locality,' which the official was required by statute to make to determine the minimum wages of the 'locality' under the Public Contracts Act, 41 U.S.C.A. § 35 et seq. The denial of federal jurisdiction to decide the question was because no 'litigable rights' to deal with the United States had been bestowed by the statute on the would-be seller, pages 125 and 127 of 310 U.S., pages 875, 877 of 60 S.Ct., 84 L.Ed. 1108. The prospective seller by statute or otherwise had nothing to do with the conditions of purchase fixed by the United States. Alabama Power Co. v. Ickes, 302 U.S. 64, at page 479, 58 S.Ct. 300, at page 303, 82 L.Ed. 374, denied that the power company had any enforceable legal right to be free of competition, financed by illegal loans. This present Oklahoma case is differentiated from each of the foregoing by the authority for statutory review and by the existence of the legally enforceable right to receive allocated grants without unlawful deductions. 16 We do not think the rule that one may not in the same proceeding both rely upon and assail a statute14 is applicable to the present situation. In the cases the Government cites, the litigants had received or sought advantages from the statute that they wished to attack, advantages other than the mere right to sue. What we are concerned with in this case is not an estoppel to sue but the allowable scope of the statutory jurisdiction. 17 From this point of view, the respondent urges that the Congress did not intend to create a justiciable right broad enough to include in attack upon the constitutionality of § 12(a). We think the final sentence of § 12(c), note 1 supra, comes near to demonstrating the unsoundness of such a contention. It reads: 18 'If any provision of this subsection is held to be invalid as applied to any party with respect to any determination or order of the Commission, such determination or order shall thereupon become final and effective as to such party in the same manner as if such provision had not been enacted.' 19 We do not see that this sentence can mean anything other than that the invalidity (unconstitutionality) of any provision of subsection 12(b) should not affect the determination of the Civil Service Commission. In view of our conclusion hereinafter expressed that § 12(a) is constitutional, whether the Commission's determination would be enforceable without a particular statutory provision is not involved in this case. 20 The Government urges that the absence of legislative consideration of attacks on the constitutionality of § 12 through the provision for judicial review negatives 'the conclusion that Congress intended Section 12(c) as an avenue of attack on Section 12(a).'15 But we do not agree that this lack of extended discussion of the scope of the judicial review by implication denies to a litigant the right to attack constitutionality. The final form of judicial review is different from that first proposed. 86 Cong.Rec. 2468. No change of purpose, however, appears. The proposer of judicial review feared arbitrary action. Id., 2469. Others a violation of political liberty. It was thought the latter objection might be reached without right of judicial review. No one intimated constitutionality could not be reached with judicial review.16 None of the subsequent changes in the bill are effective to modify this construction of the scope of this judicial review.17 21 Second. Petitioner's chief reliance for its contention that § 12(a) of the Hatch Act is unconstitutional as applied to Oklahoma in this proceeding is that the so-called penalty provisions invade the sovereignty of a state in such a way as to violate the Tenth Amendment18 by providing for 'possible forfeitures of state office or alternative penalties against the state.' Oklahoma says § 12(c) 'provides that the commencement of an appeal from an order of the Commission: '* * * shall not operate as a stay of such determination or order unless (1) it is specifically so ordered by the court, and (2) such officer or employee is suspended from his office or employment during the pendency of such proceedings. * * *" The coercive effect of the authorization to withhold sums allocated to a state is relied upon as an interference with the reserved powers of the state. 22 In United Public Workers of America v. Mitchell, decided this day, we have considered the constitutionality of this provision from the viewpoint of interference with a federal employee's freedom of expression in political matters and as to whether acting as an official of a political party violates the provision in § 12(a) against taking part in political management or in political campaigns. We do not think that the facts in this case require any further discussion of that angle. We think that acting as chairman of the Democratic State Central Committee and acting, ex officio, as a member of the 'Victory Dinner' committee for the purpose of raising funds for the Democratic Party and for selling war bonds constitute taking an active part in political management. While the United States is not concerned with and has no power to regulate local political activities as such of state officials, it does have power to fix the terms upon which its money allotments to states shall be disbursed. 23 The Tenth Amendment does not forbid the exercise of this power in the way that Congress has proceeded in this case. As pointed out in United States v. Darby, 312 U.S. 100, 124, 657, 61 S.Ct. 451, 462, 85 L.Ed. 609, 132 A.L.R. 1430, the Tenth Amendment has been consistently construed 'as not depriving the national government of authority to resort to all means for the exercise of a granted power which are appropriate and plainly adapted to the permitted end.' The end sought by Congress through the Hatch Act is better public service by requiring those who administer funds for national needs to abstain from active political partisanship. So even though the action taken by Congress does have effect upon certa n activities within the state, it has never been thought that such effect made the federal act invalid.19 As nothing in this record shows any attempt to suspend Mr. Paris from his duties as a member of the State Highway Commission, we are not called upon to deal with the assertion of Oklahoma that a state officer may be suspended by a federal court if § 12 is valid. There is an adequate separability clause. No penalty was imposed upon the state. A hearing was had, conformable to § 12 and the conclusion was reached that Mr. Paris' active participation in politics justified his removal from membership on the Highway Commission. Oklahoma chose not to remove him. We do not see any violation of the State's sovereignty in the hearing or order. Oklahoma adopted the 'simple expedient' of not yielding to what she urges is federal coercion. Compare Commonwealth of Massachusetts v. Mellon, 262 U.S. 447, 482, 43 S.Ct. 597, 599, 67 L.Ed. 1078. The offer of benefits to a state by the United States dependent upon cooperation by the state with federal plans, assumedly for the general welfare, is not unusual.20 24 In order to give the Civil Service Commission adequate standards to measure active participation in political activities, Congress adopted § 15 of the Hatch Act quoted above in note 1. By this section Congress made the test of political activity for state employees the same as the test then in effect for employees in the classified civil service. The Commission had at that time determined that 'Service on or for any political committee or similar organization is prohibited.' This could only mean that service on such a committee was active participation in politics. Such determination was made a matter of record by Senator Hatch in charge of the bill during debate on the scope of political prohibition.21 Obviously the activities of Mr. Paris were covered by the purpose and language of § 12. The words of § 12(a) requiring Mr. Paris' abstention from 'any active part in political management or political campaigns' are derived from Rule I of the Civil Service Commission and have persisted there since 1907.22 25 Oklahoma also argues that the Civil Service Commission determination that the acts of Mr. Paris constitute such a violation of § 12(a) as to warrant his removal from his state office is not in accordance with law but arbitrary, unreasonable and an abuse of discretion. The facts of Mr. Paris' activities and his connection with the Democratic State Central Committee during his tenure of office as a member of the Highway Commission of Oklahoma have been stated. The Circuit Court of Appeals said, 10 Cir., 153 F.2d at page 284, 'Manifestly, the Commission had solid footing in the Act for the conclusion that removal of Paris from office was warranted.' We agree.23 26 Finally, petitioner says that § 12(c), note 1, supra, authorizes a review of 'every minute detail of the case' to 'determine whether sufficient facts exist to support the order of the Commission, decide whether the statute has been reasonably and just y applied, and independently resolve the entire question as though the federal court had been the forum in the first instance.' The basis for this argument in so far as it differs from that referred to in the preceding paragraph, is drawn from the language of § 12(c) that 'The review by the court shall be on the record entire, including all of the evidence taken on the hearing, and shall extend to questions of fact and questions of law. * * * The court shall affirm the Commission's determination or order, or its modified determination or order, if the court determines that the same is in accordance with law.' As the facts were stipulated and no objection has been taken to the findings of fact, D.C., 61 F.Supp. 355, 357(5); 10 Cir., 153 F.2d 280, 283, the attack, on this issue, is limited to an examination into whether or not the Commission abused its discretion in the order of removal. As heretofore stated, the provisions for review underwent changes during the passage of the act.24 As finally adopted, however, the reviewing court is directed to remand when it determines that the action of the Commission 'is not in accordance with law.' § 12(c)25 The question of 'the removal of the officer or employee,' § 12(b), note 1, supra, we think is a matter of administrative discretion. Since under Rule I of the Civil Service Commission the taking of 'any active part in political management or political campaigns' had been determined by the Commission to include service on a political committee, see notes 37 and 38 of United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556 it is clear Mr. Paris' position violated § 15 of the Hatch Act. Note 1, supra. It could hardly be said that determination of the Commission in ordering his removal was an abuse of its discretion. See 61 F.Supp. at page 357(6) and (7); 153 F.2d at pages 283, 284. 27 Judgment affirmed. 28 Mr. Justice MURPHY and Mr. Justice JACKSON took no part in the consideration or decision of this case. 29 Mr. Justice BLACK and Mr. Justice RUTLEDGE dissent. 30 Mr. Justice FRANKFURTER, concurring. 31 It is of course settled that this Court must consider whenever the question is raised or even though not raised by counsel, the jurisdiction of the lower federal courts as well as the jurisdiction of this Court. Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 511, 28 L.Ed. 462. But whether a State has standing to urge a claim of constitutionality under a Congressional grant-in-aid statute does not involve 'jurisdiction' in the sense of a court's power but only the capacity of the State to be a litigant to invoke that power. In this litigation the Government did not challenge the standing of Oklahoma to question the constitutionality of the Act until the case came here. I think it is too late to raise that question at this stage. Assuming that it is here, it is my view that under the Hatch Act, in the legislative and judicial context in which it must be read, the State can question only the correctness of the procedure and the determination of the Civil Service Commission, not the validity of the Act. Section 12(b), (c), 54 Stat. 767 amending 53 Stat. 1147, 18 U.S.C. § 61l(b) and (c), 18 U.S.C.A. § 61l(b, c). 32 The Administrative Procedure Act does not apply to the present case. Pub.L.No. 404, 79th Cong., 2d Sess. June 11, 1946 § 12, 5 U.S.C.A. § 1011. That Act will, in due course, pre ent problems for adjudication. We ought not to anticipate them when, being irrelevant, they are not before us. The Act ought not to be used even for illustrative purpose because illustrations depend on construction of the Act. 33 Apart from the foregoing, I agree with Mr. Justice REED'S opinion. * See United Public Workers of America (C.I.O.) v. Mitchell et al., 330 U.s. 75, 67 S.Ct. 556. 1 53 Stat. 1147, as amended, 54 Stat. 767, 18 U.S.C.A. § 61l: 'Sec. 12. (a) No officer or employee of any State or local agency whose principal employment is in connection with any activity which is financed in whole or in part by loans or grants made by the United States or by any Federal agency shall * * * take any active part in political management or in political campaigns. * * * '(b) If any Federal agency charge with the duty of making any loan or grant of funds of the United States for use in any activity by any officer or employee to whom the provisions of subsection (a) are applicable has reason to believe that any such officer or employee has violated the provisions of such subsection, it shall make a report with respect thereto to the United States Civil Service Commission (hereinafter referred to as the 'Commission'). Upon the receipt of any such report, or upon the receipt of any other information which seems to the Commission to warrant an investigation, the Commission shall fix a time and place for a hearing, and shall by registered mail send to the officer or employee charged with the violation and to the State or local agency employing such officer or employee a notice setting forth a summary of the alleged violation and the time and place of such hearing. At such hearing (which shall be not earlier than ten days after the mailing of such notice) either the officer or employee or the State or local agency, or both, may appear with counsel and be heard. After such hearing, the Commission shall determine whether any violation of such subsection has occurred and whether such violation, if any, warrants the removal of the officer or employee by whom it was committed from his office or employment, and shall be registered mail notify such officer or employee and the appropriate State or local agency of such determination. If in any case the Commission finds that such officer or employee has not been removed from his office or employment within thirty days after notice of a determination by the Commission that such violation warrants his removal, or that he has been so removed and has subsequently (within a period of eighteen months) been appointed to any officer or employment in any State or local agency in such State, the Commission shall make and certify to the appropriate Federal agency an order requiring it to withhold from its loans or grants to the State or local agency to which such notification was given an amount equal to two years' compensation at the rate such officer or employee was receiving at the time of such violation; except that in any case of such a subsequent appointment to a position in another State or local agency which receives loans or grants from any Federal agency, such rder shall require the withholding of such amount from such other State or local agency: * * * '(c) Any party aggrieved by any determination or order of the Commission under subsection (b) may, within thirty days after the mailing of notice of such determination or order, institute proceedings for the review thereof by filing a written petition in the district court of the United States for the district in which such officer or employee resides; but the commencement of such proceeding shall not operate as a stay of such determination or order unless (1) it is specifically so ordered by the court, and (2) such officer or employee is suspended from his office or employment during the pendency of such proceedings. A copy of such petition shall forthwith be served upon the Commission, and thereupon the Commission shall certify and file in the court a transcript of the record upon which the determination or the order complained of was made. The review by the court shall be on the record entire, including all of the evidence taken on the hearing, and shall extend to questions of fact and questions of law. * * * The court shall affirm the Commission's determination or order, or its modified determination or order, if the court determines that the same is in accordance with law. If the court determines that any such determination or order, or modified determination or order, is not in accordance with law, the court shall remand the proceeding to the Commission with directions either to make such determination or order as the court shall determine to be in accordance with law or to take such further proceedings as, in the opinion of the court, the law requires. The judgment and decree of the court shall be final, subject to review by the appropriate circuit court of appeals as in other cases, and the judgment and decree of such circuit of appeals shall be final, subject to review by the Supreme Court of the United States on certiorari or certification as provided in sections 239 and 240 of the Judicial Code, as amended (U.S.C., 1934 edition, title 28, secs. 346 and 347). If any provision of this subsection is held to be invalid as applied to any party with respect to any determination or order of the Commission, such determination or order shall thereupon become final and effective as to such party in the same manner as if such provision had not been enacted. 'Sec. 15. The provisions of this act which prohibit persons to whom such provisions apply from taking any active part in political management or in political campaigns shall be deemed to prohibit the same activities on the part of such persons as the United States Civil Service Commission has heretofore determined are at the time this section takes effect prohibited on the part of employees in the classified civil service of the United States by the provisions of the civil service rules prohibiting such employees from taking any active part in political management or in political campaigns.' 18 U.S.C.A. § 61o. 2 Commonwealth of Massachusetts v. Mellon, 262 U.S. 447, 482, 43 S.Ct. 597, 599, 67 L.Ed. 1078; Perkins v. Lukens Steel Co., 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108; Alabama Power Co. v. Ickes, 302 U.S. 464, 479, 58 S.Ct. 300, 303, 82 L.Ed. 374, are cited as authority, together with other cases. 3 A respondent can support his judgment on any ground that appears in the record. LeTulle v. Scofield, 308 U.S. 415, 421, 60 S.Ct. 313, 316, 84 L.Ed. 355; City of Gainesville v. Brown-Crummer Co., 277 U.S. 54, 59, 48 S.Ct. 454, 456, 72 L.Ed. 781. 4 See note 1, supra, § 12(c). 5 See Federal Highway Act, 42 Stat. 212, as amended, 23 U.S.C. §§ 1—117, 23 U.S.C.A. §§ 1—117. 6 Cf. Columbia Broadcasting System v. United States, 316 U.S. 407, 422, 62 S.Ct. 1194, 1202, 86 L.Ed. 1563. 7 See Deitrick v. Greaney, 309 U.S. 190, 198, 200, 201, 60 S.Ct. 480, 484, 485, 84 L.Ed. 694; Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192, 202, 65 S.Ct. 226, 232. 8 See the discussion in Colegrove v. Greene, 328 U.S. 549, 66 S.Ct. 1198. 9 American Power Co. v. Securities & Exchange Comm., 325 U.S. 385, 389, 65 S.Ct. 1254, 1256, 89 L.Ed. 1683. 10 Federal Power Commission v. Pacific Power & Light Co., 307 U.S. 156, 159, 59 S.Ct. 766, 767, 768, 83 L.Ed. 1180. 11 Chicago Junction Case, 264 U.S. 258, 266, 44 S.Ct. 317, 320, 68 L.Ed. 667 (Second); Z. & F. Assets ealization Corporation v. Hull, 311 U.S. 470, 485, 61 S.Ct. 351, 354, 85 L.Ed. 288. 12 Federal Power Commission v. Pacific Power & Light Co., 307 U.S. 156, 159, 59 S.Ct. 766, 767, 768, 83 L.Ed. 1180; Federal Communications Commission v. Sanders Brothers Radio Station, 309 U.S. 470, 476, 642, 60 S.Ct. 693, 698, 84 L.Ed. 869; American Power & Light Co. v. Securities & Exchange Commission, 325 U.S. 385, 390, 65 S.Ct. 1254, 1256, 1257, 89 L.Ed. 1683; Parker v. Fleming, 329 U.S. 531, 67 S.Ct. 463. 13 Cf. National Labor Relations Board v. Jones & Laughlin, 301 U.S. 1, 25, 43, 49, 57 S.Ct. 615, 619, 627, 629, 630, 81 L.Ed. 893, 108 A.L.R. 1352; Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 321, 324, 53 S.Ct. 350, 360, 362, 77 L.Ed. 796; United States v. Ruzicka, 329 U.S. 287, 67 S.Ct. 207. Judicial review normally includes issues of the constitutionality of enactments and action thereunder. Pub.Law 404, 79th Cong., 2d Sess., Sec. 10(e), 5 U.S.C.A. § 1009(e): 'Scope of review. So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action. It shall (A) compel agency action unlawfully withheld or unreasonably delayed; and (B) hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without observance of procedure required by law; (5) unsupported by substantial evidence in any case subject to the requirements of sections 7 and 8 or otherwise reviewed on the record of an agency hearing provided by statute; or (6) unwarranted by the facts to the extent that the facts are subject to trial do novo by the reviewing court. In making the foregoing determinations the court shall review the whole record or such portions thereof as may be cited by any party, and due account shall be taken of the rule of prejudicial error.' See the full discussion of the 'Scope of Review,' Legislative History, Administrative Procedure Act, S.Doc.No. 248, 79th Cong., 2d Sess., p. 213, (e), and p. 278, § 10(e). 14 See Hurley v. Commission of Fisheries, 257 U.S. 223, 42 S.Ct. 83, 66 L.Ed. 206; United Fuel Gas Co. v. Railroad Commission of Kentucky, 278 U.S. 300, 49 S.Ct. 150, 73 L.Ed. 390; Great Falls Mfg. Co. v. Attorney General, 124 U.S. 581, 8 S.Ct. 631, 31 L.Ed. 527. 15 It cites 86 Cong.Rec. 2354, 2429, 2440, 2468—2474, 9448, 9452; H.Rep. 2376, 76th Cong., 3d Sess., p. 9. 16 86 Cong.Rec. 2470: 'Mr. Lucas. I have great respect for the opinions of the Senator from Nebraska. I rise to ask him a question: Does the Senator from Nebraska believe that the question of political liberty is involved in the pending legislation in any way? 'Mr. Norris. I have not thought so. 'Mr. Lucas. In other words, the Senator does not believe that the political rights of an individual who is charged with violation of the statute are being invaded? 'Mr. Norris. Mr. President, I now understand the Senator's question. I do not believe so. Some honest men who are better lawyers than I am believe those rights are invaded. That question can easily be tested, however, without having the amendment adopted and passed upon. If the political rights of an individual were invaded, then th law would be unconstitutional, and one could get into court immediately by various kinds of applications. The question could be placed before a court and carried to the Supreme Court and that Court could pass upon it. The adoption of the particular amendment in question would not assist in that respect. If the law is unconstitutional, it will be so found very soon, even without the adoption of this amendment, and the law will fall. 'Mr. Lucas. But if the Senator from Nebraska entertains the same view as that entertained by the Senator from Illinois with respect to the invasion of the political rights of an individual, then, I take it, the Senator from Nebraska will agree that in case an individual were charged with violation of the statute he should have his rights determined by the court of last resort? 'Mr. Norris. I agree with the Senator. But we do not need this amendment in order to get a decision on the matter. That is my contention. We could not put anything into the law, however ingenious we might be, which would take away the constitutional rights of any citizen, and if such an attempt were made the citizen could go into court and have the question determined even without the adoption of language such as contained in the pending amendment.' 17 See 86 Cong.Rec. 9446, 9495. 18 '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.' 19 Veazie Bank v. Fenno, 8 Wall. 533, 547, 19 L.Ed. 482; Stearns v. State of Minnesota, 179 U.S. 223, 244, 21 S.Ct. 73, 81, 45 L.Ed. 162; State of Florida v. Mellon, 273 U.S. 12, 47 S.Ct. 265, 71 L.Ed. 511; Helvering v. Therrell, 303 U.S. 218, 58 S.Ct. 539, 82 L.Ed. 758; Wright v. Union Central Life Ins. Co., 304 U.S. 502, 516, 58 S.Ct. 1025, 1033, 82 L.Ed. 1490; Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 338, 56 S.Ct. 466, 479, 80 L.Ed. 688. 20 Steward Machine Co. v. Davis, 301 U.S. 548, 593—598, 57 S.Ct. 883, 893—894, 81 L.Ed. 1279, 109 A.L.R. 1293; United States v. Bekins, 304 U.S. 27, 51—54, 58 S.Ct. 811, 815—817, 82 L.Ed. 1137. A review of grants-in-aid will be found in 8 American Law School Review, Corwin: National-State Cooperation, 687, 698. 21 86 Cong.Rec. 2938, § 15 of exhibit. 22 See United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556. 23 See Jacob Siegel Co. v. Federal Trade Commission, 327 U.S. 608, 66 S.Ct. 758. 24 See 86 Cong.Rec. 2468—2474; S. 3046 in the House of Representatives, Union Calendar No. 924, June 4, 1940, pp. 4 and 17; H.Rep.No. 2376, 76th Cong., 3d Sess., p. 9. The amendment which resulted in the present form of the section appears at 86 Cong.Rec. 9448. 25 The following also appears in the section: 'The Commission may modify its findings of fact or its determination or order by reason of the additional evidence so taken and shall file with the court such modified findings, determination, or order, and any such modified findings of fact, if supported by substantial evidence, shall be conclusive.' 54 Stat. 767, 769.

23

330 U.S. 75 67 S.Ct. 556 91 L.Ed. 754 UNITED PUBLIC WORKERS OF AMERICA (C.I.O.) et al.v.MITCHELL et al. No. 20. Reargued Oct. 17, 1946. Decided Feb. 10, 1947. Appeal from the District Court of the United States for the District of Columbia. [Syllabus from pages 75-77 intentionally omitted] Mr. Lee Pressman, of Washington, D.C., for appellants. Mr. Ralph F. Fuchs, of Washington, D.C., for appellees. Mr. Justice REED delivered the opinion of the Court. 1 The Hatch Act,* enacted in 1940, declares unlawful certain specified political activities of federal employees.1 Section 9 forbids officers and employees in the executive branch of the Federal Government, with exceptions, from taking 'any active part in political management or in political campaigns.'2 Section 15 declares that the activities theretofore determined by the United States Civil Service Commission to be prohibited to employees in the classified civil service of the United States by the civil service rules shall be deemed to be prohibited to federal employees covered by the Hatch Act.3 These sections of the Act cover all federal officers and employees whether in the classified civil service or not and a penalty of dismissal from employment is imposed for violation. There is no designation of a single governmental agency for its enforcement. 2 For many years before the Hatch Act the Congress had authorized the exclusion of federal employees in the competitive classified service from active participation in political management and political campaigns.4 In June, 1938, the Congressional authorization for exclusion had been made more effective by a Civil Service Commission disciplinary rule.5 That power to discipline members of the competitive classified civil service continues in the Commission under the Hatch Act by virtue of the present applicability of the Executive Order No. 8705, March 5, 1941. The applicable Civil Service Commission rules are printed in the margin.6 The only change in the Civil Service Rules relating to political activity, caused by the Hatch Act legislation, that is of significance in this case is the elimination on March 5, 1941, of the word 'privately' from the phrase 'to express privately their opinions.' This limitation to private expression had regulated classified personnel since 1907.7 3 The present appellants sought an injunction before a statutory three judge district court of the District of Columbia against appellees, members of the United States Civil Service Commission to prohibit them from enforcing against petitioners the provisions of the second sentence of § 9(a) of the Hatch Act for the reason that the sentence is repugnant to the Constitution of the United States.8 A declaratory judgment of the unconstitutionality of the sentence was also sought.9 The sentence referred to reads, 'No officer or employee in the executive branch of the Federal Government * * * shall take any active part in political management or in political campaigns.' 4 Various individual employees of the federal executive civil service and the United Public Workers of America,10 a labor union with these and other executive employees as members, as a representative of all its members, joined in the suit. It is alleged that the individuals desire to engage in acts of political management and in political campaigns. Their purposes are as stated in the excerpt from the complaint set out in the margin.11 From the affida vits it is plain, and we so assume, that these activities will be carried on completely outside of the hours of employment. Appellants challenge the second sentence of § 9(a) as unconstitutional for various reasons. They are set out below in the language of the complaint.12 5 None of the appellants, except George P. Poole, has violated the provisions of the Hatch Act. They wish to act contrary to its provisions and those of § 1 of the Civil Service Rules and desire a declaration of the legally permissible limits of regulation. Defendants moved to dismiss the complaint for lack of a justiciable case or controversy. The District Court determined that each of these individual appellants had an interest in their claimed privilege of engaging in political activities, sufficient to give them a right to maintain this suit. United Federal Workers of America (C.I.O.) v. Mitchell, D.C., 56 F.Supp. 621, 624. The District Court further determined that the questioned provision of the Hatch Act was valid and that the complaint therefore failed to state a cause of action. It accordingly dismissed the complaint and granted summary judgment to defendants. 6 First. The judgment of the District Court was entered on September 26, 1944. An order was duly entered on October 26, 1944, allowing an appeal. 28 U.S.C. § 380a, 28 U.S.C.A. § 380a. The same section of the statutes provides: 'In the event that an appeal is taken under this section, the record shall be made up and the case docketed in the Supreme Court of the United States within sixty days from the time such appeal is allowed, under such rules as may be prescribed by the proper courts.' This appeal was not docketed in this Court until February 2, 1945, a date after the return date of the order and § 380a. Thereafter the Government suggested a lack of jurisdiction in this Court to consider the appeal because of the failure of appellants to docket the appeal in time. We postponed consideration of our jurisdiction over this appeal to the hearing. We proceed now o a disposition of this question. 7 To comply with the suggestion of § 380a, this Court adopted Rule 47.13 In other cases of appeals, Rule 11 governs docketing.14 If Rule 11 applies also to appeals under § 380a, we may hear this appeal for the steps for dismissal required by Rule 11 were not taken by the appellee. This is because upon the allowance of an appeal by a judge of the district court as here, Supreme Court Rules 10 and 36, the case is transferred from the district court to this Court and subsequent steps for dismissal or affirmance are to be taken here.15 If, however, the above quoted provision of § 380a as to docketing is a prerequisite to the power of this Court to review, this appeal must fail. 8 Prior to the passage of § 380a, appeals docketed after the return day were governed by Rule 11, 275 U.S.Appendix. In principle it has long been in existence.16 By the words of the rule, it appears that dismissal for appellant's tardiness in docketing requires a step by the appellee. Even after dismissal for failure to docket, the rule permits this Court to allow the appellant to docket. Nothing in the legislative history which has been called to our attention indicates that Congress intended its docketing provision to vary Rule 11. Direct appeal accomplishes the Congressional purpose of expediting review, of course, and is consistent with an unchanged practice as to dismissals. The time to docket may have been enlarged from the conventional return day of Rules 10 and 11 to bring continental uniformity, see Rule 10, or to give time for the preparation of a record which would often be large and not transcribed or printed. It will not expedite determination of constitutional questions to dismiss appeals because of errors of practice. In fact the sentence of § 380a on docketing seems deliberately to leave the practice on failure to docket to rules of court. We do not construe the requirement of docketing within sixty days as a limitation on our power to hear this appeal. 9 So far as our Rule 47 is concerned, we construe it as requiring in accordance wit § 380a the docketing in sixty days from the allowance of the appeal, instead of the forty days of our Rule 10 and that as to dismissals, the first sentence of Rule 47 requires the same practice for appeals under § 380a that Rule 11 does for other appeals. We think it desirable to have sufficient flexibility in the rule to permit extensions of the time for return in the unusual situations that occur when large records are involved. In view of the recognized Congressional purpose to quicken review under § 380a, the discretion to delay final hearing allowed under Rule 11 will be exercised only on a definite showing of need therefor to assure fair review. This leads us to hear this appeal.17 10 Second. At the threshold of consideration, we are called upon to decide whether the complaint states a controversy cognizable in this Court. We defer consideration of the cause of action of Mr. Poole until section Three of this opinion. The other individual employees have elaborated the grounds of their objection in individual affidavits for use in the hearing on the summary judgment. We select as an example one that contains the essential averments of all the others and print below the portions with significance in this suit.18 Nothing similar to the fourth paragraph of the printed affidavit is contained in the other affidavits. The assumed controversy between affiant and the Civil Service Commission as to affiant's right to act as watcher at the polls on November 2, 1943, had long been moot when this complaint was filed. We do not therefore treat this allegation separately. The affidavits, it will be noticed, follow the generality of purpose expressed by the complaint. See note 11 supra. They declare a desire to act contrary to the rule against political activity but not that the rule has been violated. In this respect, we think they differ from the type of threat adjudicated in Railway Mail Association v. Corsi, 326 U.S. 88, 65 S.Ct. 1483, 89 L.Ed. 2072. In that case, the refusal to admit an applicant to membership in a labor union on account of race was involved. Admission had been refused. 326 U.S. at page 93, note 10, 65 S.Ct. at page 1487, 89 L.Ed. 2072. Definite action had also been taken in Hill v. Florida, 325 U.S. 538, 65 S.Ct. 1373, 89 L.Ed. 1782. In the Hill case an injunction had been sought and allowed against Hill and the Union forbidding Hill from acting as the business agent of the union and the Union from further functioning as a union until it complied with the state law. The threats which menaced the affiants of these affidavits in the case now being considered are closer to a general threat by officials to enforce those laws which they are charged to administer, compare Watson v. Buck, 313 U.S. 387, 400, 61 S.Ct. 962, 966, 85 L.Ed. 1416, than they are to the direct threat of punishment against a named organization for a completed act that made the Mail Association and the Hill cases justiciable. 11 As is well known the federal courts established pursuant to Article III of the Constitution do not render advisory opinions.19 For adjudication of constitutional issues 'concrete legal issues, presented in actual cases, not abstractions' are requisite.20 This is as true of declaratory judgments as any other field.21 These appellants seem clearly to seek advisory opinions upon broad claims of rights protected by the First, Fifth, Ninth and Tenth Amendments to the Constitution. As these appellants are classified employees, they have a right superior to the generality of citizens, compare Fairchild v. Hughes, 258 U.S. 126, 42 S.Ct. 274, 66 L.Ed. 499, but the facts of their personal interest in their civil rights, of the general threat of possible interference with those rights by the Civil Service Commission under its rules, if specified things are done by appellants, does not make a justiciable case or controversy. Appellants want to engage in 'political management and political campaigns,' to persuade others to follow appellants' views by discussion, speeches, articles and other acts reasonably designed to secure the selection of appellants' political choices. Such generality of objection is really an attack on the political expediency of the Hatch Act, not the presentation of legal issues. It is beyond the competence of courts to render such a decision. State of Texas v. Interstate Commerce Commission, 258 U.S. 158, 162, 42 S.Ct. 261, 262, 66 L.Ed. 531. 12 The power of courts, and ultimately of this Court to pass upon the constitutionality of acts of Congress arises only when the interests of litigants require the use of this judicial authority for their protection against actual interference. A hypothetical threat is not enough. We can only speculate as to the kinds of political activity the appellants desire to engage in or as to the contents of their proposed public statements or the circumstances of their publication. It would not accord with judicial responsibility to adjudge, in a matter involving constitutionality, between the freedom of the individual and the requirements of public order except when definite rights appear upon the one side and definite prejudicial interferences upon the other.22 13 The Constitution allots the nation's judicial power to the federal courts. Unless these courts respect the limits of that unique authority, they intrude upon powers vested in the legislative or executive branches. Judicial adherence to the doctrine of the separation of powers preserves the courts for the decision of issues, between litigants, capable of effective determination. Judicial exposition upon political proposals is permissible only when necessary to decide definite issues between litigants. When the courts act continually within these constitutionally imposed boundaries of their power, their ability to perform their function as a balance for the people's protection against abuse of power by other branches of government remains unimpaired. Should the courts seek to expand their power so as to bring under their jurisdiction ill defined controversies over constitutional issues, they would become the organ of political theories. Such abuse of judicial power would properly meet rebuke and restriction from other branches. By these mutual checks and balances by and between the branches of government, democracy undertakes to preserve the liberties of the people from excessive concentrations of authority. No threat of interference by the Commission with rights of these appellants appears beyond that implied by the existence of the law and the regulations. Watson v. Buck, supra, 313 U.S. at page 400, 61 S.Ct. at page 966, 85 L.Ed. 1416. We should not take judicial cognizance of the situation presented on the part of the appellants considered in this subdivision of the opinion. These reasons lead us to conclude that the determination of the trial court, that the individual appellants, other than Poole, could maintain this action, was erroneous. 14 Third. The appellant Poole does present by the complaint and affidavit matters appropriate for judicial determination.23 The affidavits filed by appellees confirm that Pool has been charged by the Commission with political activity and a proposed order for his removal from his position adopted subject to his right under Commission procedure to reply to the charges and to present further evidence in refutation.24 We proceed to consider the controversy over constitutional power at issue between Poole and the Commiss on as defined by the charge and preliminary finding upon one side and the asmissions of Poole's affidavit upon the other. Our determination is limited to those facts. This proceeding so limited meets the requirements of defined rights and a definite threat to interfere with a possessor of the menaced rights by a penalty for an act done in violation of the claimed restraint.25 15 Because we conclude hereinafter that the prohibition of § 9 of the Hatch Act and Civil Service Rule 1, see notes 2 and 6 above, are valid, it is unnecessary to consider, as this is a declaratory judgment action, whether or not this appellant sufficiently alleges that an irreparable injury to him would result from his removal from his position.26 Nor need we inquire whether or not a court of equity would enforce by injunction any judgment declaring rights.27 Since Poole admits that he violated the rule against political activity and that removal from office is therefore mandatory under the act, there is no question as to the exhaustion of administrative remedies. The act provides no administrative or statutory review for the order of the Civil Service Commission. Compare Stark v. Wickard, 321 U.S. 288, 306 310, 64 S.Ct. 559, 569—571, 88 L.Ed. 733; Macauley v. Waterman S.S. Corporation, 327 U.S. 540, 66 S.Ct. 712. As no prior proceeding, offering an effective remedy or otherwise, is pending in the courts, there is no problem of judicial discretion as to whether to take cognizance of this case. Brillhart v. Excess Insurance Co., 316 U.S. 491, 496, 497, dissent at page 500, 62 S.Ct. 1173, 1176, dissent at page 1178, 86 L.Ed. 1620; Larson v. General Motors Corporation, 2 Cir., 134 F.2d 450, 453. Under such circumstances, we see no reason why a declaratory judgment action, even though constitutional issues are involved, does not lie. See Rules of Civil Procedure, Rule 57. Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192, 197, 207, 65 S.Ct. 226, 229, 234, 89 L.Ed. 173; Tunstall v. Brotherhood of Locomotive Firemen & Enginemen, 323 U.S. 210, 212, et seq., 65 S.Ct. 235, 236, 89 L.Ed. 187.* 16 Fourth. This brings us to consider the narrow but important point involved in Poole's situation.28 Poole's stated offense is taking an 'active part in political management or in political campaigns.' He was a ward executive committeeman of a political party and was politically active on election day as a worker at the polls and a paymaster for the services of other party workers. The issue for decision and the only one we decide is whether such a breach of the Hatch Act and Rule 1 of the Commission can, without violating the Constitution, be made the basis for disciplinary action. 17 When the issue is thus narrowed, the interference with free expression is seen in better proportion as compared with the requirements of orderly management of administrative personnel. Only while the employee is politically active, in the sense of Rule 1, must he withhold expression of opinion on public subjects. See note 6. We assume that Mr. Poole would be expected to comment publicly as committeeman on political matters, so that indirectly there is an attenuated interference. We accept appellant's contention that the nature of political rights reserved to the people by the Ninth and Tenth Amendments are involved. The right claimed as inviolate may be stated as the right of a citizen to act as a party official or worker to further his own political views. Thus we have a measure of interference by the Hatch Act and the Rules with what otherwise would be the freedom of the civil servant under the First, Ninth and Tenth Amendments. And, if we look upon due process as a guarantee of freedom in those fields, there is a corresponding impairment of that right under the Fifth Amen ment. Appellants' objections under the Amendments are basically the same. 18 We do not find persuasion in appellants' argument that such activities during free time are not subject to regulation even though admittedly political activities cannot be indulged in during working hours.29 The influence of political activity by government employees, if evil in its effects on the service, the employees or people dealing with them, is hardly less so because that activity takes place after hours. Of course, the question of the need for this regulation is for other branches of government rather than the courts. Our duty in this case ends if the Hatch Act provision under examination is constitutional. 19 Of course, it is accepted constitutional doctrine that these fundamental human rights are not absolutes. The requirements of residence and age must be met. The essential rights of the First Amendment in some instances are subject to the elemental need for order without which the guarantees of civil rights to others would be a mockery.30 The powers granted by the Constitution to the Federal Government are subtracted from the totality of sovereignty originally in the states and the people. Therefore, when objection is made that the exercise of a federal power infringes upon rights reserved by the Ninth and Tenth Amendments, the inquiry must be directed toward the granted power under which the action of the Union was taken. If granted power is found, necessarily the objection of invasion of those rights, reserved by the Ninth and Tenth Amendments, must fail. Again this Court must balance the extent of the guarantees of freedom against a congressional enactment to protect a democratic society against the supposed evil of political partisanship by classified employees of government. 20 As pointed out hereinbefore in this opinion, the practice of excluding classified employees from party offices and personal political activity at the polls has been in effect for several decades. Some incidents similar to those that are under examination here have been before this Court and the prohibition against certain types of political activity by office holders has been upheld. The leading case was decided in 1882. Ex parte Curtis, 106 U.S. 371, 1 S.Ct. 381, 27 L.Ed. 232. There a subordinate United States employee was indicted for violation of an act that forbade employees who were not appointed by the President and confirmed by the Senate from giving or receiving money for political purposes from or to other employees of the government on penalty of discharge and criminal punishment. Curtis urged that the statute was unconstitutional. This Court upheld the right of Congress to punish the infraction of this law. The decisive principle was the power of Congress, within reasonable limits, to regulate, so far as it might deem necessary, the political conduct of its employees. A list of prohibitions against acts by public officials that are permitted to other citizens was given. This Court said, 106 U.S. at page 373, 1 S.Ct. at page 384, 27 L.Ed. 232: 21 'The evident p rpose of congress in all this class of enactments has been to promote efficiency and integrity in the discharge of official duties, and to maintain proper discipline in the public service. Clearly such a purpose is within the just scope of legislative power, and it is not easy to see why the act now under consideration does not come fairly within the legitimate means to such an end.' 22 The right to contribute money through fellow employees to advance the contributor's political theories was held not to be protected by any Constitutional provision. It was held subject to regulation. A dissent by Mr. Justice Bradley emphasized the broad basis of the Court's opinion. He contended that a citizen's right to promote his political views could not be so restricted merely because he was an official of government.31 23 No other member of the Court joined in this dissent. The conclusion of the Court, that there was no constitutional bar to regulation of such financial contributions of public servants as distinguished from the exercise of political privileges such as the ballot, has found acceptance in the subsequent practice of Congress and the growth of the principle of required political neutrality for classified public servants as a sound element for efficiency.32 The conviction that an actively partisan governmental personnel threatens good administration has deepened since Ex parte Curtis. Congress recognizes danger to the service in that political rather than official effort may earn advancement and to the public in that governmental favor may be channeled through political connections.33 24 In United States v. Wurzbach, 280 U.S. 396, 50 S.Ct. 167, 168, 74 L.Ed. 508, the doctrine of legislative power over actions of governmental officials was held valid when extended to members of Congress. The members of Congress were prohibited from receiving contributions for 'any political purpose whatever' from any other federal employees. Private citizens were not affected. The argument of unconstitutionality because of interference with the political rights of a citizen by that time was dismissed in a sentence. Compare United States v. Thayer, 209 U.S. 39, 28 S.Ct. 426, 52 L.Ed. 673. 25 The provisions of § 9 of the Hatch Act and the Civil Service Rule 1 are not dissimilar in purpose from the statutes against political contributions of money. The prohibitions now under discussion are directed at political contributions of energy by Government employees. These contributions, too, have a long background of disapproval.34 Congress and the President are responsible for an efficient public service. If, in their judgment, efficiency may be best obtained by prohibiting active participation by classified employees in politics as party officers or workers, we see no constitutional objection.35 26 Another Congress may determine that on the whole, limitations on active political management by federal personnel are unwise. The teaching of experience has evidently led Congress to enact the Hatch Act provisions. The declare that the present supposed evils of political activity are beyond the power of Congress to redress would leave the nation impotent to deal with what many sincere men believe is a material threat to the democratic system. Congress is not politically naive or regardless of public welfare or that of the employees. It leaves untouched full participation by employees in political decisions at the ballot box and forbids only the partisan activity of federal personnel deemed offensive to efficiency. With that limitation only, employees may make their contributions to public affairs or protect their own interests, as before the passage of the act. 27 The argument that political neutrality is not indispensable to a merit system for federal employees may be accepted. But because it is not indispensable does not mean that it is not desirable or permissible. Modern American politics involves organized political parties. Many classifications of Government employees have been accustomed to work in politics—national, state and local—as a matter of principle or to assure their tenure. Congress may reasonably desire to limit party activity of federal employees so as to avoid a tendency toward a one-party system. It may have considered that parties would be more truly devoted to the public welfare if public servants were not over active politically. 28 Appellants urge that federal employees are protected by the Bill of Rights and that Congress may not 'enact a regulation providing that no Republican, Jew or Negro shall be appointed to federal office, or that no federal employee shall attend Mass or take any active part in missionary work.' None would deny such limitations on Congressional power but because there are some limitations it does not follow that a prohibition against acting as ward leader or worker at the polls is invalid. A reading of the Act and Rule 1, notes 2 and 6, supra, together with the Commission's determination36 shows the wide range of public activities with which there is no interference by the legislation. It is only partisan political activity that is interdicted. It is active participation in political management and political campaigns. Expressions, pu lic or private, on public affairs, personalities and matters of public interest, not an objective of party action, are unrestricted by law so long as the Government employee does not direct his activities toward party success. 29 It is urged, however, that Congress has gone further than necessary in prohibiting political activity to all types of classified employees. It is pointed out by appellants 'that the impartiality of many of these is a matter of complete indifference to the effective performance' of their duties.37 Mr. Poole would appear to be a good illustration for appellants' argument. The complaint states that he is a roller in the Mint. We take it this is a job calling for the qualities of a skilled mechanic and that it does not involve contact with the public. Nevertheless, if in free time he is engaged in political activity, Congress may have concluded that the activity may promote or retard his advancement or preferment with his superiors. Congress may have thought that Government employees are handy elements for leaders in political policy to use in building a political machine. For regulation of employees it is not necessary that the act regulated be anything more than an act reasonably deemed by Congress to interfere with the efficiency of the public service. There are hundreds of thousands of United States employees with positions no more influential upon policy determination than that of Mr. Poole. Evidently what Congress feared was the cumulative effect on employee morale of political activity by all employees who could be induced to participate actively. It does not seem to us an unconstitutional basis for legislation. 30 There is a suggestion that administrative workers may be barred, constitutionally, from political management and political campaigns while the industrial workers may not be barred, constitutionally, without an act 'narrowly drawn to define and punish specific conduct.' A ready answer, it seems to us, lies in the fact that the prohibition of § 9(a) of the Hatch Act 'applies without discrimination to all employees whether industrial or administrative' and that the Civil Service Rules, by § 15 made a part of the Hatch Act, makes clear that industrial workers are covered in the prohibition against political activity. Congress has determined that the presence of government employees, whether industrial or administrative, in the ranks of political party workers is bad. Whatever differences there may be between administrative employees of the Government and industrial workers in its employ are differences in detail so far as the constitutional power under review is concerned. Whether there are such differences and what weight to attach to them, are all matters of detail for Congress. We do not know whether the number of federal employees will expand or contract; whether the need for regulation of their political activities will increase or diminish. The use of the constitutional power of regulation is for Congress, not for the courts. 31 We have said that Congress may regulate the political conduct of Government employees 'within reasonable limits,' even though the regulation trenches to some extent up n unfettered political action. The determination of the extent to which political activities of governmental employees shall be regulated lies primarily with Congress. Courts will interfere only when such regulation passes beyond the general existing conception of governmental power. That conception develops from practice, history, and changing educational, social and economic conditions. The regulation of such activities as Poole carried on has the approval of long practice by the Commission, court decisions upon similar problems and a large body of informed public opinion. Congress and the administrative agencies have authority over the discipline and efficiency of the public service. When actions of civil servants in the judgment of Congress menace the integrity and the competency of the service, legislation to forestall such danger and adequate to maintain its usefulness is required. The Hatch Act is the answer of Congress to this need. We cannot say with such a background that these restrictions are unconstitutional. 32 Section 15 of the Hatch Act, note 3 above, defines an active part in political management or political campaigns as the same activities that the United States Civil Service Commission has determined to be prohibited to classified civil service employees by the provisions of the Civil Service rules when § 15 took effect July 19, 1940. 54 Stat. 767. The activities of Mr. Poole, as ward executive committeeman and a worker at the polls, obviously fall within the prohibitions of § 9 of the Hatch Act against taking an active part in political management and political campaigns. They are also covered by the prior determinations of the Commission.38 We need to examine no further at this time into the validity of the definition of political activity and § 15.39 33 The judgment of the District Court is accordingly affirmed. 34 Affirmed. 35 Mr. Justice MURPHY and Mr. Justice JACKSON took no part in the consideration or decision of this case. 36 Mr. Justice RUTLEDGE dissents as to Poole for the reasons stated by Mr. Justice BLACK. He does not pass upon the constitutional questions presented by the other appellants for the reason that he feels the controversy as to them is not yet appropriate for the discretionary exercise of declaratory judgment jurisdiction. 37 Mr. Justice FRANKFURTER, concurring. 38 The terms of the Act of August 24, 1937, 50 Stat. 751, 752, 28 U.S.C. § 380a, 28 U.S.C.A. § 380a, in the light of its history, have convinced me that this case should be dismissed for want of jurisdiction. 39 In that Act, Congress put a limit to the time within which a case may be docketed here after an appeal below is allowed. Such a limitation by Congress is in the exercise of its power to regulate the appellate jurisdiction of this Court. It is not within our power to enlarge a limit fixed by Congress unless Congress itself gave the Court such dispensing power. 40 In allowing a direct appeal to this Court from a district court 'under such rules as may be prescribed,' Congress did not mean to give this Court power to defeat the considerations of speed in the disposition of controversies involving the constitutionality of federal le islation which led to the specific provision that a case be docketed 'within sixty days from the time such appeal is allowed'. No rule of this Court could disregard the limitations for perfecting an appeal made by Congress. Nor does Rule 47, 28 U.S.C.A. following section 354, which was the rule responsive to the Act of August 24, 1937, purport to do so. It merely reasserts the statutory requirement that in a case like this 'The record shall be made up and the case docketed in this court within sixty days from the time the appeal is allowed.' The introductory part of Rule 47, whereby the Rules of this Court regulating appellate procedure in other cases are adopted 'as far as may be,' has ample scope for operation without qualifying the necessity for speedy perfection of an appeal in cases involving constitutionality, so that the validity of acts of Congress may not remain in doubt through protracted litigation. This was a deep concern of Congress and its reason for imposing the sixty-day limitation for perfecting appeals in this class of cases. 41 But under compulsion of the Court's assumption of jurisdiction, I reach the merits and join in Mr. Justice REED'S opinion. 42 Mr. Justice BLACK, dissenting. 43 The sentence in § 9 of the statute, here upheld, makes it unlawful for any person employed in the executive branch of the Federal Government, with minor numerical exceptions,1 to 'take any active part in political management or in political campaigns.' The punishment provided is immediate discharge and a permanent ban against reemployment in the same position.2 The number of federal employees thus barred from political action is approximately three million. Section 12 of the same Act affects the participation in political campaigns of many thousands of state employees.3 No one of all these millions of citizens can, without violating this law, 'take any active part' in any campaign for a cause or for a candidate if the cause or candidate is 'specifically identified with any National or State political party.' Since under our common political practices most causes and candidates are espoused by political parties, the result is that, because they are paid out of the public treasury, all these citizens who engage in public work can take no really effective part in campaigns that may bring about changes in their lives, their fortunes, and their happiness.4 44 We are not left in doubt as to how numerous and varied are the 'activities' prohibited. For § 15 sweepingly describes them as 'the same activities * * * as the United States Civil Service Commission has heretofore determined are at the time this section takes effect prohibited on the part of employees in the classified civil service of the United States * * *.' Along with the vague and uncertain prior prohibitions of the Commission, are these things which the Commission had clearly prohibited: serving as an election officer; publicly expressing political views at a party caucus or political gathering for or against any candidate or cause identified with a party; soliciting votes for a party or candidate; participating in a political parade; writing for publication or publishing any letter or article, signed or unsigned, in favor of or against any political party, candidate, or faction; initiating, or canvassing for signatures on, community petitions or petitions to Congress. 45 In view of these prohibitions, it is little consolation to employees that the Act contradictorily says that they may 'express their opinions on all political subjects and candidates.' For this permission to 'express their opinions,' is, the Commission has rightly said, 'subject to the prohibition that employees may not take any active part in * * * political campaigns.' The hopeless contradiction between this privilege of an employee to talk and the prohibition against his talking stands out in the Commission's further warning to all employees that they can express their opinio § publicly, but 'Public expression of opinion in such way as to constitute taking an active part in political management or in political campaigns is accordingly prohibited.' Thus, whatever opinions employees may dare to express, even secretly, must be at their peril. They cannot know what particular expressions may be reported to the Commission and held by it to be a sufficient political activity to cost them their jobs. Their peril is all the greater because of another warning by the Commission that 'Employees are * * * accountable for political activity by persons other than themselves, including wives or husbands, if, in fact, the employees are thus accomplishing by collusion and indirection what they may not lawfully do directly and openly.' Thus are the families of public employees stripped of their freedom of political action. The result is that the sum of political privilege left to government and state employees, and their families, to take part in political campaigns seems to be this: They may vote in silence; they may carefully and quietly express a political view at their peril; and they may become 'spectators' (this is the Commission's word) at campaign gatherings, though it may be highly dangerous for them to 'second a motion' or let it be known that they agree or disagree with a speaker. 46 All of the petitioners here challenge the constitutional validity of that sentence of § 9 of the statute which prohibits all federal employees from taking 'any active part in political management or in political campaigns' and which by reference only sweeps under this prohibition all thenexisting civil service regulations. The charge is that this provision, thus supplemented by the regulations, violates the First Amendment by prohibiting freedom of press, speech, and assembly; that it violates the Fifth Amendment because it effects an arbitrary and gross discrimination between government employees covered and those exempted; that it also violates the Fifth Amendment because it is so vague and indefinite as to prohibit lawful activities as well as activities which are properly made unlawful by other provisions of law. Thus, these attacks of Poole and all the other petitioners are identical, namely, that the provision is unconstitutional on its face. The Court decides this question against Poole after holding that his case presents a justiciable controversy. I think Poole's challenge to the constitutionality of the provision should be sustained. And since I agree with Mr. Justice DOUGLAS that all the petitioners' complaints state a case or controversy, and show threats of imminent irreparable damages, I think that the contention that the challenged provision is unconstitutional on its face should be sustained as to all of them. 47 Had this measure deprived five million farmers, or a million businessmen of all right to participate in elections, because Congress thought that federal farm or business subsidies might prompt some of them to exercise, or be susceptible to, a corrupting influence on politics or government, I would not sustain such an Act on the ground that it could be interpreted so as to apply only to some of them. Certainly laws which restrict the liberties guaranteed by the First Amendment should be narrowly drawn to meet the evil aimed at and to affect only the minimum number of people imperatively necessary to prevent a grave and imminent danger to the public.5 Furthermore, what federal employees can or cannot do, consistently with the various civil service regulations, rules, warnings, etc., is a matter of so great uncertainty that no person can even make an intelligent guess. This was demonstrated by the government's briefs and oral arguments in this case. I would hold that the provision here attacked is too broad, ambiguous, and uncertain in its consequences to be made the basis of removing deserving employees from their jobs. See dissenting opinion, Williams v. North Carolina, 325 U.S. 226, 261, 276—278, 65 S.Ct. 1092, 1109, 1116 1117, 89 L.Ed. 1577, 157 A.L.R. 1366, and cases collected, n. 16. 48 The right to vote and privately to express an opinion on political matters, important though they be, are but parts of the broad freedoms which our Constitution has provided as the bulwark of our free political institutions. Popular government, to be effective, must permit and encourage much wider political activity by all the people.6 Real popular government means 'that men may speak as they think on matters vital to them and that falsehoods may be exposed through the processes of education and discussion * * *. Those who won our independence had confidence in the power of free and fearless reasoning and communication of ideas to discover and spread political and economic truth.' Thornhill v. State of Alabama, 310 U.S. 88, 95, 60 S.Ct. 736, 740, 741, 84 L.Ed. 1093. Legislation which muzzles several million citizens threatens popular government, not only because it injures the individuals muzzled, but also, because of its harmful effect on the body politic in depriving it of the political participation and interest of such a large segment of our citizens. Forcing public employees to contribute money and influence can well be proscribed in the interest of 'clean politics' and public administration. But I think the Constitution prohibits legislation which prevents millions of citizens from contributing their arguments, complaints, and suggestions to the political debates which are the essence of our democracy; prevents them from engaging in organizational activity to urge others to vote and take an interest in political affairs; bars them from performing the interested citizen's duty of insuring that his and his fellow citizens' votes are counted. Such drastic limitations on the right of all the people to express political opinions and take political action would be inconsistent with the First Amendment's guaranty of freedom of speech, press, assembly, and petition. And it would violate, or come dangerously close to violating, Article I and the Seventeenth Amendment of the Constitution, which protect the right of the people to vote for their Congressmen and their United States Senators and to have their votes counted. See Ex parte Yarbrough, 110 U.S. 651, 4 S.Ct. 152, 28 L.Ed. 274; United States v. Mosley, 238 U.S. 383, 35 S.Ct. 904, 59 L.Ed. 1355; United States v. Classic, 313 U.S. 299, 314, 61 S.Ct. 1031, 1037, 85 L.Ed. 1368. 49 There is nothing about federal and state employees as a class which justifies depriving them or society of the benefits of their participation in public affairs. They, like other citizens, pay taxes and serve their country in peace and in war. The taxes they pay and the wars in which they fight are determined by the elected spokesmen of all the people. They come from the same homes, communities, schools, churches, and colleges as do the other citizens. I think the Constitution guarantees to them the same right that other groups of good citizens have to engage in activities which decide who their elected representatives shall be. 50 No statute of Congress has ever before attempted so drastically to stifle the spoken and written political utterances and lawful political activities of federal and state employees as a class. The nearest approach was the Civil Service Act of 1883, 22 Stat. 403, 4, which authorized the President to promulgate rules so that among other things no Government employee should 'use his official authority or influence to coerce the political action of any person or body. In 1907, the Civil Service Commission, purporting to act under authority of the 1883 Act, did, as the Court points out, prohibit civil service employees from taking 'an active part in political management or in political campaigns.' But this Court has not approved the statutory power of the Commission to promulgate such a rule, nor has it ever expressly or by implication approved the constitutional validity of any such sweeping abridgement of the right of freedom of expression. Neither Ex parte Curtis, 106 U.S. 371, 1 S.Ct. 381, 27 L.Ed. 232, nor United States v. Wurzbach, 280 U.S. 396, 50 S.Ct. 167, 74 L.Ed. 508, lend the slightest support to the present statute. Both of these cases related to statutes which did no more than limit the right of employees to collect money from other employees for political purposes. Indeed, the Curtis decision seems implicitly to have rested on the assumption that many political activities of Government employees, beyond merely voting and speaking secretly, would not, and could not under the Constitution, be impaired by the legislation there at issue. Ex parte Curtis, supra, 106 U.S. at page 375, 1 S.Ct. at page 385. 51 It is argued that it is in the interest of clean politics to suppress political activities of federal and state employees. It would hardly seem to be imperative to muzzle millions of citizens because some of them, if left their constitutional freedoms, might corrupt the political process. All political corruption is not traceable to state and federal employees. Therefore, it is possible that other groups may later be compelled to sacrifice their right to participate in political activities for the protection of the purity of the Government of which they are a part. 52 It may be true, as contended, that some higher employees, unless restrained, might coerce their subordinates or that Government employees might use their official position to coerce other citizens. But is such a possibility of coercion of a subordinate by his employer limited to governmental employer-employee relationships?7 The same quality of argument would support a law to suppress the political freedom of all employees of private employers, and particularly of employers who borrow money or draw subsidies from the Government. Nor does it seem plausible that all of the millions of public employees whose rights to free expression are here stifled, might, if they participate in elections, coerce other citizens not employed by the Government or the States. Poole, one of the petitioners here, is a roller in a government printing office. His job is about on a par in terms of political influence with that of most other state, federal, and private business employees. Such jobs generally do not give such employees who hold them sufficient authority to enable them to wield a dangerous or coercive influence on the political world. If the possibility exists that some other public employees may, by reason of their more influential positions, coerce other public employees or other citizens, laws can be drawn to punish the coercers.8 It hardly seems consistent with our system of equal justice to all to suppress the political and speaking freedom of millions of good citizens because a few bad citizens might engage in coercion.9 53 It may also be true, as contended, that if public employees are permitted to exercise a full freedom to express their views in political campaigns, some public officials will discharge some employees and grant promotion to others on a political rather than on a merit basis. For the same reason other public officials, occupying positions of influence, may use their influence to have their own political supporters appointed or promoted. But here again, if the practice of making discharges, promotions or recommendations for promotions on a political basis is so great an evil as to require legislation, the law could punish those public officials who engage in the practice. To punish millions of employees and to deprive the nation of their contribution to public affairs, in order to remove temptation from a proportionately small number of public officials, seems at the least to be a novel method of suppressing what is thought to be an evil practice. 54 Our political system, different from many others, rests on the foundation of a belief in rule by the people—not some, but all the people. Education has been fostered better to fit people for self-expression and good citizenship. In a country whose people elect their leaders and decide great public issues, the voice of none should be suppressed—at least such is the assumption of the First Amendment. That Amendment, unless I misunderstand its meaning, includes a command that the Government must, in order to promote its own interest, leave the people at liberty to speak their own thoughts about government, advocate their own favored governmental causes, and work for their own political candidates and parties. 55 The section of the Act here held valid reduces the constitutionally protected liberty of several million citizens to less than a shadow of its substance. It relegates millions of federal, state, and municipal employees to the role of mere spectators of events upon which hinge the safety and welfare of all the people, including public employees. It removes a sizable proportion of our electorate from full participation in affairs destined to mould the fortunes of the Nation. It makes honest participation in essential political activities an offense punishable by proscription from public employment. It endows a governmental board with the awesome power to censor the thoughts, expressions, and activities of law-abiding citizens in the field of free expression from which no person should be barred by a government which boasts that it is a government of, for, and by the people—all the people. Laudable as its purpose may be, it seems to me to hack at the roots of a Government by the people themselves; and consequently I cannot agree to sustain its validity. 56 Mr. Justice DOUGLAS, dissenting in part. 57 I disagree with the Court on two of the four matters decided. 58 First. There are twelve individual appellants here asking for an adjudication of their rights.1 The Court passes on the claim of only one of them, Poole. It declines to pass on the claims of the other eleven on the ground that they do not present justiciable cases or controversies. With this conclusion I cannot agree. 59 It is clear that the declaratory judgment procedure is available in the federal courts only in cases involving actual controversies and may not be used to obtain an advisory opinion in a controversy not yet arisen. Coffman v. Breeze Corporations, 323 U.S. 316, 324, 325, 65 S.Ct. 298, 302, 303, 89 L.Ed. 264, and cases cited. The requirement of an 'actual controversy, which is written into the statute (Judicial Code § 274d, 28 U.S.C. § 400, 28 U.S.C.A. § 400) and has its roots in the Constitution (Article III, § 2) seems to me o be fully met here. 60 What these appellants propose to do is plain enough. If they do what they propose to do, it is clear that they will be discharged from their positions. The analysis of the situation by the District Court seems to me to be accurate and conclusive: 61 'The mere existence of the statute, saying that they shall not engage in political activity, the penalty in the statute that they shall be dismissed if they do, and the warning addressed to them by the Civil Service Commission in their posters certainly prevent them from engaging in such activity, if the statute is constitutional. If the statute is unconstitutional, they are being prevented from things which they have the right to do. If the statute is constitutional, it is mandatory that they be dismissed for doing such things. * * * The provisions of Civil Service Rule XV that in case of any violation of the Civil Service Act or Rules or of any Executive Order or any regulation of the Commission the Commission shall certify the facts to the proper appointing officer with specific instructions as to discipline or dismissal is now controlled by the provisions of the Hatch Act that in case of violation of Section 9(a) of that Act, dismissal is mandatory.' 56 F.Supp. 621, 624. 62 Their proposed conduct is sufficiently specific to show plainly that it will violate the Act. The policy of the Commission and the mandate of the Act leave no lingering doubt as to the consequences.2 63 On a discharge these employees would lose their jobs, their seniority, and other civil service benefits. They could, of course, sue in the Court of Claims. United States v. Lovett, 328 U.S. 303, 66 S.Ct. 1073. But the remedy there is a money judgment, not a restoration to the office formerly held. Of course, there might be other remedies available in these situations to determine their rights to the offices from which they are discharged. See White v. Berry, 171 U.S. 366, 377, 18 S.Ct. 917, 921, 43 L.Ed. 199. But to require these employees first to suffer the hardship of a discharge is not only to make them incur a penalty; it makes inadequate, if not wholly illusory, any legal remedy which may have.3 Men who must sacrifice their means of livelihood in order to test their rights to their jobs must either pursue prolonged and expensive litigation as unemployed persons or pull up their roots, change their life careers, and seek employment in other fields. At least to the average person in the lower income groups the burden of taking that course is irreparable injury,4 cf. Ex parte Young, 209 U.S. 123, 165, 28 S.Ct. 441, 456, 52 L.Ed. 714, 13 L.R.A.,N.S., 932, 14 Ann.Cas. 764, no matter how exact the required showing. Cf. Watson v. Buck, 313 U.S. 387, 400, 61 S.Ct. 962, 966, 85 L.Ed. 1416. 64 The declaratory judgment procedure may not, of course, be used as a substitute for other equitable remedies to defeat a legislative policy, Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 300, 301, 63 S.Ct. 1070, 1074, 87 L.Ed. 1407 or to circumvent the necessity of exhausting administrative remedies. Order of Ry. Conductors v. Penn. R. Co., 323 U.S. 166, 65 S.Ct. 222, 89 L.Ed. 154; Macauley v. Waterman S.S. Corp., 327 U.S. 540, 66 S.Ct. 712. But it fills a need and serves a high function previously 'performed rather clumsily by our equitable proceedings and inadequately by the law courts.' H.R.No.1264, 73d Cong., 2d Sess., p. 2.5 65 The declaratory judgment procedure is designed 'to declare rights and other legal relations of any interested party * * * whether or not further relief is or could be prayed'. Judicial Code § 274d, 28 U.S.C. § 400, 28 U.S.C.A. § 400. The fact that equity would not restrain a wrongful removal of an office holder but would leave the complainant to his legal remedies, White v. Berry, supra, is, therefore, immaterial. A judgment which, without more, adjudicates the status of a person is permissible under the Declaratory Judgment Act. Perkins v. Elg, 307 U.S. 325, 349, 350, 59 S.Ct. 884, 896, 83 L.Ed. 1320. The 'declaration of a status was perhaps the earliest exercise of this procedure.' H.R.No.1264, 73d Cong., 2d Sess., p. 2. The right to hold an office or public position against such threats is a common example of its use.6 Borchard, Declaratory Judgments (2d ed.), pp. 858 et seq. Declaratory relief is the singular remedy available here to preserve the status quo while the constitutional rights of these appellants to make these utterances and to engage in these activities are determined. The threat against them is real not fanciful, immediate not remote. The case is therefore an actual not a hypothetical one.7 And the present case seems to me to be a good example of a situation where uncertainty, peril, and insecurity result from imminent and immediate threats to asserted rights. 66 Since the Court does not reach the constitutionality of the claims of these eleven individual appellants, a discussion of them would seem to be premature. 67 Second. Poole is not in the administrative category of civil service. He is an industrial worker—a roller in the mint, a skilled laborer or artisan whose work or functions in no way affect the policy of the agency nor involve relationships with the public. There is a marked difference in the British treatment of administrative and industrial employees under civil service.8 And the difference between the two is for me relevant to the problem we have here. 68 The civil service system has been called 'the one great political invention' of nineteenth century democracy.9 The intricacies of modern government, the important and manifold tasks it performs, the skill and expertise required, the vast discretionary powers vested in the various agencies, and the impact of their work on individual claimants as well as on the general welfare have made the integrity, devotion, and skill of the men and women who compose the system a matter of deep concern of many thoughtful people.10 Political fortunes of parties will ebb and flow; top policy men in administrations will come and go; new laws will be passed and old ones amended or repealed. But those who give continuity to administration, those who contribut the basic skill and efficiency to the daily work of government, and those on whom the new as well as the old administration is dependent for smooth functioning of the complicated machinery of modern government are the core of the civil service. If they are beneficiaries of political patronage rather than professional careerists, serious results might follow—or so Congress could reasonably believe. Public confidence in the objectivity and integrity of the civil service system might be so weakened as to jeopardize the effectiveness of administrative government. Or it might founder on the rocks of incompetency, if every change in political fortunes turned out the incumbents, broke the continuity of administraton, and thus interfered with the development of expert management at the technical levels. Or if the incumbents were political adventurers or party workers, partisanship might color or corrupt the processes of administration of law with which most of the administrative agencies are entrusted. 69 The philosophy is to develop a civil service which can and will serve loyally and equally well any political party which comes into power.11 70 Those considerations might well apply to the entire group of civil servants in the administrative category-whether they are those in the so-called expert classification or are clerks, stenographers and the like. They are the ones who have access to the files, who meet the public, who arrange appointments, who prepare the basic data on which policy decisions are made. Each may be a tributary, though perhaps a small one, to the main stream which we call policy making or administrative action. If the element of partisanship enters into the official activities of any member of the group it may have its repercussions or effect throughout the administrative process. Thus in that type of case there would be much to support the view of the Court that Congress need not undertake to draw the line to include only the more important offices but can take the precaution of protecting the whole by insulating even the lowest echelon from partisan activities. 71 So, I think that if the issues tendered by Poole were tendered by an administrative employee, we would have quite a different case. For Poole claims the right to work as a ward executive committeeman, i.e., as an office holder in a political party. 72 But Poole, being an industrial worker, is as remote from contact with the public or from policy making or from the functioning of the administrative process as a charwoman. The fact that he is in the classified civil service is not, I think, relevant to the question of the degree to which his political activities may be curtailed. He is in a position not essentially different from one who works in the machine shop of a railroad or steamship which the Government runs, or who rolls aluminum in a manufacturing plant which the Government owns and operates. Can all of those categories of industrial employees constitutionally be insulated from American political life? If at some future time it should come to pass in this country, as it has in England, that a broad policy of state ownership of basic industries is inaugurated, d es this decision mean that all of the hundreds of thousands of industrial workers affected could be debarred from the normal political activity which is one of our valued traditions? 73 The evils of the 'spoils' system do not, of course, end with the administrative group of civil servants. History shows that the political regimentation of government industrial workers produces its own crop of abuses. Those in top policy posts or others in supervisory positions might seek to knit the industrial workers in civil service into a political machine. As a weapon they might seek to make the advancement of industrial workers dependent on political loyalty, on financial contributions, or on other partisan efforts. Or political activities of these workers might take place on government premises, on government time, or otherwise at government expense. These are specific evils which would require a specific treatment. 74 There is, however, no showing of any such abuse here. What Poole did, he did on his own without compulsion or suggestion or invitation from any one higher up. Nor does it appear that what he did was done on government time or on government premises. Moreover, as Mr. Justice BLACK points out laws can be drawn to punish those who use such coercion. See Ex parte Curtis, 106 U.S. 371, 1 S.Ct. 381, 27 L.Ed. 232. Such activity is more than the exercise of political prerogatives; it is the use of official power as well, and hence can be restrained or punished. Cf. Bakery and Pastry Drivers and Helpers Local 802 of International Brotherhood of Teamsters v. Wohl, 315 U.S. 769, 776, 777, 62 S.Ct. 816, 819, 820, 86 L.Ed. 1178; Thomas v. Collins, 323 U.S. 516, 543, 544, 65 S.Ct. 315, 328, 329, 89 L.Ed. 430. 75 The question is whether a permissible remedy is complete or partial political sterilization of the industrial group. There is, of course, the possibility of the mobilization whether voluntary or otherwise, of millions of employees of the federal Government and federally assisted state agencies for the purpose of maintaining a particular party or group in power. The marked increase in the number of Government employees in recent years has accentuated the problem. The difficulty lies in attempting to preserve our democratic way of life by measures which deprive a large segment of the population of all political rights except the right to vote. Absent coercion, improper use of government position or government funds, or neglect or inefficiency in the performance of duty, federal employees have the same rights as other citizens under the Constitution. They are not second class citizens. If, in exercise of their rights, they find common political interests and join with each other or other groups in what they conceive to be their interests or the interests of the nation, they are simply doing what any other group might do. In other situations where the balance was between constitutional rights of individuals and a community interest which sought to qualify those rights, we have insisted that the statute be 'narrowly drawn to define and punish specific conduct as constituting a clear and present danger to a substantial interest' of government. Cantwell v. State of Connecticut, 310 U.S. 296, 311, 60 S.Ct. 900, 906, 84 L.Ed. 1213, 128 A.L.R. 1352. And see Murdock v. Commonwealth of Pennsylvania, 319 U.S. 105, 116, 63 S.Ct. 870, 876, 87 L.Ed. 1292, 146 A.L.R. 81; Thornhill v. State of Alabama, 310 U.S. 88, 104, 105, 60 S.Ct. 736, 745, 84 L.Ed. 1093. 76 That seems to me the proper course to follow here. The prohibition in § 9(a) of the Hatch Act against government employees taking an 'active part in political management or in political campaigns' applies without discrimination to all employees whether industrial or administrative. The same is true of the Civil Service Rules. See Rules I, § 1, XV, 5 C.F.R.Cum.Supp., §§ 1.1, 15.1. But the supposed evils are both different and narrower in case of industrial workers than they are in the case of the administrative gro p.12 The public interest in the political activity of a machinist or elevator operator or charwoman is a distinct and different problem.13 In those cases the public concern is in the preservation of an unregimented industrial group, in a group free from political pressures of superiors who use their official power for a partisan purpose. Then official power is misused, perverted. The Government is corrupted by making its industrial workers political captives, victims of bureaucratic power, agents for perpetuating one party in power. 77 Offset against that public concern are the interests of the employees in the exercise of cherished constitutional rights. The nature and importance of those rights have been fully expounded in Mr. Justice BLACK'S opinion. If those rights are to be qualified by the larger requirements of modern democratic government, the restrictions should be narrowly and selectively drawn to define and punish the specific conduct which constitutes a clear and present danger to the operations of government. It seems plain to me that that evil has its roots in the coercive activity of those in the hierarchy who have the power to regiment the industrial group or who undertake to do so. To sacrifice the political rights of the industrial workers goes far beyond any demonstrated or demonstrable need. Those rights are too basic and fundamental in our democratic political society to be sacrificed or qualified for anything short of a clear and present danger to the civil service system. No such showing has been made in the case of these industrial workers,14 which justifies their political sterilization as distinguished from selective measures aimed at the coercive practices on which the spoils system feeds. * Another controversy under the same act is decided today. State of Oklahoma v. United States Civil Service Commission, 330 U.S. 127, 67 S.Ct. 544. 1 August 2, 1939, 53 Stat. 1147, July 19, 1940, 54 Stat. 767, 56 Stat. 181, 986, 58 Stat. 136, 727, 59 Stat. 108, 658, 60 Stat., ch. 904, Pub.Law 684, 18 U.S.C.A. § 61 et seq. Only the first two are important for consideration of this case. 2 18 U.S.C. § 61h, 18 U.S.C.A. § 61h: '(a) It shall be unlawful for any person employed in the executive branch of the Federal Government, or any agency or department thereof, to use his official authority or influence for the purpose of interfering with an election or affecting the result thereof. No officer or employe in the executive branch of the Federal Government, or any agency or department thereof, except a part-time officer or part-time employee without compensation or with nominal compensation serving in connection with the existing war effort, other than in any capacity relating to the procurement or manufacture of war material shall take any active part in political management or in political campaigns. All such persons shall retain the right to vote as they may choose and to express their opinions on all political subjects and candidates. For the purposes of this section the term 'officer' or 'employee' shall not be construed to include (1) the President and Vice President of the United States; (2) persons whose compensation the result thereof. No officer or employee for the office of the President; (3) heads and assistant heads of executive departments; (4) officers who are appointed by the President, by and with the advice and consent of the Senate, and who determine policies to be pursued by the United States in its relations with foreign powers or in the Nationwide administration of Federal Laws. * * * '(b) Any person violating the provisions of this section shall be immediately removed from the position or office held by him, and thereafter no part of the funds appropriated by any Act of Congress for such position or office shall be used to pay the compensation of such person.' 53 Stat. 1147, 1148; 54 Stat. 767; 56 Stat. 181. 3 18 U.S.C. § 61o, 18 U.S.C.A. § 61o. 'The provisions of this subchapter which prohibit persons to whom such provisions apply from taking any active part in political management or in political campaigns shall be deemed to prohibit the same activities on the part of such persons as the United States Civil Service Commission has heretofore determined are at the time this section takes effect prohibited on the part of employees in the classified civil service of the United States by the provisions of the civil-service rules prohibiting such employees from taking any active part in political management or in political campaigns.' 54 Stat. 767, 771. 4 See Civil Service Act (1883), § 2, 22 Stat. 403, 404, 5 U.S.C.A. § 633: 'Sec. 2. That it shall be the duty of said commissioners: 'First. To aid the President, as he may request, in preparing suitable rules for carrying this act into effect, and when said rules shall have been promulgated it shall be the duty of all officers of the United States in the departments and offices to which any such rules may relate to aid, in all proper ways, in carrying said rules, and any modifications thereof, into effect. 'Second. And, among other things, said rules shall provide and declare, as nearly as the conditions of good administration will warrant, as follows: 'Sixth, that no person in said service has any right to use his official authority or influence to coerce the political action of any person or body.' 5 U.S.C. § 631, 5 U.S.C.A. § 631: 'The President is authorized to * * * establish regulations for the conduct of persons who may receive appointments in the civil service.' First Annual Report, Civil Service Commission, Ex. Doc. No. 105, 48th Cong., 1st Sess., p. 45: 'In the exercise of the power vested in the President by the Constitution, and by virtue of the 1753d section of the Revised Statutes, and of the civil service act approved January 16, 1883, the following rules for the regulation and improvement of the executive civil service are hereby amended and promulgated: RULE I. 'No person in said service shall use his official authority or influence either to coerce the political action of any person or body or to interfere with any election.' Executive Order No. 642, June 3, 1907 (amended to consolidate without changing wording, Executive Order No. 655, June 15, 1907); Twenty-Fourth Annual Report, Civil Service Commission, House Doc. No. 600, 60th Cong., 1st Sess., p. 104: 'Section 1 of Rule I of the civil-service rules is hereby amended to read as follows: 'No person in the Executive civil service shall use his official authority or influence for the purpose of interfering with an election or affecting the result thereof. Persons who, by the provisions of these rules are in the competitive classified service, while retaining the right to vote as they please and to express privately their opinions on all political subjects, shall take no active part in political management or in political campaigns.' 5 Civil Service Rules 15, 3 Fed.Reg. 1525. 6 5 C.F.R., Cum.Supp., § 1.1: 'No interference with elections. No person in the executive civil service shall use his official authority or influence for the purpose of interfering with an election or affecting the results thereof. Persons who by the provisions of the rules in this chapter are in the competitive classified service, while retaining the right to vote as they please and to express their opinion on all political subjects, shall take no active part in political management or in political campaigns.' Section 15.1 'Legal appointment necessary to compensation. Whenever the Commission finds, after due notice and opportunity for explanation, that any person has been appointed to or is holding any position, whether by original appointment, promotion, assignment, transfer, or reinstatement, in violation of the Civil Service Act or Rules, or of any Executive Order or any regulation of the Commission, or that any employee subject thereto has violated such Act, Rules, orders, or regulations, it shall certify the facts to the proper appointing officer with specific instructions as to discipline or dismissal of the person or employee affected. If the appointing officer fails to carry out the instructions of the Commission within 10 days after receipt thereof, the Commission shall certify the facts to the proper disbursing and auditing officers, and such officers shall make no payment or allowance of the salary or wages of any such person or employee thereafter accruing.' See E.O. 8705, March 5, 1941, 6 Fed.Reg. 1313. 7 See note 4, supra, and 5 C.F.R. § 1.1, June 1, 1938. A change occurred also in Rule 15. This was to comply with a ruling of the Attorney General that the Hatch Act made removal from office a mandatory penalty for forbidden political activity. 40 Op.A.G. 1. See note 5, supra, for Rule 15 prior to Hatch Act. 8 See 28 U.S.C. § 380a, 28 U.S.C.A. § 380a; § 11—306, District of Columbia Code. 9 Judicial Code § 274d, 28 U.S.C. § 400, 28 U.S.C.A. § 400. 10 No contention that appellant, United Public Workers of America (C.I.O), lacked capacity to bring this action is made by appellees. We need not consider the question here. McCandless v. Furlaud, 293 U.S. 67, 73, 74, 55 S.Ct. 42, 44, 45, 79 L.Ed. 202. See Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 66 S.Ct. 1105. 11 'In discharge of their duties of citizenship, of their right to vote, and in exercise of their constitutional rights of freedom of speech, of the press, of assembly, and the right to engage in political activity, the individual plaintiffs desire to engage in the following acts: write for publication letters and articles in support of candidates f r office; be connected editorially with publications which are identified with the legislative program of UFWA (former name of the present union appellant) and candidates who support it; solicit votes, aid in getting out voters, act as accredited checker, watcher, or challenger; transport voters to and from the polls without compensation therefor; participate in and help in organizing political parades; initiate petitions, and canvass for the signatures of others on such petitions; serve as party ward committeeman or other party official; and perform any and all acts not prohibited by any provision of law other than the second sentence of Section 9(a) and Section 15 of the Hatch Act, which constitute taking an active part in political management and political campaigns.' 12 'The second sentence of Section 9(a) of the Hatch Act is repugnant to the Constitution of the United States as a deprivation of freedom of speech, of the press, and of assembly in violation of the First Amendment. 'The second sentence of Section 9(a) of the Hatch Act is repugnant to the Constitution of the United States as a deprivation of the fundamental right of the people of the United States to engage in political activity, reserved to the people of the United States by the Ninth and Tenth Amendments. 'The second sentence of Section 9(a) of the Hatch Act is repugnant to the Constitution of the United States, since it unreasonably prohibits Federal employees from engaging in activities which may be lawfully carried on by persons who are not Federal employees, thus constituting a deprivation of liberty in violation of the Fifth Amendment. 'The second sentence of Section 9(a) of the Hatch Act is repugnant to the Constitution of the United States since it effects an arbitrary and grossly unreasonable discrimination between employees of the Federal Government in the classified civil service subject to its provisions and employees specifically exempted therefrom, in violation of the Fifth Amendment. 'The second sentence of Section 9(a) of the Hatch Act is repugnant to the Constitution of the United States since it is so vague and indefinite as to prohibit lawful activities as well as activities which are properly made unlawful by other provisions of law, in violation of the Fifth Amendment.' 13 Rules of the Supreme Court of the United States, Rule 47, 28 U.S.C.A. following section 354: 'Appeals to this court under the Act of August 24, 1937, shall be governed, as far as may be, by the rules of this court regulating the procedure on appeal in other cases from courts of the United States; * * * The record shall be made up and the case docketed in this court within sixty days from the time the appeal is allowed.' 14 Id., Rule 11: '1. It shall be the duty of the appellant to docket the case and file the record thereof with the clerk of this court by or before the return day, whether in vacation or in term time. But, for good cause shown, the justice or judge who signed the citation, or any justice of this court, may enlarge the time, before its expiration, the order of enlargement to be filed with the clerk of this court. If the appellant shall fail to comply with this rule, the appellee may have the cause docketed and the appeal dismissed upon producing a certificate, whether in term or vacation, from the clerk of the court wherein the judgment or decree was rendered, stating the case and certifying that such appeal has been duly allowed. And in no case shall the appellant be entitled to docket the cause and file the record after the appeal shall have been dismissed under this rule, unless by special leave of the court.' 15 Steps allowed in the district court after the allowance of appeal, such as preparation of the record, extension of time and cost or supersedeas bonds, are for convenience taken in the court possessed of the record. Rules 10, 11 and 36, Supreme Court, 28 U.S.C.A. following section 354; Rule 72, Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. 16 3 Cranch 239; Bingham v. Morris, 7 Cranch 99, 3 L.Ed. 281; Sparrow v. Strong, 3 Wall. 97, 103, 18 L.Ed. 49. Compare Grigsby v. Purcell, 99 U.S. 505, 9 Otto 505, 25 L.Ed. 354. 17 Compare Georgia Hardwood Lumber Co. v. Compania De Navegacion Transmar, S.A., 323 U.S. 334, 65 S.Ct. 293, 89 L.Ed. 280. 18 'At this time, when the fate of the entire world is in the balance, I believe it is not only proper but an obligation for all citizens to participate actively in the making of the vital political decisions on which the success of the war and the permanence of the peace to follow so largely depend. For the purpose of participating in the making of these decisions it is my earnest desire to engage actively in political management and political campaigns. I wish to engage in such activity upon my own time, as a private citizen. 'I wish to engage in such activities on behalf of those candidates for public office who I believe will best serve the needs of this country and with the object of persuading others of the correctness of my judgments and of electing the candidates of my choice. This objective I wish to pursue by all proper means such as engaging in discussion, by speeches to convention , rallies and other assemblages, by publicizing my views in letters and articles for publication in newspapers and other periodicals, by aiding in the campaign of candidates for political office by posting banners and posters in public places, by distributing leaflets, by 'ringing doorbells', by addressing campaign literature, and by doing any and all acts of like character reasonably designed to assist in the election of candidates I favor. 'I desire to engage in these activities freely, openly, and without concealment. However, I understand that the second sentence of Section 9(a) of the Hatch Act and the Rules of the C.S.C. provide that if I engage in this activity, the Civil Service Commission will order that I be dismissed from federal employment. Such deprivation of my job in the federal government would be a source of immediate and serious financial loss and other injury to me. 'At the last Congressional election I was very much interested in the outcome of the campaign and offered to help the party of my choice by being a watcher at the polls. I obtained a watcher's certificate but I was advised that there might be some question of my right to use the certificate and retain my federal employment. Therefore, on November 1, 1943, the day before election, I called the regional office of the Civil Service Commission in Philadelphia and spoke to a person who gave his name as * * *. Mr. * * * stated that if I used my watcher's certificate, the Civil Service Commission would see that I was dismissed from my job at the * * * for violation of the Hatch Act. I, therefore, did not use the certificate as I had intended. 'I believe that Congress may not constitutionally abridge my right to engage in the political activities mentioned above. However, unless the courts prevent the Civil Service Commission from enforcing this unconstitutional law, I will be unable freely to exercise my rights as a citizen.' (Identifying words omitted.) 19 Correspondence & Public Papers of John Jay, Vol. 3, p. 486; Hayburn's Case and notes, 2 Dall. 409, 1 L.Ed. 436; Alabama v. Arizona, 291 U.S. 286, 291, 54 S.Ct. 399, 401, 78 L.Ed. 798; Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461, 65 S.Ct. 1384, 1389, 89 L.Ed. 1725. 20 Electric Bond & Share Co. v. Securities and Exchange Commission, 303 U.S. 419, 443, 58 S.Ct. 678, 687, 82 L.Ed. 936, 115 A.L.R. 105; United States v. Appalachian Electric Power Co., 311 U.S. 377, 423, 61 S.Ct. 291, 306, 85 L.Ed. 243; Alabama State Federation of Labor v. McAdory, supra, 325 U.S. at page 461, 5 S.Ct. at page 1389, 89 L.Ed. 1725, and cases cited; Coffman v. Breeze Corporations, 323 U.S. 316, 324, 65 S.Ct. 298, 302, 89 L.Ed. 264, and cases cited. 21 Altvater v. Freeman, 319 U.S. 359, 363, 63 S.Ct. 1115, 1117, 87 L.Ed. 1450. 22 It has long been this Court's 'considered practice not to decide abstract, hypothetical or contingent questions, * * * or to decide any constitutional question in advance of the necessity for its decision, * * * or to formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied, * * * or to decide any constitutional question except with reference to the particular facts to which it is to be applied, * * *.' Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 461, 65 S.Ct. 1384, 1389, 89 L.Ed. 1725, and cases cited. See Alma Motor Co. v. Timken-Detroit Axle Co., 329 U.S. 129, 67 S.Ct. 231. 23 'I have for a long time been interested in political activities. Both before and since my employment in the United States Mint, I have taken an active part in political campaigns and political management. In the 28th Ward, 7th Division in the City of Philadelphia I am and have been a Ward Executive Committeeman. In that position I have on many occasions taken an active part in political management and political campaigns. I have visited the residents of my Ward and solicited them to support my party and its candidates; I have acted as a watcher at the polls; I have contributed money to help pay its expenses; I have circulated campaign literature, placed banners and posters in public places, distributed leaflets, assisted in organizing political rallies and assemblies, and have done any and all acts which were asked of me in my capacity as a Ward Executive Committeeman. I have engaged in these activities both before and after my employment in the United States Mint. I intend to continue to engage in these activities on my own time as a private citizen, openly, freely, and without concealment. 'However, I have been served with a proposed order of the United States Civil Service Commission, dated January 12, 1944, which advises me that because of the political activities mentioned above, and for no other reason, 'it is, * * * the opinion of this Commission that George P. Poole, an employee of the United States Mint at Philadelphia, Pennsylvania, has been guilty of political activity in violation of Section 1, Civil Service Rule I' and that unless I can refute the charges that I have engaged in political activity, I will be dismissed from my position as a Roller in the United States Mint at Philadelphia, Pennsylvania.' 24 The tentative change and finding reads: 'I. It is charged: That * * * 'The said George P. Poole held the political party office of Democratic Ward Executive Committeeman in the City of Philadelphia, Pennsylvania. 'The said George P. Poole was politically active by aiding and assisting the Democratic Party in the capacity of worker at the polls on general election day, November 5, 1940, and assisted in the distribution of funds in paying party workers for their services on general election day, November 5, 1940.' 'III. The above described activity constitutes taking an active part in political management and in a political campaign in contravention of Section 1, Civil Service Rule I, and the regulations adopted by the Commissioners thereunder.' 25 Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826; Altvater v. Freeman, 319 U.S. 359, 364, 63 S.Ct. 1115, 1118, 87 L.Ed. 1450; Nashville, C. & St. L. Ry. v. Wallace, 288 U.S. 249, 260, 53 S.Ct. 345, 347, 77 L.Ed. 730, 87 A.L.R. 1191. 26 28 U.S.C. § 400, 28 U.S.C.A. § 400: 'In cases of actual controversy (except with respect to Federal taxes) the courts of the United States shall have power upon petition, declaration, complaint, or other appropriate pleadings to declare rights and other legal relations of any interested party petitioning for such declaration, whether or not further relief is or could be prayed, and such declaration shall have the force and effect of a final judgment or decree and be reviewable as such.' Aetna Life Insurance Co. of Hartford, Conn., v. Haworth, 300 U.S. 227, 241, 57 S.Ct. 461, 464, 81 L.Ed. 617, 108 A.L.R. 1000; Nashville, C. & St. L. Ry. v. Wallace, 288 U.S. 249, 264, 53 S.Ct. 345, 348, 77 L.Ed. 730, 87 A.L.R. 1191. 27 See White v. Berry, 171 U.S. 366, 377, 18 S.Ct. 917, 921, 43 L.Ed. 199; In re Sawyer, 124 U.S. 200, 212, 8 S.Ct. 482, 488, 31 L.Ed. 402. * In Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638, a declaratory judgment proceeding, p. 46, prior to the adoption of Rule 57, a proceeding before the N.L.R.B. was required. There is statutory judicial review from that Board's decisions, however. 28 We agree with the Government that the complaint does not fail to state a cause of action against the Commission because it seeks relief against the Commission's action under the Hatch Act instead of Rule 1 of the Commission. So far as Poole's controversy is concerned, the act and the rule are the same. 29 In labor-management relationships, it has been recognized by this Court that circumstances might justify the prohibition by employers of union activity by employees on the employer's property, even though carried out during nonworking hours. Republic Aviation Corp. v. National Labor Relations Board, 324 U.S. 793, 803, 65 S.Ct. 982, 988, 89 L.Ed. 1372, 157 A.L.R. 1081. 30 Chaplinsky v. New Hampshire, 315 U.S. 568, 571, 62 S.Ct. 766, 768, 86 L.Ed. 1031; Cantwell v. Connecticut, 310 U.S. 296, 304, 310, 60 S.Ct. 900, 903, 906, 84 L.Ed. 1213, 128 A.L.R. 1352; Schneider v. State, 308 U.S. 147, 165, 60 S.Ct. 146, 152, 84 L.Ed. 155; De Jonge v. Oregon, 299 U.S. 353, 364, 57 S.Ct. 255, 259, 81 L.Ed. 278; Cox v. New Hampshire, 312 U.S. 569, 574, 61 S.Ct. 762, 765, 85 L.Ed. 1049, 133 A.L.R. 1396; Prince v. Massachusetts, 321 U.S. 158, 169, 64 S.Ct. 438, 443, 88 L.Ed. 645; Reynolds v. United States, 98 U.S. 145, 8 Otto 145, 25 L.Ed. 244. 31 106 U.S. 376, 377, 1 S.Ct. 386, 387, 27 L.Ed. 232: '* * * every citizen having the proper qualifications has the right to accept office, and to be a candidate therefor. This is a fundamental right of which the legislature cannot deprive the citizen, nor clog its exercise with conditions that are repugnant to his other fundamental rights. Such a condition I regard that imposed by the law in question to be. It prevents the citizen from co-operating with other citizens of his own choice in the promotion of his political views. * * * The whole thing seems to be absurd. Neither men's mouths nor their purses can be constitutionally tied up in that way.' 32 Kaplan, Political Neutrality of the Civil Service, 1 Pub.Pers.Rev. 10; White, Civil Service in the Modern State (1930); Mosher and Kingsley, Public Personnel Administration (1936); White, Government Career Service (1935); Meriam, Public Personnel Problems (1938). Military personnel is restricted in much the same manner. Army Regulations No. 600—10, p. 5: '6. Political activities of persons in military service.—a. General.—No member of the Army, while on active duty, will use his official authority or influence for the purpose of interfering with an election or affecting the course or outcome thereof. Such persons, while on active duty, retain the right to vote, to express their opinions privately and informally on all political subjects and candidates, and to become candidates for public office as permitted in these regulations. They will not be permitted to participate in any way in political management or political campaigns.' An interesting discussion of the general subject of interference by federal officers in elections will be found in the Appendix to the Congressional Globe, Dec. 3, 1838—Feb. 19, 1839, pp. 157, 160 and 409, 411. 33 86 Cong.Rec. 2338—2367, 2426—2442, 2696—2723, 2920—2963, 2969—2987, 9360—9380, 9426—9432, 9434—9463. 34 Richardson, Messages and Papers of the Presidents (1897), Harrison, vol. IV, p. 52; Id., Hayes, vol. VII, pp. 450—51. See note 4, supra. When in 1891 New Bedford, Mass., under a rule removed a policeman for political activity, an opinion by Mr. Justice, then Judge, Holmes disposed summarily of McAuliffe's contention that the rule invaded his right to express his political opinion with the epigram, 'The petitioner may have a constitutional right to talk politics, but he has no constitutional right to be a policeman.' McAuliffe v. New Bedford, 155 Mass. 216, 220, 29 N.E. 517. 35 Several states have similar provisions. Ala. Code (1940), tit. 12, § 157; Conn.Gen.Stat. (Supp.1939), c. 105a, § 698e; Ohio Gen.Code (Page, 1937), § 486—23; Pa.Stat.Ann. (Purdon, 1942), Tit. 71, § 741.904; R.I.Acts & Resolves, 1939, c. 661, p. 118. 36 United States Civil Service Commission, Political Activity and Political Assessments, Form 1236, January 1944. 37 'In the light of these wide variations in duties and reponsibility for public policy and its fair enforcement, a restriction reasonably designed to preserve the impartiality of a Collector of the Revenue, a U.S. Marshal, an F.B.I. or Treasury agent may be utterly absurd and unjustified when applied to a lens grinder, a stock clerk, a machinist, or an elevator operator. It is therefore impossible both to observe reasonable regard for constitutional rights and to enact sweeping prohibitions as to political rights applicable to all Federal employees whatever the nature of their duties. In dealing with so complicated and varied a subject matter, a hatchet cannot readily be substituted for a scalpel.' 38 United States Civil Service Commission, Political Activity and Political Assessments, Form 1236, September 1939: '15. Committees.—Service on or for any political committee or similar organization is prohibited. * * * '20. Activity at the polls and for candidates.—* * * 'It is the duty of an employee to avoid any offensive activity at primary and regular elections. He must refrain from soliciting votes, assisting voters to mark ballots, helping to get out the voters on registration and election days, acting as the accredited checker, watcher, or challenger of any party or faction, assisting in counting the vote, or engaging in any other activity at the polls except the marking and depositing of his own ballot.' 39 United States v. Wurzbach, 280 U.S. 396, 399, 50 S.Ct. 167, 169, 74 L.Ed. 508. 1 Those excepted are 'a part-time officer or part-time employee without compensation or with nominal compensation serving in connection with the existing war effort,' commonly designated as 'Dollar-a-year men' and '(1) the President and Vice President of the United States; (2) persons whose compensation is paid from the appropriation for the office of the President; (3) heads and assistant heads of executive departments; (4) officers who are appointed by the President, by and with the advice and consent of the Senate, and who determine policies to be pursued by the United States in its relations with foreign powers or in the Nation-wide administration of Federal Laws.' Section 9a, 18 U.S.C. § 61h(a), 18 U.S.C.A. § 61h(a). 2 'Any person violating the provisions of this section shall be immediately removed from the position or office held by him, and thereafter no part of the funds appropriated by any Act of Congress for such position or office shall be used to pay the compensation of such person.' Section 9b, 18 U.S.C. § 61h(b), 18 U.S.C.A. § 61h(b). 3 All state employees who work for any state agency financed in whole or in part by federal grants or loans are affected by the Act. Section 12(a), 18 U.S.C. 61l, 18 U.S.C.A. § 61l. In 1945 the Federal Government paid $865,729,569.15 in grants in aid to states, Annual Report of the Secretary of the Treasury on the State of the Finances, for the fiscal year ending June 30, 1945 (1946) 714, and $688,506,157.11 in direct payments to states for the social security program, public roads and emergency maternity and nfant care. Id. at 718. Grants to and expenditures within states, providing direct relief, work relief, and other aid such as the Agricultural Adjustment Program, National Housing Agency annual contributions, etc., totaled $1,353,427,735.68. Id. at 721. In July 1946 the number of persons employed by state and local governments totaled approximately 2,824,000 of whom 654,000 were employed in schools and 2,170,000 were non-school employees. Public Employment in July, 1946, Government Employment, Dept. of Commerce, Bureau of the Census, Vol. 7, No. 3 (1946) 1. A breakdown of county employees is a sample which suggests the proportion state and local whose salaries may be paid in whole or in part by federal funds thus coming under the provisions of this Act. Of a total of 310,000 non-school county employees in the entire country, 77,000 were employed in highway departments; 4,700 in natural resources; 12,600 in health and sanitation; 40,000 in hospitals; 22,000 in public welfare. County Employment in 1944, Government Employment, op. cit. supra, Vol. 5, No. 2 (1944) 7. 4 There are minor exceptions. One concession only is granted those federal employees who live 'in the immediate vicinity of the National Capital in the States of Maryland and Virginia or in municipalities the majority of whose voters are employed by the Government of the United States. * * *' The Civil Service Commission may 'permit' them to participate in campaigns involving the 'municipality or political subdivision' in which they reside 'to the extent the Commission deems to be in (their) domestic interest * * *.' Section 16, 18 U.S.C. § 61p, 18 U.S.C.A. § 61p. A general exception permits participation (1) in an 'election and the preceding campaign if none of the candidates is to be nominated or elected * * * as representing a (political) party * * * (2) in connection with any question which is not specifically identified with any National or State political party. For the purposes of this section, questions relating to constitutional amendments, referendums, approval of municipal ordinances, and others of a similar character, shall not be deemed specifically identified with any National or State political party.' § 18, 18 U.S.C. § 61r, 18 U.S.C.A. § 61r. The importance and number of political issues thus excepted, e.g. Sunday movies, local school bond issues, location of local parks, election of local officials in whom no political party is interested, are obviously very small. 5 Thornhill v. State of Alabama, 310 U.S. 88, 60 S.Ct. 736, 84 L.Ed. 1093; Marsh v. State of Alabama, 326 U.S. 501, 66 S.Ct. 276; Bridges v. State of California, 314 U.S. 252, 260, 263, 62 S.Ct. 190, 192, 194, 86 L.Ed. 192, 159 A.L.R. 1346. 6 Some states require that employers pay their employees for the time they spend away from work while voting. See People v. Ford Motor Co., 271 App.Div. 141, 63 N.Y.S.2d 697; Note, Pay While Voting, 47 Col.L.Rev. 135 (1947). 7 Many states have laws protecting non-government employees from employer interference with their voting independence. See Note, Pay While Voting, 47 Col.L.Rev. 135, 136, note 9 (1947). 8 See note 7, supra. 9 The Act, in fact, leaves free the higher officials whose positions give them the actual power to coerce subordinates and other citizens not employed by the government. § 9a, 18 U.S.C. § 61h, 18 U.S.C.A. § 61h. 1 Elkin, Senior Economic Statistician, Railroad Retirement Board; Abelson, Associate Financial Analyst, Social Security Board; Phillips, Labor Economist, War Shipping Administration; Mitchell, Wage Analyst, National War Labor Board; Fagan, Area Director, War Manpower Commission; Winegar, Senior Officer, Bureau of Prisons; Hindin, Procedural Assistant, Federal Security Agency; Rieck, Stock Clerk, Veterans Administration; Poole, Roller, United States Mint; Shane, Lens Grinder, Frankford Arsenal; Weber, Machinist Specialist, Frankford Arsenal; Tempest, Electric Welder, Philadelphia Navy Yard. 2 The case is, therefore, unlike those situations where the Court refused to entertain actions for declaratory judgments, the state of facts being hypothetical in the sense that the challenge was to statutes which had not as yet been construed or their specific application known. See Electric Bond & Share Co. v. Securities and Exchange Commission, 303 U.S. 419, 443, 58 S.Ct. 678, 687, 82 L.Ed. 936, 115 A.L.R. 105; Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 65 S.Ct. 1384, 89 L.Ed. 1725. 3 Where the legal remedy is adequate, it may be the more appropriate one. Thus in Coffman v. Breeze Corporations, supra, declaratory relief was denied a licensor of a patent who sued his licensee for an adjudication that the Royalty Adjustment Act, 35 U.S.C.A. § 89 et seq., was unconstitutional since it appeared that a suit to recover royalties was an adequate legal remedy and that the constitutional issues could be litigated there. 4 If the prayer for declaratory relief be considered separately from the prayer for an injunction, as it may be, allegations of irreparable injury threatened are not required. Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 241, 57 S.Ct. 461, 464, 81 L.Ed. 617, 08 A.L.R. 1000. 5 As stated in the Senate Report: 'The procedure has been especially useful in avoiding the necessity, now so often present, of having to act at one's peril or to act on one's own interpretation of his rights, or abandon one's rights because of a fear of incurring damages. So now it is often necessary, in the absence of the declaratory judgment procedure, to violate or purport to violate a statute in order to obtain a judicial determination of its meaning or validity * * * So now it is often necessary to break a contract or a lease, or act upon one's own interpretation of his rights when disputed, in order to present to the court a justifiable (sic) controversy. In jurisdictions having the declaratory judgment procedure, it is not necessary to bring about such social and economic waste and destruction in order to obtain a determination of one's rights * * * There seems little question that in many situations in the conduct of business serious disputes occur between parties, where, if there were a possibility of obtaining a judicial declaration of rights in a formal action, much economic waste could be avoided and social peace promoted. Persons now often have to act at their peril, a danger which could be frequently avoided by the ability to sue for a declaratory judgment as to their rights or duties.' S. Rep. No. 1005, 73d Cong., 2d Sess., pp. 2—3. And see Borchard, Declaratory Judgments (2d ed.) p. 4. 6 The case is therefore unlike one where the moving party shows no invasion of his legal rights but only possible injury to the public (Perkins v. Lukens Steel Co., 310 U.S. 113, 125, 60 S.Ct. 869, 875, 84 L.Ed. 1108) or one where no judicial remedy for the alleged wrong has been created. General Committee of Adjustment of Brotherhood of Locomotive Engineers for Missouri-K.-T. R.R. v. Missouri K.T.R. Co., 320 U.S. 323, 64 S.Ct. 146, 88 L.Ed. 76. 7 The following are cases in hich the Court has allowed actions for declaratory judgments to be entertained: Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, supra, where an insured claimed and the insurance company denied, that he had become totally and permanently disabled and hence was relieved of the obligation to continue the payment of premiums; Currin v. Wallace, 306 U.S. 1, 59 S.Ct. 379, 83 L.Ed. 441, where tobacco warehousemen and auctioneers claimed the Tobacco Inspection Act, 7 U.S.C.A. § 511 et seq., was unconstitutional; Perkins v. Elg, supra, where one claiming to be a citizen was threatened with deportation as an alien and had been declined a passport on the same ground; Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 61 S.Ct. 510, 85 L.Ed. 826, where a third party was suing an insured and the insurer sought a judgment that it was not liable to defend the insured nor to indemnify the insured if the third party recovered; Altvater v. Freeman, 319 U.S. 359, 63 S.Ct. 1115, 87 L.Ed. 1450, where royalties were being demanded and paid under protest and by reason of an injunction; Mercoid Corp. v. Minneapolis-Honeywell Regulator Co., 320 U.S. 680, 64 S.Ct. 278, 88 L.Ed. 396, where an alleged patent infringer sought a declaration of the invalidity of the patent; Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 64 S.Ct. 698, 88 L.Ed. 949, 152 A.L.R. 1014, where an employer sued representatives of its employees for an adjudication of whether portal-to-portal pay was due under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq.; Township of Hillsborough v. Cromwell, 326 U.S. 620, 66 S.Ct. 445, where a taxpayer sued in the federal court to have assessments declared invalid on the ground that they violated the federal Constitution, the state remedy being inadequate to protect the federal right; Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394, 67 S.Ct. 416, 424, where a licensee sought a declaration that he owed no royalties because of the invalidity of the patent; Order of Railway Conductors of America v. Swan, 329 U.S. 520, 67 S.Ct. 405, where it was sought to determine which division of the National Railroad Adjustment Board had jurisdiction over railroad vardmasters. Cf. Railway Mail Ass'n v. Corsi, 326 U.S. 88, 65 S.Ct. 1483, 89 L.Ed. 2072, where a labor membership corporation, which did not admit negroes and was threatened with enforcement of a state statute declaring that practice of labor organizations unlawful, sued in a state court for an adjudication that the statute could not constitutionally be applied to it. 8 Report, Committee on Parliamentary, etc., Candidature of Crown Servants (1925), pp. 12, 13. 9 Wallas, Human Nature in Politics (2d ed.), p. 263. 10 Fish, The Civil Service and The Patronage (1905); Meriam, Public Personnel Problems (1938), ch. XI; Mosher & Kingsley, Public Personnel Administration (1941), ch. XVIII; Kingsley, Representative Bureaucracy (1944), ch. X; Morstein Marx, Public Management in the New Democracy (1940), ch. XIV; Field, Civil Service Law (1939), p. 196; Dawson, The Principle of Official Independence (1922), pp. 90 et seq.; Kaplan, Political Neutrality of the Civil Service, 1 Public Personnel Rev. 10; Chen, The Doctrine of Civil Service Neutrality in Party Conflicts in the United States and Great Britain (1937). 11 See Chen, op. cit. supra note 10, ch. I; Report of President's Committee on Civil Service Improvement, H. Doc. No. 118, 77th Cong., 1st Sess., ch. III. 12 See Morstein Marx, op. cit., supra, note 10, pp. 205—206; Report of the Committee on Parliamentary, etc., Candidature of Crown Servants, supra, note 8, p. 32; Finer, The British Civil Service (1937), pp. 203, 204. 13 As stated in Morstein Marx, op. cit., supra, note 10, pp. 205—206: 'The political neutrality of a postal clerk, of a conductor on the city-owned subway system in New York, of a technician in the Chicago Sanitary district, or of an artisan in the labor class, does not have the same significance as the political neutrality of the prominent section chiefs of the Department of State or the political neutrality of an assistant to a commissioner in a New York City department. No discussion of the problem which ignores the differences between categories of employees is anything but an academic consideration of the problem. Top officialdom has such marked opportunities of shaping policy that its political behavior must be so neutral as to raise no question of a divergence in point of view between it and the executive officers of government. It is quite proper, therefore, to require the most impeccable political neutrality from such officials. But the average or typical civil servant has no more opportunity in the sphere of policy making than does the average citizen. He is entrusted with a function ministerial in nature, a routine task almost wholly unaffected by his political point of view. This principle is recognized in the English rule that industrial workers in government employment may stand for election, a privilege denied administrative employees.' 14 Whether the Act, being unconstitutional as applied to Poole, could be separably applied to civil service employees in other categories is a question I do not reach.

89

330 U.S. 1 67 S.Ct. 504 91 L.Ed. 711 EVERSONv.BOARD OF EDUCATION OF EWING TP. et al. No. 52. Argued Nov. 20, 1946. Decided Feb. 10, 1947. Rehearing Denied March 10, 1947. See 330 U.S. 855, 67 S.Ct. 962. Appeal from the Court of Errors and Appeals of the State of New jersey. Messrs. Edward R. Burke and E. Hilton Jackson, both of Washington, D.C., for appellant. Mr. William H. Speer, of Jersey City, for appellees. [Argument of Counsel from page 2 intentionally omitted] Mr. Justice BLACK delivered the opinion of the Court. 1 A New Jersey statute authorizes its local school districts to make rules and contracts for the transportation of children to and from schools.1 The appellee, a township board of education, acting pursuant to this statute authorized reimbursement to parents of money expended by them for the bus transportation of their children on regular busses operated by the public transportation system. Part of this money was for the payment of transportation of some children in the community to Catholic parochial schools. These church schools give their students, in addition to secular education, regular religious instruction conforming to the religious tenets and modes of worship of the Catholic Faith. The superintendent of these schools is a Catholic priest. 2 The appellant, in his capacity as a district taxpayer, filed suit in a State court challenging the right of the Board to reimburse parents of parochial school students. He contended that the statute and the resolution passed pursuant to it violated both the State and the Federal Constitutions. That court held hat the legislature was without power to authorize such payment under the State constitution. 132 N.J.L. 98, 39 A.2d 75. The New Jersey Court of Errors and Appeals reversed, holding that neither the statute nor the resolution passed pursuant to it was in conflict with the State constitution or the provisions of the Federal Constitution in issue. 133 N.J.L. 350, 44 A.2d 333. The case is here on appeal under 28 U.S.C. § 344(a), 28 U.S.C.A. § 344(a). 3 Since there has been no attack on the statute on the ground that a part of its language excludes children attending private schools operated for profit from enjoying state payment for their transportation, we need not consider this exclusionary language; it has no relevancy to any constitutional question here presented.2 Furthermore, if the exclusion clause had been properly challenged, we do not know whether New Jersey's highest court would construe its statutes as precluding payment of the school transportation of any group of pupils, even those of a private school run for profit.3 Consequently, we put to one side the question as to the validity of the statute against the claim that it does not authorize payment for the transportation generally of school children in New Jersey. 4 The only contention here is that the State statute and the resolution, in so far as they authorized reimbursement to parents of children attending parochial schools, violate the Federal Constitution in these two respects, which to some extent, overlap. First. They authorize the State to take by taxation the private property of some and bestow it upon others, to be used for their own private purposes. This, it is alleged violates the due process clause of the F urteenth Amendment. Second. The statute and the resolution forced inhabitants to pay taxes to help support and maintain schools which are dedicated to, and which regularly teach, the Catholic Faith. This is alleged to be a use of State power to support church schools contrary to the prohibition of the First Amendment which the Fourteenth Amendment made applicable to the states. 5 First. The due process argument that the State law taxes some people to help others carry out their private purposes is framed in two phases. The first phase is that a state cannot tax A to reimburse B for the cost of transporting his children to church schools. This is said to violate the due process clause because the children are sent to these church schools to satisfy the personal desires of their parents, rather than the public's interest in the general education of all children. This argument, if valid, would apply equally to prohibit state payment for the transportation of children to any non-public school, whether operated by a church, or any other nongovernment individual or group. But, the New Jersey legislature has decided that a public purpose will be served by using tax-raised funds to pay the bus fares of all school children, including those who attend parochial schools. The New Jersey Court of Errors and Appeals has reached the same conclusion. The fact that a state law, passed to satisfy a public need, coincides with the personal desires of the individuals most directly affected is certainly an inadequate reason for us to say that a legislature has erroneously appraised the public need. 6 It is true that this Court has, in rare instances, struck down state statutes on the ground that the purpose for which tax-raised funds were to be expended was not a public one. Citizens' Savings & Loan Association v. City of Topeka, 20 Wall. 655, 22 L.Ed. 455; City of Parkersburg v. Brown, 106 U.S. 487, 1 S.Ct. 442, 27 L.Ed. 238; Thompson v. Consolidated Gas Utilities Corp., 300 U.S. 55, 57 S.Ct. 364, 81 L.Ed. 510. But the Court has also pointed out that this far-reaching authority must be exercised with the most extreme caution. Green v. Frazier, 253 U.S. 233, 240, 40 S.Ct. 499, 501, 64 L.Ed. 878. Otherwise, a state's power to legislate for the public welfare might be seriously curtailed, a power which is a primary reason for the existence of states. Changing local conditions create new local problems which may lead a state's people and its local authorities to believe that laws authorizing new types of public services are necessary to promote the general well-being of the people. The Fourteenth Amendment did not strip the states of their power to meet problems previously left for individual solution. Davidson v. New Orleans, 96 U.S. 97, 103, 104, 24 L.Ed. 616; Barbier v. Connolly, 113 U.S. 27, 31, 32, 5 S.Ct. 357, 360, 28 L.Ed. 923; Fallbrook Irrigation District v. Bradley, 164 U.S. 112, 157, 158, 17 S.Ct. 56, 62, 63, 41 L.Ed. 369. 7 It is much too late to argue that legislation intended to facilitate the opportunity of children to get a secular education serves no public purpose. Cochran v. Louisiana State Board of Education, 281 U.S. 370, 50 S.Ct. 335, 74 L.Ed. 913; Holmes, J., in Interstate Consolidated Street Ry. Co. v. Commonwealth of Massachusetts, 207 U.S. 79, 87, 28 S.Ct. 26, 27, 52 L.Ed. 111, 12 Ann.Cas. 555. See opinion of Cooley, J., in Stuart v. School District No. 1 of Village of Kalamazoo, 1878, 30 Mich. 69. The same thing is no less true of legislation to reimburse needy parents, or all parents, for payment of the fares of their children so that they can ride in public busses to and from schools rather than run the risk of traffic and other hazards incident to walking or 'hitchhiking.' See Barbier v. Connolly, supra, 113 U.S. at page 31, 5 S.Ct. at page 359. See also cases collected 63 A.L.R. 413; 118 A.L.R. 806. Nor does it follow that a law has a private rather than a public purpose because it provides that tax-raised funds will be paid to reimburse i dividuals on account of money spent by them in a way which furthers a public program. See Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 518, 57 S.Ct. 868, 876, 81 L.Ed. 1245, 109 A.L.R. 1327. Subsidies and loans to individuals such as farmers and home owners, and to privately owned transportation systems, as well as many other kinds of businesses, have been commonplace practices in our state and national history. 8 Insofar as the second phase of the due process argument may differ from the first, it is by suggesting that taxation for transportation of children to church schools constitutes support of a religion by the State. But if the law is invalid for this reason, it is because it violates the First Amendment's prohibition against the establishment of religion by law. This is the exact question raised by appellant's second contention, to consideration of which we now turn. 9 Second. The New Jersey statute is challenged as a 'law respecting an establishment of religion.' The First Amendment, as made applicable to the states by the Fourteenth, Murdock v. Commonwealth of Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 872, 87 L.Ed. 1292, 146 A.L.R. 81, commands that a state 'shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.' These words of the First Amendment reflected in the minds of early Americans a vivid mental picture of conditions and practices which they fervently wished to stamp out in order to preserve liberty for themselves and for their posterity. Doubtless their goal has not been entirely reached; but so far has the Nation moved toward it that the expression 'law respecting an establishment of religion,' probably does not so vividly remind present-day Americans of the evils, fears, and political problems that caused that expression to be written into our Bill of Rights. Whether this New Jersey law is one respecting the 'establishment of religion' requires an understanding of the meaning of that language, particularly with respect to the imposition of taxes. Once again,4 therefore, it is not inappropriate briefly to review the background and environment of the period in which that constitutional language was fashioned and adopted. 10 A large proportion of the early settlers of this country came here from Europe to escape the bondage of laws which compelled them to support and attend government favored churches. The centuries immediately before and contemporaneous with the colonization of America had been filled with turmoil, civil strife, and persecutions, generated in large part by established sects determined to maintain their absolute political and religious supremacy. With the power of government supporting them, at various times and places, Catholics had persecuted Protestants, Protestants had persecuted Catholics, Protestant sects had persecuted other Protestant sects, Catholics of one shade of belief had persecuted Catholics of another shade of belief, and all of these had from time to time persecuted Jews. In efforts to force loyalty to whatever religious group happened to be on top and in league with the government of a particular time and place, men and women had been fined, cast in jail, cruelly tortured, and killed. Among the offenses for which these punishments had been inflicted were such things as speaking disrespectfully of the views of ministers of government-established churches, nonattendance at those churches, expressions of non-belief in their doctrines, and failure to pay taxes and tithes to support them.5 11 These practices of the old world were transplanted to and began to thrive in the soil of the new America. The very charters granted by the English Crown to the individuals and companies designated to make the laws which would control the destinies of the colonials authorized these individuals and companies to erect religious establishments which all, whether believers or non-believers, would be required to support and attend.6 An exercise of this authority was accompanied by a repetition of many of the old world practices and persecutions. Catholics found themselves hounded and proscribed because of their faith; Quakers who followed their conscience went to jail; Baptists were peculiarly obnoxious to certain dominant Protestant sects; men and women of varied faiths who happened to be in a minority in a particular locality were persecuted because they steadfastly persisted in worshipping God only as their own consciences dictated.7 And all of these dissenters were compelled to pay tithes and taxes8 to support government-sponsored churches whose ministers preached inflammatory sermons designed to strengthen and consolidate the established faith by generating a burning hatred against dissenters. 12 These practices became so commonplace as to shock the freedom-loving colonials into a feeling of abhorrence.9 The imposition of taxes to pay ministers' salaries and to build and maintain churches and church property aroused their indignation.10 It was these feelings which found expression in the First Amendment. No one locality and no one group throughout the Colonies can rightly be given entire credit for having aroused the sentiment that culminated in adoption of the Bill of Rights' provisions embracing religious liberty. But Virginia, where the established church had achieved a dominant influence in political affairs and where many excesses attracted wide public attention, p ovided a great stimulus and able leadership for the movement. The people there, as elsewhere, reached the conviction that individual religious liberty could be achieved best under a government which was stripped of all power to tax, to support, or otherwise to assist any or all religions, or to interfere with the beliefs of any religious individual or group. 13 The movement toward this end reached its dramatic climax in Virginia in 1785—86 when the Virginia legislative body was about to renew Virginia's tax levy for the support of the established church. Thomas Jefferson and James Madison led the fight against this tax. Madison wrote his great Memorial and Remonstrance against the law.11 In it, he eloquently argued that a true religion did not need the support of law; that no person, either believer or non-believer, should be taxed to support a religious institution of any kind; that the best interest of a society required that the minds of men always be wholly free; and that cruel persecutions were the inevitable result of government-established religions. Madison's Remonstrance received strong support throughout Virginia,12 and the Assembly postponed consideration of the proposed tax measure until its next session. When the proposal came up for consideration at that session, it not only died in committee, but the Assembly enacted the famous 'Virginia Bill for Religious Liberty' originally written by Thomas Jefferson.13 The preamble to that Bill stated among other things that 14 'Almighty God hath created the mind free; that all attempts to influence it by temporal punishments, or burthens, or by civil incapacitations, tend only to beget habits of hypocrisy and meanness, and are a departure from the plan of the Holy author of our religion who being Lord both of body and mind, yet chose not to propagate it by coercions on either . . .; that to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves, is sinful and tyrannical; that even the forcing him to support this or that teacher of his own religious persuasion, is depriving him of the comfortable liberty of giving his contributions to the particular pastor, whose morals he would make his pattern * * *' And the statute itself enacted 15 'That no man shall be compelled to frequent or support any religious worship, place, or ministry whatsoever, nor shall be enforced, restrained, molested, or burthened, in his body or goods, nor shall otherwise suffer on account of his religious opinions or belief. . . .'14 16 This Court has previously recognized that the provisions of the First Amendment, in the drafting and adoption of which Madison and Jefferson played such leading roles, had the same objective and were intended to provide the same protection against governmental intrusion on religious liberty as the Virginia statute. Reynolds v. United States, supra, 98 U.S. at page 164, 25 L.Ed. 244; Watson v. Jones, 13 Wall. 679, 20 L.Ed. 666; Davis v. Beason, 133 U.S. 333, 342, 10 S.Ct. 299, 300, 33 L.Ed. 637. Prior to the adoption of the Fourteenth Amendment, the First Amendment did not apply as a restraint against the states.15 Most of them did soon provide similar constitutional protections for religious liberty.16 But some states persisted for about half a century in imposing restraints upon the free exercise of religion and in discriminating against particular religious groups.17 In recent years, so far as the provision against the establishment of a religion is concerned, the question has most frequently arisen in connection with proposed state aid to church schools and efforts to carry on religious teachings in the public schools in accordance with the tenets of a particular sect.18 Some churches have either sought or accepted state financial support for their schools. Here again the efforts to obtain state aid or acceptance of it have not been limited to any one particular faith.19 The state courts, in the main, have remained faithful to the language of their own constitutional provisions designed to protect religious freedom and to separate religious and governments. Their decisions, however, show the difficulty in drawing the line between tax legislation which provides funds for the welfare of the general public and that which is designed to support institutions which teach religion.20 17 The meaning and scope of the First Amendment, preventing establishment of religion or prohibiting the free exercise thereof, in the light of its history and the evils it was designed forever to suppress, have been several times elaborated by the decisions of this Court prior to the application of the First Amendment to the states by the Fourteenth.21 The broad meaning given the Amendment by these earlier cases has been accepted by this Court in its decisions concerning an individual's religious freedom rendered since the Fourteenth Amendment was interpreted to make the prohibitions of the First applicable to state action abridging religious freedom.22 There is every reason to give the sam application and broad interpretation to the 'establishment of religion' clause. The interrelation of these complementary clauses was well summarized in a statement of the Court of Appeals of South Carolina,23 quoted with approval by this Court, in Watson v. Jones, 13 Wall. 679, 730, 20 L.Ed. 666: 'The structure of our government has, for the preservation of civil liberty, rescued the temporal institutions from religious interference. On the other hand, it has secured religious liberty from the invasions of the civil authority.' 18 The 'establishment of religion' clause of the First Amendment means at least this: Neither a state nor the Federal Government can set up a church. Neither can pass laws which aid one religion, aid all religions, or prefer one religion over another. Neither can force nor influence a person to go to or to remain away from church against his will or force him to profess a belief or disbelief in any religion. No person can be punished for entertaining or professing religious beliefs or disbeliefs, for church attendance or non-attendance. No tax in any amount, large or small, can be levied to support any religious activities or institutions, whatever they may be called, or whatever from they may adopt to teach or practice religion. Neither a state nor the Federal Government can, openly or secretly, participate in the affairs of any religious organizations or groups and vice versa. In the words of Jefferson, the clause against establishment of religion by law was intended to erect 'a wall of separation between Church and State.' Reynolds v. United States, supra, 98 U.S. at page 164, 25 L.Ed. 244. 19 We must consider the New Jersey statute in accordance with the foregoing limitations imposed by the First Amendment. But we must not strike that state statute down if it is within the state's constitutional power even though it approaches the verge of that power. See Interstate Consolidated Street Ry. Co. v. Commonwealth of Massachusetts, Holmes, J., supra 207 U.S. at 85, 88, 28 S.Ct. 26, 27, 28, 52 L.Ed. 111, 12 Ann.Cas. 555. New Jersey cannot consistently with the 'establishment of religion' clause of the First Amendment contribute tax-raised funds to the support of an institution which teaches the tenets and faith of any church. On the other hand, other language of the amendment commands that New Jersey cannot hamper its citizens in the free exercise of their own religion. Consequently, it cannot exclude individual Catholics, Lutherans, Mohammedans, Baptists, Jews, Methodists, Non-believers, Presbyterians, or the members of any other faith, because of their faith, or lack of it, from receiving the benefits of public welfare legislation. While we do not mean to intimate that a state could not provide transportation only to children attending public schools, we must be careful, in protecting the citizens of New Jersey against state-established churches, to be sure that we do not inadvertently prohibit New Jersey from extending its general State law benefits to all its citizens without regard to their religious belief Measured by these standards, we cannot say that the First Amendment prohibits New Jersey from spending taxraised funds to pay the bus fares of parochial school pupils as a part of a general program under which it pays the fares of pupils attending public and other schools. It is undoubtedly true that children are helped to get to church schools. There is even a possibility that some of the children might not be sent to the church schools if the parents were compelled to pay their children's bus fares out of their own pockets when transportation to a public school would have been paid for by the State. The same possibility exists where the state requires a local transit company to provide reduced fares to school children including those attending parochial schools,24 or where a municipally owned transportation system undertakes to carry all school children free of charge. Moreover, state-paid policemen, detailed to protect children going to and from church schools from the very real hazards of traffic, would serve much the same purpose and accomplish much the same result as state provisions intended to guarantee free transportation of a kind which the state deems to be best for the school children's welfare. And parents might refuse to risk their children to the serious danger of traffic accidents going to and from parochial schools, the approaches to which were not protected by policemen. Similarly, parents might be reluctant to permit their children to attend schools which the state had cut off from such general government services as ordinary police and fire protection, connections for sewage disposal, public highways and sidewalks. Of course, cutting off church schools from these services, so separate and so indisputably marked off from the religious function, would make it far more difficult for the schools to operate. But such is obviously not the purpose of the First Amendment. That Amendment requires the state to be a neutral in its relations with groups of religious believers and non-believers; it does not require the state to be their adversary. State power is no more to be used so as to handicap religions, than it is to favor them. 20 This Court has said that parents may, in the discharge of their duty under state compulsory education laws, send their children to a religious rather than a public school if the school meets the secular educational requirements which the state has power to impose. See Pierce v. Society of Sisters, 268 U.S. 510, 45 S.Ct. 571, 69 L.Ed. 1070, 39 A.L.R. 468. It appears that these parochial schools meet New Jersey's requirements. The State contributes no money to the schools. It does not support them. Its legislation, as applied, does no more than provide a general program to help parents get their children, regardless of their religion, safely and expeditiously to and from accredited schools. 21 The First Amendment has erected a wall between church and state. That wall must be kept high and impregnable. We could not approve the slightest breach. New Jersey has not breached it here. 22 Affirmed. 23 Mr. Justice JACKSON, dissenting. 24 I find myself, contrary to first impressions, unable to join in this decision. I have a sympathy, though it is not ideological, with Catholic citizens who are compelled by law to pay taxes for public schools, and also feel constrained by conscience and discipline to support other schools for their own children. Such reli f to them as this case involves is not in itself a serious burden to taxpayers and I had assumed it to be as little serious in principle. Study of this case convinces me otherwise. The Court's opinion marshals every argument in favor of state aid and puts the case in its most favorable light, but much of its reasoning confirms my conclusions that there are no good grounds upon which to support the present legislation. In fact, the undertones of the opinion, advocating complete and uncompromising separation of Church from State, seem utterly discordant with its conclusion yielding support to their commingling in educational matters. The case which irresistibly comes to mind as the most fitting precedent is that of Julia who, according to Byron's reports, 'whispering 'I will ne'er consent,' consented.' I. 25 The Court sustains this legislation by assuming two deviations from the facts of this particular case; first, it assumes a state of facts the record does not support, and secondly, it refuses to consider facts which are inescapable on the record. 26 The Court concludes that this 'legislation, as applied, does no more than provide a general program to help parents get their children, regardless of their religion, safely and expeditiously to and from accredited schools,' and it draws a comparison between 'state provisions intended to guarantee free transportation' for school children with services such as police and fire protection, and implies that we are here dealing with 'laws authorizing new types of public services * * *' This hypothesis permeates the opinion. The facts will not bear that construction. 27 The Township of Ewing is not furnishing transportation to the children in any form; it is not operating school busses itself or contracting for their operation; and it is not performing any public service of any kind with this taxpayer's money. All school children are left to ride as ordinary paying passengers on the regular busses operated by the public transportation system. What the Township does, and what the taxpayer complains of, is at stated intervals to reimburse parents for the fares paid, provided the children attend either public schools or Catholic Church schools. This expenditure of tax funds has no possible effect on the child's safety or expedition in transit. As passengers on the public busses they travel as fast and no faster, and are as safe and no safer, since their parents are reimbursed as before. 28 In addition to thus assuming a type of service that does not exist, the Court also insists that we must close our eyes to a discrimination which does exist. The resolution which authorizes disbursement of this taxpayer's money limits reimbursement to those who attend public schools and Catholic schools. That is the way the Act is applied to this taxpayer. 29 The New Jersey Act in question makes the character of the school, not the needs of the children determine the eligibility of parents to reimbursement. The Act permits payment for transportation to parochial schools or public schools but prohibits it to private schools operated in whole or in part for profit. Children often are sent to private schools because their parents feel that they require more individual instruction than public schools can provide, or because they are backward or defective and need special attention. If all children of the state were objects of impartial solicitude, no reason is obvious for denying transportation reimbursement to students of this class, for these often are as needy and as worthy as those who go to public or parochial schools. Refusal to reimburse those who attend such schools is understandable only in the light of a purpose to aid the schools, because the state might well abstain from aiding a profit-making private enterprise. Thus, under the Act and resolution brought to us by this case children are classified according to the schools they attend and are to be aided if they attend the public schools or private C tholic schools, and they are not allowed to be aided if they attend private secular schools or private religious schools of other faiths. 30 Of course, this case is not one of a Baptist or a Jew or an Episcopalian or a pupil of a private school complaining of discrimination. It is one of a taxpayer urging that he is being taxed for an unconstitutional purpose. I think he is entitled to have us consider the Act just as it is written. The statement by the New Jersey court that it holds the Legislature may authorize use of local funds 'for the transportation of pupils to any school,' 133 N.J.L. 350, 354, 44 A.2d 333, 337, in view of the other constitutional views expressed, is not a holding that this Act authorizes transportation of all pupils to all schools. As applied to this taxpayer by the action he complains of, certainly the Act does not authorize reimbursement to those who choose any alternative to the public school except Catholic Church schools. 31 If we are to decide this case on the facts before us, our question is simply this: Is it constitutional to tax this complainant to pay the cost of carrying pupils to Church schools of one specified denomination? II. 32 Whether the taxpayer constitutionally can be made to contribute aid to parents of students because of their attendance at parochial schools depends upon the nature of those schools and their relation to the Church. The Constitution says nothing of education. It lays no obligation on the states to provide schools and does not undertake to regulate state systems of education if they see fit to maintain them. But they cannot, through school policy any more than through other means, invade rights secured to citizens by the Constitution of the United States. West Virginia State Board of Education v. Barnette, 319 U.S. 624, 63 S.Ct. 1178, 87 L.Ed. 1628, 147 A.L.R. 674. One of our basic rights is to be free of taxation to support a transgression of the constitutional command that the authorities 'shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.' U.S.Const., Amend. I; Cantwell v. State of Connecticut, 310 U.S. 296, 60 S.Ct. 900, 84 L.Ed. 1213, 128 A.L.R. 1352. 33 The function of the Church school is a subject on which this record is meager. It shows only that the schools are under superintendence of a priest and that 'religion is taught as part of the curriculum.' But we know that such schools are parochial only in name—they, in fact, represent a worldwide and age-old policy of the Roman Catholic Church. Under the rubric 'Catholic Schools,' the Canon Law of the Church by which all Catholics are bound, provides: 34 '1215. Catholic children are to be educated in schools where not only nothing contrary to Catholic faith and morals is taught, but rather in schools where religious and moral training occupy the first place. * * * (Canon 1372.)' 35 '1216. In every elementary school the children must, according to their age, be instructed in Christian doctrine. 36 'The young people who attend the higher schools are to receive a deeper religious knowledge, and the bishops shall appoint priests qualified for such work by their learning and piety. (Canon 1373.)' 37 '1217. Catholic children shall not attend non-Catholic, indifferent, schools that are mixed, that is to say, schools open to Catholic and non-Catholics alike. The bishop of the diocese only has the right, in harmony with the instructions of the Holy See, to decide under what circumstances, and with what safeguards to prevent loss of faith, it may be tolerated that Catholic children go to such schools. (Canon 1374.)' 38 '1224. The religious teaching of youth in any schools is subject to the authority and inspection of the Church. 39 'The local Ordinaries have the right and duty to watch that nothing is taught contrary to faith or good morals, in any of the schools of their territory. 40 'They, moreover, have the right to approve the books of Christian doctrine and the teachers of religion, and to demand, for the sake of safeguarding religion and morals, the removal of teachers and books. (Canon 1381.)' (Woywod, Rev. Stanislaus, The New Canon Law, under imprimatur of Most Rev. Francis J. Spellman, Archbishop of New York and others, 1940.) 41 It is no exaggeration to say that the whole historic conflict in temporal policy between the Catholic Church and non-Catholics comes to a focus in their respective school policies. The Roman Catholic Church, counseled by experience in many ages and many lands and with all sorts and conditions of men, takes what, from the viewpoint of its own progress and the success of its mission, is a wise estimate of the importance of education to religion. It does not leave the individual to pick up religion by chance. It relies on early and indelible indoctrination in the faith and order of the Church by the word and example of persons consecrated to the task. 42 Our public school, if not a product of Protestantism, at least is more consistent with it than with the Catholic culture and scheme of values. It is a relatively recent development dating from about 1840.1 It is organized on the premise that secular education can be isolated from all religious teaching so that the school can inculcate all needed temporal knowledge and also maintain a strict and lofty neutrality as to religion. The assumption is that after the individual has been instructed in worldly wisdom he will be better fitted to choose his religion. Whether such a disjunction is possible, and if possible whether it is wise, are questions I need not try to answer. 43 I should be surprised if any Catholic would deny that the parochial school is a vital, if not the most vital, part of the Roman Catholic Church. If put to the choice, that venerable institution, I should expect, would forego its whole service for mature persons before it would give up education of the young, and it would be a wise choice. Its growth and cohesion, discipline and loyalty, spring from its schools. Catholic education is the rock on which the whole structure rests, and to render tax aid to its Church school is indistinguishable to me from rendering the same aid to the Church itself. III. 44 It is of no importance in this situation whether the beneficiary of this expenditure of tax-raised funds is primarily the parochial school and incidentally the pupil, or whether the aid is directly bestowed on the pupil with indirect benefits to the school. The state cannot maintain a Church and it can no more tax its citizens to furnish free carriage to those who attend a Church The prohibition against establishment of religion cannot be circumvented by a subsidy, bonus or reimbursement of expense to individuals for receiving religious instruction and indoctrination. 45 The Court, however, compares this to other subsidies and loans to individuals and says, 'Nor does it follow that a law has a private rather than a public purpose because it provides that tax-raised funds will be paid to reimburse individuals on account of money spent by them in a way which furthers a public program. See Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 518, 57 S.Ct. 868, 876, 81 L.Ed. 1245, 109 A.L.R. 1327.' Of course, the state may pay out tax-raised funds to relieve pauperism, but it may not under our Constitution do so to induce or reward piety. It may spend funds to secure old age against want, but it may not spend funds to secure religion against skepticism. It may compensate individuals for loss of employment, but it cannot compensate them for adherence to a creed. 46 It seems to me that the basic fallacy in the Court's reasoning, which accounts for its failure to apply the principles it avows, is in ignoring the essentially religious test by which beneficiaries of this expenditure are selected. A policeman protects a Catholic, of course—but not because he is a Catho ic; it is because he is a man and a member of our society. The fireman protects the Church school—but not because it is a Church school; it is because it is property, part of the assets of our society. Neither the fireman nor the policeman has to ask before he renders aid 'Is this man or building identified with the Catholic Church.' But before these school authorities draw a check to reimburse for a student's fare they must ask just that question, and if the school is a Catholic one they may render aid because it is such, while if it is of any other faith or is run for profit, the help must be withheld. To consider the converse of the Court's reasoning will best disclose its fallacy. That there is no parallel between police and fire protection and this plan of reimbursement is apparent from the incongruity of the limitation of this Act if applied to police and fire service. Could we sustain an Act that said police shall protect pupils on the way to or from public schools and Catholic schools but not while going to and coming from other schools, and firemen shall extinguish a blaze in public or Catholic school buildings but shall not put out a blaze in Protestant Church schools or private schools operated for profit? That is the true analogy to the case we have before us and I should think it pretty plain that such a scheme would not be valid. 47 The Court's holding is that this taxpayer has no grievance because the state has decided to make the reimbursement a public purpose and therefore we are bound to regard it as such. I agree that this Court has left, and always should leave to each state, great latitude in deciding for itself, in the light of its own conditions, what shall be public purposes in its scheme of things. It may socialize utilities and economic enterprises and make taxpayers' business out of what conventionally had been private business. It may make public business of individual welfare, health, education, entertainment or security. But it cannot make public business of religious worship or instruction, or of attendance at religious institutions of any character. There is no answer to the proposition more fully expounded by Mr. Justice RUTLEDGE that the effect of the religious freedom Amendment to our Constitution was to take every form of propagation of religion out of the realm of things which could directly or indirectly be made public business and thereby be supported in whole or in part at taxpayers' expense. That is a difference which the Constitution sets up between religion and almost every other subject matter of legislation, a difference which goes to the very root of religious freedom and which the Court is overlooking today. This freedom was first in the Bill of Rights because it was first in the forefathers' minds; it was set forth in absolute terms, and its strength is its rigidity. It was intended not only to keep the states' hands out of religion, but to keep religion's hands off the state, and above all, to keep bitter religious controversy out of public life by denying to every denomination any advantage from getting control of public policy or the public purse. Those great ends I cannot but think are immeasurably compromised by today's decision. 48 This policy of our Federal Constitution has never been wholly pleasing to most religious groups. They all are quick to invoke its protections; they all are irked when they feel its restraints. This Court has gone a long way, if not an unreasonable way, to hold that public business of such paramount importance as maintenance of public order, protection of the privacy of the home, and taxation may not be pursued by a state in a way that even indirectly will interfere with religious proselyting. See dissent in Douglas v. Jeannette, 319 U.S. 157, 166, 63 S.Ct. 877, 882, 87 L.Ed. 1324, 146 A.L.R. 81; Murdock v. Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292, 146 A.L.R. 81; Martin v. Struthers, 319 U.S. 141, 63 S.Ct. 862, 87 L.Ed. 1313; Jones v. Opelika, 316 U.S. 584, 6 S.Ct. 1231, 86 L.Ed. 1691, 141 A.L.R. 514, reversed on rehearing 319 U.S. 103, 63 S.Ct. 890, 87 L.Ed. 1290. 49 But we cannot have it both ways. Religious teaching cannot be a private affair when the state seeks to impose regulations which infringe on it indirectly, and a public affair when it comes to taxing citizens of one faith to aid another, or those of no faith to aid all. If these principles seem harsh in prohibiting aid to Catholic education, it must not be forgotten that it is the same Constitution that alone assures Catholics the right to maintain these schools at all when predominant local sentiment would forbid them. Pierce v. Society of Sisters, 268 U.S. 510, 45 S.Ct. 571, 69 L.Ed. 1070, 39 A.L.R. 468. Nor should I think that those who have done so well without this aid would want to see this separation between Church and State broken down. If the state may aid these religious schools, it may therefore regulate them. Many groups have sought aid from tax funds only to find that it carried political controls with it. Indeed this Court has declared that 'It is hardly lack of due process for the Government to regulate that which it subsidizes.' Wickard v. Filburn, 317 U.S. 111, 131, 63 S.Ct. 82, 92, 87 L.Ed. 122. 50 But in any event, the great purposes of the Constitution do not depend on the approval or convenience of those they restrain. I cannot read the history of the struggle to separate political from ecclesiastical affairs, well summarized in the opinion of Mr. Justice RUTLEDGE in which I generally concur, without a conviction that the Court today is unconsciously giving the clock's hands a backward turn. 51 Mr. Justice FRANKFURTER joins in this opinion. 52 Mr. Justice RUTLEDGE, with whom Mr. Justice FRANKFURTER, Mr. Justice JACKSON and Mr. Justice BURTON agree, dissenting. 53 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof. * * *.' U.S.Const.Am. Art. I. 54 'Well aware that Almighty God hath created the mind free; * * * that to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves, is sinful and tyrannical; * * * 55 'We, the General Assembly, do enact, That no man shall be compelled to frequent or support any religious worship, place, or ministry whatsoever, nor shall be enforced, restrained, molested, or burthened in his body or goods, nor shall otherwise suffer on account of his religious opinions or belief. * * *'1 56 I cannot believe that the great author of those words, or the men who made them law, could have joined in this decision. Neither so high nor so impregnable today as yesterday is the wall raised between church and state by Virginia's great statute of religious freedom and the First Amendment, now made applicable to all the states by the Fourteenth.2 New Jersey's statute sustained is the first, if indeed it is not the second breach to be made by this Court's action. That a third, and a fourth, and still others will be attempted, we may be sure. For just as Cochran v. Louisiana State Board of Education, 281 U.S. 370, 50 S.Ct. 335, 74 L.Ed. 913, has opened the way by oblique ruling3 for this decision, so will the two make wider the breach for a third. Thus with time the most solid freedom steadily gives way before continuing corrosive decision. 57 This case forces us to determine squarely for the first time4 what was 'an establishment of religion' in the First Amendment's conception; and by that measure to decide whether New Jersey's action violates its command. The facts may be stated shortly, to give setting and color to the constitutional problem. 58 By statute New Jersey has authorized local boards of education to provide for the transportation of children 'to and from school other than a public school' except one operated for profit wholly or in part over established public school routes, or by other means when the child lives 'remote from any school.'5 The school board of Ewing Township has provided by resolution for 'the transportation of pupils of Ewing to the Trenton and Pennington High Schools and Catholic Schools by way of public carrier. * * *'6 59 Named parents have paid the cost of public conveyance of their children from their homes in Ewing to three public high schools and four parochial schools outside the district.7 Semiannually the Board has reimbursed the parents from public school funds raised by general taxation. Religion is taught as part of the curriculum in each of the four private schools, as appears affirmatively by the testimony of the superintendent of parochial schools in the Diocese of Trenton. 60 The Court of Errors and Appeals of New Jersey, reversing the Supreme Court's decision, 132 N.J.L. 98, 39 A.2d 75, has held the Ewing board's action not in contravention of the state constitution or statutes or of the Federal Constitution. 133 N.J.L. 350, 44 A.2d 333. We have to consider only whether this ruling accords with the prohibition of the First Amendment implied in the due process clause of the Fourteenth. I. 61 Not simply an established church, but any law respecting an establishment of religion is forbidd n. The Amendment was broadly but not loosely phrased. It is the compact and exact summation of its author's views formed during his long struggle for religious freedom. In Madison's own words characterizing Jefferson's Bill for Establishing Religious Freedom, the guaranty he put in our national charter, like the bill he piloted through the Virginia Assembly, was 'a Model of technical precision, and perspicuous brevity.'8 Madison could not have confused 'church' and 'religion,' or 'an established church' and 'an establishment or religion.' 62 The Amendment's purpose was not to strike merely at the official establishment of a single sect, creed or religion, outlawing only a formal relation such as had prevailed in England and some of the colonies. Necessarily it was to uproot all such relationships. But the object was broader than separating church and state in this narrow sense. It was to create a complete and permanent separation of the spheres of religious activity and civil authority by comprehensively forbidding every form of public aid or support for religion. In proof the Amendment's wording and history unite with this Court's consistent utterances whenever attention has been fixed directly upon the question. 63 'Religion' appears only once in the Amendment. But the word governs two prohibitions and governs them alike. It does not have two meanings, one narrow to forbid 'an establishment' and another, much broader, for securing 'the free exercise thereof.' 'Thereof' brings down 'religion' with its entire and exact content, no more and no less, from the first into the second guaranty, so that Congress and now the states are as broadly restricted concerning the one as they are regarding the other. 64 No one would claim today that the Amendment is constricted, in 'prohibiting the free exercise' of religion, to securing the free exercise of some formal or creedal observance, of one sect or of many. It secures all forms of religious expression, creedal, sectarian or nonsectarian wherever and however taking place, except conduct which trenches upon the like freedoms of others or clearly and presently endangers the community's good order and security.9 For the protective purposes of this phase of the basic freedom street preaching, oral or by distribution of literature, has been given 'the same high estate under the First Amendment as * * * worship in the churches and preaching from the pulpits.'10 And on this basis parents have been held entitled to send their children to private, religious schools. Pierce v. Society of Sisters, 268 U.S. 510, 45 S.Ct. 571, 69 L.Ed. 1070, 39 A.L.R. 468. Accordingly, daily religious education commingled with secular is 'religion' within the guaranty's comprehensive scope. So are religious training and teaching in whatever form. The word connotes the broadest content, determined not by the form or formality of the teaching or where it occurs, but by its essential nature regardless of those details. 65 'Religion' has the same broad significance in the twin prohibition concerning 'an establishment.' The Amendment was not duplicitous. 'Religion' and 'establishment' were not used in any formal or technical sense. The prohibition broadly forbids state support, financial or other, of religion in any guise, form or degree. It outlaws all use of public funds for religious purposes. II. 66 No provision of the Constitution is more closely tied to or given content by its generating history than the religious clause of the First Amendment. It is at once the refined product and the terse summation of that history. The history includes not only Madison's authorship and the proceedings before the First Congress, but also the long and intensive struggle for religious freedom in America, more especially in Virginia,11 of which the Amendment was the direct culmination.12 In the documents of the times, particularly of Madison, who was leader in the Virginia struggle before he became the Amendment's sponsor, but also in the writings of Jefferson and others and in the issues which engendered them is to be found irrefutable confirmation of the Amendment's sweeping content. 67 For Madison, as also for Jefferson, religious freedom was the crux of the struggle for freedom in general. Remonstrance, Par. 15, Appendix hereto. Madison was coauthor with George Mason of the religious clause in Virginia's great Declaration of Rights of 1776. He is credited with changing it from a mere statement of the principle of tolerance to the first official legislative pronouncement that freedom of conscience and religion are inherent rights of the individual.13 He sought also to have the Declaration expressly condemn the existing Virginia establishment.14 But the forces supporting it were then too strong. 68 Accordingly Madison yielded on this phase but not for long. At once he resumed the fight, continuing it before succeeding legislative sessions. As a member of the General Assembly in 1779 he threw his full weight behind Jefferson's historic Bill for Establishing Religious Freedom. That bill was a prime phase of Jefferson's broad program of democratic reform undertaken on his return from the Continental Congress in 1776 and submitted for the General Assembly's consideration in 1779 as his proposed revised Virginia code.15 With Jefferson's departure for Europe in 1784, Madison became the Bill's prime sponser.16 Enactment failed in successive legislatures from its introduction in June 1779, until its adoption in January, 1786. But during all this time the fight for religious freedom moved forward in Virginia on various fronts with growing intensity. Madison led throughout, against Patrick Henry's powerful opposing leadership until Henry was elected governor in November, 1784. 69 The climax came in the legislative struggle of 1784—1785 over the Assessment Bill. See Supplemental Appendix hereto. This was nothing more nor less than a taxing measure for the support of religion, designed to revive the payment of tithes suspended since 1777. So long as it singled out a particular sect for preference it incurred the active and general hostility of dissentient groups. It was broadened to include them, with the result that some subsided temporarily in their opposition.17 As altered, the bill gave to each taxpayer the privilege of designating which church should receive his share of the tax. In default of designation the legislature applied it to pious uses.18 But what is of the utmost significance here, 'in its final form the bill left the taxpayer the option of giving his tax to education.'19 70 Madison was unyielding at all times, opposing with all his vigor the general and nondiscriminatory as he had the earlier particular and discriminatory assessments proposed. The modified Assessment Bill passed second reading in December, 1784, and was all but enacted. Madison and his followers, however, maneuvered deferment of final consideration until November, 1785. And before the Assembly reconvened in the fall he issued his historic Memorial and Remonstrance.20 71 This is Madison's complete, though not his only, interpretation of religious liberty.21 It is a broadside attack upon all forms of 'establishment' of religion, both general and particular, nondiscriminatory or selective. Reflecting not only the many legislative conflicts over the Assessment Bill and the Bill for Establishing Religious Freedom but also, for example, the struggles for religious incorporations and the continued maintenance of the glebes, the Remonstrance is at once the most concise and the most accurate statement of the views of the First Amendment's author concerning what is 'an establishment of religion.' Because it behooves us in the dimming distance of time not to lose sight of what he and his coworkers had in mind when, by a single sweeping stroke of the pen, they forbade an establishment of religion and secured its free exercise, the text of the Remonstrance is appended at the end of this opinion for its wider current reference, together with a copy of the bill against which it was directed. 72 The Remonstrance, stirring up a storm of popular protest, killed the Assessment Bill.22 It collapsed in committee shortly before Christmas, 1785. With this, the way was cleared at last for enactment of Jefferson's Bill for Establishing Religious Freedom. Madison promptly drove it through in January of 1786, seven years from the time it was first introduced. This dual victory substantially ended the fight over establishments, settling the issue against them. See note 33. 73 The next year Madison became a member of the Constitutional Convention. Its work done, he fought valiantly to secure the ratification of its great product in Virginia as elsewhere, and nowhere else more effectively.23 Madison was certain in his own mind that under the Constitution 'there is not a shadow of right in the general government to intermeddle with religion'24 and that 'this subject is, for the honor of America, perfectly free and unshackled. The Government has no jurisdiction over it. . . .'25 Nevertheless he pledged that he would work for a Bill of Rights, including a specific guaranty of religious freedom, and Virginia, ith other states, ratified the Constitution on this assurance.26 74 Ratification thus accomplished, Madison was sent to the first Congress. There he went at once about performing his pledge to establish freedom for the nation as he had done in Virginia. Within a little more than three years from his legislative victory at home he had proposed and secured the submission and ratification of the First Amendment as the first article of our Bill of Rights.27 75 All the great instruments of the Virginia struggle for religious liberty thus became warp and woof of our constitutional tradition, not simply by the course of history, but by the common unifying force of Madison's life, thought and sponsorship. He epitomized the whole of that tradition in the Amendment's compact, but nonetheless comprehensive, phrasing. 76 As the Remonstrance discloses throughout, Madison opposed every form and degree of official relation between religion and civil authority. For him religion was a wholly private matter beyond the scope of civil power either to restrain or to support.28 Denial or abridgment of religious freedom was a violation of rights both of conscience and of natural equality. State aid was no less obnoxious or destructive to freedom and to religion itself than other forms of state interference. 'Establishment' and 'free exercise' were correlative and coextensive ideas, representing only different facets of the single great and fundamental freedom. The Remonstrance, following the Virginia statute's example, referred to the history of religious conflicts and the effects of all sorts of establishments, current and historical, to suppress religion's free exercise. With Jefferson, Madison believed that to tolerate any fragment of establishment would be by so much to perpetuate restraint upon that freedom. Hence he sought to tear out the institution not partially but root and branch, and to bar its return forever. 77 In no phase was he more unrelentingly absolute than in opposing state support or aid by taxation. Not even 'three pence' contribution was thus to be exacted from any citizen for such a purpose. Remonstrance, Par. 3.29 Tithes had been the life blood of establishment before and after other compulsions disappeared. Madison and his coworkers made no exceptions or abridgments to the complete separation they created. Their objection was not to small tithes. It was to any tithes whatsoever. 'If it were lawful to impose a small tax for religion the admission would pave the way for oppressive levies.'30 Not the amount but 'the principle of assessment was wrong.' And the principle was as much to prevent 'the interference of law in religion' as to restrain religious intervention in political matters.31 In this field the authors of our freedom would not tolerate 'the first experiment on our liberties' or 'wait till usurped power had strengthened itself by exercise, and entangled the question in precedents.' Remonstrance, Par. 3. Nor should we. 78 In view of this history no further proof is needed that the Amendment forbids any appropriation, large or small, from public funds to aid or support any and all religious exercises. But if more were called for, the debates in the First Congress and this Court's consistent expressions, whenever it has touched on the matter directly,32 supply it. 79 By contrast with the Virginia history, the congressional debates on consideration of the Amendment reveal only sparse discussion, reflecting the fact that the essential issues had been settled.33 Indeed the matter had become so well understood as to have been taken for granted in all but formal phrasing. Hence, the only enlightening reference shows concern, not to preserve any power to use public funds in aid of religion, but to prevent the Amendment from outlawing private gifts inadvertently by virtue of the breadth of its wording.34 In the margin are noted also the principal decisions in which expressions of this Court confirm the Amendment's broad prohibition.35 III. 80 Compulsory attendance upon religious exercises went out early in the process of separating church and state, together with forced observance of religious forms and ceremonies.36 Test oaths and religious qualification for office followed later.37 These things none devoted to our great tradition of religious liberty would think of bringing back. Hence today, apart from efforts to inject religious training or exercises and sectarian issues into the public schools, the only serious surviving threat to maintaining that complete and permanent separation of religion and civil power which the First Amendment commands is through use of the taxing power to support religion, religious establishments, or establishments having a religious foundation whatever their form or special religious function. 81 Does New Jersey's action furnish support for religion by use of the taxing power? Certainly it does, if the test remains undiluted as Jefferson and Madison made it, that money taken by taxation from one is not to be used or given to support another's religious training or belief, or indeed one's own.38 Today as then the furnishing of 'contributions of money for the propagation of opinions which he disbelieves' is the forbidden exaction; and the prohibition is absolute for whatever measure brings that consequence and whatever mount may be sought or given to that end. 82 The funds used here were raised by taxation. The Court does not dispute nor could it that their use does in fact give aid and encouragement to religious instruction. It only concludes that this aid is not 'support' in law. But Madison and Jefferson were concerned with aid and support in fact not as a legal conclusion 'entangled in precedents.' Remonstrance, Par. 3. Here parents pay money to send their children to parochial schools and funds raised by taxation are used to reimburse them. This not only helps the children to get to school and the parents to send them. It aids them in a substantial way to get the very thing which they are sent to the particular school to secure, namely, religious training and teaching. 83 Believers of all faiths, and others who do not express their feeling toward ultimate issues of existence in any creedal form, pay the New Jersey tax. When the money so raised is used to pay for transportation to religious schools, the Catholic taxpayer to the extent of his proportionate share pays for the transportation of Lutheran, Jewish and otherwise religiously affiliated children to receive their non-Catholic religious instruction. Their parents likewise pay proportionately for the transportation of Catholic children to receive Catholic instruction. Each thus contributes to 'the propagation of opinions which he disbelieves' in so far as their religious differ, as do others who accept no creed without regard to those differences. Each thus pays taxes also to support the teaching of his own religion, an exaction equally forbidden since it denies 'the comfortable liberty' of giving one's contribution to the particular agency of instruction he approves.39 84 New Jersey's action therefore exactly fits the type of exaction and the kind of evil at which Madison and Jefferson struck. Under the test they framed it cannot be said that the cost of transportation is no part of the cost of education or of the religious instruction given. That it is a substantial and a necessary element is shown most plainly by the continuing and increasing demand for the state to assume it. Nor is there pretense that it relates only to the secular instruction given in religious schools or that any attempt is or could be made toward allocating proportional shares as between the secular and the religious instruction. It is precisely because th instruction is religious and relates to a particular faith, whether one or another, that parents send their children to religious schools under the Pierce doctrine. And the very purpose of the state's contribution is to defray the cost of conveying the pupil to the place where he will receive not simply secular, but also and primarily religious, teaching and guidance. 85 Indeed the view is sincerely avowed by many of various faiths,40 that the basic purpose of all education is or should be religious, that the secular cannot be and should not be separated from the religious phase and emphasis. Hence, the inadequacy of public or secular education and the necessity for sending the child to a school where religion is taught. But whatever may be the philosophy or its justification, there is undeniably an admixture of religious with secular teaching in all such institutions. That is the very reason for their being. Certainly for purposes of constitutionality we cannot contradict the whole basis of the ethical and educational convictions of people who believe in religious schooling. 86 Yet this very admixture is what was disestablished when the First Amendment forbade 'an establishment of religion.' Commingling the religious with the secular teaching does not divest the whole of its religious permeation and emphasis or make them of minor part, if proportion were material. Indeed, on any other view, the constitutional prohibition always could be brought to naught by adding a modicum of the secular. 87 An appropriation from the public treasury to pay the cost of transportation to Sunday school, to weekday special classes at the church or parish house, or to the meetings of various young people's religious societies, such as the Y.M.C.A., the Y.M.C.A., the Y.M.H.A., the Epworth League, could not withstand the constitutional attack. This would be true, whether or not secular activities were mixed with the religious. If such an appropriation could not stand, then it is hard to see how one becomes valid for the same thing upon the more extended scale of daily instruction. Surely constitutionality does not turn on where or how often the mixed teaching occurs. 88 Finally, transportation, where it is needed, is as essential to education as any other element. Its cost is as much a part of the total expense, except at times in amount, as the cost of textbooks, of school lunches, of athletic equipment, of writing and other materials; indeed of all other items composing the total burden. Now as always the core of the educational process is the teacher-pupil relationship. Without this the richest equipment and facilities would go for naught. See Judd v. Board of Education, 278 N.Y. 200, 212, 15 N.E.2d 576, 118 A.L.R. 789. But the proverbial Mark Hopkins conception no longer suffices for the country's requirements. Without buildings, without equipment, without library, textbooks and other materials, and without transportation to bring teacher and pupil together in such an effective teaching environment, there can be not even the skeleton of what our times require. Hardly can it be maintained that transportation is the least essential of these items, or that it does not in fact aid, encourage, sustain and support, just as they do, the very process which is its purpose to accomplish. No less essential is it, or the payment of its cost, than the very teaching in the classroom or payment of the teacher's sustenance. Many types of equipment, now considered essential, better could be done without. 89 For me, therefore, the feat is impossible to select so indispensable an item from the composite of total costs, and characterize it as not aiding, contributing to, promoting or sustaining the propagation of beliefs which it is the very end of all to bring about. Unless this can be maintained, and the Court does not maintain it, the aid thus given is outlawed. Payment of transportation is no more, nor is it any the less essential to education, whether religious or secular, than payment for tuitions, for teachers' salaries, for buildings, equipment and necessary materials. Nor is it any the less directly related, in a school giving religious instruction, to the primary religious objective all those essential items of cost are intended to achieve. No rational line can be drawn between payment for such larger, but not more necessary, items and payment for transportation. The only line that can be so drawn is one between more dollars and less. Certainly in this realm such a line can be no valid constitutional measure. 90 Murdock v. Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292, 146 A.L.R. 81; Thomas v. Collins, 323 U.S. 516, 65 S.Ct. 315, 89 L.Ed. 430.41 Now, as in Madison's time, not the amount but the principle of assessment is wrong. Remonstrance, Par. 3. IV. 91 But we are told that the New Jersey statute is valid in its present application because the appropriation is for a public, not a private purpose, namely, the promotion of education, and the majority accept this idea in the conclusion that all we have here is 'public welfare legislation.' If that is true and the Amendment's force can be thus destroyed, what has been said becomes all the more pertinent. For then there could be no possible objection to more extensive support of religious education by New Jersey. 92 If the fact alone be determinative that religious schools are engaged in education, thus promoting the general and individual welfare, together with the legislature's decision that the payment of public moneys for their aid makes their work a public function, then I can see no possible basis, except one of dubious legislative policy, for the state's refusal to make full appropriation for support of private, religious schools, just as is done for public instruction. There could not be, on that basis, valid constitutional objection.42 93 Of course paying the cost of transportation promotes the general cause of education and the welfare of the individual. So does paying all other items of educational expense. And obviously, as the majority say, it is much too late to urge that legislation designed to facilitate the opportunities of children to secure a secular education serves no public purpose. Our nationwide system of public education rests on the contrary view, as do all grants in aid of education, public or private, which is not religious in character. 94 These things are beside the real question. They have no possible materiality except to obscure the all-pervading inescapable issue. Cf. Cochran v. Louisiana State Board of Education, supra. Stripped of its religious phase, the case presents no substantial federal question. Id. The public function argument, by casting the issue in terms of promoting the general cause of education and the welfare of the individual, ignores the religious factor and its essential connection with the transportation, thereby leaving out the only vital element in the case. So of course do the 'public welfare' and 'social legislation' ideas, for they come to the same thing. 95 We have here then one substantial issue, not two. To say that New Jersey's appropriation and her use of the power of taxation for raising the funds appropriated are not for public purposes but are for private ends, is to say that they are for the support of religion and religious teaching. Conversely, to say that they are for public purposes is to say that they are not for religious ones. 96 This is precisely for the reason that education which includes religious training and teaching, and its support, have been made matters of private right and function not public, by the very terms of the First Amendment. That is the effect not only in its guaranty of religion's free exercise, but also in the prohibition of establishments. It was on this basis of the private character of the function of religious education that this Court held parents entitled to send their children to private, religious schools. Pierce v. Society of Sisters, supra. Now it declares in effect that the appropriation of public funds to defray part of the cost of attending those schools is for a public purpose. If so, I do not understand why the state cannot go father or why this case approaches the verge of its power. 97 In truth this view contradicts the whole purpose and effect of the First Amendment as heretofore conceived. The 'public function'—'public welfare'—' social legislation' argument seeks in Madison's words, to 'employ Religion (that is, here, religious education) as an engine of Civil policy.' Remonstrance, Par. 5. It is of one piece with the Assessment Bill's preamble, although with the vital difference that it wholly ignores what that preamble explicitly states.43 98 Our constitutional policy is exactly the opposite. It does not deny the value or the necessity for religious training, teaching or observance. Rather it secures the r free exercise. But to that end it does deny that the state can undertake or sustain them in any form or degree. For this reason the sphere of religious activity, ad distinguished from the secular intellectual liberties, has been given the twofold protection and, as the state cannot forbid, neither can it perform or aid in performing the religious function. The dual prohibition makes that function altogether private. It cannot be made a public one by legislative act. This was the very heart of Madison's Remonstrance, as it is of the Amendment itself. 99 It is not because religious teaching does not promote the public or the individual's welfare, but because neither is furthered when the state promotes religious education, that the Constitution forbids it to do so. Both legislatures and courts are bound by that distinction. In failure to observe it lies the fallacy of the 'public function'—'social legislation' argument, a fallacy facilitated by easy transference of the argument's basing from due process unrelated to any religious aspect to the First Amendment. 100 By no declaration that a gift of public money to religious uses will promote the general or individual welfare, or the cause of education generally, can legislative bodies overcome the Amendment's bar. Nor may the courts sustain their attempts to do so by finding such consequences for appropriations which in fact give aid to or promote religious uses. Cf. Norris v. Alabama, 294 U.S. 587, 590, 55 S.Ct. 579, 580, 79 L.Ed. 1074; Hooven & Allison Co. v. Evatt, 324 U.S. 652, 659, 65 S.Ct. 870, 874, 89 L.Ed. 1252; Akins v. Texas, 325 U.S. 398, 402, 65 S.Ct. 1276, 1278, 89 L.Ed. 1692. Legislatures are free to make, and courts to sustain, appropriations only when it can be found that in fact they do not aid, promote, encourage or sustain religious teaching or observances, be the amount large or small. No such finding has been or could be made in this case. The Amendment has removed this form of promoting the public welfare from legislative and judicial competence to make a public function. It is exclusively a private affair. 101 The reasons underlying the Amendment's policy have not vanished with time or diminished in force. Now as when it was adopted the price of religious freedom is double. It is that the church and religion shall live both within and upon that freedom. There cannot be freedom of religion, safeguarded by the state, and intervention by the church or its agencies in the state's domain or dependency on its largesse. Madison's Remonstrance, Par. 6, 8.44 The great condition of religious liberty is that it be maintained free from sustenance, as also from other interferences, by the state. For when it comes to rest upon that secular foundation it vanishes with the resting. Id., Par. 7, 8.45 Public money devoted to payment of religious costs, educational or other, brings the quest for more. It brings too the struggle of sect against sect for the larger share or for any. Here one by numbers alone will benefit most, there another. That is precisely the history of societies which have had an established religion and dissident groups. Id., Par. 8, 11. It is the very thing Jefferson and Madison experienced and sought to guard against, whether in its blunt or in its more screened forms. Ibid. The end of such strife cannot be other than to destroy the cherished liberty. The dominating group will achieve the dominant benefit; or all will embroil the state in their dissensions. Id., Par. 11.46 102 Exactly such conflicts have centered of late around providing transportation to religious schools from public funds.47 The issue and the dissension work typically, in Madison's phrase, to 'destroy that moderation and harmony which the forbearance of our laws to intermeddle with Religion, has produced amongst its several sects.' Id., Par. 11. This occurs, as he well knew over measures at the very threshold of departure from the principle. Id., Par. 3, 9, 11. 103 In these conflicts wherever success has been obtained it has been upon the contention that by providing the transportation the general cause of education, the general welfare, and the welfare of the individual will be forwarded; hence that the matter lies within the realm of public function, for legislative determination.48 State courts have divided upon the issue, some taking the view that only the individual, others that the institution receives the benefit.49 A few have recognized that this dichotomy is false, that both in fact are aided.50 104 The majority here does not accept in terms any of those views. But neither does it deny that the individual or the school, or indeed both, are benefited directly and substantially.51 To do so would cut the ground from under the public function—social legislation thesis. On the contrary, the opinion concedes that the children are aided by being helped to get to the religious schooling. By converse necessary implication as well as by the absence of express denial, it must be taken to concede also that the school is helped to reach the child with its religious teaching. The religious enterprise is common to both, as is the interest in having transportation for its religious purposes provided. 105 Notwithstanding the recognition that this two-way aid is given and the absence of any denial that religious teaching is thus furthered, the Court concludes that the aid so given is not 'support' of religion. It is rather only support of education as such, without reference to its religious content, and thus becomes public welfare legislation. To this elision of the religious element from the case is added gloss in two respects, one that the aid extended partakes of the nature of a safety measure, the other that failure to provide it would make the state unneutral in religious matters, discriminating against or hampering such children concerning public benefits all others receive. 106 As will be noted, the one gloss is contradicted by the facts of record and the other is of whole cloth with the 'public function' argument's excision of the religious factor.52 But most important is that this approach, if valid, supplies a ready method for nullifying the Amendment's guaranty, not only for this case and others involving small grants in aid for religious education, but equally for larger ones. The only thing needed will be for the Court again to transplant the 'public welfare—public function' view from its proper nonreligious due process bearing to First Amendment application, holding that religious education is not 'supported' though it may be aided by the appropriation, and that the cause of education generally is furthered by helping the pupil to secure that type of training. 107 This is not therefore just a little case over bus fares. In paraphrase of Madison, distant as it may be in its present form from a complete establishment of religion, it differs from it only in degree; and is the first step in that direction. Id., Par. 9.53 Today as in his time 'the same authority which can force a citizen to contribute three pence only * * * for the support of any one religious establishment, may force him' to pay more; or 'to conform to any other establishment in all cases whatsoever.' And n w, as then, 'either * * * we must say, that the will of the Legislature is the only measure of their authority; and that in the plenitude of this authority, they may sweep away all our fundamental rights; or, that they are bound to leave this particular right untouched and sacred.' Remonstrance, Par. 15. 108 The realm of religious training and belief remains, as the Amendment made it, the kingdom of the individual man and his God. It should be kept inviolately private, not 'entangled * * * in precedents'54 or confounded with what legislatures legitimately may take over into the public domain. V. 109 No one conscious of religious values can by unsympathetic toward the burden which our constitutional separation puts on parents who desire religious instruction mixed with secular for their children. They pay taxes for others' children's education, at the same time the added cost of instruction for their own. Nor can one happily see benefits denied to children which others receive, because in conscience they or their parents for them desire a different kind of training others do not demand. 110 But if those feelings should prevail, there would be an end to our historic constitutional policy and command. No more unjust or discriminatory in fact is it to deny attendants at religious schools the cost of their transportation than it is to deny them tuitions, sustenance for their teachers, or any other educational expense which others receive at public cost. Hardship in fact there is which none can blink. But, for assuring to those who undergo it the greater, the most comprehensive freedom, it is one written by design and firm intent into our basic law. 111 Of course discrimination in the legal sense does not exist. The child attending the religious school has the same right as any other to attend the public school. But he foregoes exercising it because the same guaranty which assures this freedom forbids the public school or any agency of the state to give or aid him in securing the religious instruction he seeks. 112 Were he to accept the common school, he would be the first to protest the teaching there of any creed or faith not his own. And it is precisely for the reason that their atmosphere is wholly secular that children are not sent to public schools under the Pierce doctrine. But that is a constitutional necessity, because we have staked the very existence of our country on the faith that complete separation between the state and religion is best for the state and best for religion. Remonstrance, Par. 8, 12. 113 That policy necessarily entails hardship upon persons who forego the right to educational advantages the state can supply in order to secure others it is precluded from giving. Indeed this may hamper the parent and the child forced by conscience to that choice. But it does not make the state unneutral to withhold what the Constitution forbids it to give. On the contrary it is only by observing the prohibition rigidly that the state can maintain its neutrality and avoid partisanship in the dissensions inevitable when sect opposes sect over demands for public moneys to further religious education, teaching or training in any form or degree, directly or indirectly. Like St. Paul's freedom, religious liberty with a great price must be bought. And for those who exercise it most fully, by insisting upon religious education for their children mixed with secular, by the terms of our Constitution the price is greater than for others. 114 The problem then cannot be cast in terms of legal discrimination or its absence. This would be true, even though the state in giving aid should treat all religious instruction al ke. Thus, if the present statute and its application were shown to apply equally to all religious schools of whatever faith,55 yet in the light of our tradition it could not stand. For then the adherent of one creed still would pay for the support of another, the childless taxpayer with others more fortunate. Then too there would seem to be no bar to making appropriations for transportation and other expenses of children attending public or other secular schools, after hours in separate places and classes for their exclusively religious instruction. The person who embraches no creed also would be forced to pay for teaching what he does not believe. Again, it was the furnishing of 'contributions of money for the propagation of opinions which he disbelieves' that the fathers outlawed. That consequence and effect are not removed by multiplying to all-inclusiveness the sects for which support is exacted. The Constitution requires, not comprehensive identification of state with religion, but complete separation. VI. 115 Short treatment will dispose of what remains. Whatever might be said of some other application of New Jersey's statute, the one made here has no semblance of bearing as a safety measure or, indeed, for securing expeditious conveyance. The transportation supplied is by public conveyance, subject to all the hazards and delays of the highway and the streets incurred by the public generally in going about its multifarious business. 116 Nor is the case comparable to one of furnishing fire or police protection, or access to public highways. These things are matters of common right, part of the general need for safety.56 Certainly the fire department must not stand idly by while the church burns. Nor is this reason why the state should pay the expense of transportation or other items of the cost of religious education.57 117 Needless to add, we have no such case as Green v. Frazie , 253 U.S. 233, 40 S.Ct. 499, 64 L.Ed. 878, or Carmichael v. Southern Coal Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.R. 1327, which dealt with matters wholly unrelated to the First Amendment, involving only situations where the 'public function' issue was determinative. 118 I have chosen to place my dissent upon the broad ground I think decisive, though strictly speaking the case might be decided on narrower issues. The New Jersey statute might be held invalid on its face for the exclusion of children who attend private, profit-making schools.58 I cannot assume, as does the majority, that the New Jersey courts would write off this explicit limitation from the statute. Moreover, the resolution by which the statute was applied expressly limits its benefits to students of public and Catholic schools.59 There is no showing that there are no other private or religious schools in this populous district.60 I do not think it can be assumed there were none.61 But in the view I have taken, it is unnecessary to limit grounding to these matters. 119 Two great drives are constantly in motion to abridge, in the name of education, the complete division of religion and civil authority which our forefathers made. One is to introduce religious education and observances into the public schools. The other, to obtain public funds for the aid and support of various private religious schools. See Johnson, The Legal Status of Church-State Relationships in the United States (1934); Thayer, Religion in Public Education (1947); Note (1941) 50 Yale L.J. 917. In my opinion both avenues were closed by the Constitution. Neither should be opened by this Court. The matter is not one of quantity, to be measured by the amount of money expended. Now as in Madison's day it is one of principle, to keep separate the separate spheres as the First Amendment drew them; to prevent the first experiment upon our liberties; and to keep the question from becoming entangled in corrosive precedents. We should not be less strict to keep strong and untarnished the one side of the shield of religious freedom than we have been of the other. 120 The judgment should be reversed. 121 APPENDIX. 122 MEMORIAL AND REMONSTRANCE AGAINST RELIGIOUS AS SESSMENTS. 123 TO THE HONORABLE THE GENERAL ASSEMBLY OF THE COMMONWEALTH OF VIRGINIA. 124 A MEMORIAL AND REMONSTRANCE. 125 We, the subscribers, citizens of the said Commonwealth, having taken into serious consideration, a Bill printed by order of the last Session of General Assembly, entitled 'A Bill establishing a provision for teachers of the Christian Religion,' and conceiving that the same, if finally armed with the sanctions of a law, will be a dangerous abuse of power, are bound as faithful members of a free State, to remonstrate against it, and to declare the reasons by which we are determined. We remonstruate against the said Bill, 126 1. Because we hold it for a fundamental and undeniable truth, 'that religion, or the duty which we owe to our Creator, and the manner of discharging it, can be directed only by reason and conviction, not by force or violence.'1 The Religion then of every man must be left to the conviction and conscience of every man; and it is the right of every man to exercise it as these may dictate. This right is in its nature an unalienable right. It is unalienable; because the opinions of men, depending only on the evidence contemplated by their own minds, cannot follow the dictates of other men: It is unalienable also; because what is here a right towards men, is a duty towards the Creator. It is the duty of every man to render to the Creator such homage, and such only, as he believes to be acceptable to him. This duty is predecent both in order of time and degree of obligation, to the claims of Civil Society. Before any man can be considered as a member of Civil Society, he must be considered as a subject of the Governor of the Universe: And if a member of Civil Society, who enters into any subordinate Association, must always do it with a reservation of his duty to the general authority; much more must every man who becomes a member of any particular Civil Society, do it with a saving of his allegiance to the Universal Sovereign. We maintain therefore that in matters of Religion, no man's right is abridged by the institution of Civil Society, and that Religion is wholly exempt from its cognizance. True it is, that no other rule exists, by which any question which may divide a Society, can be ultimately determined, but the will of the majority; but it is also true, that the majority may trespass on the rights of the minority. 127 2. Because if religion be exempt from the authority of the Society at large, still less can it be subject to that of the Legislative Body. The latter are but the creatures and vicegerents of the former. Their jurisdiction is both derivative and limited: it is limited with regard to the co-ordinate departments, more necessarily is it limited with regard to the constituents. The preservation of a free government requires not merely, that the metes and bounds which separate each department of power may be invariably maintained; but more especially, that neither of them be suffered to overleap the great Barrier which defends the rights of the people. The Rulers who are guilty of such an encroachment, exceed the commission from which they derive their authority, and are Tyrants. The People who submit to it are governed by laws made neither by themselves, nor by an authority derived from them, and are slaves. 128 3. Because, it is proper to take alarm at the first experiment on our liberties. We hold this prudent jealousy to be the first duty of citizens, and one of (the) noblest characteristics of the late Revolution. The freemen of America did not wait till usurped power had strengthened itself by exercise, and entangled the question in precedents. They saw all the consequences in the principle, and they avoided the consequences by denying the principle. We revere this lesson too much, soon to forget it. Who does not see that the same authority which can establish Christianity, in exclusion of all other Religions, may establish with the same ease any particular sect of Christians, in exclusion of all other Sects? That the same authority which can force a citizen to contribute three pence only of his property for the support of any one establishment, may force him to conform to any other establishment in all cases whatsoever? 129 4. Because, the bill violates that equality which ought to be the basis of every law, and which is more indispensable, in proportion as the validity or expediency of any law is more liable to be impeached. If 'all men are by nature equally free and independent,'2 all men are to be considered as entering into Society on equal conditions; as relinquishing no more, and therefore retaining no less, one than another, of their natural rights. Above all are they to be considered as retaining an 'equal title to the free exercise of Religion according to the dictates of conscience'.3 Whilst we assert for ourselves a freedom to embrace, to profess and to observe the Religion which we believe to be of divine origin, we cannot deny an equal freedom to those whose minds have not yet yielded to the evidence which has convinced us. If this freedom be abused, it is an offence against God, not against man: To God, therefore, not to men, must an account of it be rendered. As the bill violates equality by subjecting some to peculiar burdens; so it violates the same principle, by granting to others peculiar exemptions. Are the Quakers and Menonists the only sects who think a compulsive support of their religions unnecessary and unwarrantable? Can their piety alone be intrusted with the care of public worship? Ought their Religions to be endowed above all others, with extraordinary privileges, by which proselytes may be enticed from all others? We think too favorably of the justice and good sense of these denominations, to believe that they either covet pre-eminencies over their fellow citizens, or that they will be seduced by them, from the common opposition to the measure. 130 5. Because the bill implies either that the Civil Magistrate is a competent Judge of Religious truth; or that he may employ Religion as an engine of Civil policy. The first is an arrogant pretension falsified by the contradictory opinions of Rulers in all ages, and throughout the world: The second an unhallowed perversion of the means of salvation. 131 6. Because the establishment proposed by the Bill is not requisite for the support of the Christian Religion. To say that it is, is a contradiction to the Christian Religion itself; for every page of it disavows a dependence on the powers of this world: it is a contradiction to fact; for it is known that this Religion both existed and flourished, not only without the support of human laws, but in spite of every opposition from them; and not only during the period of miraculous aid, but long after it had been left to its own evidence, and the ordinary care of Providence: Nay, it is a contradiction in terms; for a Religion not invented by human policy, must have pre-existed and been supported, before it was established by human policy. It is moreover to weaken in those who profess this Religion a pious confidence in its innate excellence, and the patronage of its Author; and to foster in those who still reject it, a suspicion that its friends are too conscious of its fallacies, to trust it to its own merits. 132 7. Because experience witnesseth that ecclesiastical establishments, instead of maintaining the purity and efficacy of Religion, have had a contrary operation. During almost fifteen centuries, has the legal establishment of Christianity been on trial. What have been its fruits? More or less in all places, pride and indolence in the Clergy; ignorance and servility in the laity; in both, superstition, bigotry and persecution. Enquire of the Teachers of Christianity for the ages in which it appeared in its greatest lustre; those of every sect, point to the ages prior to its incorporation with Civil policy. Propose a restoration of this primitive state in which its Teachers depended on the voluntary rewards of their flocks; many of them predict its downfall. On which side ought their testimony to have greatest weight, when for or when against their interest? 133 8. Because the establishment in question is not necessary for the support of Civil Government. If it be urged as necessary for the support of Civil Government only as it is a means of supporting Religion, and it be not necessary for the latter purpose, it cannot be necessary for the former. If Religion be not within (the) cognizance of Civil Government, how can its legal establishment be said to be becessary to Civil Government? What influence in fact have ecclesiastical establishments had on Civil Society? In some instances they have been seen to erect a spiritual tyranny on the ruins of Civil authority; in many instances they have been seen upholding the thrones of political tyranny; in no instance have they been seen the guardans of the liberties of the people. Rulers who wished to subvert the public liberties, may have found an established clergy convenient auxiliaries. A just government, instituted to secure & perpetuate it, needs them not. Such a government will be best supported by protecting every citizen in the enjoyment of his Religion with the same equal hand which protects his person and his property; by neither invading the equal rights by any Sect, nor suffering any Sect to invade those of another. 134 9. Because the proposed establishment is a departure from that generous policy, which, offering an asylum to the persecuted and oppressed of every Nation and Religion, promised a lustre to our country, and an accession to the number of its citizens. What a melancholy mark is the Bill of sudden degeneracy? Instead of holding forth an asylum to the persecuted, it is itself a signal of persecution. It degrades from the equal rank of Citizens all those whose opinions in Religion do not bend to those of the Legislative authority. Distant as it may be, in its present form, from the Inquisition it differs from it only in degree. The one is the first step, the other the last in the career of intolerance. The magnanimous sufferer under this cruel scourge in foreign Regions, must view the Bill as a Beacon on our Coast, warning him to seek some other haven, where liberty and philanthropy in their due extent may offer a more certain repose from his troubles. 135 10. Because, it will have a like tendency to banish our Citizens. The allurements presented by other situations are every day thinning their mumber. To superadd a fresh motive to emigration, by revoking the liberty which they now enjoy, would be the same species of folly which has dishonoured and depopulated flourishing kingdoms. 136 11. Because, it will destroy that moderation and harmony which the forbearance of our laws to intermeddle with Religion, has produced amongst its several sects. Torrents of blood have been spilt in the old world, by vain attempts of the secular arm to extinguish Religious discord, by proscribing all difference in Religious opinions. Time has at length revealed the true remedy. Every relaxation of narrow and rigorous policy, wherever it has been tried, has been found to assuage the disease. The American Theatre has exhibited proofs, that equal and complete liberty, if it does not wholly eradicate it, sufficiently destroys its malignant influence on the health and prosperity of the State. If with the salutary effects of this system under o r own eyes, we begin to contract the bonds of Religious freedom, we know no name that will too severely reproach our folly. At least let warning be taken at the first fruit of the threatened innovation. The very appearance of the Bill has transformed that 'Christian forbearance,4 love and charity,' which of late mutually prevailed, into animosities and jealousies, which may not soon be appeased. What mischiefs may not be dreaded should this enemy to the public quiet be armed with the force of a law? 137 12. Because, the policy of the bill is adverse to the diffusion of the light of Christianity. The first wish of those who enjoy this precious gift, ought to be that it may be imparted to the whole race of mankind. Compare the number of those who have as yet received it with the number still remaining under the dominion of false Religions; and how small is the former! Does the policy of the Bill tend to lessen the disproportion? No; it at once discourages those who are strangers to the light of (revelation) from coming into the Region of it; and countenances, by example the nations who continue in darkness, in shutting out those who might convey it to them. Instead of levelling as far as possible, every obstacle to the victorious progress of truth, the Bill with an ignoble and unchristian timidity would circumscribe it, with a wall of defence, against the encroachments of error. 138 13. Because attempts to enforce by legal sanctions, acts obnoxious to so great a proportion of Citizens, tend to enervate the laws in general, and to slacken the bands of Society. If it be difficult to execute any law which is not generally deemed necessary or salutary, what must be the case where it is deemed invalid and dangerous? and what may be the effect of so striking an example of impotency in the Government, on its general authority? 139 14. Because a measure of such singular magnitude and delicacy ought not to be imposed, without the clearest evidence that it is called for by a majority of citizens: and no satisfactory method is yet proposed by which the voice of the majority in this case may be determined, or its influence secured. 'The people of the respective counties are indeed requested to signify their opinion respecting the adoption of the Bill to the next Session of Assembly.' But the representation must be made equal, before the voice either of the Representatives or of the Counties, will be that of the people. Our hope is that neither of the former will, after due consideration, expouse the dangerous principle of the Bill. Should the event disappoint us, it will still leave us in full confidence, that a fair appeal to the latter will reverse the sentence against our liberties. 140 15. Because, finally, 'the equal right of every citizen to the free exercise of his Religion according to the dictates of conscience' is held by the same tenure with all our other rights. If we recur to its origin, it is equally the gift of nature; if we weigh its importance, it cannot be less dear to us; if we consult the Declaration of those rights which pertain to the good people of Virginia, as the 'basis and foundation of Government,'5 it is enumerated with equal solemnity, or rather studied emphasis. Either then, we must say, that the will of the Legislature is the only measure of their authority; and that in the plentitude of this authority, they may sweep away all our fundamental rights; or, that they are bound to leave this particular right untouched and sacred: Either we must say, that they may controul the freedom of the press, may abolish the trial by jury, may swallow up the Executive and Judiciary Powers of the State; nay that they may despoil us of our very right of suffrage, and erect themselves into an independent and hereditary assembly: or we must say, that they have no authority to enact into law the Bill under consideration. We the subscribers say, that the General Assembly of this Commonwealth have no such authority: A d that no effort may be omitted on our part against so dangerous an usurpation, we oppose to it, this remonstrance; earnestly praying, as we are in duty bound, that the Supreme Lawgiver of the Universe, by illuminating those to whom it is addressed, may on the one hand, turn their councils from every act which would affront his holy prerogative, or violate the trust committed to them: and on the other, guide them into every measure which may be worthy of his (blessing, may re) dound to their own praise, and may establish more firmly the liberties, the prosperity, and the Happiness of the Commonwealth. II Madison, 183—191. 141 SUPPLEMENTAL APPENDIX. 142 A Bill Establishing A Provision for Teachers of the Christian Religion. 143 Whereas the general diffusion of Christian knowledge hath a natural tendency to correct the morals of men, restrain their vices, and preserve the peace of society; which cannot be effected without a competent provision for learned teachers, who may be thereby enabled to devote their time and attention to the duty of instructing such citizens, as from their circumstances and want of education, cannot otherwise attain such knowledge; and it is judged that such provision may be made by the Legislature, without counteracting the liberal principle heretofore adopted and intended to be preserved by abolishing all distinctions of pre-eminence amongst the different societies or communities of Christians; 144 Be it therefore enacted by the General Assembly, that for the support of Christian teachers,—per centum on the amount, or—in the pound on the sum payable for tax on the property within this Commonwealth, is hereby assessed, and shall be paid by every person chargeable with the said tax at the time the same shall become due; and the Sheriffs of the several Counties shall have power to levy and collect the same in the same manner and under the like restrictions and limitations, as are or may be prescribed by the laws for raising the Revenues of this State. 145 And be it enacted, That for every sum so paid, the Sheriff or Collector shall give a receipt, expressing therein to what socity of Christians the person from whom he may receive the same shall direct the money to be paid, keeping a distinct account thereof in his books. The Sheriff of every County, shall, on or before the _ _ day of _ _ in every year, return to the Court, upon oath, two alphabetical lists of the payments to him made, distinguishing in columns opposite to the names of the persons who shall have paid the same, the society to which the money so paid was by them appropriated; and one column for the names where no appropriation shall be made. One of which lists, after being recorded in a book to be kept for that purpose, shall be filed by the Clerk in his office; the other shall be the Sheriff be fixed up in the Court-house, there to remain for the inspection of all concerned. And the Sheriff, after deducting five per centum for the collection, shall forthwith pay to such person or persons as shall be appointed to receive the same by the Vestry, Elders, or Directors, however, denominated of each such society, the sum so stated to be due to that society; or in default thereof, upon the motion of such person or persons to the next or any succeeding Court, execution shall be awarded for the same against the Sheriff and his security, his and their executors or administrators; provided that ten days previous notice be given of such motion. An upon every such execution, the Officer serving the same shall proceed to immediate sale of the estate taken, and shall not accept of security for payment at the end of three months, nor to have the goods forthcoming at the day of sale; for his better direction wherein, the Clerk shall endorse upon every such execution that no security of any kind shall be taken. 146 And be it further enacted, That the money to be raised by virtue of this Act, shall be by the Vestr es, Elders, or Directors of each religious society, appropriated to a provision for a Minister or Teacher of the Gospel of their denomination, or the providing place of divine worship, and to none other use whatsoever; except in the denominations of Quakers and Menonists, who may receive what is collected from their members, and place it in their general fund, to be disposed of in a manner which they shall think best calculated to promote their particular mode of worship. DP And be it enacted, That all sums which at the time of payment to the Sheriff or Collector may not be appropriated by the person paying the same, shall be accounted for with the Court in manner as by this Act is directed; and after deducting for his collection, the Sheriff shall pay the amount thereof (upon account certified by the Court to the Auditors of Public Accounts, and by them to the Treasurer) into the public Treasury, to be disposed of under the direction of the General Assembly, for the encouragement of seminaries of learning within the Counties whence such sums shall arise, and to no other use or purpose whatsoever. 147 THIS Act shall commence, and be in force, from and after the day of _ _ in the year _ _. 148 A Copy from the Engrossed Bill. 149 John Beckley, C.H.D. 150 Washington Mss. (Papers of George Washington, Vol. 231); Library of Congress.* 1 'Whenever in any district there are children living remote from any schoolhouse, the board of education of the district may make rules and contracts for the transportation of such children to and from school, including the transportation of school children to and from school other than a public school, except such school as is operated for profit in whole or in part. 'When any school district provides any transportation for public school children to and from school, transportation from any point in such established school route to any other point in such established school route shall be supplied to school children residing in such school district in going to and from school other than a public school, except such school as is operated for profit in whole or in part.' New Jersey Laws 1941, c. 191, p. 581, N.J.Rev.Stat. 18:14—8, N.J.S.A. 2 Appellant does not challenge the New Jersey statute or the resolution on the ground that either violates the equal protection clause of the Fourteenth Amendment by excluding payment for the transportation of any pupil who attends a 'private school run for profit.' Although the township resolution authorized reimbursement only for parents of public and Catholic school pupils, appellant does not allege, nor is there anything in the record which would offer the slightest support to an allegation, that there were any children in the township who attended or would have attended, but for want of transportation, any but public and Catholic schools. It will be appropriate to consider the exclusion of students of private schools operated for profit when and if it is proved to have occurred, is made the basis of a suit by one in a position to challenge it, and New Jersey's highest court has ruled adversely to the challenger. Striking down a state law is not a matter of such light moment that it should be done by a federal court ex mero motu on a postulate neither charged nor proved, but which rests on nothing but a possibility. Cf. Liverpool, New York & Philadelphia Steamship Co. v. Com'rs of Emigration, 113 U.S. 33, 39, 5 S.Ct. 352, 355, 28 L.Ed. 899. 3 It might hold the excepting clause to be invalid, and sustain the statute with that clause excised. Section 1:1—10 N.J.Rev.Stat., N.J.S.A., provides with regard to any statute that if 'any provision thereof, shall be declared to be unconstitutional * * * in whole or in part, by a court of competent jurisdiction, such * * * article shall, to the extent that it is not unconstitutional, * * * be enforced * * *.' The opinion of the Court of Errors and Appeals in this very case suggests that state law now authorizes transportation of all pupils. Its opinion stated: 'Since we hold that the legislature may appropriate general state funds or authorize the use of local funds for the transportation of pupils to any school, we conclude that such authorization of the use of local funds is likewise authorized by P.L.1941, Chapter 191, and R.S. 18:7—78.' 133 N.J.L. 350, 354, 44 A.2d 333, 337. (Italics supplied.) 4 See Reynolds v. United States, 98 U.S. 145, 162, 25 L.Ed. 244; cf. Knowlton v. Moore, 178 U.S. 41, 89, 106, 20 S.Ct. 747, 766, 772, 44 L.Ed. 969. 5 See e.g. Macaulay, History of England (1849) I, cc. 2, 4; The Cambridge Modern History (1908) V, cc. V, IX, XI; Beard, Rise of American Civilization (1937) I, 60; Cobb, Religious Liberty in America (1902) c. II; Sweet, The Story of Religion in America (1939) c. II; Sweet, Religion in Colonial America (194 ) 320—322. 6 See e.g. the charter of the colony of Carolina which gave the grantees the right of 'patronage and advowsons of all the churches and chapels * * * together with licence and power to build and found churches, chapels and oratories * * * and to cause them to be dedicated and consecrated, according to the ecclesiastical laws of our kingdom of England.' Poore, Constitutions (1878) II, 1390, 1391. That of Maryland gave to the grantee Lord Baltimore 'the Patronages and Advowsons of all Churches which * * * shall happen to be built, together with Licence and Faculty of erecting and founding Churches, Chapels, and Places of Worship * * * and of causing the same to be dedicated and consecrated according to the Ecclesiastical Laws of our Kingdom of England, with all, and singular such, and as ample Rights, Jurisdictions, Privileges, * * * as any Bishop * * * in our Kingdom of England ever * * * hath had. * * *' McDonald, Documentary Source Book of American History (1934) 31, 33. The Commission of New Hampshire of 1680, Poore, supra, II, 1277, stated: 'And above all things We do by these presents will, require and comand our said Councill to take all possible care for ye discountenancing of vice and encouraging of virtue and good living; and that by such examples ye infidle may be invited and desire to partake of ye Christian Religion, and for ye greater ease and satisfaction of ye sd loving subjects in matters of religion, We do hereby require and comand yt liberty of conscience shall be allowed unto all protestants; yt such especially as shall be conformable to ye rites of ye Church of Engd shall be particularly countenanced and encouraged.' See also Town of Pawlet v. Clark, 9 Cranch 292, 3 L.Ed. 735. 7 See e.g. Semple, Baptists in Virginia (1894); Sweet, Religion in Colonial America, supra at 131—152, 322—339. 8 Almost every colony exacted some kind of tax for church support. See e.g. Cobb, op. cit. supra, note 5, 110 (Virginia); 131 (North Carolina); 169 (Massachusetts); 270 (Connecticut); 304, 310, 339 (New York); 386 (Maryland); 295 (New Hampshire). 9 Madison wrote to a friend in 1774: 'That diabolical, hell-conceived principle of persecution rages among some. * * * This vexes me the worst of anything whatever. There are at this time in the adjacent country not less than five or six well-meaning men in close jail for publishing their religious sentiments, which in the main are very orthodox. I have neither patience to hear, talk, or think of anything relative to this matter; for I have squabbled and scolded, abused and ridiculed, so long about it to little purpose, that I am without common patience. So I must beg you to pity me, and pray for liberty of conscience to all.' I Writings of James Madison (1900) 18, 21. 10 Virginia's resistance to taxation for church support was crystalized in the famous 'Parson's Case' argued by Patrick Henry in 1763. For an account see Cobb, op. cit., supra, note 5, 108 111. 11 II Writings of James Madison, 183. 12 In a recently discovered collection of Madison's papers, Madison recollected that his Remonstrance 'met with the approbation of the Baptists, the Presby-terians, the Quakers, and the few Roman Catholics, universally; of the Methodists in part; and even of not a few of the Sect formerly established by law.' Madison, Monopolies, Perpetuities, Corporations, Ecclesiastical Endowments, in Fleet, Madison's 'Detached Memorandum,' 3 William and Mary Q. (1946) 534, 551, 555. 13 For accounts of background and evolution of the Virginia Bill for Religious Liberty see e.g. James, The Struggle for Religious Liberty in Virginia (1900); Thom, The Struggle for Religious Freedom in Virginia; the Baptists (1900); Cobb, op. cit., supra, note 5, 74—115; Madison, Monopolies, Perpetuities, Corporations, Ecclesiastical Endowments, op. cit., supra, note 12, 554, 556. 14 12 Hening, Statutes of Virginia (1823) 84; Commager, Documents of American History (1944) 125. 15 Permoli v. Municipality No. 1 of City of New Orleans, 3 How. 589, 11 L.Ed. 739. Cf. Barron, for Use of Tiernan v. Mayor and City Council of City of Baltimore, 7 Pet. 243, 8 L.Ed. 672. 16 For a collection of state constitutional provisions on freedom of religion see Gavel, Public Funds for Church and Private Schools (1937) 148—149. See also 2 Cooley, Constitutional Limitations (1927) 960—985. 17 Test provisions forbade office holders to 'deny * * * the truth of the Protestant religion,' e.g. Constitution of North Carolina 1776, § XXXII, II Poore, supra, 1413. Maryland permitted taxation for support of the Christian religion and limited civil office to Christians until 1818, Id., I, 819, 820, 832. 18 See Note 50 Yale L.J. (1941) 917; see also cases collected Synod of Dakota v. State, 2 S.D. 366, 50 N.W. 632, 14 L.R.A. 418; 5 A.L.R. 879; 141 A.L.R. 1148. 19 See cases collected Synod of Dakota v. State, 2 S.D. 366, 50 N.W. 632, 14 L.R.A. 418; 5 A.L.R. 879; 141 A.L.R. 1148. 20 Ibid. See also Cooley, op. cit., supra, note 16. 21 Terrett v. Taylor, 9 Cranch 43, 3 L.Ed. 650; Watson v. Jones, 13 Wall. 679, 20 L.Ed. 666; Davis v. Beason, 133 U.S. 333, 10 S.Ct. 299, 33 L.Ed. 637; Cf. Reynolds v. United States, supra, 98 U.S. 162, 25 L.Ed. 244; Reuben Quick Bear v. Leupp, 210 U.S. 50, 28 S.Ct. 690, 52 L.Ed. 954. 22 Cantwell v. State of Conn., 310 U.S. 296, 60 S.Ct. 900, 84 L.Ed. 1213, 128 A.L.R. 1352; Jamison v. State of Texas, 318 U.S. 413, 63 S.Ct. 669, 87 L.Ed. 869; Largent v. State of Texas, 318 U.S. 418, 63 S.Ct. 667, 87 L.Ed. 873; Murdock v. Commonwealth of Pennsylvania, supra; West Virginia State Board of Education v. Barnette, 319 U.S. 624, 63 S.Ct. 1178, 87 L.Ed. 1628, 147 A.L.R. 674; Follett v. Town of McCormick, 321 U.S. 573, 64 S.Ct. 717, 88 L.Ed. 938, 152 A.L.R. 317; Marsh v. State of Alabama, 326 U.S. 501, 66 S.Ct. 276; Cf. Bradfield v. Roberts, 175 U.S. 291, 20 S.Ct. 121, 44 L.Ed. 168. 23 Harmon v. Dreher, 1843, Speer's Eq., S.C., 87, 120. 24 New Jersey long ago permitted public utilities to charge school children reduced rates. See Public Service R. Co. v. Board of Public Utility Com'rs. 1917, 81 N.J.L. 363, 80 A. 27; see also Interstate Consolidated Street Ry. Co. v. Commonwealth of Mass., supra. The District of Columbia Code requires that the new charter of the District public transportation company provide a three cent fare 'for school children * * * going to and from public, parochial or like schools * * *.' Act Jan. 14, 1933, § 1, subd. 19, 47 Stat. 752, 759, D.C.Code 1940, § 44—214 note. 1 See Cubberley, Public Education in the United States (1934) ch. VI; Knight, Education in the United States (1941) ch. VIII. 1 'A Bill for Establishing Religious Freedom,' enacted by the General Assembly of Virginia, January 19, 1786. See 1 Randall, The Life of Thomas Jefferson (1858) 219—220; XII Hening's Statutes of Virginia (1823) 84. 2 Schneider v. State, 308 U.S. 147, 60 S.Ct. 146, 84 L.Ed. 155; Cantwell v. Connecticut, 310 U.S. 296, 60 S.Ct. 900, 84 L.Ed. 1213, 128 A.L.R. 1352; Murdock v. Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292, 146 A.L.R. 81; Prince v. Massachusetts, 321 U.S. 158, 64 S.Ct. 438, 88 L.Ed. 645; Thomas v. Collins, 323 U.S. 516, 530, 65 S.Ct. 315, 322, 89 L.Ed. 430. 3 The briefs did not raise the First Amendment issue. The only one presented was hether the state's action involved a public or an exclusively private function under the due process clause of the Fourteenth Amendment. See Part IV, infra. On the facts, the cost of transportation here is inseparable from both religious and secular teaching at the religious school. In the Cochran case the state furnished secular textbooks only. But see text infra at note 40 et seq., and Part IV. 4 Cf. note 3 and text Part IV; see also note 35. 5 The statute reads: 'Whenever in any district there are children living remote from any schoolhouse, the board of education of the district may make rules and contracts for the transportation of such children to and from school * * * other than a public school, except such school as is operated for profit in whole or in part. 'When any school district provides any transportation for public school children to and from school, transportation from any point in such established school route to any other point in such established school route shall be supplied to school children residing in such school district in going to and from school other than a public school, except such school as is operated for profit in whole or in part.' Laws of New Jersey 1941, c. 191, N.J.S.A. 18:14—8. 6 The full text of the resolution is given in note 59 infra. 7 The public schools attended were the Trenton Senior High School, the Trenton Junior High School and the Pennington High School. Ewing Township itself provides no public high schools, affording only elementary public schools which stop with the eighth grade. The Ewing school board pays for both transportation and tuitions of pupils attending the public high schools. The only private schools, all Catholic, covered in application of the resolution are St. Mary's Cathedral High School, Trenton Catholic Boys High School, and two elementary parochial schools, St. Hedwig's Parochial School and St. Francis School. The Ewing board pays only for transportation to these schools, not for tuitions. So far as the record discloses the board does not pay for or provide transportation to any other elementary school, public or private. See notes 58, 59 and text infra. 8 IX Writings of James Madison (ed. by Hunt, 1904) 288; Padover, Jefferson (1942) 74. Madison's characterization related to Jefferson's entire revision of the Virginia Code, of which the Bill for Establishing Religious Freedom was part. See note 15. 9 See Reynolds v. United States, 98 U.S. 145, 25 L.Ed. 244; Davis v. Beason, 133 U.S. 333, 10 S.Ct. 299, 33 L.Ed. 637; Mormon Church v. United States, 136 U.S. 1, 10 S.Ct. 792, 34 L.Ed. 481; Jacobson v. Massachusetts, 197 U.S. 11, 25 S.Ct. 358, 49 L.Ed. 643, 3 Ann.Cas. 765; Prince v. Massachusetts, 321 U.S. 158, 64 S.Ct. 438, 88 L.Ed. 645; also Cleveland v. United States, 329 U.S. 14, 67 S.Ct. 13. Possibly the first official declaration of the 'clear and present danger' doctrine was Jefferson's declaration in the Virginia Statute for Establishing Religious Freedom: 'that it is time enough for the rightful purposes of civil government, for its officers to interfere when principles break out into overt acts against peace and good order.' 1 Randall, The Life of Thoma Jefferson (1858) 220; Padover, Jefferson (1942) 81. For Madison's view to the same effect, see note 28 infra. 10 Murdock v. Pennsylvania, 319 U.S. 105, 109, 63 S.Ct. 870, 873, 87 L.Ed. 1292, 146 A.L.R. 81; Martin v. Struthers, 319 U.S. 141, 63 S.Ct. 862, 87 L.Ed. 1313; Jamison v. Texas, 318 U.S. 413, 63 S.Ct. 669, 87 L.Ed. 869; Marsh v. Alabama, 326 U.S. 501, 66 S.Ct. 276; Tucker v. Texas, 326 U.S. 517, 66 S.Ct. 274. 11 Conflicts in other states, and earlier in the colonies, contributed much to generation of the Amendment, but none so directly as that in Virginia or with such formative influence on the Amendment's content and wording. See Cobb, Religious Liberty in America (1902); Sweet, The Story of Religion in America (1939). The Charter of Rhode Island of 1663, II Poore, Constitutions (1878) 1595, was the first colonial charter to provide for religious freedom. The climactic period of the Virginia struggle covers the decade 1776—1786, from adoption of the Declaration of Rights to enactment of the Statute for Religious Freedom. For short accounts see Padover, Jefferson (1942) c. V; Brant, James Madison, The Virginia Revolutionist (1941) cc. XII, XV; James, The Struggle for Religious Liberty in Virginia (1900) cc. X, XI; Eckenrode, Separation of Church and State in Virginia (1910). These works and Randall, see note 1, will be cited in this opinion by the names of their authors. Citations to 'Jefferson' refer to The Works of Thomas Jefferson (ed. by Ford, 1904—1905); to 'Madison,' to The Writings of James Madison (ed. by Hunt, 1901—1910). 12 Brant, cc. XII, XV; James, cc. X, XI; Eckenrode. 13 See Brant, c. XII, particularly at 243. Cf. Madison's Remonstrance, Appendix to this opinion. Jefferson of course held the same view. See note 15. 'Madison looked upon * * * religious freedom, to judge from the concentrated attention he gave it, as the fundamental freedom.' Brant, 243; and see Remonstrance, Par. 1, 4, 15, Appendix. 14 See Brant, 245—246. Madison quoted liberally from the Declaration in his remonstrance and the use made of the quotations indicates that he considered the Declaration to have outlawed the prevailing establishment in principle, if not technically. 15 Jefferson was chairman of the revising committee and chief draftsman. Corevisers were Wythe, Pendleton, Mason and Lee. The first enacted portion of the revision, which became known as Jefferson's Code, was the statute barring entailments. Primogeniture soon followed. Much longer the author was to wait for enactment of the Bill for Religious Freedom; and not until after his death was the corollary bill to be accepted in principle which he considered most important of all, namely, to provide for common education at public expense. See V Jefferson, 153. However, he linked this with disestablishment as collorary prime parts in a system of basic freedoms. I Jefferson, 78. Jefferson and Madison by his sponsorship, sought to give the Bill for Establishing Religious Freedom as nearly constitutional status as they could at the time. Acknowledging that one legislature could not 'restrain the acts of succeeding Assemblies and that therefore to declare this act to be irrevocable would be of no effect in law,' the Bill's concluding provision as enacted nevertheless asserted: 'Yet we are free to declare, and do declare, that the rights hereby asserted are of the natural rights of mankind, and that if any act shall be hereafter passed to repeal the present or to narrow its operations, such act will be an infringement of natural right.' 1 Randall, 220. 16 See I Jefferson, 70—71; XII Jefferson, 447; Padover, 80. 17 Madison regarded this action as desertion. See his letter to Monroe of April 12, 1785; II Madison, 129, 131—132; James, cc. X, XI. But see Eckenrode, 91, suggesting it was surrender to the inevitable. The bill provided: 'That for every sum so paid, the Sheriff or Collector shall give a receipt, expressing therein to what society of Christians the person from whom he may receive the same shall direct the money to be paid. * * *' See also notes 19, 43 infra. A copy of the Assessment Bill is to be found among the Washington manuscripts in the Library of Congress. Papers of George Washington, Vol. 231. Because of its crucial role in the Virginia struggle and bearing upon the First Amendment's meaning, the text of the Bill is et forth in the Supplemental Appendix to this opinion. 18 Eckenrode, 99, 100. 19 Id., 100; II Madison, 113. The bill directed the sheriff to pay 'all funds which * * * may not be appropriated by the person paying the same * * * into the public Treasury, to be disposed of under the direction of the General Assembly, for the encouragement of seminaries of learning within the Counties whence such sums shall arise, and to no other use or purpose whatsoever.' Supplemental Appendix. 20 See generally Eckenrode, c. V; Brant, James, and other authorities cited in note 11 above. 21 II Madison, 183; and the Appendix to this opinion. Eckenrode, 100 ff. See also Fleet, Madison's 'Detached Memoranda' (1946) III William & Mary Q. (3d Series) 534, 554—562. 22 The major causes assigned for its defeat include the elevation of Patrick Henry to the governorship in November of 1784; the blunder of the proponents in allowing the Bill for Incorporations to come to the floor and incur defeat before the Assessment Bill was acted on; Madison's astute leadership, taking advantage of every 'break' to convert his initial minority into a majority, including the deferment of action on the third, reading to the fall; the Remonstrance, bringing a flood of protesting petitions; and the general poverty of the time. See Eckenrode, c. V, for an excellent short, detailed account. 23 See James, Brant, op. cit. supra note 11. 24 V Madison, 176. Cf. notes 33, 37. 25 V Madison, 132. 26 Brant, 250. The assurance made first to his constituents was responsible for Madison's becoming a member of the Virginia Convention which ratified the Constitution. See James, 154—158. 27 The amendment with respect to religious liberties read, as Madison introduced it: 'The civil rights of none shall be abridged on account of religious belief or worship, nor shall any national religion be established, nor shall the full and equal rights of conscience be in any manner, or on any pretext, infringed.' 1 Annals of Congress 434. In the process of debate this was modified to its present form. See especially 1 Annals of Congress 729—731, 765; also note 34. 28 See text of the Remonstrance, Appendix; also notes 13, 15, 24, 25 supra and text. Madison's one exception concerning restraint was for 'preserving public order.' Thus he declared in a private letter, IX Madison, 484, 487, written after the First Amendment was adopted: 'The tendency to a usurpation on one side or the other, or to a corrupting coalition or alliance between them, will be best guarded agst. by an entire abstinance of the Govt. from interference in any way whatever, beyond the necessity of preserving public order, & protecting each sect agst. trespasses on its legal rights by others.' Cf. note 9. 29 The third ground of remonstrance, see the Appendix, bears repetition for emphasis here: 'Because, it is proper to take alarm at the first experiment on our liberties. * * * The freemen of America did not wait till usurped power had strengthened itself by exercise, and entangled the question in precedents. They saw all the consequences in the principle, and they avoided the consequences by denying the principle. We revere this lesson too much, soon to forget it. Who does not see that * * * the same authority which can force a citizen to contribute three pence only of his property for the support of any one establishment, may force him to conform to any other establishment in all cases whatsoever?' (Emphasis added.) II Madison 183, 185—186. 30 Eckenrode, 105, in summary of the Remonstrance. 31 'Because the bill implies either that the Civil Magistrate is a competent Judge of Religious truth, or that he may employ Religion as an engine of Civil policy. The first is an arrogant pretention falsified by the contradictory opinion of Rulers in all ages, and throughout the world: The second an unhallowed perversion of the means of salvation.' Remonstrance, Appendix, Par. 5; II Madison 183, 187. 32 As is pointed out above, note 3, and in Part IV infra, Cochran v. Louisiana State Board of Education, 281 U.S. 370, 50 S.Ct. 335, 74 L.Ed. 913, was not such a case. 33 See text supra at notes 24, 25. Madison, of course, was but one of many holding such views, but nevertheless agreeing to the common understanding for adoption of a Bill of Rights in order to remove all doubt engendered by the absence of explicit guaranties in the original Constitution. By 1791 the great fight over establishments had ended, although some vestiges remained then and later, even in Virginia. The glebes, for example, were not sold there until 1802. Cf. Eckenrode, 147. Fixing an exact date for 'disestablishment' is almost impossible, since the process was piecemeal. Although Madison failed in having the Virginia Bill of Rights declare explicitly against establishment in 1776, cf. note 14 and text supra, in 1777 the levy for support of the Anglican clergy was suspended. It was never resumed. Eckenrode states: 'This act, in effect, destroyed the establishment. Many dates have been given for its end, but it really came on January 1, 1777, when the act suspending the payment of tithes became effective. This was not seen at the time. * * * But in freeing almost half of the taxpayers from the burden of the state religion, the state religion was at an end. Nobody could be forced to support it, and an attempt to levy tithes upon Anglicans alone would be to recruit the ranks of dissent.' P. 53. See also pp. 61, 64. The question of assessment however was revived 'with far more strength than ever, in the summer of 1784.' Id., 64. It would seem more factual therefore to fix the time of disestablishment as of December, 1785-January, 1786, when the issue in large was finally settled. 34 At one point the wording was proposed: 'No religion shall be established by law, nor shall the rights of conscience be infringed.' 1 Annals of Congress 729. Cf. note 27. Representative Huntington of Connecticut feared this might be construed to prevent judicial enforcement of private pledges. He stated 'that he feared * * * that the words might be taken in such latitude as to be extremely hurtful to the cause of religion. He understood the amendment to mean what had been expressed by the gentleman from Virginia; but others might find it convenient to put another construction upon it. The ministers of their congregations to the Eastward were maintained by the contributions of those who belonged to their society; the expense of building meeting-houses was contributed in the same manner. These things were regulated by by-laws. If an action was brought before a Federal Court on any of these cases, the person who had neglected to perform his engagements could not be compelled to do it; for a support of ministers or building of places of worship might be construed into a religious establishment.' 1 Annals of Congress 730. To avoid any such possibility, Madison suggested inserting the word 'national' before 'religion,' thereby not only again disclaiming intent to bring about the result Huntington feared but also showing unmistakably that 'establishment' meant public 'support' of religion in the financial sense. I Annals of Congress 731. See also IX Madison, 484—487. 35 The decision most closely touching the question, where it was squarely raised, is Quick Bear v. Leupp, 210 U.S. 50, 28 S.Ct. 690, 52 L.Ed. 954. The Court distinguished sharply between appropriations from public funds for the support of religious education and appropriations from funds held in trust by the Government essentially as trustee for private individuals, Indian wards, as beneficial owners. The ruling was that the latter could be disbursed to private, religious schools at the designation of those patrons for paying the cost of their education. But it was stated also that such a use of public moneys would violate both the First Amendment and the specific statutory declaration involved, namely, that 'it is hereby declared to be the settled policy of the government to hereafter make no appropriation whatever for education in any sectarian school.' 210 U.S. at page 79, 28 S.Ct. at page 697, 52 L.Ed. 954. Cf. Ponce v. Roman Catholic Apostolic Church, 210 U.S. 296, 322, 28 S.Ct. 737, 747, 52 L.Ed. 1068. And see Bradfield v. Roberts, 175 U.S. 291, 20 S.Ct. 121, 44 L.Ed. 168, an instance of highly artificial grounding to support a decision sustaining an appropriation for the care of indigent patients pursuant to a contract with a private hospital. Cf. also the authorities cited in note 9. 36 See text at note 1. 37 '* * * but o religious Test shall ever be required as a Qualification to any Office or public Trust under the United States.' Const. Art. VI, cl. 3. See also the two forms prescribed for the President's Oath or Affirmation. Const. Art. II, § 1. Cf. Ex parte Garland, 4 Wall. 333, 18 L.Ed. 366; Cummings v. Missouri, 4 Wall. 277, 18 L.Ed. 356; Lovett v. United States, 328 U.S. 303, 66 S.Ct. 1073. 38 In the words of the Virginia statute, following the portion of the preamble quoted at the beginning of this opinion: '* * * even the forcing him to support this or that teacher of his own religious persuasion, is depriving him of the comfortable liberty of giving his contributions to the particular pastor whose morals he would make his pattern, and whose powers he feels most persuasive to righteousness, and is withdrawing from the ministry those rewards, which proceeding from an approbation of their personal conduct, are an additional incitement to earnest and unremitting labors for the instruction of mankind.' Cf. notes 29, 30, 31 and text supra. 39 See note 38. 40 See Bower, Church and State in Education (1944) 58: '* * * the fundamental division of the education of the whole self into the secular and the religious could not be justified on the grounds of either a sound educational philosophy or a modern functional concept of the relation of religion to personal and social experience.' See also Vere, The Elementary School, in Essays on Catholic Education in the United States (1942) 110—111; Gabel, Public Funds for Church and Private Schools (1937) 737—739. 41 It would seem a strange ruling that a 'reasonable,' that is, presumably a small, license fee cannot be placed upon the exercise of the right of religious instruction, yet that under the correlative constitutional guaranty against 'an establishment' taxes may be levied and used to aid and promote religious instruction, if only the amounts so used are small. See notes 30 31 supra and text. Madison's objection to 'three pence' contributions and his stress upon 'denying the principle' without waiting until 'usurped power had * * * entangled the question in precedents,' note 29, were reinforced by his further characterization of the Assessment Bill: 'District as it may be, in its present form, from the Inquisition it differs from it only in degree. The one is the first step, the other the last in the career of intolerance.' Remonstrance, Par. 9; II Madison 183, 188. 42 If it is part of the state's function to supply to religious schools or their patrons the smaller items of educational expense, because the legislature may say they perform a public function, it is hard to see why the larger ones also may not be paid. Indeed, it would seem even more proper and necessary for the state to do this. For if one class of expenditures is justified on the ground that it supports the general cause of education or benefits the individual, or can be made to do so by legislative declaration, so even more certainly would be the other. To sustain payment for transportation to school, for textbooks, for other essential materials, or perhaps for school lunches, and not for what makes all these things effective for their intended end, would be to make a public function of the smaller items and their cumulative effect, but to make wholly private in character the larger things without which the smaller could have no meaning or use. 43 'Whereas the general diffusion of Christian knowledge hath a natural tendency to correct the morals of men, restrain their vices, and preserve the peace of society; which cannot be effected without a competent provision for learned teachers, who may be thereby enabled to devote their time and attention to the duty of instructing such citizens, as from their circumstances and want of education, cannot otherwise attain such knowledge; and it is judged that such provision may be made by the Legislature, without counteracting the liberal principle heretofore adopted and intended to be preserved by abolishing all distinctions of pre-eminence amongst the different societies of communities of Christians; * * *' Supplemental Appendix; Foote, Sketches of Virginia (1850) 340. 44 'Because the Establishment proposed by the Bill is not requisite for the support of the Christian Religion. To say that it is, is a contradiction to the Christian Religion itself; for every page of it disavows a dependence on the powers of this world. * * * Because the establishment in question is not necessary for the support of Civil Government. * * * What influence in fact have ecclesiastical establishments had on Civil Society? * * * in no instance have they been seen the guardians of the l berties of the people.' II Madison 183, 187, 188. 45 'Because experience witnesseth that ecclesiastical establishments, instead of maintaining the purity and efficacy of Religion, have had a contrary operation.' II Madison 183, 187. 46 'At least let warning be taken at the first fruit of the threatened innovation. The very appearance of the Bill has transformed that 'Christian forbearance, love and charity,' which of late mutually prevailed, into animosities and jealousies, which may not soon be appeased.' II Madison 183, 189. 47 In this case briefs amici curiae have been filed on behalf of various organizations representing three religious sects, one labor union, the American Civil Liberties Union, and the states of Illinois, Indiana, Louisiana, Massachusetts, Michigan and New York. All these states have laws similar to New Jersey's and all of them, with one religious sect, support the constitutionality of New Jersey's action. The others oppose it. Maryland and Mississippi have sustained similar legislation. Note 49 infra. No state without legislation of this sort has filed an opposing brief. But at least six states have held such action invalid, namely, Delaware, Oklahoma, New York, South Dakota, Washington and Wisconsin. Note 49 infra. The New York ruling was overturned by amendment to the state constitution in 1938. Constitution of New York, Art. XI, § 4. Furthermore, in this case the New Jersey courts divided, the Supreme Court holding the statute and resolution invalid, 132 N.J.L. 98, 39 A.2d 75, the Court of Errors and Appeals reversing that decision, 133 N.J.L. 350, 44 A.2d 333. In both courts, as here, the judges split, one of three dissenting in the Supreme Court, three of nine in the Court of Errors and Appeals. The division is typical. See the cases cited in note 49. 48 See the authorities cited in note 49; and see note 54. 49 Some state courts have sustained statutes granting free transportation or free school books to children attending demoninational schools on the theory that the aid was a benefit to the child rather than to the school. See Nichols v. Henry, 301 Ky. 434, 191 S.W.2d 930, with which compare Sherrard v. Jefferson County Board of Education, 294 Ky. 469, 171 S.W.2d 963; Cochran v. Louisiana State Board of Education, 168 La. 1030, 123 So. 664, affirmed 281 U.S. 370, 50 S.Ct. 335, 74 L.Ed. 913; Borden v. Louisiana State Board of Education, 168 La. 1005, 123 So. 655, 67 A.L.R. 1183; Board of Education v. Wheat, 174 Md. 314, 199 A. 628; Adams v. County Com'rs of St. Mary's County, 180 Md. 550, 26 A.2d 370; Chance v. Mississippi State Textbook R. & O. Board, 190 Miss. 453, 200 So. 706. See also Bowker v. Baker, 73 Cal.App.2d 653, 167 P.2d 256. Other courts have held such statutes unconstitutional under state constitutions as aid to the schools. Judd v. Board of Education, 278 N.Y. 200, 15 N.E.2d 576, 118 A.L.R. 789, but see Note 47 supra; Smith v. Donahue, 202 App.Div. 656, 195 N.Y.S. 715; State ex rel. Traub v. Brown, 3 Del. 181, 6 W.W.Harr. 181, 172 A. 835; Gurney v. Ferguson, 190 Okl. 254, 122 P.2d 1002; Mitchell v. Consolidated School District, 17 Wash.2d 61, 135 P.2d 79, 146 A.L.R. 612; State ex rel. Van Straten v. Milquet, 180 Wis. 109, 192 N.W. 392. And cf. Hlebanja v. Brewe, 58 S.D. 351, 236 N.W. 296. And since many state constitutions have provisions forbidding the appropriation of public funds for private purposes, in these and other cases the issue whether the statute was for a 'public' or 'private' purpose has been present. See Note (1941) 50 Yale L.J. 917, 925. 50 E.g., Gurney v. Ferguson, 190 Okl. 254, 255, 122 P.2d 1002; Mitchell v. Consolidated School District, 17 Wash.2d 61, 68, 135 P.2d 79, 146 A.L.R. 612; Smith v. Donahue, 202 App.Div. 656, 664, 195 N.Y.S. 715; Board of Education v. Wheat, 174 Md. 314, 316, dissenting opinion at page 340, 199 A. 628, at page 639. This is true whether the appropriation and payment are in form to the individual or to the institution. Id. Questions of this gravity turn upon the purpose and effect of the state's expenditure to accomplish the forbidden object, not upon who receives the amount and applies it to that end or the form and manner of the payment. 51 The payments here averaged roughly $40.00 a year per child. 52 See Part V. 53 See also note 46 supra and Remonstrance, Par. 3. 54 Thus each brief filed here by the supporters of New Jersey's action, see note 47, not only relies strongly on Cochran v. Louisiana State Board of Education, 281 U.S. 370, 50 S.Ct. 335, 74 L.Ed. 913, but either explicitly or in effect maintains that it is controlling in the present case. 55 See text at notes 17—19 supra and authorities cited; also Foote, Sketches of Virginia (1850) c. XV. Madison's entire thesis, as reflected throughout the Remonstrance and in his other writings, as well as in his opposition to the final form of the Assessment Bill, see note 43, was altogether incompatible with acceptance of general and 'nondiscriminatory' support. See Brant, c. XII. 56 The protections are of a nature which does not require appropriations specially made from the public treasury and earmarked, as is New Jersey's here, particularly for religious institutions or uses. The First Amendment does not exclude religious property or activities from protection against disorder or the ordinary accidental incidents of community life. It forbids support, not protection from interference or destruction. It is a matter not frequently recalled that President Grant opposed tax exemption of religious property as leading to a violation of the principle of separation of church and state. See President Grant's Seventh Annual Message to Congress, December 7, 1875, in IX Messages and Papers of the Presidents (1897) 4288 4289. Garfield, in a letter accepting the nomination for the presidency, said: '* * * it would be unjust to our people, and dangerous to our institutions, to apply any portion of the revenues of the nation, or of the States, to the support of sectarian schools. The separation of the Church and the State in everything relating to taxation should be absolute.' II The Works of James Abram Garfield (ed. by Hibsdale, 1883) 783. 57 Neither do we have here a case of rate-making by which a public utility extends reduced fares to all school children, including patrons of religious schools. Whether or not legislative compulsion upon a private utility to extend such an advantage would be valid, or its extension by a municipally owned system, we are not required to consider. In the Former instance, at any rate, and generally if not always in the latter, the vice of using the taxing power to raise funds for the support of religion would not be present. 58 It would seem at least a doubtfully sufficient basis for reasonable classification that some children should be excluded simply because the only school feasible for them to attend, in view of geographic or other situation, might be one conducted in whole or in part for profit. Cf. note 5. 59 See note 7 supra. The resolution was as follows, according to the school board's minutes read in proof: 'The transportation committee recommended the transportation of pupils of Ewing to the Trenton and Pennington High Schools and Catholic Schools by way of public carrier as in recent years. On motion of Mr. Ralph Ryan and Mr. M. French the same was adopted.' (Emphasis added.) The New Jersey court's holding that the resolution was within the authority conferred by the state statute is binding on us. Reinman v. Little Rock, 237 U.S. 171, 176, 35 S.Ct. 511, 513, 59 L.Ed. 900; Hadacheck v. Sebastian, 239 U.S. 394, 414, 36 S.Ct. 143, 147, 60 L.Ed. 348, Ann.Cas.1917B, 927. 60 The population of Ewing Township, located near the City of Trenton, was 10,146 according to the census of 1940. Sixteenth Census of the United States, Population, Vol. 1, 674. 61 In Thomas v. Collins, 323 U.S. 516, 530, 65 S.Ct. 315, 322, 89 L.Ed. 430, it was said that the preferred place given in our scheme to the great democratic freedoms secured by the First Amendment gives them 'a sanctity and a sanction not permitting dubious intrusions.' Cf. Remonstrance, Pars. 3, 9. And in other cases it has been held that the usual presumption of constitutionality will not work to save such legislative excursions in this field. United States v. Carolene Products Co., 304 U.S. 144, 152, 58 S.Ct. 778, 783, 82 L.Ed. 1234, Note 4; see Wechsler, Stone and the Constitution (1946) 46 Col.L.Rev. 764, 795 et seq. Apart from the Court's admission that New Jersey's present action approaches the verge of her power, it would seem that a statute, ordinance or resolution which on its face singles out one sect only by name for enjoyment of the same advantages as public schools or their students, should be held discriminatory on its face by virtue of that fact alone, unless it were positively shown that no other sects sought or were available to receive the same advantages. 1 Decl.Rights, Art. 16. (Note in the original.) 2 Decl. Reghts, Art. 1. (Note in the original.) 3 Art. 16. (Note in the original.) 4 Art. 16. (Note in the original.) 5 Decl. Rights-title. (Note in the original.) * This copy of the Assessment Bill is from one of the hand-bills which on December 24, 1784, when the third reading of the bill was postponed, were ordered distributed to the Virginia counties by the House of Delegates. See Journal of the Virginia House of Delegates, December 24, 1784; Eckenrode, 102—103. The bill is therefore in its final form, for it never again reached the floor of the House. Eckenrode, 113.

23

330 U.S. 160 67 S.Ct. 645 91 L.Ed. 818 BOZZAv.UNITED STATES. No. 190. Argued and Submitted Jan. 7, 1947. Decided Feb. 17, 1947. [Syllabus from pages 160-162 intentionally omitted] Mr. W. Marvin Smith, of Washington, D.C., for respondent. Mr. Harold Simandl, of Newark, N.J., for petitioner. Mr. Justice BLACK delivered the opinion of the Court. 1 The petitioner and one Chirichillo were convicted in a Federal District Court on all counts of a five-count indictment against them which charged violation of the Internal Revenue laws in connection with the operation of a still. The Court of Appeals reversed petitioner's conviction on counts four and five because of insufficient evidence, but affirmed as to counts one, two, and three. 3 Cir., 155 F.2d 592. We granted certiorari. 329 U.S. 698, 67 S.Ct. 58. Count one charged that the defendants had carried on 'the business of a distiller * * * with intent willfully to defraud the * * * United States of the tax on * * * spirits so distilled * * *' in violation of 26 U.S.C. § 2833(a), 26 U.S.C.A. Int.Rev.Code, § 2833(a). Count two charged them with having had possession and custody of the still in violation of 26 U.S.C. § 2810(a), 26 U.S.C.A. Int.Rev.Code, § 2810(a). Count three charged that they had made and fermented mash for the production of alcohol in violation of 26 U.S.C. § 2834, 26 U.S.C.A. Int.Rev.Code, § 2834. It is argued that the evidence was insufficient to support any of the three counts here at issue. The Government concedes its insufficiency as to counts two and three. 2 There was testimony to show the following: Chirichillo rented a farmhouse under an assumed name and installed a 300-gallon still with all equipment necessary to ferment mash and distill alcohol. The still was operated day and night. Chirichillo himself mixed the ingredients to make the mash in the attic of the 2 1/2-story frame building, but the alcohol distillation was carried on in another part of the building. Petitioner was at the house two or three times a week. When there he took instructions from Chirichillo and helped him in the operation of the still; he helped manufacture the alcohol. When Chirichillo carried his products to Newark, the car in which he carried the illicitly distilled alcohol would follow along behind another car—sometimes petitioner's, sometimes another helper's. The farmhouse where the illicit business was carried on appeared from the outside to be deserted; the windows were without shades and the house had been practically stripped of furniture. 3 We accept the Government's concession that the evidence fails to show that this petitioner had made, or helped to make, the mash as charged in count three. All of the evidence showed that Chirichillo alone handled and mixed the ingredients of the mash, and there is nothing whatever to indicate that the petitioner ever took any part in, or aided and abetted, this particular part of the unlawful process in any manner, or, indeed, that he was ever in or around the attic where the mash was made from ingredients stored there. The Internal Revenue statutes have broken down the various steps and phases of a continuous illicit distilling business and made each of them a separate offense. Thus, these statutes have clearly carved out the conduct of making mash as a separate offense, thereby distinguishing it from the other offenses involving other steps and phases of the distilling business. Consequently, testimony to prove this separate offense of making mash must point directly to conduct within the narrow margins which the statute alone d fines. One who neither engages in the conduct specifically prohibited, nor aids and abets it, does not violate the section which prohibits it. 4 The sufficiency of the evidence as to count two which charged that the petitioner had custody or possession of the still is a closer question. It might be possible that petitioner's helping to make the alcohol aided and abetted in its 'custody or possession.' But that would be a very strained inference under any circumstances. Here again the statutes treat custody or possession as a wholly distinct offense. Yet there was no testimony that the petitioner ever exercised, or aided the exercise of, any control over the distillery. His participation in carrying the finished product by car does not fit the category of 'custody and possession' so nearly as it resembles the transportation of illegal liquor, 26 U.S.C. § 2803, 26 U.S.C.A. Int.Rev.Code, § 2803—an offense which the Circuit Court of Appeals has found the evidence insufficient to prove. Nor was there any testimony that the petitioner acted in any other capacity calculated to facilitate the custody or possession, such as, for illustration, service as a caretaker, watchman, lookout, or in some other similar capacity. Under these circumstances, we accept the Government's concession that a judgment of guilty should not have been rendered on the second count. 5 We think there was adequate evidence to support a finding of guilt on the first count which charged operation of the business of distilling to defraud the Government of taxes. There was certainly ample evidence to show that Chirichillo carried on the business of a distiller and that the petitioner helped him to do it. 18 U.S.C. § 550, 18 U.S.C.A. § 550, provides that one who aids and abets another to commit a crime is guilty as a principal. Consequently, the jury had a right to find, as it did, that the petitioner and Chirichillo were equally guilty of operating the business of the distillery. See United States v. Johnson, 319 U.S. 503, 515, 518, 63 S.Ct. 1233, 1239, 1240, 87 L.Ed. 1546. 6 But, it is argued, there was no evidence that the petitioner acted with knowledge that the distillery business was carried on with an intent to defraud the Government of its taxes. The same evidence as to knowledge of this guilty purpose, however, that applied to Chirichillo was almost, if not quite, equally persuasive against both defendants. Petitioner assisted in the manufacture of alcohol in Chirichillo's still which was operated under conditions of secretiveness in an apparently abandoned farmhouse. The finished alcohol was carried to Newark in a car which followed another car, sometimes the petitioner's. The members of the jury could properly draw on their own experience and observations that lawful stills, unlike the still in which petitioner worked, usually are not operated clandestinely and do not deliver their products in the fashion employed here. The members of the jury were not precluded from drawing inferences as to fraudulent purposes from these circumstances, nor were they compelled to believe that this petitioner was oblivious of the purposes of what went on around him. Men in the jury box, like men on the street, can conclude that a person who actively helps to operate a secret distillery knows that he is helping to violate Government revenue laws. That is a well known object of an illicit distillery. Doubtless few who ever worked in such a place, or even heard about one, would fail to understand the cry: 'The Revenuers are coming!' We hold that the verdict of guilty on the first count must stand. 7 The only statute for violation of which petitioner's conviction is sustained by us carries a minimum mandatory sentence of fine of one hundred dollars and imprisonment, 26 U.S.C. § 2833(a), 26 U.S.C.A. Int.Rev.Code, § 2833(a). In announcing sentence at a morning session, the trial judge mentioned imprisonment only. Thereafter the petitioner was taken briefly to the U.S. Marshal's office and then to a local federal detention jail awaiting transportation to the penitentiary where he was finally to be confined. But about five hours after the sentence was announced, the judge recalled the petitioner and according to stipulation, stated in the presence of petitioner and his counsel that 'in the imposition of sentence this morning * * * it has been called to my attention that there are certain mandatory fines and penalties which I omitted to impose. For the record now minimum mandatory fines and penalties will be imposed.' Thus a one hundred dollar fine was fixed as required by law, along with the imprisonment sentence. Petitioner charges that this action constituted double jeopardy forbidden by the Federal Constitution. 8 It is well established that a sentence which does not comply with the letter of the criminal statute which authorizes it is so erroneous that it may be set aside on appeal, Reynolds v. United States, 98 U.S. 145, 168, 169, 8 Otto 145, 168, 169, 25 L.Ed. 244; Murphy v. Commonwealth of Massachusetts, 177 U.S. 155, 157, 20 S.Ct. 639, 640, 44 L.Ed. 711, or in habeas corpus proceedings. In re Bonner, 151 U.S. 242, 14 S.Ct. 323, 38 L.Ed. 149. But in those cases it was recognized that an excessive sentence should be corrected, even though the prisoner had already served part of his term, not by absolute discharge of the prisoner, but by an appropriate amendment of the invalid sentence by the court of original jurisdiction, at least during the term of court in which the invalid sentence was imposed.1 Cf. De Benque v. United States, 66 App.D.C. 36, 85 F.2d 202, 106 A.L.R. 839. In the light of these cases, the fact that petitioner has been twice before the judge for sentencing and in a federal place of detention during the five hour interim cannot be said to constitute double jeopardy as we have heretofore considered it. Petitioner contends, however, that these cases are inapplicable here because correction of this sentence so as to make it lawful increases his punishment. Cf. United States v. Benz, 282 U.S. 304, 309, 51 S.Ct. 113, 114, 75 L.Ed. 354. If this inadvertent error cannot be corrected in the manner used here by the trial court, no valid and enforceable sentence can be imposed at all. Cf. Jordan v. United States, 4 Cir., 60 F.2d 4, 6 with Barrow v. United States, 54 App.D.C. 128, 295 F. 949. This Court has rejected the 'doctrine that a prisoner, whose guilt is established by a regular verdict, is to escape punishment altogether because the court committed an error in passing the sentence.' In re Bonner, supra, 151 U.S. at page 260, 14 S.Ct. at page 327, 38 L.Ed. 149. The Constitution does not require that sentencing should be a game in which a wrong move by the judge means immunity for the prisoner. See King v. United States, 69 App.D.C. 10, 98 F.2d 291, 296. In this case the court 'only set aside what it had no authority to do, and substitute(d) directions required by the law to be done upon the conviction of the offender.' In re Bonner, supra, 151 U.S. at page 260, 14 S.Ct. at page 327, 38 L.Ed. 149. It did not twice put petitioner in jeopardy for the same offense.2 The sentence as corrected, imposes a valid punishment for an offense instead of an invalid punishment for that offense. 9 Other contentions here do not merit our discussion. The judgment as to count one is affirmed. The judgment is reversed as to counts two and three. 10 It is so ordered. 11 Affirmed in part and reversed in part. 12 Mr. Justice DOUGLAS, Mr. Justice MURPHY, and Mr. Justice RUTLEDGE dissenting as to the affirmance of the judgment on count one. 13 We are of the view that to convict one as an aider and abetter in engaging in or carrying on a distillery business with intent 'to defraud' the United States of the tax on the distilled spirits, 53 Stat. 319, 26 U.S.C. § 2833(a), 26 U.S.C.A. Int.Rev.Code, § 2833(a), evidence is necessary which shows that by some act of concealment he promoted the fraud, or by counsel and advice furthered the unlawful scheme, or in fact had some interest in the project.1 See United States v. Cooper, 25 Fed.Cas. pages 627, 629, No. 14,863; United States v. Logan, 26 Fed.Cas. pages 900, 992, No. 15,624; Seiden v. United States, 2 Cir., 16 F.2d 197, 199; Partson v. United States, 8 Cir., 20 F.2d 127, 129; Anderson v. United States, 5 Cir., 30 F.2d 485, 487. Aiding and abetting in the illicit manufacture of liquor is one thing.2 Aiding and abetting in carrying on the business with intent to defraud the United States of a tax is quite a different matter, and requires a different test, if the two offenses are not to be blended. The evidence in the case and the instructions given the jury3 seem to us inadequate to sustain a conviction under count one, charging Bozza with aiding and abetting in a tax fraud scheme. 14 In view of this conclusion, Mr. Justice RUTLEDGE reserves expression of opinion concerning the legality of the sentence. 1 Compare Rule 45(c), Rules of Criminal Procedure for the District Courts of the United States, 18 U.S.C.A. following section 687. 2 In Ex parte Lange, 18 Wall. 163, 21 L.Ed. 872, relied on by petitioner here, the defendant had been sentenced to fine and imprisonment for violation of a statute which authorized a sentence only of fine or imprisonment. Since he had paid his fine and therefore suffered punishment under a valid sentence, it was held that his sentence had been 'executed by full satisfaction of one of the alternative penalties of the law * * *.' Murphy v. Commonwealth of Massachusetts, supra, 177 U.S. at page 160, 20 S.Ct. at page 641, 44 L.Ed. 711. Therefore, Lange's plea, that the trial court could not correct the sentenc without causing him to suffer double punishment, was sustained. Cf. In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500. But here the petitioner had not suffered any lawful punishment until the court had announced the full mandatory sentence of imprisonment and fine. 1 Judge Learned Hand, after reviewing the various definitions of aiding and abetting, said: 'It will be observed that all these definitions have nothing whatever to do with the probability that the forbidden result would follow upon the accessory's conduct; and that they all demand that he in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his action to make it succeed. All the words used—even the most colorless, 'abet'—carry an implication of purposive attitude towards it.' United States v. Peoni, 2 Cir., 100 F.2d 401, 402. 2 Thus § 2833(a) makes it an offense to 'carry on the business of a distiller without having given bond as required by law.' Section 2834 makes it unlawful to make or ferment mash, fit for distillation, in any building or on any premises other than an authorized distillery. 3 '* * * if you find that he was merely an underling, serving at the beck and call of an employer and nothing more than that (sic) would not justify your finding him to be engaged in the business of a distiller. But if from the evidence you conclude logically that he aided and abetted in the carrying on of this business, then he would be chargeable as a principal. * * * Aiding and abetting is something more than merely committing an act which may have the effect of assisting or furthering a criminal transaction. Before a defendant can be held as an aider and abetter the government must prove beyond a reasonable doubt that he committed an act which furthered or assisted the criminal transaction, and at the time he committed the act he knew that a crime was in process of commission, and with that knowledge he acted with intent to aid and abet in the criminal transaction.' While the above charges were requested by defendant, we nevertheless feel that the failure of the instructions to satisfy the standard we suggest is an error which we should notice. Sibbach v. Wilson & Co., 312 U.S. 1, 16, 61 S.Ct. 422, 427, 85 L.Ed. 479.

01

330 U.S. 183 67 S.Ct. 657 91 L.Ed. 832 ANGELv.BULLINGTON. No. 31. Argued Nov. 18, 19, 1946. Decided Feb. 17, 1947. Mr. George Lyle Jones, of Asheville, N.C., for petitioner. Mr. R. Roy Rush, of Roanoke, Va., for respondent. R. Justice FRANKFURTER delivered the opinion of the Court. 1 In 1940, Bullington, a citizen of Virginia, sold land in Virginia to Angel, a citizen of North Carolina. Only part of the purchase price was paid. For the balance, Angel executed a series of notes secured by a deed of trust on the land. Upon default on one of the notes, Bullington acting upon an acceleration clause in the deed, caused all other notes to become due and called upon the trustees to sell the land. The sale was duly made in Virginia and the proceeds of the sale applied to the payment of the notes. This controversy concerns attempts to collect the deficiency. 2 Bullington began suit for the deficiency in the Superior Court of Macon County, North Carolina. Angel countered with a demurrer, the substance of which was that a statute of North Carolina (c. 36, Public Laws 1933, Mitchie's Code § 2593(f)) precluded recovery of such a deficiency judgment. This is the relevant portion of that enactment: 3 'In all sales of real property by mortgagees and/or trustees under powers of sale contained in any mortgage or deed of trust hereafter executed, * * * the mortgagee or trustee or holder of the notes secured by such mortgage or deed of trust shall not be entitled to a deficiency judgment on account of such mortgage, deed of trust or obligation secured by the same: * * *'. 4 The Superior Court overruled the demurrer, and an appeal to the Supreme Court of North Carolina followd. Bullington supported his Superior Court judgment on the ground that the United States Constitution precluded North Carolina from shutting the doors of its courts to him. The North Carolina Supreme Court, holding that the North Carolina Act of 1933 barred Bullington's suit against Angel, reversed the Superior Court and dismissed the action. 220 N.C. 18, 16 S.E.2d 411, 136 A.L.R. 1054. Bullington did not seek to review this judgment here. Instead, he sued Angel for the deficiency in the United States District Court for the Western District of North Carolina. Angel pleaded in bar the judgment in the North Carolina action. The District Court, 56 F.Supp. 372, gave judgment for Bullington and the Circuit Court of Appeals for the Fourth Circuit affirmed. 150 F.2d 679. We granted certiorari, 326 U.S. 713, 66 S.Ct. 231, because the failure to dismiss this action, on the ground that the judgment in the North Carolina court precluded the right thereafter to recover on the same cause of action in the federal court, presented an important question in the administration of justice. 5 1. We start with the fact that the prevailing rule as to res judicata is settled law in North Carolina. An adjudication bars future litigation between the same parties not only as to all issues actually raised and decided but also as to those which could have been raised. Southern Distributing Co. v. Carraway, 196 N.C. 58, 60, 61, 144 S.E. 535; Moore v. Harkins, 179 N.C. 167, 101 S.E. 564. When the disposition of a prior litigation is invoked as a bar to an action, the identity of the causes of action in the two suits is usually the bone of contention. On this score there can here be no controversy. It is indisputable that the parties, the nature of the claim and the desired relief were precisely the same in the two actions successively brought by Bullington against Angel, first in the Superior Court of Macon County and then in the federal district court. For all practical purposes, the complaint in the present action was a carbon copy of the complaint in the State court action. If the North Carolina action had been dismissed because it was brought in one North Carolina court rather than in another, of course no federal issue would have been involved. See, e.g., Woods v. Nierstheimer, 328 U.S. 211, 66 S.Ct. 996. Had that been the case, a suit for the same cause of action could have been initiated in a North Carolina federal district court, just as another suit could have been brought in the proper North Carolina State court. But that is not the present situation. A quite different situation is before us. Being somewhat unusual, it calls for a critical consideration of the scope and purpose of the doctrine of res judicata. 6 2. The judgment of the Supreme Court of North Carolina would clearly bar this suit had it been brought anew in a state court. For purp ses of diversity jurisdiction a federal court is 'in effect, only another court of the State'. Guaranty Trust Co. v. York, 326 U.S. 99, 108, 65 S.Ct. 1464, 1469, 89 L.Ed. 2079, 160 A.L.R. 1231; see Madisonville Traction Company v. Saint Bernard Mining Company, 196 U.S. 239, 253, 25 S.Ct. 251, 256, 49 L.Ed. 462; Ex parte Schollenberger, 96 U.S. 369, 377, 24 L.Ed. 853. Of course, Bullington could not have succeeded in the District Court for the Western District of North Carolina after an adverse judgment in the State courts, had the decision in this case involved no federal ground. That is equally true where a federal question was decided in the State courts. That the adjudication of federal questions by the North Carolina Supreme Court may have been erroneous is immaterial for purposes of res judicata. Baltimore S.S. Co. v. Phillips, 274 U.S. 316, 325, 47 S.Ct. 600, 604, 71 L.Ed. 1069. A higher court was available for an authoritative adjudication of the federal questions involved. And so the question is whether federal rights were necessarily involved and adjudicated in the litigation in the State courts. 7 3. For purposes of res judicata, the significance of what a court says it decides is controlled by the issues that were open for decision. What were the issues in the North Carolina litigation? Bullington sought a deficiency judgment. Angel, by demurrer, resisted on the ground that a North Carolina statute precluded a deficiency judgment. The North Carolina Supreme Court, reversing the trial court, found the North Carolina statute a bar to such a suit. It said that 8 'the limitation created by the statute is upon the jurisdiction of the court in that it is declared that the holder of notes given to secure the purchase price of real property 'shall not be entitled to a deficiency judgment on account' thereof. This closes the courts of this state to one who seeks a deficiency judgment on a note given for the purchase price of real property. The statute operates upon the adjective law of the state, which pertains to the practice and procedure, or legal machinery by which the substantive law is made effective, and not upon the substantive law itself. It is a limitation of the jurisdiction of the courts of this state.' 220 N.C. 18, 20, 16 S.E.2d 411, 412, 136 A.L.R. 1054. 9 But the allowable 'limitation of the jurisdiction of the courts' of North Carolina presents more than a question of local law for determination by the North Carolina Supreme Court. Speaking for a unanimous Court, Mr. Justice Brandeis thus expressed the subordination to the requirements of the Constitution of the power of a State to withdraw jurisdiction from its courts: 'The power of a state to determine the limits of the jurisdiction of its courts and the character of the controversies which shall be heard in them is, of course, subject to the restrictions imposed by the Federal Constitution.' McKnett v. St. Louis & S.F.R. Co., 292 U.S. 230, 233, 54 S.Ct. 690, 691, 78 L.Ed. 1227. The Contract Clause, U.S.Const. Art. 1, § 10, the Full Faith and Credit Clause, U.S.Const. art. 4, § 1, the Privileges or Immunities Clause, U.S.Const. art. 4, § 2, all fetter the freedom of a State to deny access to its courts howsoever much it may regard such withdrawal of jurisdiction 'the adjective law of the State', or the exercise of its right to regulate 'the practice and procedure' of its courts. Broderick v. Rosner, 294 U.S. 629, 642, 55 S.Ct. 589, 592, 79 L.Ed. 1100, 100 A.L.R. 1133. A State 'cannot escape its constitutional obligations by the simple device of denying jurisdiction in such cases to Courts otherwise competent.' Kenney v. Supreme Lodge, 252 U.S. 411, 415, 40 S.Ct. 371, 372, 64 L.Ed. 638, 10 A.L.R. 716; and see White v. Hart, 13 Wall. 646, 20 L.Ed. 685. This pervasive principle of our federal law, constitutional and statutory, was thus put by Mr. Justice Holmes: 'Whatever springes the State may set for those who are endeavoring to assert rights that the State confers, the assertion of Federal rights, w en plainly and reasonably made, is not to be defeated under the name of local practice.' Davis v. Wechsler, 263 U.S. 22, 24, 44 S.Ct. 13, 14, 68 L.Ed. 143. 10 4. Here, claims based on the United States Constitution were plainly and reasonably made in the North Carolina suit. The North Carolina Supreme Court met these claims. It met them by saying that the North Carolina statute did not deal with substantive matters but merely with matters regulating local procedure. But whether the claims are based on a federal right or are merely of local concern is itself a federal question on which this Court, and not the Supreme Court of North Carolina, has the last say. That Court could not put a federal claim aside, as though it were not in litigation, by the talismanic word 'jurisdiction'. When an asserted federal right is denied, the sufficiency of the grounds of denial is for this Court to decide. Titus v. Wallick, 306 U.S. 282, 291, 59 S.Ct. 557, 562, 83 L.Ed. 653. Bullington could have come here, not merely by the grace of this Court on certiorari, but on appeal, as did White in White v. Hart, supra, to challenge, successfully, the right of Georgia to limit the jurisdiction of the Georgia courts; as did the East New York Savings Bank in the recent case of East New York Sav. Bank v. Hahn, 326 U.S. 230, 66 S.Ct. 69, 160 A.L.R. 1279, to challenge, though unsuccessfully, the limitation which New York placed upon the jurisdiction of its courts. Cf. Kenney v. Supreme Lodge, 252 U.S. 411, 416, 40 S.Ct. 371, 372, 64 L.Ed. 638, 10 A.L.R. 716. Since it was open for Bullington to come here to seek reversal of the decision of the North Carolina Supreme Court shutting him out of the North Carolina courts and he chose not to do so, the decision of the North Carolina Supreme Court concluded an adjudication of a federal question even though it was not couched in those terms. For purposes of litigating the issues in controversy in the North Carolina action, the North Carolina Supreme Court was an intermediate tribunal. If a litigant chooses not to continue to assert his rights after an intermediate tribunal has decided against him, he has concluded his litigation as effectively as though he had proceeded through the highest tribunal available to him. An adjudication of an issue implies that a man had a chance to win his case. The chance was necessarily afforded by =FNfUDd

89

330 U.S. 169 67 S.Ct. 650 91 L.Ed. 823 CONFEDERATED BANDS OF UTE INDIANSv.UNITED STATES. No. 141. Argued Jan. 14, 15, 1947. Decided Feb. 17, 1947. As Amended March 31, 1947. [Syllabus from pages 169-171 intentionally omitted] Mr. Ernest L. Wilkinson, of Washington, D.C., for petitioners. Mr. Marvin J. Sonosky, of Washington D.C., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 Petitioners brought this action in the Court of Claims under the Act of June 28, 1938, 52 Stat. 1209, as amended, 55 Stat. 593, to recover compensation for lands made available to them by an 1875 Executive Order of the President and sub-sequently taken from them by the United States. Their claim was that by an Act of June 15, 1880, 21 Stat. 199, Congress had undertaken to sell these lands for the benefit of the petitioners, but that they had never been compensated for them. The Court of Claims, one judge concurring specially, made findings of fact and concluded as a matter of law that petitioners had no compensable interest in the lands because they 'never did acquire title to these * * * lands and * * * the Congress never did agree to sell them for the account of' petitioners. Ct.Cl., 64 F.Supp. 569, 571. We granted certiorari, 329 U.S. 694, 67 S.Ct. 50. 2 The findings of the Court of Claims from official letters, Executive Orders and statutes incorporated in these findings were as follows: A treaty of March 2, 1868, 15 Stat. 619, between the United States and petitioners' ancestors, the Ute Indian tribes, established a reservation for them in Colorado. The northern boundary of the 15 million acres there ceded was described in the treaty as a line fifteen miles north of, and parallel to the 40th parallel of north latitude. In the 15-mile wide strip north of the 40th parallel lay the White River Valley which had been settled by the Utes as a most suitable place for grazing and cultivation. One of the two Government Indian agencies provided for the reservation by the treaty was established in that strip. 3 As a result of misunderstandings in 1869 and 1874 between the Utes and white settlers to the north as to the true location of the northern treaty boundary, a survey was made in 1875 by one Miller. Miller's instructions, however, required him to stake out a line which he admitted to the local Indian agent and to the Utes themselves to be fifteen to eighteen miles south of the true boundary described in the treaty. If Miller's line had been correct, it would have excluded from the 1868 reservation the fertile White River Valley, and would have also excluded the agency buildings which had been erected there. 4 The marking out of the erroneous Miller line greatly upset the Indians because they feared they would be driven from the White River Valley. This embarrassed the local Indian agent who had previously assured the Indians that the White River Valley lay within their reservation. He promptly reported the results of the survey and the reaction of the Indians to the Commissioner of Indian Affairs in Washington, and urged the necessity of a new survey at the earliest practicable date. He stated that if the Miller survey were correct, however, the Indians would be driven from the White River Valley—'the only farming land and stock range in this part of the reservation'—and forced to settle on a river forty miles to the south. The Commissioner, acting on this report and a statement by Miller's attorney that Miller's line was correct, wrote to the Secretary of the Interior that the Miller survey 'develops the fact that the White River and surrounding valleys as well as the Agency buildings and improvements at the White River Agency lie north of the * * * boundary and consequently are not within the limits of the * * * Ute Reservation.' He therefore recommended to the Secretary that the President be requested to issue an Executive Order to make available to the Utes additional territory north of the 1868 treaty boundary. The President, on t e recommendation of the Secretary of the Interior, issued the order.1 And thereafter the Commissioner wrote the local agent that the order included 'all that tract of country lying between the north boundary of the Ute reservation as defined in the treaty of March 2, 1868 * * * which was the boundary surveyed by Mr. Miller. * * * This action fully protects your Indians in the peaceable possession of their improvements in the White River Valley and the Agency buildings, and will enable you to assure the Indians of the exact location of their reservation as enlarged.' In 1879, several years after the Executive Order was issued, hostilities broke out between some of the Utes and Government representatives in which the Indian agent at White River, all the agency's male employees, and a U.S. military detachment were killed in the so-called 'Meeker massacre.' Ex. Doc. No. 1, pt. 5, 47th Cong., 2d Sess. (1879) 16—19, 82—97. There have been charges and counter-charges as to who was responsible for inciting these hostilities. Whoever was responsible, it is clear that Congress, aroused by the massacre, took steps to punish the Indians who participated in it, to dispossess the Utes of their reservation, and to remove them from Colorado. Congressional action to accomplish this was provided by the Act of June 15, 1880, 21 Stat. 199, which ratified and embodied an agreement reached earlier that year between the Government and the leaders of the Utes who had promised 'to use their best endeavors with their people to procure their consent to cede to the United States all the territory of the present Ute Reservation * * *.' This Act authorized specific allotments to individual Indians from the lands so ceded. But § 3 provided that 'all the lands not * * * allotted, the title to which is, by the said agreement of * * * the Ute Indians, and this acceptance by the United States, released and conveyed to the United States * * *' would be restored to the public domain for sale as public lands. The proceeds of the sale of the land so conveyed by the Utes to the United States were, upon satisfaction of indemnity conditions imposed because of the massacre, to be distributed to the Indians. Thereafter, in 1882, an Executive Order declared that the lands withdrawn from the public domain by the Executive Order of 1875 and 'set apart for the use of the * * * Ute Indians * * * hereby is, restored to the public domain.' 1 Kappler, supra, pp. 834, 834. 5 Pursuant to an Act of 1909, 35 Stat. 781, petitioners recovered a judgment for the proceeds of certain lands sold by the Government, as well as the value of certain lands appropriated by the Government to its own use, all of which were part of the 1868 treaty lands. The Ute Indians v. United States, 45 Ct.Cl. 440; 46 Ct.Cl. 225. Thus, except for certain treaty lands not at issue here, litigation concerning which is now pending in the Court of Claims, the only lands in Colorado for which the Indians have not been paid are those to the north of and outside the 1868 treaty reservation which were made avail ble to them by the Executive Order of 1875. In pursuit of compensation for these Executive Order lands, petitioners have brought this action pursuant to the Act of June 28, 1938, supra. That Act confers jurisdiction on the Court of Claims to hear, determine, and render final judgment on all legal and equitable claims of the Utes and to award judgment for the Indians where it is found 'that any lands formerly belonging' to them 'have been taken by the United States without compensation * * *.' 6 Petitioners contend here that their predecessors understood that they not only owned the White River Valley lands, but that they also owned the Executive Order lands when, in 1880, they agreed to cede their reservation; and that Congress, by incorporating the agreement in the 1880 Act, thereby ratified it along with the Indians' understanding of it. Petitioners further contend that whether or not Congress intended to obligate the Government to account for the Executive Order lands, they knew of the Indians' understanding so that 'the understanding of the Indians having been established,' their understanding entitles them to recover. Finally they argue that the Executive Order unlike the one in issue in Sioux Tribe of Indians v. United States, 316 U.S. 317, 62 S.Ct. 1095, 86 L.Ed. 1501, conveyed a compensable interest to these Indians. The Government counters that the President had no power to give a compensable interest to the Indians to lands lying outside the true 1868 treaty boundaries; that if the President intended to make available lands outside the true boundary it was only to give a transitory, possessory, and not a compensable, interest; that his intent was, in fact, only to secure the Indians in their possession of the White River Valley, but no more, on the mistaken assumption that the White River Valley had been cut off from the reservation by the Miller survey; that the 1880 Act, neither by its terms, its legislative history, nor its administrative interpretation, suggests that Congress intended to ratify or expand the Executive Order or to compensate the Indians for the Executive Order lands; that the Indians did not have a contrary understanding; that in the face of such clear legislative language and intent, a contrary understanding of the Indians, even if established, could not justify a holding that the Indians obtained a compensable interest. 7 It is conceded that the petitioners have either been, or are currently pressing litigation in the Court of Claims by which they seek to be, compensated for the White River Valley lands, and in fact, for all of the land which was contained in the true boundaries of the 1868 reservation. The additional claim, insofar as it rests on the Executive Order of 1875, cannot be sustained. For the President had no authority to convey to the petitioners a compensable interest in the lands described in the order lying north of the true 1868 boundary. Sioux Tribe of Indians v. United States, supra.2 Nor is there any indication in the findings that the President intended to convey more than a transitory, possessory interest by the 1875 Order. That order made the Indians no more than tenants at the will of the Government on that part of the land outside the true treaty reservation. Id. 316 U.S. at page 331, 62 S.Ct. at page 1101, 86 L.Ed. 1501. Moreover, the Court of Claims' findings of fact, as emphasized by the special concurring opinion, indicate that the Executive Order was promulgated under the mistaken belief that its issuance was necessary in order to give the Indians the use of the White River Valley lands intended to be granted to them by the 1868 treaty and from which they might otherwise have been excluded by the Miller survey. These findings do not indicate that the Commissioner, the Secretary, or the President intended the order to make available the lands it in fact described lying north of the true treaty boundary. The order was designed only to resolve the misunderstanding created by Miller about the White River Valley lands.3 The fullest possible purpose of the Executive Order has actually been carried out. For the Indians' enjoyment of the White River lands was protected during their stay on the reservation, and the lands have either already been paid for, or are the subject of pending litigation in the Court of Claims whereby the Indians seek payment for them. It is with these things in mind that we must consider petitioner's contention that they have a right to recover compensation because of the 1880 Act. 8 There is not one word in that Act showing a congressional purpose to convey the Executive Order lands, or any other lands, to the Indians. On the contrary, the Act embodied a transaction whereby the Indians were the transferors and conveyed lands to the Government. For the value of lands so conveyed, and for no other, the Government was to make an account to the Indians after certain deductions had been made. 9 Nor is it possible to deduce from the 1880 Act a congressional purpose to transform the Executive Order into a conveyance of something more than a mere temporary and cancellable possessory right to the Indians. Neither the language of the 1880 Act, its legislative history, nor the circumstances which brought it about, justify the claim that Congress intended to expand the Executive Order into a transfer of a compensable interest in lands not included in the original treaty reservation. The Act was an aftermath of the 'Meeker massacre.' With the massacre in mind, Congress decided to remove the Indians from the Colorado reservation as part of the punishment meted out for this tragedy.4 The very first section of the 1880 Act prohibited any payments at all to the Indians until the Indians involved had surrendered, been apprehended, or until the President had proof that they were dead or outside the United States. Compensation for the families of the massacre victims was to be deducted from the land sale proceeds payable to the Indians. We cannot find from this background a congressional purpose to make a gift to the Indians of the Executive Order lands for which compensation is here sought. The only lands for which Congress agreed in 1880 to compensate the Indians were those that 'the title to which' the Indians then 'released and conveyed to the United States.' They could only release and convey the lands that belonged to them, and only the lands given to them by the original 1868 treaty belonged to them. It was for compensation for such lands only that Congress, in 1938, authorized this action to be maintained. Under all these circumstances, the fact that the 1880 Act required the chiefs and headmen to procure the consent of their people to the cession of 'the present Ute Reservation,' is not sufficient to attribute to Congress a purpose to treat as a part of that reservation, lands which had never been legally conveyed to the Indians and which had only been made available to them by the Executive Order for the sole purpose of making them secure in their possession of the White River Valley. 10 It is said, however, that the Indians understood in 1880 that they owned the Executive Order lands which lay north of the White River Valley; that they understood their 'present Ute reservation' to include them; that they understood that Congress undertook by the 1880 Act to sell the lands for their benefit; and that Congress was aware of this understanding. The majority opinion of the Court of Claims stated that 'in all probability' this was true. The writer of the concurring opinion thought differently. But even if the Indians had believed that they had a compensable interest in the Executive Order lands, this fact would not necessarily have given it to them. Certainly the absence of presidential authority to give them a compensable title could not be supplied by the Indians' understanding that the President had such authority. The Sioux Indians may also have thought the President had authority to convey title to them; but the reasons on which our decision in the Sioux case, supra, rested do not indicate that our holding depended in any way upon the understanding of the Indians. Nor can this alleged understanding be imputed to Congress in the face of plain language and a rather full legislative history indicating that the 1880 Act neither conveyed nor ratified conveyance of these lands. While it has long been the rule that a treaty with Indians is to be construed so as to carry out the Government's obligations in accordance with the fair understanding of the Indians, we cannot, under the guise of interpretation, create Presidential authority where there was none, nor rewrite congressional acts so as to make them mean something they obviously were not intended to mean. Choctaw Nation of Indians v. United States, 318 U.S. 423, 431, 432, 63 S.Ct. 672, 677, 678, 87 L.Ed. 492. We cannot, under any acceptable rule of interpretation, hold that the Indians owned the lands merely because they thought so. Solicitous as the Government is to carry out its promises to the Indians in good faith, we are satisfied from this record that the Government has performed all that it promised. 11 As we have pointed out, it seems obvious to us from the findings of the Court of Claims that the Executive Order was only intended to secure for these Indians' ancestors possession of the White River Valley lands conveyed to them by the original 1868 treaty, and which was jeopardized by the Miller survey.5 In fact, the President had no authority to convey a compensable interest in these or other lands to the Utes. Fairly to carry out the 1868 treaty was the order's aim. The 1880 Act, we believe, did not enlarge upon the limited purpose of the Executive Order. To compensate these Indians for lands, not intended to be conveyed by the 1868 treaty, the Executive Order, nor the 1880 Act, would be to pay them for lands which neither they nor their ancestors ever owned and to which they had no claim in equity or justice, so far as the transactions here at issue are concerned. No rule of construction justifies such a result. 12 Affirmed. 13 Mr. Justice MURPHY, dissenting. 14 The United States, in my opinion, is morally and legally obligated to pay for the land in issue in this case. The Executive Order of 1875 by its terms set aside certain land up to the 'first standard parallel north' for the use of the Ute Indians 'as an addition to their present reservation.' That order alone, of course, could convey no compensable interest to the Indians under the rule of Sioux Tribe of Indians v. United States, 316 U.S. 317, 62 S.Ct. 1095, 86 L.Ed. 1501. But events subsequent to the issuance of the Executive Order in this case make inapplicable the principle of the Sioux case. In 1880 the United States and the Ute chiefs and headmen entered into an agreement whereby the latter promised 'to use their best endeavors with their people to procure their consent to cede to the United States all the territory of the present Ute Rese vation in Colorado.' Congress thereupon passed the Act of June 15, 1880, which recited in its preamble that the chiefs and headmen had 'submitted to the Secretary of the Interior an agreement for the sale to the United States of their present reservation in the State of Colorado.' The Act then incorporated the agreement previously made and provided that all unallotted lands should be deemed to be released and conveyed to the United States. 15 It seems clear to me that by 1880 the term 'present reservation' included the land which the Executive Order of 1875 stated had been set aside as an addition to the then present reservation. And when the 1880 agreement and the 1880 Act referred to 'present reservation' they must have included that additional land. Adding this informal acknowledgment by Congress of the expanded reservation to the occupation of the land by the Indians and their understaning that it belonged to the reservation, a compensable interest becomes evident. It is immaterial that there was no formal documents conveying a fee simple interest to the Indians; it is likewise irrelevant that there was no formal acknowledgment of the Indian title. Spalding v. Chandler, 160 U.S. 394, 16 S.Ct. 360, 40 L.Ed. 469; United States v. Alcea Band of Tillamooks, 329 U.S. 40, 67 S.Ct. 167. It is enough that the Indians had the right to possess and occupy the land and that the Indians fairly understood that to be the case. An acknowledgment by Congress, however informal, then adds a legal obligation to the moral duty of the United States to pay for the land involved. Such is the situation here. 16 The Court indicates, however, that the Executive Order of 1875 does not mean what it says. It clearly set apart for the use of the Indians 'as an addition to the present reservation' all the described land up to the 'first standard parallel north.' But it is now suggested that those responsible for the promulgation of that order did not really intend to set aside all the land up to the 'first standard parallel north,' despite the explicit language used. It is said, rather, that the order actually was designed to affect only the White River Valley lands—lands which are some nine miles south of the 'first standard parallel north.' That interpretation of the intent of the framers of the order would make the northern boundary of the Executive Order land coterminous with the northern boundary of the true treaty reservation. 17 But there is nothing in the findings of the Court of Claims to justify such an interpretation. To disregard the plain words of the order by subtracting a nine-mile strip from a clearly worded description requires definite findings to that effect which are supported by the record. It is not our function, of course, to supply those findings ourselves. Nor can we infer them from the decision of the Court of Claims. That court alone has the power and the duty to make the necessary findings on material issues. 53 Stat. 752, 28 U.S.C. § 288, 28 U.S.C.A. § 288; United States v. Causby, 328 U.S. 256, 267, 268, 66 S.Ct. 1062, 1068, 1069. If it is material that the framers of the Executive Order intended to set aside less land than that described in the order, the case should be remanded to the Court of Claims so that it can make the necessary findings in this respect. 18 Mr. Justice FRANKFURTER and Mr. Justice DOUGLAS join in this dissent. 1 The Executive Order of November 22, 1875, 1 Kappler, Indian Affairs, Laws and Treaties, p. 834 (1904) is as follows: 'It is hereby ordered that the tract of country in the Territory of Colorado lying within the following-described boundaries, viz: Commencing at the northeast corner of the present Ute Indian Reservation, as defined in the treaty of March 2, 1868 (Stats. at Large, vol. 15, p. 619); thence running north on the 107th degree of longitude to the first standard parallel north; thence west on said first standard parallel to the boundary line between Colorado and Utah; thence south with said boundary to the northwest corner of the Ute Indian Reservation; thence east with the north boundary of the said reservation to the place of beginning, be, and the same hereby is, withdrawn from sale and set apart for the use of the several tribes of Ute Indians, as an addition to the present reservation in said Territory.' 2 Cf. Executive Order of August 17, 1876, which interpreted a treaty so as to 'set apart (certain land) as a part of the Ute Indian Reservation, in accordance with the first article of an agreement made with said Indians and ratified by Congress. * * *' 1 Kappler, supra, p. 834. 3 The Court of Claims did not find this as an ultimate fact. But the correspondence which plainly shows it was incorporated in the findings. This Court has said with reference to findings of the Court of Claims that the 'absence of the finding of an ultimate fact does not require a reversal of the judgment if the circumstantial facts as found are such that the ultimate fact follows from them as a necessary inference.' United States v. Wells, 283 U.S. 102, 120, 51 S.Ct. 446, 452, 75 L.Ed. 867. 4 See S. 772 and S.Res. 51, 10 Cong.Rec. pt. 1 (1879) 30, 77; H.Res. 142, 10 Cong.Rec. 44; H.R. 2420, 10 Cong.Rec. 17; H.Res. 154, 10 Cong.Rec. 113; H.R. 50 2, 10 Cong.Rec. pt. 2 (1880) 1538. 5 See 67 S.Ct. 654, supra.

12

330 U.S. 158 67 S.Ct. 644 91 L.Ed. 816 WALLING, Adm'r, Wage & Hour Div., U.S. Department of Labor,v.NASHVILLE, C. & ST. L. RY. No. 335. Argued Jan. 17, 1947. Decided Feb. 17, 1947. Mr. William S. Tyson, of Washington, D.C., for petitioner. Mr. Walton Whitwell, of Nashville, Tenn., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 The petitioner, Administrator of the Wage and Hour Division, United States Department of Labor, filed this action in a Federal District Court to enjoin alleged violations by the respondent railroad of §§ 15(a)(2) and 15(a)(5) of the Fair Labor Standards Act, 52 Stat. 1060, 1068, 29 U.S.C.A. § 15(a)(2, 5). These sections require that minimum wages be paid to employees covered by the Act and that appropriate records be kept concerning their employment and pay. The railroad was charged with having violated the Act with regard to two types of alleged employees: First, persons in training to become yard and main line firemen, brakemen, and switchmen; second, others in training to become clerks, stenographers, callers, messengers, and other similar general miscellaneous workers. The District Court held that the first group were not 'employees' and therefore were not covered by the Act, 29 U.S.C.A. § 201 et seq. On this ground alone the injunction was denied as to them. It also denied relief as to the second group, clerks, etc., partly on this same ground. Another ground for denying relief as to the second group was the court's finding that the railroad 'for several years past has been complying with the Act as to them, and apparently intends in good faith to do so in the future.' D.C., 60 F.Supp. 1004, 1007, 1008. The Circuit Court of Appeals affirmed. 6 Cir., 155 F.2d 1016, one judge dissenting. We granted certiorari because of the importance of the questions decided. 329 U.S. 696, 67 S.Ct. 85. 2 The finding of the District Court that the railroad had been complying with the Act in good faith in its business relations with the trainee clerks, stenographers, etc. is not challenged. No argument is here made that this is not adequate support for denial of the relief granted as to this second group. Under these circumstances, we affirm the court's action in denying an injunction to enjoin violations of the Act as to these trainees. We therefore do not reach the question as to whether this group as a whole or any of the persons in it were or were not employees under the Act. 3 The sole ground for denying relief as to the persons training to become firemen, brakemen, and switchmen was that they were not employees. The findings of fact here as to be training of these trainees are in all relevant respects practically identical with the findings of fact in Walling v. Portland Terminal Company, 330 U.S. 148, 67 S.Ct. 639, this day decided. These findings of fact are not challenged. For the reasons set out in that opinion we hold that the Circuit Court of Appeals was not in error in holding that the persons receiving training in order to become qualified for employment as firemen, brakemen, and switchmen, are not employees within the meaning of the Fair Labor Standards Act. 4 Affirmed.

67

330 U.S. 212 67 S.Ct. 752 91 L.Ed. 849 CONEv.WEST VIRGINIA PULP & PAPER CO. No. 184. Argued Feb. 3, 1947. Decided March 3, 1947. Motion to Amend Mandate Denied June 16, 1947. See 331 U.S. 794, 67 S.Ct. 1725. Messrs. H. Wayne Unger, of Walterboro, S.C., and James P. Mozingo, of Darlington, S.C., for petitioner. Messrs. Christie Benet, of Columbia, S.C., and Charles W. Waring of Charleston, S.C., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 The petitioner brought this action in a South Carolina state court. Upon motion of respondent, it was removed to the Federal District Court because of diversity of citizenship of the parties. The complaint claimed $25,000 damages upon allegations that the respondent's agents had trespassed upon and cut timber from lands owned by and in the possession of the petitioner. Respondent's answer denied that the petitioner had title or possession of the lands and timbers. Both title and possession became crucial issues in the trial. The burden of proving them rested on the petitioner.1 When all the evidence of both parties had been introduced, the respondent moved for a directed verdict in its favor on the ground that the petitioner had failed to prove that he either owned or was in possession of the land.2 This motion was denied. The jury returned a verdict for petitioner for $15,000, and the court entered judgment on the verdict. The respondent moved for a new trial on the ground of newly discovered evidence. This motion was denied. Respondent did not move for judgment notwithstanding the verdict as it might have done under Rule 50(b) of the Federal Rules of Civil Procedure, which is set out below.3 2 The Circuit Court of Appeals decided that the admission of certain evidence offered by the petitioner to prove legal title was prejudicial error. It held that without this improperly admitted evidence petitioner's proof was not sufficient to submit the question of title to the jury. That court also held that petitioner's evidence showing possession was insufficient to go to the jury. It therefore reversed the case. But instead of remanding it to the District Court for a new trial, the Circuit Court of Appeals directed that judgment be entered for respondent. That court has thus construed Rule 50(b) as authorizing an appellate court to direct a judgment notwithstanding the verdict, even though no motion for such a judgment had been made in the District Court within ten days after the jury's discharge. 3 The petition for certiorari challenged the power of an appellate court to direct entry of a judgment notwithstanding the verdict where timely motion for such a judgment had not been made in the District Court. On three previous occasions we have granted certiorari to consider this point but failed to reach it because, upon examination of the evidence, we found it sufficient to justify submission of all three cases to the jury. Conway v. O'Brien, 312 U.S. 492, 61 S.Ct. 634, 85 L.Ed. 969; Berry v. United States, 312 U.S. 450, 61 S.Ct. 637, 85 L.Ed. 945; Halliday v. United States, 315 U.S. 94, 62 S.Ct. 438, 86 L.Ed. 711. In this case we granted certiorari 'limited to the questions of federal procedure raised by the petition for the writ.' 329 U.S. 701, 67 S.Ct. 57. The point we had in mind was whether a party's failure to make a motion in th District Court for judgment notwithstanding the verdict, as permitted in Rule 50(b), precludes an appellate court from directing entry of such a judgment. Other questions have been discussed here, but we do not consider them. Consequently, we accept, without approving or disapproving, the Circuit Court of Appeals' holding that there was prejudicial error in the admission of evidence and in the submission of the case to the jury. 4 Rule 50(b) contains no language which absolutely requires a trial court to enter judgment notwithstanding the verdict even though that court is persuaded that it erred in failing to direct a verdict for the losing party. The rule provides that the trial court 'may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed.' This 'either-or' language means what it seems to mean, namely, that there are circumstances which might lead the trial court to believe that a new trial rather than a final termination of the trial stage of the controversy would better serve the ends of justice. In short, the rule does not compel a trial judge to enter a judgment notwithstanding the verdict instead of ordering a new trial; it permits him to exercise a discretion to choose between the two alternatives. See Berry v. United States, supra, 312 U.S. 452, 453, 61 S.Ct. 638, 85 L.Ed. 945.4 And he can exercise this discretion with a fresh personal knowledge of the issues involved, the kind of evidence given, and the impression made by witnesses. His appraisal of the bona fides of the claims asserted by the litigants is of great value in reaching a conclusion as to whether a new trial should be granted. Determination of whether a new trial should be granted or a judgment entered under Rule 50(b) calls for the judgment in the first instance of the judge who saw and heard the witnesses and has the feel of the case which no appellate printed transcript can impart. See March v. Philadelphia & West Chester Traction Co., 285 Pa. 413, 418, 132 A. 355; Bunn v. Furstein, 153 Pa.Super. 637, 638, 34 A.2d 924. See also Yutterman v. Sternberg, 8 Cir., 86 F.2d 321, 324, 111 A.L.R. 736. Exercise of this discretion presents to the trial judge an opportunity, after all his rulings have been made and all the evidence has been evaluated, to view the proceedings in a perspective peculiarly available to him alone. He is thus afforded 'a last chance to correct his own errors without delay, expense, or other hardships of an appeal.' See Greer v. Carpenter, 323 Mo. 878, 882, 19 S.W.2d 1046, 1047; Cf. United States v. Johnson, 327 U.S. 106, 112, 66 S.Ct. 464, 466. 5 There are other practical reasons why a litigant should not have his right to a new trial foreclosed without having had the benefit of the trial court's judgment on the question. Take the case where a trial court is about to direct a verdict because of failure of proof in a certain aspect of the case. At that time a litigant might know or have reason to believe that he could fill the crucial gap in the evidence. Traditionally, a plaintiff in such a dilemma has had an unqualifi d right, upon payments of costs, to take a nonsuit in order to file a new action after further preparation, unless the defendant would suffer some plain legal prejudice other than the mere prospect of a second lawsuit. Pleasants v. Fant, 22 Wall. 116, 122, 22 L.Ed. 780; Jones v. S.E.C., 298 U.S. 1, 19, 20, 56 S.Ct. 654, 659, 80 L.Ed. 1015, and cases cited. Rule 41(a)(1) preserves this unqualified right of the plaintiff to a dismissal without prejudice prior to the filing of defendant's answer. And after the filing of an answer, Rule 41(a)(2) still permits a trial court to grant a dismissal without prejudice 'upon such terms and conditions as the court deems proper.'5 6 In this case had respondents made a timely motion for judgment notwithstanding the verdict, the petitioner could have either presented reasons to show why he should have a new trial, or at least asked the court for permission to dismiss. If satisfied from the knowledge acquired from the trial and because of the reasons urged that the ends of justice would best be served by allowing petitioner another chance, the judge could have so provided in his discretion. The respondent failed to submit a motion for judgment notwithstanding the verdict to the trial judge in order that he might exercise his discretionary power to determine whether there should be such a judgment, a dismissal or a new trial. In the absence of such a motion, we think the appellate court was without power to direct the District Court to enter judgment contrary to the one it had permitted to stand. 7 It has been suggested that the petitioner could have presented affidavits to the Circuit Court of Appeals to support his claim for a new trial, and that that court could thereupon have remanded the question to the District Court to pass upon it.6 Such a circuitous method of determining the question cannot be approved. For Rule 50(b) specifically prescribes a period of ten days for making a motion for judgment notwithstanding the verdict. Yet the method here suggested would enable litigants to extend indefinitely the prescribed ten day period simply by adoption of the expedient of an appeal. Furthermore, it would present the question initially to the appellate court when the primary discretionary responsibility for its decision rests on the District Court. 8 Reversed. 1 Under governing South Carolina law an action such as this is not one to try title but 'to recover damages for trespass of property of which the plaintiff was in possession.' Macedonia Baptist Church v. City of Columbia, 195 S.C. 59, 70, 10 S.E.2d 350, 355. But possession may be presumed from proof of legal title. Beaufort Land and Investment Co. v. New River Lumber Co., 86 S.C. 358, 68 S.E. 637, 30 L.R.A.,N.S., 243; Haithcock v. Haithcock, 123 S.C. 61, 115 S.E. 727; Code of Laws of South Carolina (1942) § 377. Petitioner here undertook to prove possession both by showing that he had legal title and by showing that he had openly and notoriously exercised acts of dominion, possession, and ownership over a long period of years. 2 Respondent first moved to dismiss the case on the same grounds under Rule 41(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. That rule provides for a dismissal, under the circumstances and conditions there set out where 'upon the facts and the law the plaintiff has shown no right to relief.' Since substantially the same disposition of the case on the same grounds was later requested by respondent in the motion for a directed verdict, we shall have no occasion further to discuss the motion to dismiss. 3 50(b) 'Reservation of Decision on Motion. Whenever a motion for a directed verdict made at the close of all the evidence is denied or for any reason is not granted, the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion. Within 10 days after the reception of a verdict, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion for a directed verdict * * *. A motion for a new trial may be joined with this motion, or a new trial may be prayed for in the alternative. If a verdict was returned the court may allow the judgment to stand or may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed. If no verdict was returned the court may direct the entry of judgment as if the requested verdict had been directed or may order a new trial. 4 The Advisory Committee on Rules for Civil Procedure in commenting on Rule 50(b) stated that 'A trial court or an appellate court in setting aside a verdict always has discretion, if justice requires it, to order a new trial, instead of directing the entry of judgment. Rule 50(b) states that the court on a motion for judgment notwithstanding the verdict 'may either order a new trial or direct the entry of judgment' for the moving party.' Report of Proposed Amendments to Rules of Civil Procedure (1946) 66. See also New York Symposium on Federal Rules (1938) 283 284. Compare March v. Philadelphia & West Chester Traction Co., 285 Pa. 413, 132 A. 355; Nadeau v. Maryland Casualty Co., 170 Minn. 326, 331, 212 N.W. 595; Anderson v. Newsome, 193 Minn. 157, 258 N.W. 157; Porsmer v. Davis, 152 Minn. 181, 188 N.W. 279; Jackson v. Hansard, 45 Wyo. 201, 218, 17 P.2d 659. 5 Rule 41(a)(2), Federal Rules of Civil Procedure, has been interpreted as authorizing a plaintiff to dismiss his action 'without prejudice where the court believes that although there is a technical failure of proof there is nevertheless a meritorious claim.' Report of Proposed Amendments to Rules of Civil Procedure (1946) 64; see United States v. Lyman, 1 Cir., 125 F.2d 67; Lyman v. United States, 1 Cir., 138 F.2d 509; Home Owners' Loan Corporation v. Huffman, 8 Cir., 134 F.2d 314, 317. 6 This general suggestion was made by the Advisory Committee on Rules for Civil Procedure in its recent recommendation to us for modification of Rule 50(b). The Committee said: 'Even on appeal, if the appellate court sets aside his verdict, he may present to the appellate court affidavits to support his claim to a new trial, and the appellate court has power to receive the affidavits and remand the case to the trial court with instructions to consider the affidavits and determine whether a new trial should be allowed.' Report of Proposed Amendments, supra, 66.

89

330 U.S. 248 67 S.Ct. 747 91 L.Ed. 876 NORTHERN PAC. RY. CO.v.UNITED STATES. No. 400. Argued Jan. 13, 1947. Decided March 3, 1947. Mr. Lorenzo B. da Ponte, of St. Paul, Minn., for petitioner. Mr. Robert L. Werner, of New York City, for respondent. [Argument of Counsel from page 249 intentionally omitted] Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This is a companion case to United States v. Powell, and United States v. Atlantic Coast Line R. Co., 330 U.S. 238, 67 S.Ct. 742. This case, like those, involves the construction of the provision of § 321(a) of the Transportation Act of 1940, 49 U.S.C.A. § 65(a), which entitles 'military or naval property of the United States moving for military or naval and not for civil use' to land-grant rates. Petitioner was a land-grant road, 13 Stat. 365, 370, and for years carried government property at land-grant rates. 43 Stat. 477, 486, 10 U.S.C. § 1375, 10 U.S.C.A. § 1375. It qualified to receive the higher rates authorized by § 321(a) of the Transportation Act of 1940 by the timely filing of the required release of land-grant claims pursuant to § 321(b) of the Act.1 2 The shipments in controversy were made over petitioner's railroad on government bills of lading in 1941, 1942, and 1943. They were admittedly government property at the time of carriage. Petitioner submitted its bills to the Government at the published commercial tariff rates. The United States, claiming that under § 321(a) of the Transportation Act each shipment was entitled to move at land-grant rates, deducted the difference between the commercial rates and the land-grant rates. Petitioner thereupon brought this suit under the Tucker Act, 28 U.S.C.A. § 41(20), to recover the deducted sums. The District Court entered judgment for the United States on the claims here involved. 64 F.Supp. 1. The Circuit Court of Appeals affirmed. 7 Cir., 156 F.2d 346. The ase is here on certiorari. 3 The shipments involved five types of property: 4 Copper cable.—Copper cable was transported to Tacoma, Wash., for use in the installation of degaussing equipment (a defense against magnetic mines) on a cargo vessel being so built that it might readily be converted into a military or naval auxiliary. The work was done by a contractor under contract with the Maritime Commission. The degaussing specifications were furnished by the Navy which also furnished the equipment and bore the cost. The vessel was delivered in 1941 and was operated as directed by the Maritime Commission or the War Shipping Administration. Whether it operated as a cargo vessel or as a military or naval auxiliary does not appear. 5 Lumber for construction of munitions plant.—In 1942 the Twin Cities Ordnance Plant was being constructed in Minnesota by contractors under the supervision of the Army. The plant was government owned and Army sponsored. Army officers were procuring agents for the lumber used in the construction. Petitioner transported lumber for use in the construction. The plant was completed in 1943 and manufactured ammunition for the armed forces. 6 Lumber for construction of Marine Corps pontons.—Petitioner in 1943 carried fir lumber to a plant in Minnesota to be treated, kiln dried, milled, and manufactured by a contractor into parts of demountable floating bridges required to move military personnel and war vehicles across water barriers. The construction was under a contract with the Marine Corps. The manufactured product was either shipped overseas in connection with military or naval operations or was used in connection with the training of combat engineers. 7 Bowling alleys for Dutch Harbor.—Petitioner moved bowling alley equipment to Seattle, Washington, for reshipment to the Naval Air Base, Dutch Harbor, Alaska. The Navy had entered into a contract for the construction of an air base at Dutch Harbor on public land reserved for Navy use. The purchase and installation of the bowling alleys were pursuant to that contract and were approved by the Navy officer who had supervision and control of the construction program. The recreational facilities, which included the bowling alleys, were planned for initial use by the civilian construction crew and then, when construction work was ended, by the Navy. But in fact they were used only by members of the armed forces. 8 Liquid paving asphalt for Cold Bay, Alaska, airport.—In 1942 petitioner moved liquid paving asphalt to Seattle, Washington, for reshipment to Alaska. The asphalt was for use in constructing runways at an airport at Cold Bay under a program of the Civil Aeronautics Authority approved by a joint cabinet board as being necessary for the national defense. Work was commenced by a civilian contractor and, after the shipment had moved, was taken over by the Army which thereafter had full control of the field. 9 In four of the above instances the property was consigned to an army or navy officer; in the fifth, the shipment of liquid paving asphalt, the Civil Aeronautics Authority was the consignee. And as we have said, the property in each case was at the time of shipment property of the United States. The question remains whether within the meaning of § 321(a) it was 'military or naval' property and, if so, whether it was 'moving for military or naval' use. 10 There is a suggestion that since the shipment of asphalt was to a civilian agency, the Civil Aeronautics Authority, it was not 'military or naval' property. The theory is that 'military or naval' property means only property shipped by or under control of the army or navy. 11 We see no merit in that suggestion. Section 321(a) makes no reference to specific agencies or departments of government. The fact that the War or Navy Department does the procurement might, of course, carry special weight or be decisive in close cases. But it is well known that procurement of military supplies or war material is often handled by agencies other than the War and Navy Departments. Procurement of cargo and transport vessels by the Maritime Commission is an outstanding example. See Merchant Marine Act of 1936, § 902, 49 Stat. 2015, 2016, as amended, 46 U.S.C. § 1242, 46 U.S.C.A. § 1242. And shortly before the Transportation Act of 1940 was enacted, Congress by the Act of June 25, 1940, 54 Stat. 572, 573, 574, authorized the Reconstruction Finance Corporation to create subsidiary corporations to purchase and produce equipment, supplies, and machinery for the manufacture of arms, ammunition, and implements of war. And later that Act was amended to enable those corporations to purchase or produce any supply or article necessary for the national defense or war effort. Act of June 10, 1941, 55 Stat. 248, 249, 15 U.S.C.A. § 606b. As we have held in United States v. Powell, supra, not every purchase which furthers the national defense is for 'military or naval' use within the meaning of § 321(a). But property may fall within that category though it is procured by departments other than War or Navy. 12 It is also suggested that the property covered by the exception in § 321(a) is confined to property for ultimate use directly by the armed forces. Under that view materials shipped for the construction of vessels for the Maritime Commission and used to service troops at home or abroad would not be 'military or naval' property. We likewise reject that argument. Civilian agencies may service the armed forces or act as adjuncts to them. The Maritime Commission is a good example. An army and navy on foreign shores or in foreign waters cannot live and fight without a supply fleet in their support. The agency, whether civil or military, which performs that function is serving the armed forces. The property which it employs in that service is military or naval property, serving a military or naval function. 13 But petitioner contends that, even if that is true, the construction of vessels or other military equipment or supplies is in a different category. It argues that none of the articles shipped in the present case was military or naval, since they were not furnished to the armed forces for their use. They were supplied, so the argument runs, for manufacture and construction which are civilian pursuits and which were here in fact performed by civilian contractors. Only the completed product, not the component elements, was, in that view, for military or naval use. 14 Military or naval property may move for civil use, as where army or navy surplus supplies are shipped for sale to the public. But in general the use to which the property is to be put is the controlling test of its military or naval character. Pencils as well as rifles may be military property. Indeed, the nature of modern war, its multifarious aspects, the requirements of the men and women who constitute the armed forces and their adjuncts, give military or naval property such a broad sweep as to include almost any type of property. More than articles actually used by military or naval personnel in combat are included. Military or naval use includes all property consumed by the armed forces or by their adjuncts, all property which they use to further their projects, all property which serves their many needs or wants in training or preparation for war, in combat, in maintaining them at home or abroad, in their occupation after victory is won. It is the relation of the shipment to the military or naval effort that is controlling under § 321(a). The property in question may have to be reconditioned, repaired, processed or treated in some other way before it serves their needs. But that does not detract from its status as military or naval property. Southern Pacific Co. v. Defense Supplies Corp., D.C., 64 F.Supp. 605. Within the meaning of § 321(a) an intermediate manufacturing phase cannot be said to have an essential 'civil' aspect, when the products or articles involved are destined to serve military or naval needs. It is the dominant purpose for which the manufacturing or processing activity is carried on that is controlling. 15 Measured by that test, there can be no doubt that the five types of property involved in the present litigation were 'military or naval' property of the United States 'moving for military or naval and not for civil use' within the meaning of § 321(a). The lumber for the pontons, the asphalt for the airfield, the lumber for the ammunition plant were used in Army or Navy projects directly related to combat preparation or to actual combat. Copper cable for the cargo vessel, though farther removed from that category, was well within the definition of 'military or naval' property. It, too, was a defensive weapon. Beyond that it was purchased by the Navy Department and consigned to one of its officers. It was supplied pursuant to Navy specifications; and the ship on which it was installed was being prepared for possible ultimate use by the Navy. The bowling alleys were also well within the statutory classification. The needs of the armed forces plainly include recreational facilities. The morale and physical condition of combat forces are as important to the successful prosecution of a war as their equipment. The fact that the bowling alleys were planned for initial use of civilian workers makes no difference. It is the nature of the work being done, not the status of the person handling the materials, that is decisive. Supplies to maintain civilians repairing army or navy planes is a case in point. The dominant purpose of the project in this case was the same whether civilians or military or navy personnel did the actual work. 16 Petitioner contends that if Congress intended to include in 'military or naval property' articles for use in the manufacture of implements of war, it would have said so. It seeks support for that position from other Congressional enactments under which such materials were excluded because not mentioned2 or were included by specific reference.3 We can find, however, little support for petitioner's contention in that argument. Apart from the different wording of those acts and the different ends they served, there is one decisive and controlling circumstance. We have more in § 321(a) than a declaration that 'military or naval' property is entitled to land-grant rates. Congress went further and drew the line between property moving for 'military or naval' use and property moving for 'civil' use. As we have said, the controlling test is the use to which the property is dedicated or devoted. The fact that Congress did not define what was a 'military or naval' use as distinguished from a 'civil' use is unimportant. The classification made by Congress under this Act, unlike that made under the acts on which petitioner relies, was all inclusive not partial. What is military or naval is contrasted to what is civil. The normal connotation of one serves to delimit or expand the other. It is in that context that 'military or naval' must be construed. 17 Petitioner also contends that § 321(a) is a remedial enactment which should be liberally construed so as to permit no exception which is not required. Cf. Piedmont & N. Ry. Co. v. Interstate Commerce Commission, 286 U.S. 299, 311, 312, 52 S.Ct. 541, 545, 76 L.Ed. 1115. But it is a familiar rule that where there is any doubt as to the meaning of a statute which 'operates as a grant of public property to an individual, or the relinquishment of a public interest,' the doubt should be resolved in favor of the Government and against the private claimant. Slidell v. Grandjean, 111 U.S. 412, 437, 4 S.Ct. 475, 487, 28 L.Ed. 321. See Southern Ry. Co. v. United States, 322 U.S. 72, 76, 64 S.Ct. 869, 872, 88 L.Ed. 1144. That rule has been applied in construing the reduced rate conditions of the land-grant legislation. Southern Pacific Co. v. United States, 307 U.S. 393, 401, 59 S.Ct. 923, 928, 83 L.Ed. 1363; Southern Ry. Co. v. United States, supra. That principle is applicable here where the Congress, by writing into § 321(a) an exception, retained for the United States an economic privilege of great value. The fact that the railroads, including petitioner, filed releases of their land-grant claims in order to obtain the benefits of § 321(a) is now relied upon as constituting full consideration for the rate concession. It is accordingly argued that the railroads made a contract with the United States which should be generously construed. Cf. Russell v. Sebastian, 233 U.S. 195, 205, 34 S.Ct. 517, 520, 58 L.Ed. 912, Ann.Cas.1914C, 1282. The original land-grants resulted in a contract. Burke v. Southern Pacific R. Co., 234 U.S. 669, 680, 34 S.Ct. 907, 911, 58 L.Ed. 1527. Yet, as we have seen, they were nonetheless public grants strictly construed against the grantee. The present Act, though passed in the interests of the railroads, was in essence merely a continuation of land-grant rates in a narrower category. Therefore, it, too, must be construed like any other public grant. 18 Affirmed. 1 This release was followed by a settlement of the litigation before this Court in United States v. Northern Pacific R. Co., 311 U.S. 317, 61 S.Ct. 264, 85 L.Ed. 210. See United States v. Northern Pacific R. Co., D.C., 41 F.Supp. 273; S.Doc.No. 48, 77th Cong., 1st Sess. 2 The embargo against 'arms or munitions of war' authorized by the Joint Resolution of March 14, 1912 (see 37 Stat. 1733), was held not to include machinery for the construction of a munitions plant. 32 Op.Atty.Gen. 132. 3 Thus the Act of July 2, 1940, 54 Stat. 712, 714, 50 U.S.C.Appendix, § 701, 50 U.S.C.A.Appendix, § 701, authorized the President to prohibit or curtail 'the exportation of any military equipment or munitions, or component parts thereof, or machinery, tools, or material, or supplies necessary for the manufacture, servicing, or operation thereof * * *'. The Act of November 30, 1940, 54 Stat. 1220, 50 U.S.C.A. §§ 101, 104—106, amending the Anti-Sabotage Act, defined 'national-defense material' as including 'arms, armament, ammunition, livestock, stores of clothing, food, foodstuffs, fuel, supplies, munitions, and all other articles of whatever description and any part or ingredient thereof,' which the United States intended to use in the national defense. The Act of October 16, 1941, 55 Stat. 742, 50 U.S.C.A.Appendix, §§ 721—724, authorized the Preside t to requisition the following types of property for the defense of the United States: 'military or naval equipment, supplies, or munitions, or component parts thereof, or machinery, tools, or materials necessary for the manufacture, servicing, or operation of such equipment, supplies, or munitions * * *'.

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330 U.S. 238 67 S.Ct. 742 91 L.Ed. 868 UNITED STATESv.POWELL et al. SAME v. ATLANTIC COAST LINE R. CO. Nos. 56 and 57. Argued Jan. 13, 1947. Decided March 3, 1947. Mr. Robert L. Werner, of New York City, for petitioner. Mr. Thomas L. Preston, of Norfolk, Va., for respondents Powell and others. Mr. Thomas W. Davis, of Wilmington, N.C., for respondent Atlantic Coast Line R. Co. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 These cases involve controversies between the United States and respondent carriers over the transportation charges for shipments of government property in 1941. In one case phosphate rock and superphosphate are involved; in the other, phosphate rock. In both the commodities were purchased by the United States, shipped on government bills of lading over the lines of respondents, and consigned to the British Ministry of War Transport. They were exported to Great Britain under the Lend-Lease Act of March 11, 1941, 55 Stat. 31, 22 U.S.C.Supp. 1, § 411 et seq., 22 U.S.C.A. § 411 et seq., for use as farm fertilizer under Britain's wartime program for intensified production of food. It is agreed that these shipments were 'defense articles' as defined in § 2 of that Act.1 2 Respondents billed the United States for transportation charges on these shipments at the commercial rate and were paid at that rate. The Seaboard is a land-grant railroad. The Atlantic Coast Line is not; but it entered into an equalization agreement with the United States in 1938 under which it agreed to accept land-grant rates for shipments which the United States could alternatively move over a land-grant road.2 The General Accounting Office excepted to these payments on the ground that land-grant rates were applicable. The amounts of the alleged over-payments were deducted from subsequent bills concededly due by the United States. Respondents thereupon instituted suits under the Tucker Act, 36 Stat. 1091, 1093, as amended, 28 U.S.C. § 41(20), 28 U.S.C.A. § 41(20), to recover the amounts withheld. The United States counterclaimed for the difference between the amounts due under the commercial rate and those due under the land-grant rate and asked that the difference be set off against the claims of respondents and that the complaints be dismissed. The District Courts gave judgment for respondents. The Circuit Court of Appeals affirmed. 4 Cir., 152 F.2d 228, 230. The cases are here on petitions for writs of certiorari which we granted because of the importance of determining the controlling principle for settlement of the many claims of this character against the Government. 3 For years the land-grant rate was fifty per cent of the commercial rate and was applicable to the transportation of property or troop of the United States. 43 Stat. 477, 486, 10 U.S.C. § 1375, 10 U.S.C.A. § 1375; United States v. Union Pacific R. Co., 249 U.S. 354, 355, 39 S.Ct. 294, 295, 63 L.Ed. 643; Southern Ry. Co. v. United States, 322 U.S. 72, 73, 64 S.Ct. 869, 870, 88 L.Ed. 1144. A change was effected by the Transportation Act of September 18, 1940, 54 Stat. 898, 954, 49 U.S.C. § 65, 49 U.S.C.A. § 65. See Krug v. Santa Fe Pac. R. Co., 329 U.S. 591, 67 S.Ct. 540. All carriers by railroad which released their land grant claims against the United States3 were by that Act entitled to the full commercial rates for all shipments, except that those rates were inapplicable to the transportation of 'military or naval property of the United States moving for military or naval and not for civil use or to the transportation of members of the military or naval forces of the United States (or property of such members) when such members are traveling on official duty * * *' § 321(a).4 The Seaboard filed such a release. Accordingly, the question presented by these cases is whether the fertilizer was 'military or naval property of the United States moving for military or naval and not for civil use' within the meaning of § 321(a) of the Transportation Act. 4 The legislative history of the Transportation Act of 1940 throws no light on the scope of the except clause.5 But it is apparent from the face of the statute that there are important limitations on the type of property which must be carried at less than the applicable commercial rates. In the first place, it is not the transportation of 'all' property of the United States that is excepted but only the transportation of 'military or naval' property of the United States. In the second place, the excepted property must be 'moving for military or naval and not for civil use.' Thus the scope of the clause is restricted both by the nature of the property shipped and by the use to which it will be put at the end of the transportation. 5 The bulk and main stress of petitioner's argument are based on the Lend-Lease Act which was enacted about six months after the Transportation Act. It is pointed out that in the case of every shipment under the Lend-Lease Act there was a finding by the Executive that the shipment would promote our national defense,6 that the Act was indeed a defense measure,7 and that unless the administration of that Act is impeached, all lend-lease 'defense articles' fall within the except clause and are entitled to land-grant rates. 6 Under conditions of modern warfare, foodstuffs lend-leased for civilian consumption, sustained the war production program and made possible the continued manufacture of munitions, arms, and other war supplies necessary to maintain the armed forces. For like reasons, fertilizers which made possible increased food production served the same end. In that sense all civilian supplies which maintained the health and vigor of citizens at home or abroad served military functions. 7 So for us the result would be clear if the standards of the Lend-Lease Act were to be read into the Transportation Act. For the circumstance that the fertilizer was to be used by an ally rather than by this nation would not be controlling. 8 Our difficulty, however, arises when we are asked to transplant those standards into the Transportation Act. And that difficulty is not surmounted though the exception in § 321(a) be construed, as it must be, Northern Pacific R. Co. v. United States, 330 U.S. 248, 67 S.Ct. 747, strictly in favor of the United States. 9 In the first place, the Transportation Act, which preceded the Lend-Lease Act by only six months, provided its own standards. They were different at least in terms from the standards of the Lend-Lease Act; and they were provided at a time when Congress was much concerned with the problems of national defense. In September, 1940, when the Transportation Act was passed, Congress and the nation were visibly aware of the possibilities of war. Appropriations for the army and navy were being increased and the scope of their operations widened,8 alien registration was required,9 training of civilians for military service was authorized,10 development of stock piles of strategic and critical materials was encouraged11—to mention only a few of the measures being passed in the interests of national defense. See 50 Yale L.J. 250. Moreover, the realities of total war were by then plain to all. Europe had fallen; militarism was rampant. Yet in spite of our acute awareness of the nature of total war, in spite of the many measures being enacted and the many steps being taken by the Congress and the Chief Executive to prepare our national defense, s 321(a) of the Transportation Act was couched in different terms. In other parts of that Act,12 as in many other Congressional enactments passed during the period, the exigencies of national defense constituted the standard to govern administrative action. But the standard written into § 321(a) did not reflect the necessities of national defense or the demands which total war makes on an economy. It used more conventional language—'military or naval' use as contrasted to 'civil' use. That obviously is not conclusive on the problem of interpretation which these cases present. But in light of the environment in which § 321(a) was written we are reluctant to conclude that Congress meant 'all property of the United States transported for the national defense' when it used more restrictive language. 10 In the second place, the language of § 321(a) emphasizes a distinction which would be largely obliterated if the requirements of national defense, accentuated by a total war being waged in other parts of the world, were read into it. Section 321(a) uses 'military or naval' use in contrast to 'civil' use. Yet if these fertilizer shipments are not for 'civil' use, we would find it difficult to hold that like shipments by the Government to farmers in this country during the course of the war were for 'civil' use. For in total war food supplies of allies are pooled; and the importance of maintaining full agricultural production in this country if the war effort was to be successful, cannot be gainsaid. When the resources of a nation are mobilized for war, most of what it does is for a military end—whether it be rationing, or increased industrial or agricultural production, price control, or the host of other familiar activities. But in common parlance, such activities are civil, not military. It seems to us that Congress marked that distinction when it wrote § 321(a). If that is not the distinction, then 'for military or naval and not for civil use' would have to be read' for military or naval use or for civil use which serves the national defense.' So to construe § 321(a) would, it seems to us, largely or substantially wipe out the line which Congress drew and, in time of war, would blend 'civil' and 'military' when Congress undertook to separate them. Yet § 321(a) was designed as permanent legislation, not as a temporary measure to meet the exigencies of war. It was to supply the standard by which rates for government shipments were to be determined at all times—in peace as well as in war. Only if the distinction between 'military' and 'civil' which common parlance marks is preserved, will the statute have a constant meaning whether shipments are made in days of peace, at times when there is hurried activity for defense, or during a state of war. 11 In the third place, the exception in § 321(a) extends not only to the transportation of specified property for specified uses. It extends as well to 'the transportation of members of the military or naval forces of the United States (or property of such members) when such members are traveling on official duty * * *'. That clause plainly does not include the multitude of civilians employed by the Gove nment during the war and exclusively engaged in furthering the war effort, whether they be lend-lease officials or others.13 Thus, the entire except clause contained in § 321(a) will receive a more harmonious construction if the scope of 'military or naval' is less broadly construed, so as to be more consonant with the restrictive sense in which it is obviously used in the personnel portion of the clause. 12 In sum, we hold that respondents in these cases were entitled to the full applicable commercial rate for the transportation of the fertilizer. In Northern Pacific R. Co. v. United States, supra, we develop more fully the breadth of the category of 'military or naval property' of the United States 'moving for military or naval * * * use'. It is sufficient here to say that the fertilizer was being transported for a 'civil' use within the meaning of § 321(a), since it was destined for use by civilian agencies in agricultural projects and not for use by the armed services to satisfy any of their needs or wants or by any civilian agency which acted as their adjunct or otherwise serviced them in any of their activities. 13 Affirmed. 14 Mr. Justice RUTLEDGE dissents. 1 The term includes 'Any agricultural, industrial or other commodity or article for defense.' 2 The points from which the phosphate was moved by the Atlantic Coast Line are also stations on the Seaboard Line. Hence the United States is entitled to secure land-grant deductions from the Atlantic Coast Line if the Seaboard would have been subject to land-grant rates on those articles. Since the land-grant rates were substantially lower than the commercial rates, roads which competed with the land-grant lines were unable to get the government business. For that reason they entered into equalization agreements. See Southern Ry. Co. v. United States, 322 U.S. 72, 73, 74, 64 S.Ct. 869, 870, 871, 88 L.Ed. 1144. 3 Section 321(b). 4 This provision was eliminated from § 321(a) by the Act of December 12, 1945, 59 Stat. 606, 49 U.S.C.Supp. V, § 65(a), 49 U.S.C.A. § 65(a). Section 2 of that Act, 49 U.S.C.A. § 65 note, made October 1, 1946, the effective date of the amendment but provided that 'any travel or transportation specifically contracted for prior to such effective date shall be paid for at the rate, fare, or charge in effect at the time of entering into such contract of carriage or shipment.' Senator Wheeler, Chairman of the Senate Committee on Interstate Commerce, who had charge of the bill on the floor, made the following statement concerning pending controversies of the nature involved in the instant cases: 'Now, Mr. President, I wish to repeat what I said a moment ago. It should be made perfectly clear that the passage of this bill resulting in the repeal of the land-grant rates will have no effect whatever upon the controversies as to the proper classification of this material, provided it has moved prior to the effective date of the act. These controversies, which were discussed extensively at the hearings, will have to be settled by the courts; and action on the present bill, if favorable, will have no effect whatever upon the question of whether materials that have moved prior to the repeal fall within or without the classification of military or naval property.' 91 Cong.Rec. p. 9237. 5 See H.Rep.No. 2016, 76th Cong., 3d Sess., p. 87; H.Rep.No. 2832, 76th Cong., 3d Sess., p. 93. Relief from land grant deductions was urged on the basis of the financial plight of the railroads and the substantial increase in government traffic which occurred in the 1930's. See Report of President's Committee of September 20, 1938, I Hearings, House Committee on Interstate and Foreign Commerce, 76th Cong., 1st Sess., on H.R. 2531, pp. 261, 271—272; Public Aids to Transportation (1938), Vol. II, pp. 42—45. The section finally enacted appears to represent a compromise between a House Bill eliminating land-grant rates entirely see H.Rep.No. 1217, 76th Cong., 1st Sess., p. 27) and a Senate Bill which by its silence left them unchanged. S. 2009, 76th Cong., 1st Sess. 6 The authority was vested in the President who might, when he deemed it 'in the interest of national defense,' authorize the Secretary of War, the Secretary of the Navy, or the head of any other department or agency of the Government to lease, lend, etc., 'any defense article'. § 3(a)(2), 22 U.S.C.A. § 412(a)(2). 7 The Act was entitled 'An Act to Promote the Defense of the United States'; and the interests of national defense were the standards governing its administration, as § 3(a)(2), supra, note 6, makes plain. The same purpose is evident from the Committee Reports. H.Rep.No. 18, 77th Cong., 1st Sess., pp. 2, 11; S.Rep.No. 45, 77th Cong., 1st Sess., p. 2. And as President Roosevelt stated on September 11, 1941, in transmitting the Second Report under the Act, 'We are not furnishing this aid as an act of charity or sympathy, but as a means of defending America. * * * The lend-lease program is no mere side issue to our program of arming for defense. It is an integral part, a keystone, in our great national effort to preserve our national security for generations to come, by crushing the disturbers of our peace.' S.Doc.No. 112, 77th Cong., 1st Sess., p. VI. 8 See, for example, Act of June 11, 1940, 54 Stat. 265, 292, 297; Act of June 13, 1940, 54 Stat. 350, 377; Act of June 14, 1940, 54 Stat. 394, 34 U.S.C.A. §§ 498—1, 498a—1, 498c—2, 498f—1, 498g—1, 498l, 601, 749c; Acts of June 15, 1940, 54 Stat. 396, 22 U.S.C.A. § 521 et seq.; Act June 15, 1940, 54 Stat. 400; Act of June 26, 1940, 54 Stat. 599. 9 Act of June 28, 1940, 54 Stat. 670, 8 U.S.C. § 451 et seq., 8 U.S.C.A. § 451 et seq. 10 Act of September 16, 1940, 54 Stat. 885, 50 U.S.C.Appendix, § 301 et seq., 50 U.S.C.A.Appendix, § 301 et seq. 11 Act of September 16, 1940, 54 Stat. 897, 15 U.S.C.A. § 606d. 12 Thus § 1 emphasized the policy in establishing a national transportation system adequate, inter alia, to meet the needs 'of national defense'. 13 The provision under land-grant legislation that 'troops of the United States' should be transported at half rates was held not to include discharged soldiers, discharged military prisoners, rejected applicants for enlistment, applicants for enlistment provisionally accepted, retired enlisted men, or furloughed soldiers en route back to their stations. United States v. Union Pacific R. Co., supra. The same result was reached in the case of engineer officers of the War Department who were assigned to duty in connection with the improvement of rivers and harbors. Southern Pacific Co. v. United States, 285 U.S. 240, 52 S.Ct. 324, 76 L.Ed. 736.

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330 U.S. 219 67 S.Ct. 756 91 L.Ed. 854 NATIONAL LABOR RELATIONS BOARDv.DONNELLY GARMENT CO. et al. INTERNATIONAL LADIES' GARMENT WORKERS' UNION v. SAME. Nos. 38 and 39. Argued Oct. 16, 1946. Decided March 3, 1947. [Syllabus from pages 219-221 intentionally omitted] Miss Ruth Weyand, of Washington, D.C., for National Labor Relations board. Mr. Clifton Langsdale, of Kansas City, Mo., for International Ladies' Garment Workers' Union. Mr. Robert J. Ingraham, of Kansas City, Mo., for Donnelly Garment Co. Mr. Frank E. Tyler, of Kansas City., Mo., for Donnelly Garment Workers' Union. r. Justice FRANKFURTER delivered the opinion of the Court. 1 On March 6, 1940, the National Labor Relations Board, on finding that the Donnelly Garment Company had engaged in labor practices condemned as 'unfair' by the Wagner Act, issued an order against the Company 'to effectuate the policies' of the Act. The Circuit Court of Appeals for the Eighth Circuit denied enforcement of the order and remanded the case to the Board. 123 F.2d 215. After carrying out what it conceived to be the directions of the Court the Board again found against the Company. The Court below denied enforcement of the Board's second order 'for want of due process in the proceedings upon which the order is based.' 8 Cir., 151 F.2d 854, 875. The correctness of this ruling is now before us, for we brought the case here, 327 U.S. 775, 66 S.Ct. 958, to rule on important issues in the administration of the Wagner Act. This protracted litigation has given rise to a swarm of questions. In view of the fact that the case comes to us after it has been twice before the Board and three times before the court below, on a record of thirteen volumes with a total of more than 5000 pages, even an earnest attempt at compactness cannot avoid a somewhat extended opinion. 2 The case presents limited legal phases of one of those bitter, unedifying conflicts with which American industrial history is unfortunately replete. For other litigation growing out of this strife, see D.C., 20 F.Supp. 767; D.C., 21 F.Supp. 807; 304 U.S. 243, 58 S.Ct. 875, 82 L.Ed. 1316, Id., D.C., 23 F.Supp. 998; 8 Cir., D.C., 99 F.2d 309; 8 Cir., 119 F.2d 892; 8 Cir., 121 F.2d 561; D.C., 47 F.Supp. 61; Donnelly Garment Co. v. Dubinsky, D.C., 47 F.Supp. 65; 47 F.Supp. 67; Donnelly Garment Co. v. International Ladies' Garment Workers' Union, D.C., 55 F.Supp. 572; Donnelly Garment Co. v. Dubinsky, D.C., 55 F.Supp. 587; Donnelly Garment Co. v. Unternational Ladies' Garment Workers' Union, 8 Cir., 147 F.2d 246; 154 F.2d 38. It has its roots in a campaign by the International Ladies Garment Workers Union (hereafter designated as International) to unionize the women's garment industry in Kansas City, Missouri. Because of its importance, the Donnelly Garment Company (to be called Company for short) became the particular target of these unionizing efforts. These continued with varying intensity over a period of years but met with little success among the Company's employees. 3 In 1938, International began proceedings before the Board charging the Company with a series of unfair labor practices in violation of §§ 2(6), (7) and 8(1), (2), (3) of the National Labor Relations Act, 49 Stat. 449, 29 U.S.C. § 151 et seq., 29 U.S.C.A. § 151 et seq. The main charge was that the Company, to counteract the efforts of International, had stimulated the formation of a plant union, the Donnelly Garment Workers Union (hereafter called Union) and had dominated it through financial and other aid. Following the usual procedure there was a hearing before a trial examiner. At the hearing, the Examiner rejected an offer by the Company to prove, through the testimony of 1200 employees, that they had not been coerced by the Company to join Union, but that each of them had done so of his own free will, and that they had no knowledge of Company influence in the affairs of Union. The Examiner also excluded evidence to show that the formation of the Union followed strike threats and violence by International, successful against smaller competitors of the Company, to coerce the Company into a closed-shop agreement with International. To these and other less important exclusions the Company duly excepted on the submission of the Trial Examiner's intermediate report. The Board upheld the Examiner's rulings on evidence, accepted his findings of fact, and, with a qualification not here relevant, adopted his recommendations. Thereupon it issued the usual cease-and-desist order, and directed the disestablishment of Union and reimbursement to employees of the amount of the dues which the Company had checked off on behalf of Union (21 N.L.R.B. 164). 4 Review of this order came before the Circuit Court of Appeals on the Company's petition to set it aside and on the Board's cross-petition for its enforcement. On several contentions, the disposition of which is relevant to the questions now calling for decision, the Court sustained the Board. It found no basis for setting aside the proceedings as unfair on the claim that either the Examiner or the Board was biased. It held that the Board properly limited the evidence to issues raised by the complaint, and since International was not on trial it found no impropriety in the exclusion of evidence offered to prove its misconduct. The Court did however find that the Company had been denied a fair hearing in not being allowed to present the testimony of its employees to the effect that Union was truly independent and that they had joined it voluntarily. The Court remanded the case to the Board 'for further proceedings not inconsistent with the opinion of this Court'. 5 The Board thereupon set the case for a second hearing before the original Examiner. Insisting that he was biased and had prejudiced as valueless 'the evidence to be adduced at the pending hearing', the Company moved for a new trial examiner. The Board denied the application and the case proceeded to hearing. This time the Examiner heard eleven of the 1200 employees named in the offer of proof rejected in the earlier proceeding, but declined to hear the rest on the ground that their testimony would be merely cumulative. He allowed the President of the Company, whom illness had kept from the earlier hearing, to testify fully. Otherwise, he received no evidence that had been available but was not offered at the earlier proceeding, and exclauded all evidence of events subsequent to the termination of the first hearing. The Examiner's findings and recommendations, in respects here material, were substantially the same as those he had previously made, and the Board, acting upon his intermediate report, issued virtually the same order. 50 N.L.R.B. 241. The Company again petitioned the Circuit Court of Appeals to set aside the order, and the Board again requested its enforcement. During the pendency of these proceedings, the Company invoked § 10(e) of the Wagner Act and asked the Court leave to adduce before the Board evidence which it claimed had been erroneously excluded. This motion was not granted. Instead, as already noted, the Court denied the Board's petition for enforcement 'for want of due process in the proceedings upon which the order is based.' 8 Cir., 151 F.2d 854, 875. The Court set forth its views in a careful opinion of more than thirty pages in the printed record. There was also a concurring opinion, and a dissent. 6 The Court canvassed many items of evidence. As to some of the Board's rulings which it disapproved, the Court stated explicitly that by themselves they would not have afforded sufficient ground for reversal. Rulings which individually would not invalidate an order of the Board do not in combination acquire the necessary strength to undo what the Board, acting under authority given it by Congress, has done. We do not find that in their combination these rulings amounted to unfairness. We must therefore consider one by one those objections which the Court deemed sufficient to vitiate the Board's order. For the Court below did not suggest that the Board as a tribunal was so biased as to be incapable of fair judgment in this case. It found that such a finding against the Board was not justified. 7 First. The controlling basis of the Court's finding of unfairness in the Board proceedings related to testimony proffered by the Company at the second hearing before the Examiner. This second hearing was not a new proceeding. It was a stage in a process consisting of the first proceeding before the Board, the remand resulting from review of the Board's order in the Circuit Court of Appeals, and he second proceeding before the Board in response to this remand. The correctness of the Court's judgment refusing enforcement of the Board's second order must be judged in the light of the interrelation of the two proceedings before the Board, and the Board's justifiable interpretation of the directions which it received upon remand of the first order. Indeed, the disposition of the present case turns decisively on the view that is taken of the Board's interpretation of its duty under the Court's mandate. 8 It becomes necessary therefore to revert to the precise terms of the Court's mandate. The order was remanded by the Circuit Court of Appeals 'to said Labor Board for further proceedings not inconsistent with the opinion of this Court.' The Court's opinion yields this gloss upon its mandate: 9 'Our conclusion is that the petition of the Board for enforcement of the order under review must be denied. We think that the least that the Board can do, in order to cure the defects in its procedure caused by the failure of the Trial Examiner to receive admissible evidence, is to vacate the order and the findings and conclusions upon which it is based; to accord to the petitioners (the Company and the plant union) an opportunity to introduce all of the competent and material evidence which was rejected by the Trial Examiner; and to receive and consider such evidence together with all other competent and material evidence in the record before making new findings and a new order.' 8 Cir., 123 F.2d 215, 225. 10 The Board based its new order upon the record of the first proceeding, reopening the hearing only for the purpose of admitting the erroneously excluded testimony of the employees. In short, the Board did not understand the remand to call for a new trial. The Court, when called upon to construe it four years later, took a different view of the meaning of its decision of November, 1941: 'It is, we think, apparent that what this Court, in effect, ruled was that the Company and the plant union were entitled to a new trial upon the evidence already taken and such competent and material evidence as might be proffered upon a further hearing.' 8 Cir., 151 F.2d 854, 856. From this point of view, the Court could readily conclude that the record which came to it 'presents an incomplete picture.' 11 We have recognized that 'the court that issues a mandate is normally the best judge of its content, on the general theory that the author of a document is ordinarily the authoritative interpreter of its purposes.' But, we continued, 'it is not even true that a lower court's interpretation of its mandate is controlling here. Compare United States v. Morgan, 307 U.S. 183, 59 S.Ct. 795, 83 L.Ed. 1211. Therefore, we would not be foreclosed by the interpretation which the Court of Appeals gave to its mandate, even if it had been directed to a lower court.' Federal Communications Commission v. Pottsville Broadcasting Co., 309 U.S. 134, 141, 60 S.Ct. 437, 440, 84 L.Ed. 656. Here, as in that case a much deeper issue is involved. As we had occasion to point out in the Pottsville case, there are significant differences between the relations of an appellate court to a lower court and those of a court to a law-enforcing agency, like the Board, whose order is subject only to restricted judicial review. These differences may be particularly telling upon remand of an order to the agency. Due regard for these differences must guide us through the maze of details in this case. 12 In the context of the opinion remanding the Board's original order and of the nature of the administrative process with which it is entrusted, the Board was justified in not deeming itself under duty to grant a 'new trial' in the sense in which a lower court must start anew when an upper court directs such a new trial. There was no reference to a 'new trial', nor was any intimation given that such was the breadth of what the remand required. From the Court's opinion there appears only a very restricted dissatisfaction with the original proceedings before the Board, calling for a correspondingly restricted correction. 'The least that the Board can do', wrote the court, 'is * * * to accord to the petitioners an opportunity to introduce all of the competent and material evidence which was rejcted by the Trial Examiner; and to receive and consider such evidence together with all other competent and material evidence in the record before making new findings and a new order.' 123 F.2d at page 225. 'The least that the Board can do' may well imply that the Board is authorized to draw on the wide scope of its statutory discretion. But to advise the Board of 'the least that (it) can do' does not put the Board in default for not doing more. Due process does not afford a party the right to treat as a rehearsal a hearing on the issues for which the hearing was adequate. And the Wagner Act does not require that ground be covered a second time or piecemeal. 13 Second. Since in our view the remand did not call for a proceeding de novo, the Board was not required to reopen any issue as to which its ruling was left unassailed by the Circuit Court of Appeals in its first decision. We shall therefore consider the particular defects which the Circuit Court of Appeals found in the second hearing, by treating that hearing not as a new trial but as the sequel of the first hearing under a remand by the Circuit Court of Appeals for the limited purpose of correcting the prior erroneous exclusion of testimony. 14 (1) The Board's decision that the Company had engaged in unfair labor practices to a large extent turned on the Company's relation to the plant union. It is fair to infer that the lower court's denial of enforcement of the Board's order was influenced most by its finding that the Trial Examiner and the Board did not comply with the Court's mandate on the first review regarding the proffer of testimony of the Company's employees to the effect that they voluntarily organized and joined the Union and that, to their knowledge, its affairs were uninfluenced by the Company. At the second hearing the Examiner admitted the testimony of eleven such employees, excluding further oral testimony of the same nature as merely cumulative. The court below did not quarred with confining this line of testimony to eleven witnesses. But it reached the view that neither the Examiner nor the Board took this testimony into account in reaching the findings on which the Board's second order was based. It was principally from this that the Court concluded that the Company was denied the full hearing to secure which the case was remanded to the Board. 15 According to an early English judge, 'The devil himself knoweth not the mind of man', and a modern reviewing court is not much better equipped to lay bare unexposed mental processes. It is a grave responsibility to conclude that in admitting the testimony of the Company's employees, the Board went through a mere pretense of obedience to the Court's direction, and heard the testimony with a deaf ear and a closed mind. In light of the authority with which Congress has endowed the Board, and with due regard to the conscientiousness which we must attribute to another branch of the Government, we cannot reject its explicit avowal that it did take into account evidence which it should have considered unless an examination of the whole record puts its acceptance beyond reason. Since this matter is crucial, it is appropriate to quote fully the Board's decision on the point: 16 'In remanding the case to the Board for further hearing, the Circuit Court directed that the respondent (the Company) and the D.G.W.U. (the plant union) be permitted to adduce the previously proffered testimony of respondent's (the Company's) employees to show, in substance, that they formed and joined the D.G.W.U. of their own free will and that they were not influenced, interfered with, or coerced by the respondent in choosing that organization as their bargai ing representative. In compliance with the Court's mandate and pursuant to the respective offers of proof submitted by the respondent and the D.G.W.U. at the original hearing, the Board permitted the introduction of such testimony. We have carefully considered all such evidence adduced by the respondent and the D.G.W.U. We find, however, that the testimony in question does not overcome more positive evidence in the record that the respondent committed acts of interference and assistance in the formation and administration of the D.G.W.U. which subjected that organization to the respondent's domination and which removed from the employees' selection of the D.G.W.U. the complete freedom of choice which the Act contemplates. Since we find the testimony here adduced totally unpersuasive that the employees voluntarily designated the D.G.W.U., we are moreover impelled to adhere to the opinion, derived from our experience in administration of the Act, that conclusionary evidence of this nature is immaterial to issue such as those presented in this case. A consideration of all the evidence convinces us, and we find, that the respondent dominated and interfered with the formation and administration of the D.G.W.U. and contributed support thereto; and that the respondent thereby interfered with, restrained, and coerced it employees in the exercise of the rights guaranteed in Section 7 of the Act.' 50 N.L.R.B. 241. 17 We cannot read this otherwise than as an assurance by the Board that it did not merely go through the motions of allowing the testimony of these witnesses to get into the record as an empty formality, but that it duly heeded the order of the Court and reflected upon the testimony. The Board judged of its worth, as it had a right to, in light of the mass of other testimony in the case, and found it unpersuasive. Had the Board said no more the court below could hardly have found disregard of its mandate. The Board's skeptical expression regarding this kind of testimony hardly disproves obedience to the Court's mandate. Even lower courts sometime indicate disagreement with a ruling they are bound to enforce. Out of repeated instances of hearing the same thing a generalization as to its worth will almost inevitably emerge in the thoughts of a tribunal. As to this sort of testimony, it has been observed that a feeling by employees 'that they were under no sense of constraint * * * is a subtle thing, and the recognition of constraint may call for a high degree of introspective perception.' Judge Magruder in Bethlehem Shipbuilding Corporation v. National Labor Relations Board, 1 Cir., 114 F.2d 930, 937. We are not called upon to lay down a general rule of materiality regarding such testimony. Suffice it is to say that the Board obeyed the decision of the Circuit Court of Appeals that the testimony of the Company's employees regarding Union was to be adduced and considered. Its probative value was for the Board. See Pittsburgh Plate Glass Co. v. National Labor Relations Board, 313 U.S. 146, 163, 61 S.Ct. 908, 917, 85 L.Ed. 1251. And the Court did not rule that the rest of the record repelled the Board's assurance that it 'carefully considered' the evidence the Court bade it to consider. It expressly withheld consideration of the Board's order on the basis of the whole record. 18 (2) The new testimony of the Donnelly employees led to rulings on evidence by the Examiner, approved by the Board, which in the view of the Court below contributed to render the hearing unfair. The testimony related to the offensive aspect of International's unionizing efforts and the bearing of this upon the claim of Company that Union was quite independent and not the Company's instrument. The employees were allowed to testify that they were antagonized by acts of violence on the part of International and that they sought self-protection in a union of their own, voluntarily formed. The Examiner limited this line of testimony to acts of violence within six months preceding the o ganization of Union. This was based on the notion that a time limit had to be drawn somewhere in ascertaining the effect of known violence in persuading Donnelly employees to form their own union, and that a period longer than six months was too remote, or, in any event, had not sufficient probative value. Surely this was a reasonable ruling by the hearing-tribunal. At any rate it was not so circumscribing of proof in establishing the issue toward which the evidence was directed as to call for correction. But it is urged that while the Company was so restricted on proof of this issue the Board allowed evidence further back calculated to show a continuous state of mind toward influencing employee association by the Company. By way of rebuttal to the employees' testimony that the plant union of 1937 was a spontaneous effort of the employees wholly uninfluenced by the Company, the Board admitted evidence to show that the Company fostered a company union in 1935. It does not follow that the limitation of time on admissible evidence is the same regardless of the issue for which the evidence is tendered. Certainly we cannot say that it was not admissible to allow this evidence of company coercion in 1935 as bearing on the independence of the new plant union in 1937. And so we cannot find a solid enough ground to establish discriminatory treatment by the Board because on this issue it went back to 1935 whereas on the issue of the influence of International's violence in the formation of the 1937 plant union, it drew the line at events six months prior thereto. 19 (3) While we think that the Board properly construed the scope of the remand not to require a retrial of issues canvassed at the first hearing, time does not stop still even for the administrative process. Change in circumstances may make relevant at the second hearing what was irrelevant at the first hearing. The Circuit Court of Appeals found such a change in circumstances in a decision of this Court rendered after the first review below. In its decision of November 6, 1941, the Circuit Court of Appeals sustained the exclusion by the Board of testimony to prove misdeeds by International. The tenor of its reasoning was that an inquiry into charges of unfair labor practices by the Company did not make relevant charges of misconduct against International, the complainant. The Board issued the order now challenged on June 9, 1943. In the meantime, on January 18, 1943, this Court decided National Labor Relations Board v. Indiana & Michigan Electric Co., 318 U.S. 9, 63 S.Ct. 394, 399, 87 L.Ed. 579. That case, so the court below thought, required the admission at the second hearing of the offer of proof regarding International's acts of violence. 20 We regard this as a misapplication of the Indiana & Michigan case. This case is not that case. They have in common an accusation of grave misconduct against a complainant before the Board. Otherwise, the circumstances of the two cases, and the legal issues they raise, are very different. The Indiana & Michigan case involved a proceeding under § 10(e) of the National Labor Relations Act authorizing the Circuit Court of Appeals to order additional evidence to be taken before the Board when it is shown "to the satisfaction of the court that such additional evidence is material,' and that there were reasonable grounds for the failure to adduce the evidence' at the hearing. We have previously held that such an application 'was addressed to the sound judicial discretion of the court'. Southport Petroleum Co. v. National Labor Relations Board, 315 U.S. 100, 104, 62 S.Ct. 452, 455, 86 L.Ed. 718. Section 10(e) in effect formulates a familiar principle regarding newly discovered evidence. Even without such explicitness this Court has, on occasion, not allowed administrative orders to stand where there has been a drastic change in circumstances. In Indiana & Michigan the offer of proof related to events subsequent to the Board's hearing, tending to show acts of seriou violence on behalf of a complaining union. The Board had refused to reopen the case and the Circuit Court of Appeals for the Sixth Circuit granted the application under § 10(e). 124 F.2d 50. We held that, in the light of the circumstances before it, the Circuit Court of Appeals did not abuse its discretion in ordering additional evidence to be taken before the Board. The proffered testimony was held relevant on three grounds: (1) Inasmuch as the Board, by the very nature of its case load, must exercise discretion in entertaining complaints, the newly revealed misconduct on the part of the complainant might affect, not the jurisdiction of the Board, but the exercise of its power to entertain a charge; (2) the new evidence bore materially upon the credibility of some important witnesses before the Board; (3) the Board had attributed to the Company responsibility for the conduct of some of its supervisory employees, and the new evidence might lead the Board to conclude that their conduct was to be attributed to self-interest and not charged against the employer. 21 Here we have a totally different situation. We are not reviewing an allowable exercise of judicial discretion by the Circuit Court of Appeals in ordering the Board to hear newly discovered evidence. On review of its order, the Board cannot be compelled to admit evidence which it excluded unless such exclusion was clearly insupportable. The power to adduce additional evidence granted to the Circuit Court of Appeals by § 10(e) cannot be employed to enlarge the statutory scope of judicial review. The short of the matter is that the Court deemed it reversible error on the part of the Board not to entertain testimony on a matter which the court deemed irrelevant to the issues at the first hearing. It did so because it interpreted the Indiana & Michigan case to hold that failure by the Board to allow a full-dress inquiry into the misconduct of a complainant, particularly if very serious, renders the proceedings unfair as a matter of law. We were not dealing with such an abstraction in the Indiana & Michigan case. Nothing short of such an abstraction will justify invalidation of the order in this case because the Board did not deal with the charges against International as a separate issue, or as though the International had been on trial. The only consideration affecting the behavior of a complainant that played a part in the decision in Indiana & Michigan and which may here be invoked, is the suggestion that the character of a complainant may right-fully influence the Board in entertaining a complaint. But the charges against International had in fact been brought to the attention of the Board even though not in the way in which International would have been tried had it been formally charged with crime. It would be unreasl to deny that there was plenty of evidence in the record to apprise the Board of alleged misconduct by International if on that score it chose not to entertain charges of unfair labor practices against the company. In the light of the Board's opinion, it would be doctrinaire to assume that it would have reached any other result if evidence of International's misconduct had been more voluminous. Pittsburgh Plate Glass Co. v. National Labor Relations Board, supra. The two other respects in which newly discovered evidence as to violence was ordered to be heard in the Indiana & Michigan case are completely lacking here. We have not new evidence material to the credibility of important witnesses or relevant in assessing the responsibility by an employer for conduct of supervisory employees. The refusal of the Board in effect to try International did not impair the validity of the Board's order. 22 Even in judicial trials, the whole tendency is to leave rulings as to the illuminating relevance of testimony largely to the discretion of the trial court that hears the evidence. See, e.g., Morgan, Foreword, American Law Institute Code of Evidence, p. 15. Courts of Appeal are less and le § inclined to base error on such rulings. Administrative tribunals are given even freer scope in the application of the conventional rules of evidence. See Tagg Bros. & Moorhead v. United States, 280 U.S. 420, 442, 50 S.Ct. 220, 225, 74 L.Ed. 524. It is significant that the Wagner Act specifically provided that 'the rules of evidence prevailing in courts of law or equity shall not be controlling.' § 10(b). 23 Third. This brings us to the only other objection to a ruling of the Board made after the first hearing. On the first review, the court below rejected the Company's contention that the Examiner was biased. 8 Cir., 123 F.2d at page 219. On the second review, the Court was of opinion that the Board improperly denied the Company's application for a new Examiner. It did so, apparently, not because it found actual bias on the part of the Examiner demonstrated at either hearing. The Court seemed to be moved by the generous feeling that a party ought not to be put to trial before an examiner who, by reason of his prior rulings and findings, may not be capable of exercising impartiality. Cetainly it is not the rule of judicial administration, that, statutory requirements apart, see Judicial Code, § 21, 28 U.S.C. § 25, 28 U.S.C.A. § 25, a judge is disqualified from sitting in a retrial because he was reversed on earlier rulings. We find no warrant for imposing upon administrative agencies a stiffer rule, whereby examiners would be disentitled to sit because they ruled strongly against a party in the first hearing. The Board might have gone beyond the legal compulsions and ordered the new evidence to be heard before a new Examiner who could report with a mind wholly free from prior litigious embroilments. The Board might have been well advised also to allow greater leeway in admitting evidence not strictly relevant. It takes time to avoid even the appearance of grievances. But it is time well spent, even though it is not easy to satisfy interested parties, and defeated litigants, no matter how fairly treated, do not always have the feeling that they have received justice. In any event we are not the advisers of these agencies. And we have no right to upset their orders unless they fall afoul of legal requirements. Cf. Inland Empire Dist. Council v. Millis, 325 U.S. 697, 65 S.Ct. 1316, 89 L.Ed. 1877. We do not find that the Board's order offends them. 24 Fourth. We have examined all the issues pressed here but we need not enlarge upon our conclusion that they are without merit. There remains the proper disposition of the case. Having found infirmities in the proceedings which led to the order, the Court below did not consider the sufficiency of the evidence to sustain the findings on which the order was based. This controversy has been so long in litigation that, other things being equal, it would be highly desirable finally to dispose of the whole case here. But other things are not equal. It is not the function of this Court to review in the first instance the sufficiency of evidence on which the Board's order is based. Congress placed that function in the Circuit Court of Appeals. And this case is peculiarly not one in which we should do the unusual thing and pass on evidence without its prior consideration by the lower court. It is not for to make an independent examination of this entire record. The demands of the work of this Court preclude an independent canvass of a record of thirteen volumes, containing more than 5000 pages. Two judges below who had gone over this mass of evidence reached opposite conclusions regarding its sufficiency to support the Board's findings. For the determination of this issue we remand the case to the Circuit Court of Appeals. 25 Reversed and remanded.

67

330 U.S. 258 67 S.Ct. 677 91 L.Ed. 884 UNITED STATESv.UNITED MINE WORKERS OF AMERICA. SAME v. LEWIS, JOHN L. President of United Mine Workers of America. UNITED MINE WORKERS OF AMERICA v. UNITED STATES. LEWIS, JOHN L. President of United Mine Workers of America v. SAME. UNITED MINE WORKERS OF AMERICA et al. v. SAME. Nos. 759, 760, 781, 782, 811. Argued Jan. 14, 1947. Decided March 6, 1947. [Syllabus from pages 258-261 intentionally omitted] Messrs. Tom C. Clark, Atty. Gen., and John F. Sonnett, Asst. Atty. Gen., for United States. Messrs. Welly K. Hopkins and Joseph A. Padway, both of Washington, D.C., for United Mine Workers of America and John L. Lewis, individually, etc. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 In October, 1946, the United States was in possession of, and operating, the major portion of the country's bituminous coal mines.1 2 Terms and conditions of employment were controlled 'for the period of Government possession' by an agreement2 entered into on May 29, 1946, between Secretary of Interior Krug, as Coal Mines Administrator, and John L. Lewis, as President of the United Mine Workers of America.3 The Krug-Lewis agreement embodied far reaching changes favorable to the miners;4 and, except as amended and supplemented therein, the agreement carried forward the terms and conditions of the National Bituminous Coal Wage Agreement of April 11, 1945.5 3 On October 21, 1946, the defendant Lewis directed a letter to Secretary Krug and presented issues which led directly to the present controversy. According to the defendant Lewis, the Krug-Lewis agreement carried forward § 15 of the National Bituminous Coal Wage Agreement of April 11, 1945. Under that section either party to the contract was privileged to give ten days' notice in writing of a desire for a negotiating conference which the other party was required to attend; fifteen days after the beginning of the conference either party might give notice in writing of the termination of the agreement, effective five days after receipt of such notice. Asserting authority under this clause, the defendant Lewis in his letter of October 21 requested that a conference begin November 1 for the purpose of negotiating new arrangements concerning wages, hours, practices, and other pertinent matters appertaining to the bituminous coal industry.6 4 Captain N. H. Collisson, then Coal Mines Administrator, answered for Secretary Krug. Any contractual basis for requiring negotiations for revision of the Krug-Lewis agreement was denied.7 In the opinion of the Government, § 15 of the 1945 agreement had not been preserved by the Krug-Lewis agreement; indeed, § 15 had been expressly nullified by the clause of the latter contract providing that the terms contained therein were to cover the period of Government possession. Although suggesting that any negotiations looking toward a new agreement be carried on with the mine owners, the Government expressed willingness to discuss matters affecting the operation of the mines under the terms of the Krug-Lewis agreement. 5 Conferences were scheduled and began in Washington on November 1, both the union and the Government adhering to their opposing views regarding the right of either party to terminate the contract.8 At the fifth meeting, held on November 11, the union for the first time offered specific proposals for changes in wages and other conditions of employment. On November 13 Secretary Krug requested the union to negotiate with the mine owners. This suggestion was rejected.9 On November 15 the union, by John L. Lewis, notified Secretary Krug that 'Fifteen days having now elapsed since the beginning of said conference, the United Mine Workers of America, exercising its option hereby terminates said Krug-Lewis Agreement as of 12:00 o'clock P.M., Midnight, Wednesday, November 20, 1946.' 6 Secretary Krug again notified the defendant Lewis that he had no power under the Krug-Lewis agreement or under the law to terminate the contract by unilateral declaration.10 The President of the United States announced his strong support of the Government's position and requested reconsideration by the union in order to avoid a national crisis. However, the defendant Lewis, as union president, circulated to the mine workers copies of the November 15 letter to Secretary Krug. This communication was for the 'official information' of union members. 7 The United States on November 18 filed a complaint in the District Court for the District of Columbia against the United Mine Workers of America and John L. Lewis, individually and as president of the union. The suit was brought under the Declaratory Judgment Act11 and sought judgment to the effect that the defendants had no power unilaterally to terminate the Krug-Lewis agreement. And alleging that the November 15 notice was in reality a strike notice, the United States, pending the final determination of the cause, requested a temporary restraining order and preliminary injunctive relief. 8 The court, immediately and without notice to the defendants, issued a temporary order12 restraining the defendants from continuing in effect the notice of November 15, from encouraging the mine workers to interfere with the operation of the mines by strike or cessation of work, and from taking any action which would interfere with the court's jurisdiction and its determination of the case. The order by its terms was to expire at 3:00 p.m. on November 27 unless extended for good cause shown. A hearing on the preliminary injunction was set for 10:00 a.m. on the same date. The order and complaint were served on the defendants on November 18. 9 A gradual walkout by the miners commenced on November 18, and, by midnight of November 20, consistent with the miners' 'no contract, no work' policy, a full-blown strike was in progress. Mines furnishing the major part of the nation's bituminous coal production were idle. 10 On November 21 the United States filed a petition for a rule to show cause why the defendants should not be punished as and for contempt, alleging a willful violation of the restraining order. The rule issued, setting November 25 as the return day and, if at that time the contempt was not sufficiently purged, setting November 27 as the day for trial on the contempt charge. 11 On the return day, defendants, by counsel, informed the court that no action had been taken concerning the November 15 notice, and denied the jurisdiction of the court to issue the restraining order and rule to show cause. Trial on the contempt charge was thereupon ordered to begin as scheduled on November 27. On November 26 the defendants filed a motion to dischrge and vacate the rule to show cause. Their motion challenged the jurisdiction of the court, and raised the grave question of whether the Norris-LaGuardia Act13 prohibited the granting of the temporary restraining order at the instance of the United States.14 12 After extending the temporary restraining order on November 27, and after full argument on November 27 and November 29, the court, on the latter date, overruled the motion and held that its power to issue the restraining order in this case was not affected by either the Norris-LaGuardia Act or the Clayton Act.15 13 The defendants thereupon pleaded not guilty and waived an advisory jury. Trial on the contempt charge proceeded. The Government presented eight witnesses, the defendants none. At the conclusion of the trial on December 3, the court found that the defendants had permitted the November 15 notice to remain outstanding, had encouraged the miners to interfere by a strike with the operation of the mines and with the performance of governmental functions, and had interfered with the jurisdiction of the court. Both defendants were found guilty beyond reasonable doubt of both criminal and civil contempt dating from November 18. The court entered judgment on December 4, fining the defendant Lewis $10,000, and the defendant union $3,500,000. On the same day a preliminary injunction, effective until a final determination of the case, was issued in terms similar to those of the restraining order. 14 On December 5 the defendants filed notices of appeal from the judgments of contempt. The judgments were stayed pending the appeals. The United States on December 6 filed a petition for certiorari in both cases. Section 240(a) of the Judicial Code, 28 U.S.C.A. § 347(a), authorizes a petition for certiorari by any party and the granting of certiorari prior to judgment in the Circuit Court of Appeals. Prompt settlement of this case being in the public interest, we granted certiorari on December 9, 329 U.S. 708, 67 S.Ct. 359, and subsequently, for similar reasons, granted petitions for certiorari filed by the defendants, 329 U.S. 709, 67 S.Ct. 373; 329 U.S. 710, 67 S.Ct. 485. The cases were consolidated for argument. I. 15 Defendants' first and principal contention is that the restraining order and preliminary injunction were issued in violation of the Clayton and Norris-LaGuardia Acts. We have come to a contrary decision. 16 It is true that Congress decreed in § 20 of the Clayton Act that 'no such restraining order or injunction shall prohibit any person or persons * * * from recommending, advising, or persuading others * * *' to strike. But by the Act itself this provision was made applicable only to cases 'between an employer and employees, or between employers and employees, or between employees, or between persons employed and persons seeking employment * * *.'16 For reasons which will be explained at greater length in discussing the applicability of the Norris-LaGuardia Act, we cannot construe the general term 'employer' to include the United States, where there is no express reference to the United States and no evident affirmative grounds for believing that Congress intended to withhold an otherwise available remedy from the Government as well as from a specified class of private persons. 17 Moreover, it seems never to have been suggested that the proscription on injunctions found in the Clayton Act is in any respect broader than that in the Norris-LaGuardia Act. Defendants o not suggest in their argument that it is. This Court, on the contrary, has stated that the Norris-LaGuardia Act 'still further * * * (narrowed) the circumstances under which the federal courts could grant injunctions in labor disputes.'17 Consequently, we would feel justified in this case to consider the application of the Norris-LaGuardia Act alone. If it does not apply, neither does the less comprehensive proscription of the Clayton Act;18 if it does, defendant's reliance on the Clayton Act is unnecessary. 18 By the Norris-LaGuardia Act, Congress divested the federal courts of jurisdiction to issue injunctions in a specified class of cases. It would probably be conceded that the characteristics of the present case would be such as to bring it within that class if the basic dispute had remained one between defendants and a private employer, and the latter had been the plaintiff below. So much seems to be found in the express terms of §§ 4 and 13 of the Act, set out in the margin.19 The specifications in s 13 are in general terms and make no express exception for the United States. From these premises, defendants argue that the restraining order and injunction were forbidden by the Act and were wrongfully issued. 19 Even if our examination of the Act stopped here, we could hardly assent to this conclusion. There is an old and well-known rule that statutes which in general terms divest pre-existing rights or privileges will not be applied to the sovereign without express words to that effect.20 It has been stated, in cases in which there were extraneous and affirmative reasons for believing that the sovereign should also be deemed subject to a restrictive statute, that this rule was a rule of construction only.21 Though that may be true, the rule has been invoked successfully in cases so closely similar to the present one,22 and the statement of the rule in those cases has been so explicit,23 that we are inclined to give it much weight here. Congress was not ignorant of the rule which those cases reiterated; and, with knowledge of that rule, Congress would not, in writing the Norris-LaGuardia Act, omit to use 'clear and specific (language) to that effect' if it actually intended to reach the Government in all cases. 20 But we need not place entire reliance in this exclusionary rule. Section 2,24 which declared t e public policy of the United States as a guide to the Act's interpretation, carries indications as to the scope of the Act. It predicates the purpose of the Act on the contrast between the position of the 'individual unorganized worker' and that of the 'owners of property' who have been permitted to 'organize in the corporate and other forms of ownership association', and on the consequent help-lessness of the worker 'to exercise actual liberty of contract * * * and thereby to obtain acceptable terms and conditions of employment.' The purpose of the Act is said to be to contribute to the worker's 'full freedom of association, self-organization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment, and that he shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives * * * for the purpose of collective bargaining * * *' These considerations, on their face, obviously do not apply to the Government as an employer or to relations between the Government and its employees. 21 If we examine §§ 4 and 13, on which defendants rely, we note that they do not purport to strip completely from the federal courts all their pre-existing powers to issue injunctions, that they withdraw this power only in a specified type of case, and that this type is a case 'involving or growing out of any labor dispute.' Section 13, in the first instance, declares a case to be of this type when it 'involves persons' or 'involves any conflicting or competing interests' in a labor dispute of 'persons' who stand in any one of several defined economic relationships. And 'persons' must be involved on both sides of the case, or the conflicting interests of 'persons' on both sides of the dispute. The Act does not define 'persons'. In common usage that term does not include the sovereign, and statutes employing it will ordinarily not be construed to do so.25 Congress made express provision, R.S. § 1, 1 U.S.C. § 1, 1 U.S.C.A. § 1, for the term to extend to partnerships and corporations, and in § 13 of the Act itself for it to extend to associations. The absence of any comparable provision extending the term to sovereign governments implies that Congress did not desire the term to extend to them. 22 Those clauses in § 13(a) and (b) spelling out the position of 'persons' relative to the employer-employee relationship affirmatively suggest that he United States, as an employer, was not meant to be included. Those clauses require that the case involve persons 'who are engaged in the same industry, trade, craft or occupation', who 'have direct or indirect interests therein', who are 'employees of the same employer', who are 'members of the same or an affiliated organization of employers or employees', or who stand in some one of other specified positions relative to a dispute over the employer-employee relationship. Every one of these qualifications in § 13(a) and (b) we think relates to an economic role ordinarily filled by a private individual or corporation, and not by a sovereign government. None of them is at all suggestive of any part played by the United States in its relations with its own employees. We think that Congress' failure to refer to the United States or to specify any role which it might commonly be thought to fill is strong indication that it did not intend that the Act should apply to situations in which United States appears as employer. 23 In the type of case to which the Act applies, § 7 requires certain findings of fact as conditions precedent to the issuance of injunctions even for the limited purposes recognized by the Act. One such required finding is that 'the public officers charged with the duty to protect complainant's property are unable or unwilling to furnish adequate protection.' Obviously, such finding could never be made if the complainant were the United States, and federal property were threatened by federal employees, as the responsibility of protection would then rest not only on state officers, but also on all federal civil and military forces. If these failed, a federal injunction would be a meaningless form. This provision, like those in §§ 2, 4 and 13, already discussed, indicates that the Act was not intended to affect the relations between the United States and its employees. 24 Defendants maintain that certain facts in the legislative history of the Act so clearly indicate an intent to restrict the Government's use of injunctions that all the foregoing arguments to the contrary must be rejected. 25 Representative Beck of Pennsylvania indicated in the course of the House debates that he thought the Government would be included within the prohibitions of the Act.26 Mr. Beck was not a member of the Judiciary Committee which reported the bill, and did not vote for its passage. We do not accept his views as expressive of the attitude of Congress relative to the status of the United States under the Act. 26 Representative Blanton of Texas introduced an amendment to the bill which would have made an exception to the provision limiting the injunctive power 'where the United States Government is the petitioner', and this amendment was defeated by the House.27 But the first comment made on this amendment, after its introduction, was that of Representative LaGuardia, the House sponsor of the bill, who opposed it, not on the ground that such an exception should not be made, but rather on the ground that the express exception was unnecessary. Mr. LaGuardia read the definition of a person 'participating or interested in a labor dispute' in § 13(b), referred to the provisions of § 13(a), and then added: 'I do not see how in any possible way the United States can be brought in under the provisions of this bill.' When Mr. Blanton thereupon suggested the necessity of allowing the Government to use injunctions to maintain discipline in the army and navy, Mr. LaGuardia pointed out that these services are not 'a trade, craft or occupation'. Mr. Blanton's only answer to Mr. LaGuardia's opposition was that the latter 'does not know what extensions will be made.' A vote was then taken and the amendment defeated.28 Obviously this incident does not reveal a C ngressional intent to legislate concerning the relationship between the United States and its employees. 27 In the debates in both Houses of Congress numerous references were made to previous instances in which the United States had resorted to the injunctive process in labor disputes between private employers and private employees,29 where some public interest was thought to have become involved. These instances were offered as illustrations of the abuses flowing from the use of injunctions in labor disputes and the desirability of placing a limitation thereon. The frequency of these references and the attention directed to their subject matter are compelling circumstances. We agree that they indicate that Congress, in passing the Act, did not intend to permit the United States to continue to intervene by injunction in purely private labor disputes. 28 But whether Congress so intended or not is a question different from the one before us now. Here we are concerned only with the Government's right to injunctive relief in a dispute with its own employees. Although we recognize that Congress intended to withdraw such remedy in the former situation, it does not follow that it intended to do so in the latter. The circumstances in which the Government sought such remedy in 1894 and 1922 were vastly different from those in which the Government is seeking to carry out its responsibilities by taking legal action against its own employees, and we think that the references in question have only the most distant and uncertain bearing on our present problem. Indeed, when we look further into the history of the Act, we find other events which unequivocally demonstrate that injunctive relief was not intended to be withdrawn in the latter situation. 29 When the House had before it a rule for the consideration of the bill, Representative Michener, a ranking minority member of the Judiciary Committee and spokesman for the minority party on the Rules Committee, made a general statement in the House concerning the subject matter of the bill and advocating its immediate consideration. In this survey he clearly stated that the Government's rights with respect to its own employees would not be affected:30 30 'Be it remembered that this bill does not attempt to legislate concerning Government employees. I do not believe that the enactment of this bill into law will take away from the Federal Government any rights which it has under existing law, to seek and obtain injunctive relief where the same is necessary for the functioning of the Government.' 31 In a later stage of the debate, Representative Michener repeated this view in the following terms:31 32 'This deals with labor disputes between individuals, not where the Government is involved. It is my notion that under this bill the Government can function with an injunction, if that is necessary in order to carry out the purpose of the Government. I should like to see this clarified, but I want to go on record as saying that under my interpretation of this bill the Federal Government will not at any time be prevented from applying for an injunction, if one is necessary in order that the Government may function.' 33 Representatives Michener and LaGuardia were members of the Judiciary Committee which reported and recommended the bill to the House. They were the most active spokesmen for the Committee, both in explaining the bill and advocating its passage. No member of the House who voted for the bill challenged their explanations. At least one other member expressed a like understanding.32 We cannot but believe that the House accepted these authoritive representations as to the proper construction of the bill.33 The Senate expressed no contrary understanding,34 and we must co clude that Congress in passing the Act, did not intend to withdraw the Government's existing rights to injunctive relief against its own employees. 34 If we were to stop here, there would be little difficulty in accepting the decision of the District Court upon the scope of the Act. And the cases in this Court express consistent views concerning the types of situations to which the Act applies.35 They have gone no farther than to follow Congressional desires by regarding as beyond the jurisdiction of the District Courts the issuance of injunctions sought by the United States and directed to persons who are not employees of the United States. None of these cases dealt with the narrow segment of the employer-employee relationship now before us. 35 But regardless of the determinative guidance so offered, defendants rely upon the opinions of several Senators uttered in May, 1943, while debating the Senate version of the War Labor Disputes Act.36 The debate at that time centered around a substitute for the bill, S. 796, as originally introduced.37 Section 5 of the substitute, as amended, provided, 'The district courts of the United States and the United States Courts of the Territories or possessions shall have jurisdiction, for cause shown, but solely upon application by the Attorney General or under his direction * * * to restrain violations or threatened violations of this act.'38 Following the rejection of other amendments aimed at permitting a much wider use of injunctions and characterized as contrary to the Norris-LaGuardia Act,39 several Senators were of the opinion that § 5 itself would remove some of the protection given employees by that Act,40 a view contrary to what we have just determined to be the scope of the Act as passed in 1932. Section 5 was defeated and no injunctive provisions were contained in the Senate bill. 36 We have considered these opinions, but cannot accept them as authoritative guides to the construction of the Norris-LaGuardia Act. They were expressed by Senators, some of whom were not members of the Senate in 1932, and none of whom was on the Senate Judiciary Committee which reported the bill. They were expressed eleven years after the Act was passed and cannot be accorded even the same weight as if made by the same individuals in the course of the Norris-LaGuardia debates.41 Moreover, these opinions were given by individuals striving to write legislation from the floor of the Senate and working without the benefit of hearings and committee reports on the issues crucial to us here.42 We fail to see how the remarks of these Senators in 1943 can serve to change the legislative intent of Congress expressed in 1932 and we accordingly adhere to our conclusion that the Norris-LaGuardia Act did not affect the jurisdiction of the Courts to issue injunctions when sought by the United States in a labor dispute with its own employees. 37 It has been suggested, however, that Congress, in passing the War Labor Disputes Act, effectively restricted the theretofore existing authority of the Courts to issue injunctions in connection with labor disputes in plants seized by the United States. Chief reliance is placed upon the rejection by the Senate of § 5 of the Connally substitute bill.43 But it is clear that no comparable action transpired in the House. Indeed, proposals in the House and the House substitute44 for S. 796 authorized the use of injunctions in connection with private plants not yet seized by the United States. These admitted inroads on the Norris-LaGuardia Act drew much comment45 on the floor of the House, but nevertheless prevailed. Seizure was also contemplated, and criminal sanctions were made available in this situation, without specifically authorizing the use of injunctions by the United States. The latter issue was not raised, not debated and not commented upon in the House. But the fact that the House version did not provide for the issuance of injunctions to aid in the operation of seized plants is not the issue here. Rather, it is whether the House expressed any intent to restrict the existing authority of the courts. We find not the slightest suggestion to that effect in either the House substitute bill or the debates concerning it. 38 Nor can the action of the conference committee be construed as a Congressional proscription of issuing injunctions to aid the United States in dealing with employees in seized plants. Neither the House nor Senate version, as these bills went to conference, in any way placed this issue before the conferees. The conference committee simply struck the broader provisions of the House bill allowing injunctions to issue in private labor disputes and had no occasion to consider the narrower question we have before us now. The conferees, in producing the Act in its final form, did nothing which suggests that the Congress intended to bar injunctions sought by the Government to aid in the operation of seized plants. We thus find nothing in the legislative background of the War Labor Disputes Act which constitutes an authoritative expression of Congress directing the courts to withhold from the United States injunctive relief in connection with an Act designed to strengthen the hand of the Government in serious labor disputes. 39 The defendants contend, however, that workers in mines seized by the Government are not employees of the federal Government; that in operating the mines thus seized, the Government is not engaged in a sovereign function; and that, consequently, the situation in this case does not fall within the area which we have indicated as lying outside the scope of the Norris-LaGuardia Act. It is clear, however, that workers in the mines seized by the Government under the authority of the War Labor Disputes Act stand in an entirely different relationship to the federal Government with respect to their employment from that which existed before the seizure was effected. That Congress intended such was to be the case is apparent both from the terms of the statute and from the legislative deliberations preceding its enactment. Section 3 of the War Labor Disputes Act calls for the seizure of any plant, mine, or facility when the President finds that the operation thereof is threatened by strike or other labor disturbance and that an interruption in production will unduly impede the war effort. Congress intended that by virtue of Government seizure, a mine should become, for purposes of production and operation, a Government facility in as complete a sense as if the Government held full title and ownership.46 Consistent with that view, criminal penalties were provided for interference with the operation of such facilities.47 Also included were procedures for adjusting wages and conditions of employment of the workers in such a manner as to avoid interruptions in production.48 The question with which we are confronted is not whether the workers in mines under Government seizure are 'employees' of the federal Government for every purpose which might be conceived,49 but whether, for the purposes of this case, the incidents of the relationship existing between the Government and the workers are those of governmental employer and employee. 40 Executive Order 9728, in pursuance of which the Government seized possession of the mines, authorized the Secretary of the Interior to negotiate with the representatives of the miners, and thereafter to apply to the National Wage Stabilization Board for appropriate changes in terms and conditions of employment for the period of governmental operation.50 Such negotiations were undertaken and resulted in the Krug-Lewis agreement. That agreement contains many basic departures from the earlier contract entered into between the mine workers and the private operators on April 11, 1945, which, except as amended and supplemented by the Krug-Lewis agreement, was continued in effect for the period of Government possession. Among the terms of the Krug-Lewis agreement were provisions for a new mine safety code. Operating managers were directed to provide the mine employees with the protection and benefits of Workmen's Compensation and Occupational Disease Laws. Provision was made for a Welfare and Retirement Fund and a Medical and Hospital Fund. The agreement granted substantial wage increases and contained terms relating to vacations and vacation pay. Included were provisions calling for changes in equitable grievance procedures. 41 It should be observed that the Krug-Lewis agreement was one solely between the Government and the union. The private mine operators were not parties to the contract nor were they made parties to any of its subsequent modifications. It should also be observed that the provisions relate to matters which normally constitute the subject matter of collective bargaining between employer and employee. Many of the provisions incorporated into the agreement for the period of Government operation had theretofore been vigorously opposed by the private operators and have not subsequently received their approval. 42 It is descriptive of the situation to state that the Government, in order to maintain production and to accomplish the purposes of the seizure, has substituted itself for the private employer in dealing with those matters which formerly were the subject to collective bargaining between the union and the operators. The defendants by their conduct have given practical recognition to this fact. The union negotiated a collective agreement with the Government and has made use of the procedures provided by the War Labor Di putes Act to modify its terms and conditions. The union has apparently regarded the Krug-Lewis agreement as a sufficient contract of employment to satisfy the mine workers' traditional demand of a contract as a condition precedent to their work. The defendant Lewis, in responding to a suggestion of the Secretary of the Interior that certain union demands should be taken to the private operators with the view of making possible the termination of Government possession, stated in a letter dated November 15, 1946: 'The Government of the United States seized the mines and entered into a contract. The mine workers do not propose to deal with parties who have no status under the contract.' The defendant Lewis in the same letter referred to the operators as 'strangers to the Krug-Lewis Agreement' and to the miners as the '400,000 men who now serve the Government of the United States in the bituminous coal mines.' The defendants, however, point to the fact that the private managers of the mines have been retained by the Government in the role of operating managers with substantially the same functions and authority. It is true that the regulations for the operations of the mines issued by the Coal Mines Administrator provide for the retention of the private managers to assist in the realization of the objects of Government seizure and operation.51 The regulations, however, also provide for the removal of such operating managers at the discretion of the Coal Mines Administrator.52 Thus the Government, though utilizing the services of the private managers, has nevertheless retained ultimate control. 43 The defendants also point to the regulations which provide that none of the earnings or liabilities resulting from the operation of the mines, while under seizure, are for the account or at the risk or expense of the Government;53 that the companies continue to be liable for all Federal, State, and local taxes;54 and that the mining companies remain subject to suit.55 The regulations on which defendants rely represent an attempt on the part of the Coal Mines Administrator to define the respective powers and obligations of the Government and private operators during the period of Government control. We do not at this time express any opinion as to the validity of these regulations. It is sufficient to state that, in any event, the matters to which they refer have little persuasive weight in determining the nature of the relation existing between the Government and the mine workers. 44 We do not find convincing the contention of the defendants that in seizing and operating the coal mines the Government was not exercising a sovereign function and that, hence, this is not a situation which can be excluded from the terms of the Norris-LaGuardia Act. In the Executive Order which directed the seizure of the mines, the President found and proclaimed that 'the coal produced by such mines is required for the war effort and is indispensable for the continued operation of the national economy during the transition from war to peace; that the war effort will be unduly impeded or delayed by * * * interruptions (in production); and that the exercise * * * of the powers vested in me is necessary to insure the operation of such mines in the interest of the war effort and to preserve the national economic structure in the present emergency * * *.' Under the conditions found by the President to exist, it would be difficult to conceive of a more vital and urgent function of the Government than the seizure and operation of the bituminous coal mines. We hold that in a case such as this, where the Government has seized actual possession of the mines, or other facilities, and is operating them, and the relationship between the Government and the workers is that of employer a d employee, the Norris-LaGuardia Act does not apply. II. 45 Although we have held that the Norris-LaGuardia Act did not render injunctive relief beyond the jurisdiction of the District Court, there are alternative grounds which support the power of the District Court to punish violations of its orders as criminal contempt. 46 Attention must be directed to the situation obtaining on November 18. The Government's complaint sought a declaratory judgment in respect to the right of the defendants to terminate the contract by unilateral action. What amounted to a strike call, effective at midnight on November 20, had been issued by the defendant Lewis as an 'official notice'. Pending a determination of defendants' right to take this action, the Government requested a temporary restraining order and injunctive relief. The memorandum in support of the restraining order seriously urged the inapplicability of the Norris-LaGuardia Act to the facts of this case, and the power of the District Court to grant the ancillary relief depended in great part upon the resolution of this jurisdictional question. In these circumstances, the District Court unquestionably had the power to issue a restraining order for the purpose of preserving existing conditions pending a decision upon its own jurisdiction. 47 The temporary restraining order was served on November 18. This was roughly two and one-half days before the strike was to begin. The defendants filed no motion to vacate the order. Rather, they ignored it, and allowed a nationwide coal strike to become an accomplished fact. This Court has used unequivocal language in condemning such conduct,56 and has in United States v. Shipp, 1906, 203 U.S. 563, 27 S.Ct. 165, 51 L.Ed. 319, 8 Ann.Cas. 265, provided protection for judicial authority in situations of this kind. In that case this Court had allowed an appeal from a denial of a writ of habeas corpus by the Circuit Court of Tennessee. The petition had been filed by Johnson, then confined under a sentence of death imposed by a state court. Pending the appeal, this Court issued an order staying all proceedings against Johnson. However, the prisoner was taken from jail and lynched. Shipp, the sheriff having custody of Johnson, was charged with conspiring with others for the purpose of lynching Johnson, with intent to show contempt for the order of this Court. Shipp denied the jurisdiction of this Court to punish for contempt on the ground that the stay order was issued pending an appeal over which this Court had no jurisdiction because the constitutional questions alleged were frivolous and only a pretense. The Court, through Mr. Justice Holmes, rejected the contention as to want of jurisdiction, and in ordering the contempt to be tried, stated: 48 'We regard this argument as unsound. It has been held, it is true, that orders made by a court having no jurisdiction to make them may be disregarded without liability to process for contempt. In re Sawyer, 124 U.S. 200, 8 S.Ct. 482, 31 L.Ed. 402; Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117; Ex parte Rowland, 104 U.S. 604, 26 L.Ed. 861. But even if the Circuit Court had no jurisdiction to entertain Johnson's petition, and if this court had no jurisdiction of the appeal, this court, and this court alone, could decide that such was the law. It and it alone necessarily had jurisdiction to decide whether the case was properly before it. On that question, at least, it was its duty to permit argument, and to take the time required for such consideration as it might need. See Mansfield, Coldwater & Lake Michigan Ry. Co. v. Swan, 111 U.S. 379, 387, 4 S.Ct. 510, (514), 28 L.Ed. 462, 465. Until its judgment declining jurisdiction should be announced, it had authority, from the necessity of the case, to make orders to preserve the existing conditions and the subject of the petition, just as the state court was bound to refrain from further proceedings until the same time. Rev.Stat. § 766, act of March 3, 1893, c. 226, 27 Stat. 751 (28 U.S.C.A. § 465). The fact that the petitioner was entitled to argue his case shows what needs no proof, that the law contemplates the possibility of a decision either way, and therefore must provide for it.' 203 U.S. 573, 27 S.Ct. 166, 51 L.Ed. 319, 8 Ann.Cas. 265. 49 If this Court did not have jurisdiction to hear the appeal in the Shipp case, its order would have had to be vacated. But it was ruled that only the Court itself could determine that question of law. Until it was found that the Court had no jurisdiction, '* * * it had authority, from the necessity of the case, to make orders to preserve the existing conditions and the subject of the petition * * *.' 50 Application of the rule laid down in United States v. Shipp, supra, is apparent in Carter v. United States, 5 Cir., 1943, 135 F.2d 858. There a district court, after making the findings required by the Norris-LaGuardia Act, issued a temporary restraining order. An injunction followed after a hearing in which the court affirmatively decided that it had jurisdiction and overruled the defendants' objections based upon the absence of diversity and the absence of a case arising under a statute of the United States. These objections of the defendants prevailed on appeal, and the injunction was set aside. Brown v. Coumanis, 5 Cir., 1943, 135 F.2d 163, 146 A.L.R. 1241. But in Carter, a companion case, violations of the temporary restraining order were held punishable as criminal contempt. Pending a decision on a doubtful question of jurisdiction, the District Court was held to have power to maintain the status quo and punish violations as contempt.57 51 In the case before us, the District Court had the power to preserve existing conditions while it was determining its own authority to grant injunctive relief. The defendants, in making their private determination of the law, acted at their peril. Their disobedience is punishable as criminal contempt. 52 Although a different result would follow were the question of jurisdiction frivolous and not substantial, such contention would be idle here. The applicability of the Norris-LaGuardia Act to the United States in a case such as this had not previously received judicial consideration, and both the language of the Act and its legislative history indicated the substantial nature of the problem with which the District Court was faced. 53 Proceeding further, we find impressive authority for the proposition that an order issued by a court with jurisdiction over the subject matter and person must be obeyed by the parties until it is reversed by orderly and proper proceedings.58 This is true without regard even for the constitutionality of the Act under which the order is issued. In Howat v. Kansas, 1922, 58 U.S. 181, 189, 190, 42 S.Ct. 277, 280, 281, 66 L.Ed. 550, this Court said: 54 'An injunction duly issuing out of a court of general jurisdiction with equity powers, upon pleadings properly invoking its action, and served upon persons made parties therein and within the jurisdiction, must be obeyed by them, however erroneous the action of the court may be, even if the error be in the assumption of the validity of a seeming, but void law going to the merits of the case. It is for the court of first instance to determine the question of the validity of the law, and until its decision is reversed for error by orderly review, either by itself or by a higher court, its orders based on its decision are to be respected, and disobedience of them is contempt of its lawful authority, to be punished.'59 55 Violations of an order are punishable as criminal contempt even though the order is set aside on appeal, Worden v. Searls, 1887, 121 U.S. 14, 7 S.Ct. 814, 30 L.Ed. 853,60 or though the basic action has become moot. Gompers v. Buck's Stove & Range Co., 1911, 221 U.S. 418, 31 S.Ct. 492, 55 L.Ed. 797, 34 L.R.A.,N.S. 874. 56 We insist upon the same duty of obedience where, as here, the subject matter of the suit, as well as the parties, was properly before the court; where the elements of federal jurisdiction were clearly shown; and where the authority of the court of first instance to issue an order ancillary to the main suit depended upon a statute, the scope and applicability of which were subject to substantial doubt. The District Court on November 29 affirmatively decided that the Norris-LaGuardia Act was of no force in this case and that injunctive relief was therefore authorized. Orders outstanding or issued after that date were to be obeyed until they expired or were set aside by appropriate proceedings, appellate or otherwise. Convictions for criminal contempt intervening before that time may stand. 57 It does not follow, of course, that simply because a defendant may be punished for criminal contempt for disobedience of an order later set aside on appeal, that the plaintiff in the action may profit by way of a fine imposed in a simultaneous proceeding for civil contempt based upon a violation of the same order. The right to remedial relief falls with an injunction which events prove was erroneously issued, Worden v. Searls, supra, 121 U.S. at pages 25, 26, 7 S.Ct. at page 820, 30 L.Ed. 853; Salvage Process Corp. v. Acme Tank Cleaning Process Corp., 2 Cir., 1936, 86 F.2d 727; S. Anargyros v. Anargyros & Co., C.C.1911, 191 F. 208;61 and a fortiori when the injunction or restraining order was beyond the jurisdiction of the court. Nor does the reason underlying United States v. Shipp, supra, compel a different result. If the Norris-LaGuardia Act were applicable in this case, the conviction for civil contempt would be reversed in its entirety. 58 Assuming, then, that the Norris-LaGuardia Act applied to this case and prohibited injunctive relief at the request of the United States, we would set aside the preliminary injunction of December 4 and the judgment for civil contempt; but we would, subject to any infirmities in the contempt proceedings or in the fines imposed, affirm the judgments for criminal contempt as validly punishing violations of an order then outstanding and unreversed. III. 59 The defendants have pressed upon us the procedural aspects of their trial and allege error so prejudicial as to require reversal of the judgments for civil and criminal contempt. But we have not been persuaded. 60 The question is whether the proceedings will support judgments for both criminal and civil contempt; and our attention is directed to Rule 42(b) of the Rules of Criminal Procedure.62 The rule requires criminal contempt to be prosecuted on notice stating the essential facts constituting the contempt charged. In this respect, there was compliance with the rule here. Notice was given by a rule to show cause served upon defendants together with the Government's petition and supporting affidavit. The pleadings rested only upon information and belief, but Rule 42(b) was not designed to cast doubt upon the propriety of instituting criminal contempt proceedings in this manner.63 The petition itself charged a violation of the outstanding restraining order, and the affidavit alleged in detail a failure to withdraw the notice of November 15, the cessation of work in the mines, and the consequent interference with governmental functions and the jurisdiction of the court. The defendants were fairly and completely apprised of the events and conduct constituting the contempt charged. 61 However, Rule 42(b) requires that the notice issuing to the defendants describe the criminal contempt charged as such. The defendants urge a failure to comply with this rule. The petition alleged a willful violation of the restraining order, and both the petition and the rule to show cause inquired as to way the defendants should not be 'punished as and for a contempt' of court. But nowhere was the contempt described as criminal as required by the rule. 62 Nevertheless, the defendants were quite aware that a criminal contempt was charged.64 In their motion to discharge and vacate the rule to show cause, the contempt charged was referred to as criminal.65 And in argument on the motion the defend nts stated and were expressly informed that a criminal contempt was to be tried. Yet it is now urged that the omission of the words 'criminal contempt' from the petition and rule to show cause was prejudicial error. Rule 42(b) requires no such rigorous application, for it was designed to insure a realization by contemnors that a prosecution for criminal contempt is contemplated.66 Its purpose was sufficiently fulfilled here, for this failure to observe the rule in all respects has not resulted in substantial prejudice to the defendants. 63 Not only were the defendant fully informed that a criminal contempt was charged, but we think they enjoyed during the trial itself all the enhanced protections accorded defendants in criminal contempt proceedings.67 We need not treat these at length, for defendants, in this respect, urge only their right to a jury trial as provided in § 11 of the Norris-LaGuarlia Act. But § 11 is not operative here, for it applies only to cases 'arising under this Act',68 and we have already held that the restriction upon injunctions imposed by the Act do not govern this case.69 The defendants, we think, were properly tried by the court without a jury. 64 If the defendants were thus accorded all the rights and privileges owing to defendants in criminal contempt cases, they are put in no better position to complain because their trial included a proceeding in civil contempt and was carried on in the main equity suit. Common sense would recognize that conduct can amount to both civil and criminal contempt. The same acts may justify a court in resorting to coercive and to punitive measures.70 Disposing of both aspects of the contempt in a single proceeding would seem at least a convenient practice. Litigation in patent cases has frequently followed this course,71 and the same method can be noted in other situations in both federal and state courts.72 Rule 42(b), while demanding fair notice and recognition of the criminal aspects of the case, contains nothing preclud ng a simultaneous disposition of the remedial aspects of the contempt tried. Even if it be the better practice to try criminal contempt alone and so avoid obscuring the defendant's privileges in any manner, a mingling of civil and criminal contempt proceedings must nevertheless be shown to result in substantial prejudice before a reversal will be required.73 That the contempt proceeding carried the number and name of the equity suit74 does not alter this conclusion, especially where, as here, the United States would have been the complaining party in whatever suit the contempt was tried. In so far as the criminal nature of the double proceeding dominates75 and in so far as the defendants' rights in the criminal trial are not diluted by the mixing of civil with criminal contempt, to that extent is prejudice avoided.76 Here, as we have indicated, all rights and privileges of the defendants were fully respected, and there has been no showing of substantial prejudice flowing from the formal peculiarities of defendants' trial. 65 Lastly, the defendants have assigned as error and argued in their brief that the District Court improperly extended the restraining order on November 27 for another ten days. There was then in progress argument on defendants' motion to vacate the rule to show cause, a part of the contempt proceedings. In the circumstances of this case, we think there was good cause shown for extending the order.77 IV. 66 Apart from their contentions concerning the formal aspects of the proceedings below, defendants insist upon the liability of the United States to secure relief by way of civil contempt in this case, and would limit the right to proceed by civil contempt to situations in which the United States is enforcing a statute expressly allowing resort to the courts for enforcement of statutory orders. McCrone v. United States, 1939, 307 U.S. 61, 59 S.Ct. 685, 83 L.Ed. 1108, however, rests upon no such narrow ground, for the Court there said that 'Article 3, Section 2, of the Constitution, U.S.C.A. expressly contemplates the United States as a party to civil proceedings by extending the jurisdiction of the federal judiciary 'to Controversies to which the United States shall be a Party." Id., 307 U.S. at page 63, 59 S.Ct. at page 686, 83 L.Ed. 1108. The United States was fully entitled to bring the present suit and to benefit from orders entered in its behalf.78 We will not reduce the practical value of the relief granted by limiting the United States, when the orders have been disobeyed, to a proceeding in criminal contempt, and by denying to the Government the civil remedies enjoyed by other litigants, concluding the opportunity to demonstrate that disobedience has occasioned loss.79 V. 67 It is urged that, in any event, the amount of the fine of $10,000 imposed on the defendant Lewis and of the fine of $3,500,000 imposed on the defendant Union were arbitrary, excessive, and in no way related to the evidence adduced at the hearing. 68 Sentences for criminal contempt are punitive in their nature and are imposed for the purpose of vindicating the authority of the court. Gompers v. Buck's Stove & Range Co., supra, 221 U.S. at page 441, 31 S.Ct. at page 498, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. The interests of orderly government demand that respect and compliance be given to orders issued by courts possessed of jurisdiction of persons and subject matter. One who defies the public authority and willfully refuses his obedience, does so at his peril. In imposing a fine for criminal contempt, the trial judge may properly take into consideration the extent of the willful and deliberate defiance of the court's order, the seriousness of the consequences of the contumacious behavior, the necessity of effectively terminating the defendant's defiance as required by the public interest, and the importance of deterring such acts in the future. Because of the nature of these standards, great reliance must be placed upon the discretion of the trial judge. 69 The trial court properly found the defendants guilty of criminal contempt. Such contempt had continued for 15 days from the issuance of the restraining order until the finding of guilty. Its willfulness had not been qualified by any concurrent attempt on defendants' part to challenge the order by motion to vacate or other appropriate procedures. Immediately following the finding of guilty, defendant Lewis stated openly in court that defendants would adhere to their policy of defiance. This policy, as the evidence showed, was the germ center of an economic paralysis which was rapidly extending itself from the bituminous coal mines into practically every other major industry of the United States. It was an attempt to repudiate and override the instrument of lawful government in the very situation in which governmental action was indispensable. 70 The trial court also properly found the defendants guilty of civil contempt. Judicial sanctions in civil contempt proceedings may, in a proper case, be employed for either or both of two purposes; to coerce the defendant into compliance with the court's order, and to compensate the complainant for losses sustained. Gompers v. Buck's Stove & Range Co., supra, 221 U.S. at pages 448, 449, 31 S.Ct. at pages 500, 501, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. Where compensation is intended, a fine is imposed, payable to the complainant. Such fine must of course be based upon evidence of complainant's actual loss,80 and his right, as a civil litigant, to the compensatory fine is dependent upon the outcome of the basic controversy.81 71 But where the purpose is to make the defendant comply, the court's discretion is otherwise exercised. It must then consider the character and magnitude of the harm threatened by continued contumacy, and the probable effectiveness of any suggested sanction in bringing about the result desired.82 72 It is a corollary of the above principles that a court which has returned a conviction for contempt must, in fixing the amount of a fine to be imposed as a punishment or as a means of securing future compliance, consider the amount of defendant's financial resources and the consequent seriousness of the burden to that particular defendant. 73 In the light of these principles, we think the record clearly warrants a fine of $10,000 against defendant Lewis for criminal contempt. A majority of the Court, however, does not think that it warrants the unconditional imposition of a fine of $3,500,000 against the defendant union. A majority feels that, if the court below had assessed a fine of $700,000 against the defendant union, this, under the circumstances, would not be excessive as punishment for the criminal contempt theretofore committed; and feels that, in order to coerce the defendant union into a future compliance with the court's order, it would have been effective to make the other $2,800,000 of the fine conditional on the defendant's failure to purge itself within a reasonable time. Accordingly, the judgment against the defendant union is held to be excessive. It will be modified so as to require the defendant union to pay a fine of $700,000, and further, to pay an additional fine of $2,800,000 unless the defendant union, within five days after the issuance of the mandate herein, shows that it has fully complied with the temporary restraining order issued November 18, 1946, and the preliminary injunction issued December 4, 1946. The defendant union can effect full compliance only by withdrawing unconditionally the notice given by it, signed John L. Lewis, President, on November 15, 1946, to J. A. Krug, Secretary of the Interior, terminating the Krug-Lewis agreement as of twelve o'clock midnight, Wednesday, November 20, 1946, and by notifying, at the same time, its members of such withdrawal in substantially the same manner as the members of the defendant union were notified of the notice to the Secretary of the Interior above-mentioned; and by withdrawing and similarly instructing the members of the defendant union of the withdrawal of any other notice to the effect that the Krug-Lewis agreement is not in full force and effect until the final determination of the basic issues arising under the said agreement. 74 We well realize the serious proportions of the fines here imposed upon the defendant union. But a majority feels that the course taken by the union carried with it such a serious threat to orderly constitutional government, and to the economic and social welfare of the nation, that a fine of substantial size is required in order to emphasize the gravity of the offense of which the union was found guilty. The defendant Lewis, it is true, was the aggressive leader in the studied and deliberate non-compliance with the order of the District Court; but, as the record shows, he stated in open court prior to imposition of the fines that 'the representatives of the United Mine Workers determined that the so-called Krug-Lewis agreement was breached', and that it was the union's 'representatives' who 'notified the Secretary of the Interior that the contract was terminated as of November 20th'. And certainly it was the members of the defendant union who executed the nationwide strike. Loyalty in responding to the orders of their leader may, in some minds, minimize the gravity of the miners' conduct; but we cannot ignore the effect of their action upon the rights of other citizens, or the effect of their action upon our system of government. The gains, social and economic, which the miners and other citizens have realized in the past, are ultimately due to the fact that they enjoy the rights of free men under our system of government. Upon the maintenance of that system depends all future progress t which they may justly aspire. In our complex society, there is a great variety of limited loyalties, but the overriding loyalty of all is to our country and to the institutions under which a particular interest may be pursued. 75 We are aware that the defendants may have sincerely believed that the restraining order was ineffective and would finally be vacated. However, the Government had sought a declaration of its contractual rights under the Krug-Lewis agreement, effective since May 29, 1946, and solemnly subscribed by the Government and the defendant union. The restraining order sought to preserve conditions until the cause could be determined, and obedience by the defendants would have secured this result. They had full opportunity to comply with the order of the District Court, but they deliberately refused obedience and determined for themselves the validity of the order. When the rule to show cause was issued, provision was made for a hearing as to whether or not the alleged contempt was sufficiently purged. At that hearing the defendants stated to the court that their position remained then in the status which existed at the time of the issuance of the restraining order. Their conduct showed a total lack of respect for the judicial process. Punishment in this case is for that which the defendants had done prior to imposition of the judgment in the District Court, coupled with a coercive imposition upon the defendant union to compel obedience with the court's outstanding order. 76 We have examined the other contentions advanced by the defendants but have found them to be without merit. The temporary restraining order the the preliminary injunction were properly issued, and the actions of the District Court in these respects are affirmed. The judgment against the defendant Lewis is affirmed. The judgment against the defendant union is modified in accordance with this opinion, and, as modified, that judgment is affirmed. So ordered. 77 Affirmed in part and modified and affirmed in part. 78 Mr. Justice JACKSON joins in this opinion except as to the Norris-LaGuardia Act which he thinks relieved the courts of jurisdiction to issue injunctions in this class of case. 79 Mr. Justice FRANKFURTER, concurring in the judgment. 80 The historic phrase 'a government of laws and not of men' epitomized the distinguishing character of our political society. When John Adams put that phrase into the Massachusetts Declaration of Rights, pt. 1, art. 30, he was not indulging in a rhetorical flourish. He was expressing the aim of those who, with him, framed the Declaration of Independence and founded the Republic. 'A government of laws and not of men' was the rejection in positive terms of rule by fiat, whether by the fiat of governmental or private power. Every act of government may be challenged by an appeal to law, as finally pronounced by this Court. Even this Court has the last say only for a time. Being composed of fallible men, it may err. But revision of its errors must be by orderly process of law. The Court may be asked to reconsider its decisions, and this has been done successfully again and again throughout our history. Or, what this Court has deemed its duty to decide may be changed by legislation, as it often has been, and, on occasion, by constitutional amendment. 81 But from their own experience and their deep reading in history, the Founders knew that Law alone saves a society from being rent by internecine strife or ruled by mere brute power however disguised. 'Civilization involves subjection of force to reason, and the agency of this subjection is law.'1 The conception of a government by laws dominated the thoughts of those who founded this Nation and designed its Constitution, although they knew as well as the belittlers of the conception that laws have to be made, interpreted and enforced by men. To that end, they set apart a body of men, who were to be the depositories of law, who by their disciplined training and character and by withdrawal from the usual temptations of private interest may reasonably be expected to be 'as free, impartial, and independent as the lot of humanity will admit'. So strongly were the framers of the Constitution bent on securing a reign of law that they endowed the judicial office with extraordinary safeguards and prestige. No one, no matter how exalted his public office or how righteous his private motive, can be judge in his own case. That is what courts are for. And no type of controversy is more peculiarly fit for judicial determination than a controversy that calls into question the power of a court to decide. Controversies over 'jurisdiction' are apt to raise difficult technical problems. They usually involve judicial presuppositions, textual doubts, confused legislative history, and like factors hardly fit for final determination by the self-interest of a party. 82 Even when a statute deals with a relatively uncomplicated matter, and the 'words in their natural sense as they would be read by the common man' would appear to give an obvious meaning, considerations underlying the statute have led this Court to conclude that 'the words cannot be taken quite so simply.' See Alexander Milburn Co. v. Davis-Bournonville Co., 270 U.S. 390, 400, 46 S.Ct. 324, 70 L.Ed. 651. How much more true this is of legislation like the Norris-LaGuardia Act. This Act altered a long process of judicial history, but altered it by a scheme of complicated definitions and limitations. 83 The Government here invoked the aid of a court of equity in circumstances which certainly were not covered by the Act with inescapable clarity. Colloquially speaking, the Government was 'running' the mines. But it was 'running' them not as an employer, in the sense that the owners of the coal mines were the employers of the men the day before the Government seized the mines. Nor yet was the relation between the Government and the men like the relation of the Government to the civil service employees in the Department of the Interior. It would be naive or wilful to assert that the scope of the Norris-LaGuardia Act in a situation like that presented by this bill raised a question so frivolous that any judge should have summarily thrown the Government out of court without day. Only when a court is so obviously traveling outside its orbit as to be merely usurping judicial forms and facilities, may an order issued by a court be disobeyed and treated as though it were a letter to a newspaper. Short of an indisputable want of authority on the part of a court, the very existence of a court presupposes its power to entertain a controversy, if only to decide, after deliberation, that it has no power over the particular controversy. Whether a defendant may be brought to the bar of justice is not for the defendant himself to decide. 84 To be sure, an obvious limitation upon a court cannot be circumvented by a frivolous inquiry into the existence of a power that has unquestionably been withheld. Thus, the explicit withdrawal from federal district courts of the power to issue injunctions in an ordinary labor dispute between a private employer and his employees cannot be defeated, and an existing right to strike thereby impaired, by pretending to entertain a suit for such an injunction in order to decide whether the court has jurisdiction. In such a case, a judge would not be acting as a court. He would be a pretender to, not a wielder of, judicial power. 85 That is not this case. It required extended arguments, lengthy briefs, study and reflection preliminary to adequate discussion in conference, before final conclusions could be reached regarding the proper interpretation of the legislation controlling this case. A majority of my brethren find that neither the Norris-LaGuardia Act nor the War Labor Disputes Act limited the power of the district court to issue the orders under review. I have come to the contrary view. But to suggest that the right to de ermine so complicated and novel an issue could not be brought within the cognizance of the district court, and eventually of this Court, is to deny the place of the judiciary in our scheme of government. And if the district court had power to decide whether this case was properly before it, it could make appropriate orders so as to afford the necessary time for fair consideration and decision while existing conditions were preserved. To say that the authority of the court may be flouted during the time necessary to decide is to reject the requirements of the judicial process. 86 It does not mitigate such defiance of law to urge that hard-won liberties of collective action by workers were at stake. The most prized liberties themselves pre-suppose an independent judiciary through which these liberties may be, as they often have been, vindicated. When in a real controversy, such as is now here, an appeal is made to law, the issue must be left to the judgment of courts and not the personal judgment of one of the parties. This principle is a postulate of our democracy. 87 And so I join the opinion of the Court insofar as it sustains the judgment for criminal contempt upon the broad ground of vindicating the process of law.2 The records of this Court are full of cases, both civil and criminal, involving life or land or small sums of money, in which the Court proceeded to consider a federal claim that was not obviously frivolous. It retained such cases under its power until final judgment, though the claim eventually turned out to be unfounded and the judgment was one denying the jurisdiction either of this Court or of the court from which the case came. In the case before us, the District Court had power 'to preserve the existing conditions' in the discharge of 'its duty to permit argument, and to take the time required for such consideration as it might need' to decide whether the controversy involved a labor dispute to which the Norris-LaGuardia Act applied. United States v. Shipp, 203 U.S. 563, 573, 27 S.Ct. 165, 166, 51 L.Ed. 319, 8 Ann.Cas. 265 and Howat v. State of Kansas, 258 U.S. 181, 42 S.Ct. 277, 66 L.Ed. 550. 88 In our country law is not a body of technicalities in the keeping of specialists or in the service of any special interest. There can be no free society without law administered through an independent judiciary. If one man can be allowed to determine for himself what is law, every man can. That means first chaos, then tyranny. Legal process is an essential part of the democratic process. For legal process is subject to democratic control by defined, orderly ways which themselves are part of law. In a democracy, power implies responsibility. The greater the power that defies law the less tolerant can this Court be of defiance. As the Nation's ultimate judicial tribunal, this Court, beyond any other organ of society, is the trustee of law and charged with the duty of securing obedience to it. 89 It only remains to state the basis of my disagreement with the Court's views on the bearing of the Norris-LaGuardia Act, 47 Stat. 70, 29 U.S.C. § 101, 29 U.S.C.A. § 101, and the War Labor Disputes Act, 57 Stat. 163, 50 U.S.C.App. § 1501, 50 U.S.C.A. Appendix, § 1501. As to the former, the Court relies essentially on a general doctrine excluding the Government from the operation of a statute in which it is not named, and on the legislative history of the Act. I find the countervailing considerations weightier. The Norris-LaGuardia Act deprived the federal courts of jurisdiction to issue injunctions in labor disputes except under conditions not here relevant. The question before a court of equity therefore is whether a case presents a labor dispute as efined by the Act. Section 13(c) defines 'labor disputes': 90 'The term 'labor dispute' includes any controversy concerning terms or conditions of employment * * * regardless of whether or not the disputants stand in the proximate relation of employer and employee.' 91 That the controversy before the district court comes within this definition does not need to be labored. The controversy arising under the Lewis-Krug contract concerned 'terms or conditions of employment' and was therefore a 'labor dispute', whatever further radiations the dispute may have had. The Court deems it appropriate to interpolate an exception regarding labor disputes to which the Government is a party. It invokes a canon of construction according to which the Government is excluded from the operation of general statutes unless it is included by explicit language. 92 The Norris-LaGuardia Act has specific origins and definite purposes and should not be confined by an artifical canon of construction. The title of the Act gives its scope and purpose, and the terms of the Act justify its title. It is an Act 'to define and limit the jurisdiction of courts sitting in equity'. It does not deal with the rights of parties but with the power of the courts. Again and again the statute says 'no court * * * shall have jurisdiction', or an equivalent phrase. Congress was concerned with the withdrawal of power from the federal courts to issue injunctions in a defined class of cases. Nothing in the Act remotely hints that the withdrawal of this power turns on the character of the parties. The only reference to parties underscores their irrelevance to the issue of jurisdiction, for the power of the courts is withdrawn in a labor dispute 'regardless of whether or not the disputants stand in the proximate relation of employer and employee'. The limitation on the jurisdiction of the court depends entirely on the subject matter of the controversy. Section 13(a) defines it: 93 'A case shall be held to involve or to grow out of a labor dispute when the case involves persons who are engaged in the same industry, trade, craft, or occupation; or have direct or indirect interests therein; or who are employees of the same employer; or who are members of the same or an affiliated organization of employers or employees; * * *.' Neither the context nor the content of the Act qualifies the terms of that section. Did not the suit brought by the Government against Lewis and the United Mine Workers 'grow out of a labor dispute' within the terms of § 13(a)? 94 As already indicated, the Court now finds an exception to the limitation which the Norris-LaGuardia Act placed upon the equity jurisdiction of the district court, not in the Act but outside it. It invokes a canon of construction that a sovereign is presumptively not intended to be bound by its own statute unless named in it. At best, this canon, like other generalities about statutory construction, is not a rule of law. Whatever persuasiveness it may have in construing a particular statute derives from the subject matter and the terms of the enactment in its total environment. 'This rule has its historical basis in the English doctrine that the Crown is unaffected by acts of Parliament not specifically directed against it. * * * The presumption is an aid to consistent construction of statutes of the enacting sovereign when their purpose is in doubt, but it does not require that the aim of a statute fairly to be inferred be disregarded because not explicitly stated.' So wrote the late Chief Justice for the whole Court in United States v. State of California, 297 U.S. 175, 186, 56 S.Ct. 421, 425, 80 L.Ed. 567, and this point of view was very recently applied in United States v. Rice, 327 U.S. 742, 749, 66 S.Ct. 835, 837. It is one thing to read a statute so as not to bind the sovereign by restrictions, or to impose upon it duties, which are applicable to ordinary citizens. It is quite another to interpolate into a statute limiting the jurisdiction of a cou t, the qualification that such limitation does not apply when the Government invokes the jurisdiction. No decision of this Court gives countenance to such a doctrine of interpolation. The text, context, content and historical setting of the Norris-LaGuardia Act all converge to indicate the unrestricted withdrawal by Congress from the federal district courts of the power to issue injunctions in labor disputes, excepting only under circumstances explicitly defined and not here present. The meaning which a reading of the text conveys and which is confirmed by the history which led Congress to free the federal courts from entanglements in these industrial controversies through use of the injunction, ought not to be subordinated to an abstract canon of construction that carries the residual flavor of the days when a personal sovereign was the law-maker. 95 Moreover, the rule proves too much. If the United States must explicitly be named to be affected, the limitations imposed by the Norris-LaGuardia Act upon the district court's jurisdiction could not deprive the United States of the remedies it therefore had. Accordingly, the courts would not be limited in their jurisdiction when the United States is a party and the Act would not apply in any proceeding in which the United States is complainant. It would mean that, in order to protect the public interest, which may be jeopardized just as much whether an essential industry continued under private control or has been temporarily seized by the Government, a court could, at the behest of the Attorney General of the United States, issue an injunction as courts did when they issued the Debs, the Hayes and the Railway Shopmen's injunctions.3 But it was these very injunctions, secured by the Attorney General of the United States under claim of compelling public emergency, that gave the most powerful momentum to the enactment of the Norris-LaGuardia Act. This history is too familiar to be rehearsed. It is surely surprising to conclude that when a long and persistent effort to take the federal courts out of the industrial conflict, insofar as the labor injunction put them into it, found its way to the statute books, the Act failed to meet the grievances that were most dramatic and deepest in the memory of those most concerned with the legislation. 96 It is urged, however, that legislative history cuts down what might otherwise be the scope of the Act. Reliance is placed on statements by two Representatives during the House debates on the Bill, calculated to show that Congress purposed to exclude from the limitation of the jurisdiction of the district courts labor disputes involving 'employees' of the Government, at least where injunctions are sought by the Attorney General. Since both statements came from spokesmen for the Bill, they carry weight. The nature of these remarks, the circumstances under which they were delivered, as well as their setting, define their meaning and the significance to be given them as a gloss upon the Act. 97 There was before the House an Amendment by Representative Blanton which would have made the Act applicable 'except where the United States Government is the petitioner.' (75 Cong.Rec. 5503.) Representative LaGuardia opposed the Amendment, remarking 'I do not see how in any possible way the United States can be brought in under the provisions of this bill.' If this is to be read apart from the meaning afforded by the context of the debates and the whole course of the legislation, it would mean that the jurisdiction to grant a Debs injunction continued unaffected. No one would have been more startled by such a conclusion that Mr. LaGuardia. The fact is that a situation like the present, where the Government for a time has ome relation to a labor dispute in an essentially private industry, was evidently not in the thought of Congress. Certainly it was not discussed. Mr. LaGuardia's statement regarding the position of the United States under the Act followed his reading of § 13(b) under which a person is to be deemed interested in a labor dispute only if 'engaged in the same industry, trade, craft, or occupation in which such dispute occurs.' His brief, elliptical remark plainly conveyed that the business of the Government of the United States is not an 'industry, trade, craft, or occupation.' This is made unequivocally clear by the colloquy that followed. Mr. Blanton inquired whether Mr. LaGuardia was willing 'for the Army and the Navy to form a labor union and affiliate themselves with the American Federation of Labor and not permit the Government of the United States to preserve its rights?' The short answer for Mr. LaGuardia to have made was 'The United States is not subject to the provisions of the Act, because by employer we mean a private employer.' Instead of that, Mr. LaGuardia replied, 'Oh, the Army and the Navy are not in a trade, craft, or occupation.' In short, the scope of the limitation upon the jurisdiction of the courts depended not on party, but on subject matter. Representative Blanton's amendment was rejected by 125 to 21. 98 The second Representative upon whom the Court relies is Mr. Michener. He said, 'Be it remembered that this bill does not attempt to legislate concerning Government employees. I do not believe that the enactment of this bill into law will take away from the Federal Government any rights which it has under existing law, to seek and obtain injunctive relief where the same is necessary for the functioning of the Government.' (75 Cong.Rec. 5464.) Later he added '* * * This deals with labor disputes between individuals, not where the Government is involved. It is my notion that under this bill the Government can function with an injunction, if that is necessary in order to carry out the purpose of the Government. I should like to see this clarified, but I want to go on record as saying that under my interpretation of this bill the Federal Government will not at any time be prevented from applying for an injunction, if one is necessary in order that the Government may function.' (Id. at 5509.) What Mr. Michener gave as his interpretation of what survived the Norris-LaGuardia Act, was precisely the claim of the Government in asking for the Debs injunction. That injunction was sought and granted in order that the Government might function. Insofar, then, as Mr. Michener's statements imply that the United States could again get a Debs injunction, his understanding is belied by the whole history of the legislation, as reflected in its terms.4 These statements can only mean, then, that if, say, employees in the Treasury Department had to be enjoined so that government could go on, it was Representative Michener's view that an injunction could issue. No attempt was made to make this view explicit in the Act. It was not discussed, and only one statement appears to share it.5 In any event, it does not imply a broader exemption than that of which Representative LaGuardia spoke. 99 It is to be noted that the discussion in the House f llowed passage in the Senate of that which subsequently became the Act. It is a matter of history that the Senate Judiciary Committee was the drafting and driving force behind the Bill. The Bill had extended consideration by a subcommittee of the Senate Judiciary Committee followed by weighty reports and full discussion on the Senate floor. We are not pointed to a suggestion or a hint in the Senate proceedings that the withdrawal of jurisdiction to issue injunctions in labor disputes was subject to a latent exception as to injunctions sought by the Government. The whole contemporaneous history is against it. The experience which gave rise to the Norris-LaGuardia Act only underscores the unrestricted limitation upon the jurisdiction of the courts, except in situations of which this is not one. To find implications in the fact that in the course of the debates it was not explicitly asserted that the district courts could not issue an injunction in a labor controversy even at the behest of the Government is to find the silence of Congress more revealing than the natural meaning of legislation and the history which begot it. The remarks of Mr. LaGuardia and Mr. Michener ought not to be made the equivalent of writing an amendment into the Act. It is one thing to draw on all relevant aids for shedding light on the dark places of a statute. To allow inexplicit remarks in the give-and-take of debate to contradict the very terms of legislation and the history behind it is to put out the controlling light on meaning shed by the explicit provisions of an Act in its setting. 100 But even if we assume that the Act was not intended to apply to labor disputes involving 'employees' of the United States, are the miners in the case before us 'employees' of the United States within the meaning of this interpolated exception? It can hardly be denied that the relation of the miners to the United States is a hybrid one. Clearly, they have a relation to the Government other than that of employees of plants not under Government operation. Equally clearly, they have a relation and a status different from the relation and status of the clerks at the Treasury Department. Never in the country's history have the terms of employment of the millions in Government service been established by collective bargaining. But the conditions of employment—hours, wages holidays, vacations, Health and Welfare Program, etc.—were so fixed for the miners during the period of Government seizure. The proper interpretation of this collective agreement between the Government and the United Mine Workers is precisely what is at the bottom of this controversy. Neither a spontaneous nor a sophisticated characterization would resort to the phrase 'Government employees' without more, in speaking of the miners during the operation of the mines by the Government. The only concrete characterization of the status of employees in seized plants was expressed by Under Secretary Patterson at a hearing on the predecessor bill to that which became the law under which this seizure was made. He spoke of the role of the Government as that of 'A receiver that would be charged with the continuity of operation of the plant'.6 Nothing in the Acts authorizing seizure of private plants indicates that the employees of these plants were to be considered employees of the United States in the usual and natural meaning of the term. In the full debates on bills providing for Government seizure of plants, Congressional leaders clearly indicated their understanding that as the law then stood there could be no injunctions in labor disputes in seized plants.7 101 But not only was such the understanding when the legal question emerged in the course of considering the need of war legislation. Recent legislation and its history are relevant not merely because they show later understanding of the terms of an older statute. The War Labor Disputes Act of 1943 is directly and primarily involved in this case. The whole controversy arises under the authority to seize mines given by that Act. The real question before us is whether in authorizing such seizure and operation Congress also gave to the United States the right to prevent interference with its statutory operation through the equitable remedies here invoked. 102 By the War Labor Disputes Act Congress created a new relationship among the Government, the plant owners, the employees. The rights, duties, remedies incident to that relation are those given by the Act. Congress naturally addressed itself to possible interferences with the Government's operation of seized plants. It dealt specifically with this subject. It gave the Government specific remedies which it might invoke against such interference.8 Remedy by injunction was not given. It was not merely omitted. A fair reading of the legislative history shows that it was expressly and definitively denied. As reported out of the Senate Committee, S. 796 provided for plant seizure. It did not include the injunction among the remedies for in erference with Government operation.9 But when the Bill reached the floor of the Senate, Senator Connally, sponsor of the Bill, offered and urged an amendment giving the district courts jurisdiction to restrain violations of the measure.10 He accepted, somewhat reluctantly, the amendment of Senator Wagner to limit the proposed amendment to an injunction at the behest of the Attorney General, precisely as was here sought and granted.11 On motion of Senator Danaher, this proposal was rejected by the Senate after full debate,12 participated in by Senators especially conversant with the history and scope of the existing remedies available to the Government. With this remedy denied to the Government, the Bill was passed and sent to the House.13 The House did not like the Bill. Its version did not see fit specifically to add to the limited seizure provisions of the Selective Service Act of 1940, 50 U.S.C.A.Appendix § 301 et seq., although apparently it assumed that there could be seizure under existing law in the case of failure by defense plants to produce as a result of labor troubles. Instead, the House version provided stringent anti-strike and anti-lockout provisions as to plants in private operation, and by specific amendment to the Norris-LaGuardia Act the district courts were authorized to restrain violations of such provisions. But this pro tanto repeal of the Norris-LaGuardia Act was not made available to the United States as a remedy against interference with operation of plants seized under the earlier, 1940 Act.14 103 The bill then went to conference. What came out was, so far as here material, the bill that had passed the Senate. The United States was granted power to seize and operate defense plants whose production was hampered by labor disputes. Specific remedies were formulated by Congress against interference with the Government's operation. The injunction was not included.15 In neither house was further attempt made to reintroduce the Connally proposal giving the Government relief by injunction. Nor was it suggested that the Government had such redress under existing law. On the floor of the Senate, Senator Thomas of Utah, Chairman of the Committee on Education and Labor, said: 104 'Mr. President, I ask the Senator from New Mexico (Mr. Hatch), the Senator from Connecticut (Mr. Danaher), and the Senator from Texas (Mr. Connally), the sponsor of the bill, whether there is a unanimous opinion on the part of those three great lawyers that there will not be a reopening of the district courts to industry-labor disputes? * * * I should like that point to be made so firmly and so strongly that no lawyer in the land who would like to take advantage of the situation created by the mere mention of the words 'district court' will resort to the court in order to confuse our industry-labor relations.' Mr. Connally answered: 105 'Mr. President, * * * I think I speak for the Senator from Vermont and the Senator from New Mexico and the Senator from Connecticut and also the Senator from Indiana (Mr. Van Nuys), although he is not present, when I say that there is no jurisdiction whatever conferred by this bill providing for resort to the United States district court, except the one mentioned by the Senator from Connecticut, which is merely the right to go there for a civil action for damages, and no jurisdiction whatever is given over labor disputes. Does that answer the Senator?' 106 'Mr. Thomas of Utah. I thank the Senator for making that statement and I hope it will satisfy the lawyers of the country. 107 'Mr. Connally. I am sure it will.'16 108 Under these circumstances the Bill became law, and the seizure giving rise to this controversy was made under that law. The separate items of this legislative history cannot be judged in isolation. They must be considered together, and as part of the course of legislation dealing with injunctions in labor disputes. To find that the Government has the right which Senator Connally's amendment sought to confer but which the Congress withheld is to say that voting down the amendment had the same effect as voting it up. 109 Events since the passage of the Act underscore what would appear to be the controlling legislative history of the War Labor Disputes Act, and prove that Congress saw fit not to authorize district courts to issue an injunction in cases like this. To meet the grave crisis growing out of the trike on the railroads last May, Congress, upon the recommendation of the President and the Attorney General, deemed additional legislation necessary for dealing with labor disputes. The proposals in each house carried a provision which authorized an injunction to issue for violation of the War Labor Disputes Act.17 Senator Mead proposed an amendment to delete the provisions for injunctions.18 In the debates that followed no one suggested that the new proposal was unnecessary, that the jurisdiction proposed to be conferred already existed, or that if granted, as requested by the Attorney General, it would not, as Senator Mead claimed, repeal pro tanto the Norris-LaGuardia Act. The debates show clearly that what was contemplated was a change in the War Labor Disputes Act, whereby a new and an additional remedy would be authorized.19 The Bill never became law. 110 As is well known, as the debates clearly show, as Senator Connally admitted, the War Labor Disputes Act was directed primarily against stoppage in the coal mines.20 The situation that Congress feared was exactly that which has occurred and which underlies this controversy. To deal with the situation, Congress gave the United States the power to seize the mines. To effectuate this power, the Government was given authority to invoke criminal penalties for interferences with the operation of the mines. Senator Connally sought more. He wanted Congress to empower the district courts to enjoin interference. The Senate did not want an injunction to issue and voted the proposal down. The Senate's position was adopted by the Conference Committee. The House of Representatives yielded its view and approved the Conference report. The whole course of legislation indicates that Congress withheld the remedy of injunction. This Court now holds that Congress authorized the injunction. 111 I concur in the Court's opinion insofar as it is not inconsistent with these views, and, under the compulsion of the ruling of the majority that the court below had jurisdiction to issue its orders, I join in the Court's judgment. 112 Mr. Justice BLACK and Mr. Justice DOUGLAS, concurring in part and dissenting in part. 113 For the reasons given in the Court's opinion, we agree that neither the Norris-LaGuardia Act nor the War Labor Disputes Act barred the Government from obtaining the injunction it sought in these proceedings. The 'labor disputes' with which Congress was concerned in the Norris-LaGuardia Act were those between private employers and their employees. As to all such 'labor disputes,' the Act drastically limited the jurisdiction of federal courts; it barred relief by injunction except under very narrow circumstances, whether injunction be sought by private employers, the Government, or anyone else. But the attention of Congress was neither focused upon, nor did it purport to affect, 'labor disputes', if such they can be called, between the Government and its own employees. There was never an intimation in the progress of the Act's pa sage that a labor dispute within the Act's meaning would arise because of claims against the Government asserted collectively by employees of the Interior, State, Justice, or any other Government department. Congress had never in its history provided a program for fixing wages, hours, and working conditions of its employees by collective bargaining. Working conditions of Government employees had not been the subject of collective bargaining, nor been settled as a result of labor disputes. It would require specific congressional language to persuade us that Congress intended to embark upon such a novel program or to treat the Government employer-employee relationship as giving rise to a 'labor dispute' in the industrial sense. 114 We have no doubt that the miners became Government employees when the Government took over the mines. It assumed complete control over the mines and their operation. The fact that it utilized the managerial forces of the private owners does not detract from the Government's complete authority. For whatever control Government agents delegated to the private managers, those agents had full power to take away and exercise themselves. If we thought, as is here contended, that the Government's possession and operation of the mines were not genuine, but merely pretended, we should then say that the Norris-LaGuardia Act barred these proceedings. For anything less than full and complete Government operation for its own account1 would make this proceeding the equivalent of the Government's seeking an injunction for the benefit of the private employers. We think the Norris-LaGuardia Act prohibits that. But as we read the War Labor Disputes Act and the President's order taking over the mines against the background of circumstances which prompted both, we think, apparently contrary to the implications of the regulations, that the Government operates these mines for its own account as a matter of law;2 and those who work in them, during the period of complete Government control, are employees of the Government. 115 Since the Norris-LaGuardia Act is inapplicable, we agree that the District Court had power in these proceedings to enter orders necessary to protect the Government against an invasion of the rights it asserted, pending adjudication of the controversy its complaint presented to the court. It is therefore unnecessary for us to reach the question of whether the District Court also had power to enter these orders under the doctrine of United States v. Shipp, 203 U.S. 563, 27 S.Ct. 165, 51 L.Ed. 319, 8 Ann.Cas. 265. We agree that the court had power summarily to coerce obedience to those orders and to subject defendants to such con itional sanctions as were necessary to compel obedience. And we agree that in such civil contempt proceedings to compel obedience, it was not necessary for the court to abide by all the procedural safeguards which surround trials for crime. Without such coercive powers, courts could not settle the cases and controversies before them. Courts could not administer justice if persons were left free pending adjudication to engage in conduct which would either immediately interrupt the judicial proceedings or so change the status quo of the subject matter of a controversy that no effective judgment could be rendered. Disorder in the courtroom, or so near to it as to interrupt a trial, and disobedience of an affirmative court order, are typical examples of offenses which must necessarily be dealt with summarily. To remove such imminent interference with orderly judicial proceedings, courts must have power to act immediately. In recognition of this fact, the contempt power came into existence.3 This power is of ancient lineage,4 has always been exercised by our courts, and has the express recognition of Congress under the name of contempt. Rev.Stat. § 725, 28 U.S.C. § 385, 28 U.S.C.A. § 385. Where the court exercises such coercive power, however, for the purpose of compelling future obedience, those imprisoned 'carry the keys of their prison in their own pockets,' In re Nevitt, 8 Cir., 117 F. 448, 461; by obedience to the court's valid order, they can end their confinement; and the court's coercive power in such a 'civil contempt' proceeding ends when its order has been obeyed. Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 441, 445, 31 S.Ct. 492, 498, 499, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. See also Doyle v. London Guaranty & Accident Co., 204 U.S. 599, 607, 27 S.Ct. 313, 315, 51 L.Ed. 641. The District Court did not enter a conditional decree here. But this Court has modified the District Court's decree to provide as part of the judgment such a coercive sanction in the form of a conditional fine. We agree with the Court's decision in this respect.5 116 The Gompers decision and many others have pointed out that the object of such coercive contempt proceedings is not to punish for an offense against the public, but to compel obedience to valid court orders. Yet the decision of this Court also approves unconditional fines of criminal punishment for past disobedience. We cannot agree to this aspect of the Court's judgment. At a very early date this Court declared, and recently it has reiterated, that in contempt proceedings courts should never exercise more than 'the least possible power adequate to the end proposed.' Anderson v. Dunn, 6 Wheat. 204, 231, 5 L.Ed. 242; In re Michael, 326 U.S. 224, 227, 66 S.Ct. 78. 117 In certain circumstances criminal contempt culminating in unconditional punishment for past disobedience may well constitute an exercise of 'the least possible power adequate to the end proposed.' Thus in situations which would warrant only a use of coercive sanctions in the first instance, criminal punishment might be appropriate at a later stage if the defendant should persist in disobeying the order of the court. Without considering the constitutional requisites of such criminal punishment, we believe the application of it inappropriate and improper here. The imposition of criminal punishment here was an exercise of far more than 'the least possible power adequate to the end proposed.' For here the great and legitimate 'end proposed' was affirmative action by the defendants to prevent interruption of coal production pending final adjudication of the controversy. Coercive sanctions sufficient to accomplish this end were justified. From the record we have no doubt but that a conditional civil sanction would bring about at least as prompt and unequivocal obedience to the court's order as would criminal punishment for past disobedience. And this would accomplish a vindication of the District Court's authority against a continuing defiance. Consequently, we do not believe that the accomplishment of the justifiable 'end proposed' called for summary criminal punishment which is designed to deter others from disobedience to court orders, or to avenge a public wrong, rather than the imposition of a coercive sanction. And for the reasons stated by Mr. Justice Rutledge, we think that the flat $700,000 criminal fine against the defendant union is excessive by constitutional and statutory standards. 118 In determining whether criminal punishment or coercive sanction should be employed in these proceedings, the question of intent—the motivation of the contumacy—becomes relevant. Difficult questions of law were presented by this case. It is plain that the defendants acted willfully for they knew that they were disobeying the court's order. But they appear to have believed in good faith, though erroneously, that they were acting within their legal rights. Many lawyers would have so advised them. This does not excuse their conduct; the whole situation emphasized the duty of testing the restraining order by orderly appeal instead of disobedience and open defiance. However, as this Court said in Cooke v. United States, 267 U.S. 517, 538, 45 S.Ct. 390, 395, 69 L.Ed. 767, 'the intention with which acts of contempt have been committed must necessarily and properly have an important bearing n the degree of guilt and the penalty which should be imposed.' 119 We think it significant that the conduct which was prohibited by the restraining order for violation of which these defendants have been punished for contempt is also punishable under the War Labor Disputes Act. That Act provides a maximum punishment of $5,000 fine and one year imprisonment for those who interfere with the operation of mines taken over by the United States. Had the defendants been tried under that statute, their punishment would have been limited thereby and in their trial they would have enjoyed all the constitutional safeguards of the Bill of Rights. Whatever constitutional safeguards are required in a summary contempt proceeding, whether it be for criminal punishment, or for the imposition of coercive sanction, we must be ever mindful of the danger of permitting punishment by contempt to be imposed for conduct which is identical with an offense defined and made punishable by statute. In re Michael, 326 U.S. 224, 226, 66 S.Ct. 78, 79.6 120 The situation of grave emergency facing the country when the District Court acted called for the strongest measures—measures designed to produce quick and unqualified obedience of the court's order. If the $10,000 fine on defendant Lewis and the $3,500,000 fine on the defendant union be treated as coercive fines, they would not necessarily be excessive. For they would then be payable only if the defendants continued to disobey the court's order. Defendants could then avoid payment by purging themselves. The price of continued disobedience would be the amount of the fines. See Doyle v. London Guaranty & Accident Co., supra, 204 U.S. at page 602, 27 S.Ct. at page 313, 51 L.Ed. 641. The fines would be fixed so as to produce the greatest likelihood that they would compel obedience. 121 We should modify the District Court's decrees by making the entire amount of the fines payable conditionally. On December 7, 1946, Mr. Lewis directed the mine workers to return to work until midnight, March 31, 1947. But, so far as we are aware, the notice which purported to terminate the contract has not been withdrawn. Thus, there has been, at most, only a partial compliance with the temporary injunction. 122 Hence our judgment should provide that the defendants pay their respective fines only in the event that full and unconditional obedience to the temporary injunction, including withdrawal of the notice which purported to terminate the contract, is not had on or before a day certain. 123 Mr. Justice MURPHY, dissenting. 124 An objective reading of the Norris-LaGuardia Act removes any doubts as to its meaning and as to its applicability to the facts of this case. Section 4 provides in clear, unmistakable language that 'No court of the United States shall have jurisdiction to issue any restraining order or temporary or permanent inj nction in any case involving or growing out of any labor dispute * * *.' That language, which is repeated in other sections of the Act, is sufficient by itself to dispose of this case without further ado. But when proper recognition is given to the background and purpose of the Act, it becomes apparent that the implications of today's decision cast a dark cloud over the future of labor relations in the United States. 125 Due recognition must be given to the circumstances that gave rise to this case. The Government was confronted with the necessity of preserving the economic health of the nation; dire distress would have eventuated here and abroad from a prolonged strike in the bituminous coal mines. It was imperative that some effective action be taken to break the stalemate. But those factors do not permit the conversion of the judicial process into a weapon for misapplying statutes according to the grave exigencies of the moment. That can have tragic consequences even more serious and lasting than a temporary dislocation of the nation's economy resulting from a strike of the miners. 126 The whole thrust of the Norris-LaGuardia Act is directed toward the use of restraining orders and injunctions in cases arising out of labor disputes between private employers and private employees. It was in that setting that the abuses of federal equity power had flourished; and it was those abuses that led to the adoption of the Act. The application of the Act to the instant situation is thus clear. It cannot be denied that this case is one growing out of a labor dispute between the private coal operators and the private miners. That is a matter of common knowledge. Executive Order No. 9728 which authorized the Secretary of the Interior to take possession of and to operate the coal mines, explicitly stated that this action was taken 'as a result of existing or threatened strikes and other labor disturbances. Those strikes and labor disturbances grew out of the relations between the operators and the miners. The Government further recognized that fact by its subsequent refusal to negotiate with the miners on their demands and its insistence that these demands be addressed to the private mine owners. It is precisely in situations arising out of disputes of this nature that Congress has said that no court of the United States shall have jurisdiction to issue any restraining order or injunction. 127 The crux of this case is whether the fact that the Government took over the possession and operation of the mines changed the private character of the underlying labor dispute between the operators and the miners so as to make inapplicable the Norris-LaGuardia Act. The answer is clear. Much has been said about the Government's status as employer and the miners' status as Government employees following the seizure. In my opinion, the miners remained private employees despite the temporary gloss of Government possession and operation of the mines; they bear no resemblance whatever to employees of the executive departments, the independent agencies and the other branches of the Government. But when all is said and done, the obvious fact remains that this case involves and grows out of a labor dispute between the operators and the miners. Government seizure of the mines cannot hide or change that fact. Indeed, the seizure took place only because of the existence of the dispute and because it was thought some solution might thereafter result. The dispute, however, survived the seizure and is still very much alive. And it still retains its private character, the operators on the one side and the coal miners on the other. 128 The important point, and it cannot be overemphasized, is that Congress has decreed that strikes and labor disturbances growing out of private labor disputes are to be dealt with by some means other than federal court restraining orders and injunctions. Further confirmation, if any be needed, is to be found in the terms and in the history of the War Labor Disputes Act. To this clearly enunciated policy of making 'government by injunction' illegal, Congress has made no exception where the public interest is at stake or where the Government has seized the private properties involved. Congress can so provide. But it has not done so as yet; until it does, we are not free to sanction the use of restraining orders and injunctions in a case of this nature. 129 The Government's seizure of the coal mines thus becomes irrelevant to the issue. The federal equity power to issue restraining orders and injunctions simply cannot be invoked in this case, since it grows out of a private labor dispute. And it makes no difference that the party seeking the proscribed relief is the Government rather than a private employer. The touchstone of the Norris-LaGuardia Act is the existence of a labor dispute, not the status of the parties. Among the specific evils which the framers of the Act had in mind were the injunctions secured by the Government in the Debs, the Hayes and the Railway Shopmen's cases. The Act was drawn to prevent, among other things, the recurrence of such injunctions. The Government concededly could not obtain an injunction in a private labor dispute where there has been no seizure of private properties, no matter how great the public interest in the dispute might be. To permit the Government to obtain an injunction where there has been a seizure would equally flout the language and policy of the Act. In whatever capacity the Government acts, this statute closes the doors of the federal courts where a restraining order or injunction is sought in a case arising out of a private labor dispute. 130 Moreover, if seizure alone justifies an injunction contrary to the expressed will of Congress, some future Government could easily utilize seizure as a subterfuge for breaking any or all strikes in private industries. Under some war-time or emergency power, it could seize private properties at the behest of the employers whenever a strike threatened or occurred on a finding that the public interest was in peril. A restraining order could then be secured on the specious theory that the Government was acting in relation to its own employees. The workers would be effectively subdued under the impact of the restraining order and contempt proceedings. After the strike was broken, the properties would be handed back to the private employers. That essentially is what has happened in this case. That is what makes the decision today so full of dangerous implications for the future. Moreover, if the Government is to use its seizure power to repudiate the Norris-LaGuardia Act and to intervene by injunction in private labor disputes, that policy should be determined by Congress. It is not the function of this Court to sanction that policy where Congress has remained silent. Once Congress has spoken, it will be time enough to consider the constitutional issues raised by an application of that policy. 131 Since in my view the restraining order and the temporary injunction in this case are void and without effect, there remains for me only the contention that the defendants are guilty of criminal contempt for having willfully ignored the void restraining order. It is said that the District Court had the power to preserve existing conditions while it was determining its own authority to grant injunctive relief; hence the defendants acted at their own peril in disobeying the restraining order. Eloquent pleas are made for the supremacy of the judiciary over the individual and the requirement that a person obey court orders until they are reversed by orderly and proper proceedings. Heavy emphasis is placed upon United States v. Shipp, 203 U.S. 563, 27 S.Ct. 165, 51 L.Ed. 319, 8 Ann.Cas. 265. 132 These arguments have a seductive attractiveness here. Ordinarily, of course, it is better policy to obey a void order than run the risk of a contempt citation. And as a general proposition, individuals cannot be allowed to be the judges of the validity of court orders issued aga nst them. But the problem raised by the violation of the restraining order in this case must be viewed against the background and language of the Norris-LaGuardia Act. 133 Unlike most other situations, this Act specifically prohibits the issuance of restraining orders except in situations not here involved. There is no exception in favor of a restraining order where there is some serious doubt about the court's jurisdiction; indeed, the prohibition against restraining orders would be futile were such an exception recognized for the minds of lawyers and judges are boundless in their abilities to raise serious jurisdictional objections. And so Congress has flatly forbidden the issuance of all restraining orders under this Act. It follows that when such an order is issued despite this clear prohibition, no man can be held in contempt thereof, however unwise his action may be as a matter of policy. When he violates the void order, 28 U.S.C. § 385, 28 U.S.C.A. § 385, comes into operation, forbidding punishment for contempt except where there has been disobedience of a 'lawful writ, process, order, rule, decree, or command' of a court. 134 This absolute outlawry of restraining orders in cases involving private labor disputes is not without reason. The issuance of such orders prior to the adoption of the Norris-LaGuardia Act had a long and tortured history. Time and again strikes were broken merely by the issuance of a temporary restraining order, purporting to maintain the status quo. Because of the highly fluid character of labor disputes, the delay involved in testing an order of that nature often resulted in neutralizing the rights of employees to strike and picket. And too often, these orders did more than stabilize existing conditions; they called for affirmative change. The restraining order in the instant case is but one example of this. While purporting to preserve the status quo, it actually commands the defendants to rescind the strike call—thereby affirmatively interfering with the labor dispute. 135 Congress was well aware of this use of restraining orders to break strikes. After full consideration it intentionally and specifically prohibited their use, with certain exceptions not here relevant. We are not free to disregard that prohibition. Hence the doctrine of the Shipp case has no relation whatever to our present problem. That case dealt with an order of this Court staying the execution of a convicted felon, an order which lay within the recognized power of this Court and which had not been validly prohibited by Congress. Naturally, no man could violate that order with impunity. But we are acting here in the unique field of labor relations, dealing with a type of order which Congress has definitely proscribed. If we are to hold these defendants in contempt for having violated a void restraining order, we must close our eyes to the expressed will of Congress and to the whole history of equitable restraints in the field of labor disputes. We must disregard the fact that to compel one to obey a void restraining order in a case involving a labor dispute and to require that it be tested on appeal is to sanction the use of the restraining order to break strikes—which was precisely what Congress wanted to avoid. Every reason supporting the salutary principle of the Shipp case breaks down when that principle is applied in this setting. I would therefore reverse the judgment of the District Court in toto. 136 It has been said that the actions of the defendants threatened orderly constitutional government and the economic and social stability of the nation. Whatever may be the validity of those statements, we lack any power to ignore the plain mandates of Congress and to impose vindictive fines upon the defendants. They are entitled to be judged by this Court according to the sober principles of law. A judicial disregard of what Congress has decreed may seem justified for the moment in view of the crisis which gave birth to this case. But such a disregar may ultimately have more disastrous and lasting effects upon the economy of the nation than any action of an aggressive labor leader in disobeying a void court order. The cause of orderly constitutional government is illserved by misapplying the law as it is written, inadequate though it may be, to meet an emergency situation, especially where that misapplicaion permits punitive sanctions to be placed upon an individual or an organization. 137 Mr. Justice RUTLEDGE, dissenting. 138 This case became a cause celebre the moment it began. No good purpose can be served by ignoring that obvious fact. But it cannot affect our judgment save only perhaps to steel us, if that were necessary, to the essential and accustomed behavior of judges.1 In all cases great or small this must be to render judgment evenly and dispassionately according to law, as each is given understanding to ascertain and apply it. 139 No man or group is above the law. Nor is any beyond its protection. In re Yamashita, 327 U.S. 1, dissenting opinion 41, 66 S.Ct. 340, 359. These truths apply equally to the Government. When its power is exerted against the citizen or another in the nation's courts, those tribunals stand not as partisans, but as independent and impartial arbiters to see that the balance between power and right is held even. In discharging that high function the courts themselves, like the parties, are subject to the law's majestic limitations. We are not free to decide this case, or any, otherwise than as in conscience we are enabled to see what the law commands. I. 140 Mr. Justice FRANKFURTER has shown conclusively, I think, that the policy of the Norris-LaGuardia Act, 47 Stat. 70, applies to this situation. The legislative history he marshals so accurately and cogently compels the conclusion that the War Labor Disputes Act of 1943, 57 Stat. 163, not only confirms the applicability of the earlier statute, but itself excludes resort to injunctive relief for enforcement of its own provisions in situations of this sort. 141 That Act expressly provides the remedies for its enforcement. Beyond seizure of plants, mines and facilities for temporary2 governmental operation, they are exclusively criminal in character.3 They do not include injunctive or other equitable relief. Nor was the omission unintentional or due to oversight. It was specific and deliberate. 142 The Senate thoroughly considered and debated various proposals for authorizing equity to intervene in labor disputes, one by the Act's sponsor in that body. Positively, repeatedly and unwaveringly it rejected all of them. They were likewise rejected in conference, where the Senate's view prevailed over that of the House. The latter body had not been inattentive to the problem. It sought and failed to secure the very thing this Court now says, in effect, was included.4 That issue and that policy were indeed the main thrust and focus of the legislative struggle, and the outcome was not negative; it was positive and conclusive against using or giving the equitable remedies. 143 Surely we have not come so far toward complete inversion of legislative history as to write out of the law the views concerning a matter of such major policy held by the chamber which prevailed at the final stage of enactment and to write into the law diametrically opposing views of another chamber which yielded at that time. The case, as Mr. Justice FRANKFURTER demonstrates beyond any doubt, cannot be one where inattention, oversight or inaction may explain or give significance to what was done by the House of Representatives. That body was defeated, not simply silent, in the outcome. Willingly or otherwise, it acquiesced in the Senate's policy of refusing to authorize injunctive relief, and in doing so joined formally and effectively in the final act which made that policy law. 144 This means to me that Congress, in that action, did not simply confirm the Norris-LaGuardia Act's policy or leave it untouched with respect to situations within the War Labor Disputes Act's coverage. It means that Congress was not departing from or nullifying that policy. Rather by the later Act Congress adopted the same policy, the long prevailing national policy, for those situations. 145 The Senate, and at the end the Congress, were not declining expressly to authorize labor injunctions only to turn squarely about and nullify that refusal in the same breath, merely by virtue of the fact that the employees of seized plants necessarily were made subject temporarily to ultimate governmental operating direction and control.5 We cannot attribute to Congress an intent so duplicitous. Thus to construe the Act not only would bring the provision for temporary control into collision with its remedial provisions as the history shows they were intended to apply. It would be to find Congress guilty of using a devious method for achieving indirectly exactly the thing it expressly declined to do. The words 'governmental employee,' 'employee * * * for the purposes of this case' or 'relationship * * * of employer and employee,' none of which appear in the statute, cannot be given effect consistently with our function to write into the Act, by judicial interpolation, remedial provisions which Congress flatly and finally declined to incorporate. 146 Whether Congress acted wisely in this refusal is not our concern. But it is not irrelevant to the Act's meaning, purpose and effect that there were good reasons, indeed strong ones, for Congress to continue to follow the Norris-LaGuardia Act's policy rather than break away from it at that crucial time. Under the statute practically every industrial or mining facility, together with many of transportation,6 was subject to seizure and governmental operation. Introducing the labor injunction into the Act's structure therefore would have been tantamount to repeal of the Norris-LaGuardia Act for the duration of the emergency powers, since seizure was authorized whenever the President should find, after investigation, and proclaim that there was an interruption of operations 'as a result of a strike or other labor disturbance.' § 3. Ready means thus would have been made available, if such had been the statute's purpose, for suspending the Norris-LaGuardia policy and provisions in any case where they might become operative. 147 Congress was thoroughly familiar with the history and effects of injunctions in labor disputes, with the long settled national policy against them, and with the universal abhorrence in the ranks of labor, however otherwise divided, toward them. In view of all these things Congress well may have felt and I think did feel, as my brother's recital of the history shows, that it was both unnecessary and unwise, perhaps would even be harmful to furtherance of the war effort, in substance to repeal the Norris LaGuardia policy for the duration of the war emergency and thus to resurrect, in that critical situation, the long disused instruments that Act had outlawed. 148 It is important in this connection that 1943, rather than 1945 or 1946, was the year in which the War Labor Disputes Act was adopted. We were then not yet over the hump of the war. But neither had we reached the peak of labor disturbances which came only after active hostilities ceased, more than two years later.7 The great body of American workers was bending to the patriotic duty of peak production for war purposes. By comparison with what occurred after the fighting ended, the volume of man-days lost was about one-tenth of the later postwar peak loss.8 Moreover, at that time the War Labor Board, specially constituted to deal with such disturbances, was functioning with a high degree of efficiency in their settlement.9 There was nevertheless strong feeling that labor disputes should not be allowed to interrupt war production, regardless of cause or blame. And from this arose the demand for more effective powers to deal with them. 149 It was in this setting and to meet the problems it had thrown up, not the later one out of which this controversy arose, that the War Labor Disputes Act was adopted. The Act was exactly what its title indicated, a measure for dealing with labor disputes in the emergency of the war. Congress, it is true, anticipated that for a limited period after the end of fighting the same emergency powers would be needed.10 But this does not mean that those powers were shaped, or are now to be measured in scope, so as to meet all of the situations which since have arisen in the vastly changed circumstances; or that Congress intended them to be met by repealing the settled policy against injunctions in labor disputes in the sweeping manner now accomplished by the Court's decision. On the contrary, in June of 1943, Congress dealt with the situation then before it and refused to authorize such relief because that situation did not demand this. 150 In view of all these considerations, I cannot believe that Congress, in effect and by indirection, was exerting its war power to the greatest possible extent or was thereby either repealing or suspending the nation's settled policy against injunctions in labor disputes. Rather, the conclusion is inescapable that Congress was relying exclusively upon the added powers of enforcement expressly conferred by the Act, namely, the power of seizure and the force of the criminal sanction, to accomplish the needed results.11 151 These were in themselves powerful sanctions. They carried with them the added and very great sanction of aroused public opinion12 which would follow not simply upon interruption of essential war production but more particularly upon such an event in any facility taken over and operated under governmental auspices. Congress, after mature deliberation, concluded that these sanctions were adequate, and for that reason made them exclusive. In no other way can its repeated and final refusals to confer the strenuously sought equitable remedies be made consistent with the legislative and general history or be given meaning and effect. To construe the Act as permitting what Congress thus so explicitly refused to allow is to go beyond our function and intrude upon that of Congress. This we have no right or power to do. If the situation presented by the facts of this case is one which goes beyond the powers Congress has conferred for dealing with it, that is a matter for Congress' consideration, not for correction by this Court. 152 Accordingly, upon the specific terms of the War Labor Disputes Act itself, upon the legislative history as summarized by Mr. Justice FRANKFURTER, and upon the historical setting in which the statute was enacted as defining the problems it was designed to meet, together with shaping the nature and scope of the measures required to meet them, I conclude that that Act in no way impaired but on the contrary adopted and incorporated the policy of the Norris-LaGuardia Act concerning the issuance of injunctions in labor disputes. II. 153 This conclusion substantially compels the further one that United States v. Shipp, 203 U.S. 563, 27 S.Ct. 165, 51 L.Ed. 319, 8 Ann.Cas. 265, has no valid application to the situation presented by this case. 154 This Court has not yet expressly denied, rather it has repeatedly confirmed Congress' power to control the jurisdiction of the inferior federal courts and its own appellate jurisdiction. Const., Art. III, § 2. Ex parte McCradle, 7 Wall. 506, 19 L.Ed. 264; Lockerty v. Phillips, 319 U.S. 182, 187, 63 S.Ct. 1019, 1022, 87 L.Ed. 1339 and authorities cited. See Warren, New Light on the History of the Federal Judiciary Act of 1789 (1923), 37 Harv.L.Rev. 49, 67ff. That power includes the power to deny jurisdiction as well as to confer it. Ibid. And where Congress has acted expressly to exclude particular subject matter from the jurisdiction of any court, except this Court's original jurisdiction, I know of no decision here which holds the exclusion invalid, or that a refusal to obey orders or judgments contravening Congress' mandate is criminal or affords cause for punishment as for contempt. 155 If that were the law, the result could only be to nullify the congressional power over federal jurisdiction for a great volume of cases. And if it should become the law, for every case raising a question not frivolous co cerning the court's jurisdiction to enter an order or judgment, that punishment for contempt may be imposed irrevocably simply upon a showing of violation, the consequences would be equally or more serious. The force of such a rule, making the party act on pain of certain punishment regardless of the validity of the order violated or the court's jurisdiction to enter it as determined finally upon review, would be not only to compel submission.13 It would be also in practical effect for many cases to terminate the litigation, foreclosing the substantive rights involved without any possibility for their effective appellate review and determination. 156 This would be true, for instance, wherever the substantive rights asserted or the opportunity for exercising them would vanish with obedience to the challenged order. Cf. Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117. The First Amendment liberties especially would be vulnerable to nullification by such control. Thus, the constitutional rights of free speech and free assembly could be brought to naught and censorship established widely over those areas merely by applying such a rule to every case presenting a substantial question concerning the exercise of those rights. This Court has refused to countenance a view so destructive of the most fundamental liberties. Thomas v. Collins, 323 U.S. 516, 65 S.Ct. 315, 89 L.Ed. 430. These and other constitutional rights would be nullified by the force of invalid orders issued in flat violation of the constitutional provisions securing them, and void for that reason. The same thing would be true also in other cases involving doubt, where statutory or other rights asserted or the benefit of asserting them would vanish, for any practical purpose, with obedience. 157 Indeed it was because these were so often the effects, not simply of final orders entered after determination upon the merits, but of interlocutory injunctions and ex parte restraining orders, that the Norris-LaGuardia Act became law and, as I think, the War Labor Disputes Act continued in force its policy. For in labor disputes the effect of such orders, it was pointed out officially and otherwise,14 is generally not merely failure to maintain the status quo pending final decision on the merits. It is also most often to break the strike, without regard to its legality or any conclusive determination on that account, and thus to render moot and abortive the substantive controversy.15 158 It is not every case therefore where substantial doubt appears, concerning either the issues in the main cause or the court's jurisdiction to issue interlocutory or other orders, in which violation will bring the so-called Shipp doctrine into play. If that were true then indeed would a way have been found to nullify the constitutional limitations placed upon the powers of courts, including the control of Congress over their jurisdiction. Then also the liberties of our people would be placed largely at the mercy of invalid orders issued without power given by the Constitution and in contravention of power constitutionally withheld by Congress. Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117; Thomas v. Collins, supra. 159 Indeed the Shipp doctrine thus broadly conceived would go far toward nullifying the historic jurisdiction of this Court and others in habeas corpus, for it would do this in the many situations where the cause of commitment is violation of a doubtfully valid court order and the ground asserted for release is the court's lack of jurisdiction to enter it. Thus, in this case, if the party Lewis had been imprisoned rather than fined, the broad application now made of the Shipp decision would dictate that he could not be released by habeas corpus, even though it were now held here that the restraining orders were beyond the District Court's jurisdiction to issue.16 If those orders were valid, for purposes of finally and conclusively imposing punishment in contempt, regardless of the court's want of power to issue them, this would be so whether the punishment were fine or imprisonment. And it clearly would follow in cases of criminal contempt,17 perhaps in others, that the court's lack of jurisdiction could furnish no basis for granting relief, unless the penalty were found to be cruel and unusual or, in the case of a fine, excessive.18 160 I cannot believe that the historic powers of our courts in habeas corpus or the rights of citizens, confirmed as these have been for so long by an unbroken line of decisions,19 have been or can be overthrown and subverted, merely by the fact that the question of the court's power to issue the order violated may be doubtful and not merely frivolous. Nor do I think the Shipp decision accomplished or purported to accomplish so much. 161 Certainly if its purpose had been to overrule the decisions so thoroughly established, and to trench so heavily upon the historic liberties they and the Constitution itself secure, some note would have been taken of that fact. So great a revolution hardly could have been wrought unanimously or without attentive recognition of what was being done. There was indeed reference in the opinion to the previous decisions. The Court stated: 'It has been held, it is true, that orders made by a court having no jurisdiction to make them may be disregarded without liability to process for contempt,' citing the Sawyer, Fisk, and Rowland cases.20 203 U.S. at page 573, 27 S.Ct. at page 166, 51 L.Ed. 319, 8 Ann.Cas. 265. But there was not the slightest suggestion, by this reference or otherwise, that the Court had any purpose whatever to impair the force of those decisions, much less to overrule them. Nor in fact was this its intent. It mentioned them only to put them aside as inapplicable to the situation before it. 162 Indeed, in Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 31 S.Ct. 492, 55 L.Ed. 797, 34 L.R.A.,N.S. 874, decided five years after the Shipp decision, a unanimous Court joined in citing Ex parte Rowland, 104 U.S. at page 612, 26 L.Ed. 861, in context consistent only with the view that its doctrine, and therefore that of others like it decided prior to the Shipp case, remained fully effective. Page 436 of 221 U.S., page 496 of 31 S.Ct., 55 L.Ed. 797, 34 L.R.A.,N.S. 874. There was no intimation, as otherwise necessarily would have been given, that the Shipp decision had reversed or modified the Rowland case, or any like it, in any way. And in Ex parte Young, 209 U.S. 123, not only the Court, p. 143, but the opposing distinguished counsel, pp. 135, 139, 28 S.Ct. 441, 447, 52 L.Ed. 714, 13 L.R.A.,N.S., 932, 14 Ann.Cas. 764, all concurred in reaffirming the Rowland ruling. Harlan, J., dissenting, retracted his former contrary view (see note 19 supra) in this respect. 209 U.S. at pages 169, 174, 28 S.Ct. at pages 458, 460, 52 L.Ed. 714, 13 L.R.A.,N.S., 932, 14 Ann.Cas. 764. And Holmes, J., who spoke for the Court in the Shipp case, joined with the Court's reaffirmation of the Rowland doctrine in both the Gompers and Young opinions. 163 The Court in Shipp was dealing with a situation quite different from the ones presented in the previous decisions and in this case. In none of them was the action which violated the court's order such as would have defeated its jurisdiction not only to enter the order but also to proceed with the cause before it in any manner, except to deal with the matter of contempt.21 In them the Court was not faced with the necessity for taking action to vindicate its power to hear and determine the main controversy, as well as the incidental one arising upon the validity of the interlocutory or other order. Nor is it here. 164 But exactly such a situation was presented in the Shipp case. The conduct there held to be contempt not only was in itself criminal and in violation, as it turned out, of this Court's lawful order for taking the appeal in Johnson's case. It ousted this Court altogether of jurisdiction to take any action in that cause. It rendered the cause moot, thereby putting an end to any proceedings concerning it here or elsewhere. Shipp's alleged conduct constituted therefore the most serious possible interference with the due and orderly course of administering justice. It utterly destroyed the power of all courts to act. Further, the order violated was not made directly in contravention of an act of Congress, as was true in the Fisk case and, as I think, in this one. It rather was made in complete conformity with the statutes conferring authority on this Court to take jurisdiction of and hear such causes. Nothing in it violated either a congressional mandate and policy or the rights of any party. 165 Moreover the decision was not effective, as its doctrine is now said to be, to put Shipp to any choice of obedience on pain of certain punishment regardless of the violated order's validity or invalidity as ultimately determined on review. No such situation was presented on the facts, and no such ruling could properly have been made. Shipp had not been convicted. The case came here upon a challenge in limine, not after the event, made upon the pleadings in the contempt proceedings to their validity. The basis asserted was the invalidity of the order allowing the appeal in Johnson's case, for alleged want of jurisdiction of this Court to enter it.22 That contention was rejected and the order was held valid. It was in this connection only that the Court stated it had 'jurisdiction to determine its jurisdiction' in doubtful cases. That statement was not a ruling that, regardless of a violated order's ultimate validity as determined on review,23 punishment in contempt for violating it could be irrevocably imposed. It was merely a statement of the reason for the order's validity.24 The holding was that this Court had jurisdiction, as of course it does in doubtful as well as clear cases, to determine whether the federal courts—the Circuit Court and accordingly this Court also—had power to pass upon Johnson's petition for habeas corpus.25 166 From that ruling and from it alone the consequence followed that Shipp could be held in contempt on proof, still to be made, that he had done acts in violation of the order as thus conclusively determined to be valid by the court of last resort. This was a far cry from holding that punishment in contempt can be laid irrevocably, regardless of the outcome on review concerning the order's validity. The Court by its ruling was not making void orders valid for purposes of punishment by way of contempt. Only if the Court has held its own order which Shipp violated invalid would such a question have been presented. 167 The Shipp decision therefore was in fact simply an application of the long established rule that punishment in contempt may be inflicted on proof of violation of a valid order of court as determined finally on review. It did not overrule, nor was it in any way inconsistent with the long prior course of decisions holding that when an order is void for want of jurisdiction it may be disobeyed with impunity pending but depending upon determination of its invalidity by appeal, habeas corpus, or other mode of review. Gompers v. Buck's Stove & Range Co., supra; Ex parte Young, supra. It was an application, in the circumstances presented, of the settled rule that one who takes it upon himself to violate an order of court he thinks void thereby takes the risk that on review he will be sustained and, in the contrary event and then only, will he be subject irrevocably to punishment for contempt. Ibid. 168 In my judgment this is the rule properly applicable in this case, the only one consistent with the settled and unvaried course of decision, with the commands of the War Labor Disputes Act, of the Norris-LaGuardia Act and with § 268 of the Judicial Code, 36 Stat. 1163, 28 U.S.C. § 385, 28 U.S.C.A. § 385. 169 Apart from immediate and other interferences with judicial proceedings not presented here, that section authorizes punishment for contempt only for disobedience of a 'lawful writ, process, order, rule, decree, or command of the said courts.' (Emphasis added.) The section by its terms, apart from the exceptions not here applicable, limits power to punish for contempt to violations of lawful orders, thereby necessarily excluding others. Nor did it purport to make lawful for that purpose interlocutory orders issued without jurisdiction as determined finally upon review.26 170 This case, unlike the Shipp case, in no way involves interference with any of the legal proceedings or the due course of administering justice in any sense contemplated by § 268 or by the Shipp decision. No court, trial or appellate, was deprived by the defendant's conduct of jurisdiction or power to take any action in any of the proceedings, collateral or in the main suit, which existed at the beginning of the controversy. The order therefore falls exclusively within the concluding clause of § 268 and the power to punish for contempt on account of its violation depends by the command of that clause, upon the order's lawful character. 171 Since in my opinion the order was jurisdictionally invalid when issued, by virtue of the War Labor Disputes Act and its adoption of the Norris-LaGuardia Act's policy, it follows that the violation gave no sufficient cause for sustaining the conviction for contempt. Ex parte Fisk, supra. Lewis and the United Mine Workers necessarily took the risk that the order would be found valid on review and, in that event, that punishment for contempt would apply. They did not take the risk that it would apply in any event, even if the order should be found void as beyond the jurisdiction of the Court to enter. See the dissenting opinion in Carter v. United States, 5 Cir., 135 F.2d 858, 862. The Shipp case furnishes no precedent for such a view nor do I know of any other in this Court which does.27 172 On the contrary that view has been long rejected, and I do not think we should disturb or depart from that settled course of decision now. 'If the command of the writ (of mandamus) was in excess of jurisdiction, so necessarily were the proceedings for contempt in not obeying.' Ex parte Rowland, 104 U.S. 604, 617, 618, 26 L.Ed. 861. The power of the federal courts to issue stay orders to maintain the status quo pending appeal, like other matters affecting their jurisdiction except in the case of this Court's original jurisdiction, is subject to Congress' control. That control has been exercised, in my view, to exclude such jurisdiction in cases of this character. And, this being true, I do not think either we or any other court subject to that mandate has power to punish as for contempt the violation of such an order issued in contravention of Congress' command. Ex parte Fisk, supra. III. 173 The issues concerning the manner in which the contempt proceeding was conducted are in themselves of great moment, apart from the foregoing conclusions which I think are dispositive of the controversy. And the Court's ruling upon them are of such a character that I cannot accede by silence. 174 At times in our system the way in which courts perform their function becomes as important as what they do in the result. In some respects matters of procedure constitute the very essence of ordered liberty under the Constitution. For this reason, especially in the Bill of Rights, specific guaranties have been put around the manner in which various legal proceedings shall be conducted. They differentiate sharply between the procedures to be followed in criminal proceedings and in civil ones. These differences mark one of the great constitutional divides.28 They separate the zone of punishment for crime, with all its odious consequences, from that of giving civil relief, where no such consequences attend, not partially but completely. 175 In any other context than one of contempt, the idea that a criminal prosecution and a civil suit for damages or equitable relief could be hashed together in a single criminal-civil hodgepodge would be shocking to every American lawyer and to most citizens. True, the same act may give rise to all these varied legal consequences. But we have never adopted, rather our Constitution has totally rejected the continental system of compounding criminal proceedings with civil adjudications.29 Our tradition is exactly the contrary and few would maintain that this has had no part in bringing about the difference existing today for individual freedom here and in Europe. 176 I do not think the Constitution contemplated that there should be in any case an admixture of civil and criminal proceedings in one. Such an idea is altogether foreign to its spirit. There can be no question that contempt power was conferred adequate to sustain the judicial function, in both civil and criminal forms. But it does not follow that the Constitution permits lumping the two together or discarding for the criminal one all of the procedural safeguards so carefully provided for every other such proceeding. 177 The founders did not command the impossible. They could not have conceived that procedures so irreconcilably inconsistent in many ways30 could be applied simultaneously. Nor was their purpose to create any part of judicial power, even in contempt, wholly at large, free from any constitutional limitation or to pick and choose between the conflicting civil and criminal procedures and remedies at will. Much less was it to allow mixing civil remedies and criminal punishments in one lumped form of relief, indistinguishably compounding them and thus putting both in unlimited judicial discretion, with no possibility of applying any standard of measurement on review.31 178 If this can be done in any case, it can be done in others. And that being true, if it can be done at all, not simply a loophole but a very large breach has been left in the wall of procedural protections thrown around the citizen's punishment for crime. For it is to be recalled that under the Court's ruling here upon the Shipp doctrine not merely the violation of valid judicial orders, but also the disobedience of invalid orders issued in excess of any court's jurisdiction becomes a crime and punishable as such by summary proceedings in criminal contempt, although the substantive rights involved in the litigation are wholly civil ones. The vastly expanded area of criminal conduct under this conception would afford equally wide room for dispensing with the criminal procedural protections under the unrestricted scope, otherwise than by 'judicial discretion,' which the present ruling concerning criminal or criminal-civil proceedings in contempt affords. 179 In my opinion, our system does not comprehend a power so unconfined anywhere within its broad borders, and it is time the large confusion about this were swept away.32 It is not necessary in this case to ask or decide whether all of the Constitution's criminal procedural protections thrown about all other criminal prosecutions, without suggestion of explicit exception, apply to criminal contempt proceedings. It is enough that we are sure some of them apply, as this Court has ruled repeatedly.33 It does not matter that some of those which incontestably are applicable may not have been put in issue or preserved for review in this case.34 The question cuts more deeply than the application of any specific guaranty. It affects the right to insist upon or have the benefit of any. 180 The case is characteristic of the long existing confusion concerning contempts and the manner of their trial, among other things, in that most frequently the question of the nature and character of the proceeding, whether civil or criminal, is determined at its end in the stage of review rather than, as it should be and as in my opinion it must be, at the beginning. Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 444, 31 S.Ct. 492, 499, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. And this fact in itself illustrates the complete jeopardy in which rights are placed when the nature of the proceeding remains unknown and unascertainable until the final action on review. 181 Not only is one thus placed in continuing dilemma throughout the proceedings in the trial court concerning which set of procedural rights he is entitled to stand upon, whether upon the criminal safeguards or only on the civil. He also does not and cannot know until it is too late, that is, until the appellate phase is ended, whether one group or the other of appellate jurisdictional and procedural rules applies. Indeed he may find that his right of review has been taken either prematurely or too late depending entirely on whether the appellate court finally concludes that the proceeding has been civil or criminal in character.35 See Swayzee, Contempt of Court in Labor Injunction Cases (1935) 21 22. 182 Precisely for these reasons this Court, when confronted in the Gompers case, supra, with a proceeding commingling civil and criminal features, such as we have here, refused to countenance such a mixture and, finding that the proceedings had been civil, held the criminal penalty of fixed terms of imprisonment to be invalid.36 The Court said: 183 'There was therefore a departure—a variance—between the procedure adopted and the punishment imposed, when, in answer to a prayer for remedial relief, in the equity cause, the court imposed a punitive sentence appropriate only to a proceeding at law for criminal contempt. The result was as fundamentally erroneous as if in an action of 'A vs. B, for assault and battery,' and judgment entered had been that the defendant be confined in prison for twelve months.' 221 U.S. at page 449, 31 S.Ct. at page 501. 184 Not only must the punishments be kept separate and distinct.37 This must be done with the entire proceedings.38 Punishment and civil relief must be correlated with the character of the proceeding. Procedural rights not only in matters of practice,39 but in others 'which involve substantial rights and constitutional privileges,'40 are so distinct and in some instances contradictory that 'manifestly' they cannot be intermingled. Nor can those applicable in criminal proceedings be disregarded when criminal penalty is sought. Not only such matters as the privilege against self-incrimination, the presumption of innocence, the necessity for proof beyond a reasonable doubt,41 the allowance of costs, the appropriate mode of review42 with attendant limitations of time and other differences, require this. What is most important, because the application and observance of all these rights and others depend upon it, is that the person charged is entitled to know from the beginning, not merely at the end or some intermediate stage,43 in which sort of proceeding he is involved. 185 This, the Court said, 'is not a mere matter of form, for manifestly every citizen, however unlearned in the law, by a mere inspection of the papers in contempt proceedings ought to be able to see whether it was instituted for private litigation or for public prosecution * * *. He should not be left in doubt as to whether relief or punishment was the object in view. He is not only entitled to be informed of the nature of the charge against him, but to know that it is a charge, and not a suit. United States v. Cruikshank, 92 U.S. 542, 559, 23 L.Ed. 588, 593.' 221 U.S. at page 446, 31 S.Ct. at page 500. 186 This rule has now been incorporated also in Rule 42(b) of the Federal Rules of Criminal Procedure,44 and was applicable in this case. By the terms of that rule the charge of criminal contempt was required to be 'prosecuted on notice' and it was further commanded that the notice state 'the essential facts constituting the criminal contempt charged and describe it as such,' which was not done here. The rule was adopted to outlaw 'the frequent confusion between criminal and civil contempt proceedings,' following immediately a suggestion made in McCann v. New York Stock Exchange, 2 Cir., 80 F.2d 211.45 See also Nye v. United States, 313 U.S. 33, at pages 42—43, 61 S.Ct. 810, at page 812, 813. But it flatly incorporates the effect of the decision in the Gompers case, supra. 187 The language used by the Court was language of the Constitution, reinforced by citation of the Cruikshank case. Careful as it was about expressly overruling prior decisions46 where the Sixth Amendment's requirement47 had not been observed, there can be no doubt that the Court was announcing for the future that the constitutional requirement must be complied with. And the result in the case itself accorded with what this view required.48 188 One who does not know until the end of litigation what his procedural rights in trial are, or may have been, has no such rights. He is denied all by a hide-and-seek game between those that are criminal and those that are civil. The view which would seem to be the only one consistent with the whole spirit of the Constitution, and with the nature of our free institutions, is that all of the constitutional guaranties applicable to trials for crime should apply to such trials for contempt, excepting only those which may be wholly inconsistent with the nature and execution of the function the court must perform.49 As has been said, courts in performing this function are not above the Constitution; rather they are empowere to perform it in order to make the Constitution itself operative.50 Accordingly, not the least but the greatest possible application of it to this phase of their work is the only rule consistent with their place in the constitutional scheme. In re Michael, 326 U.S. 224, 227, 66 S.Ct. 78, 79. 189 Hence, whatever may be true of indictment and jury trials, I see no compelling reason whatever for not applying the other limitations of the Sixth Amendment. None of them is inconsistent with the due and proper performance of the court's function in criminal contempt. Some at the least are applicable by virtue of the due process guaranty of the Fifth Amendment. 'Due process of law, therefore, in the prosecution of contempt, except of that committed in open court, requires that the accused should be advised of the charges and have a reasonable opportunity to meet them by way of defense or explanation. We think this includes the assistance of counsel, if requested, and the right to call witnesses to give testimony, relevant either to the issue of complete exculpation or in extenuation of the offense and in mitigation of the penalty to be imposed.' Cooke v. United States, 267 U.S. 517, 537, 45 S.Ct. 390, 395, 69 L.Ed. 767. Only one case, apart from those involving indictment or jury trial, has held the Sixth Amendment inapplicable in such proceedings.51 Whether or not that case was a departure from our long established tradition that in criminal proceedings the defendant is entitled to be confronted with the witnesses against him, other departures should not be made. 190 Surely the rights to a speedy and public trial, to have compulsory process for obtaining witness in his favor, to have the assistance of counsel for his defense, and, as the Gompers case held, to be informed of the nature as well as the cause of the accusation, cannot be denied in our system to any person charged with crime, with the single exception of contempts committed in the immediate presence of the court by way of interference with the proceedings. Those guaranties are in no way inconsistent with the court's proper and complete discharge of its function in contempt. And they would seem to be essential to any conception of a fair trial as the Fifth Amendment's due process clause comprehends this. 191 When the assertion and securing of all other rights depends upon one, that one is the core of all. Here the right 'to know that it was a charge, and not a suit' comprehended all other procedural rights in the trial and appellate courts. Without this, none could be asserted or maintained. The denial of that right, deferring it until the decision here is handed down, is in my opinion not only a denial of all. It is a violation both of the Constitution and of Rule 42(b). 192 But we are told that this, and all that followed or may have followed from it, make no difference because there was no prejudice. There are at least two answers. This Court has held that the denial of constitutional guaranties in trials for crime is in itself prejudice. Kotteakos v. United States, 328 U.S. 750, 765, 66 S.Ct. 1239, 1248, and cases cited in note 19. The other, there was prejudice and in the most important thing beyond knowing the nature of the proceeding in advance of trial, namely, in the penalty itself. IV 193 Not only was the penalty against the union excessive, as the Court holds. Vice infected both 'fines' more deeply. As the proceeding itself is said to have been both civil and criminal, so are the two 'fines.' Each was imposed in a single lump sum, with no allocation of specific portions as among civil damages, civil coercion and criminal punishment. The Government concedes that some part of each 'fine' was laid for each purpose. But the trial court did not state, and the Government has refused to speculate, how much was imposed in either instance for each of those distinct remedial functions. 194 This was in the teeth of the Gompers and other previous decisions here. The law has fixed standards for each remedy, and they are neither identical nor congealable. They are, for damages in civil contempt, the amount of injury proven and no more, Gompers v. Buck's Stove & R. Co., supra, 221 U.S. at page 444, 31 S.Ct. at page 499, 55 L.Ed. 797, 34 L.R.A.,N.S., 874; for coercion, what may be required to bring obedience and not more, whether by way of imprisonment or fine;52 for punishment, what is not cruel and unusual or, in the case of a fine, excessive within the Eighth Amendment's prohibition. And for determining excessiveness of criminal fines there are analogies from legislative action which in my opinion are controlling.53 195 The Government concedes that the Eighth Amendment's limitation applies to penalties in criminal contempt; and that in civil contempt the damages awarded cannot exceed the proven amount of injury. It also concedes, as I understand, that purely coercive relief can be no greater than is necessary to secure obedience. But in its view there was no necessity here for allocation of specific amounts in order to comply with these distinct standards. Rather punishment and damages may be lumped with a third undefined amount for civil coercion; and the whole mass sustained, without reference to the constituent elements or any of the established standards for measuring them, other than by overall application of the Eighth Amendment's limitation to the mass. And in this view it maintains neither 'fine' is excessive. 196 Obviously, however, when all these distinct types and functions of relief are lumped together, in a single so-called 'fine,' none of the long established bases for measurement can be applied, for there is nothing to which they can apply. We can only speculate upon what portion of each 'fine' may have been laid to compensate for damages, what for punishment, and what, if any,54 for civil coercion. Moreover, the District Court made no findings whatever concerning the amount of civil damages sustained, even if it could be assumed that there was evidence to sustain such findings.55 And on the record none of the 'fine' was made contingent, affording an opportunity for compurgation, as is required for coercive penalties.56 197 It follows that we have no basis except our own speculative imagination by which to determine whether the so-called 'fines,' or either of them, are excessive as damages, or indeed as coercive relief looking to the future, or as penalty for past crime. 198 In this state of things, it is utterly impossible to perform our function of review in the manner heretofore required, even within the broad limits prescribed for cases of civil and criminal contempt. This commingling of the various forms of relief, like that of the proceedings themselves, deprives these contemnors of any possibility for having the scope of the relief given against them measured according to law. 199 That is no insubstantial deprivation. When hybrid proceedings can produce hybrid penalties, concealing what is for punishment and what remedial, what criminal and what civil, and in the process can discard constitutional procedural protections against just such consequences, as convenience or other wholly discretionary impulse may command, then indeed to the extent we allow this will we have adopted the continental tradition of the civilians and rejected our own. No case in this Court heretofore has ever sustained such conglomerate proceedings and penalties.57 200 That the Government is complainant here, both as 'employer' seeking remedial relief and in sovereign capacity58 seeking to vindicate the court's authority by criminal penalty, does not nullify all these long established limitations or put the courts wholly at large, limited by nothing except their unconfined discretion as to the scope and character of the relief allowable. Power there is to take adequate measures when violation is clearly shown and adequate proof is made to sustain them. For proven violation, criminal penalty within the Eighth Amendment's limits as we would measure similar impositions placed by Congress, at the most; for damages proven and found, civil award commensurate with the finding; and for coercion, civil relief by way of imprisonment or 'fine,' but in either case contingent only, not final, giving opportunity for compurgation and for termination, on its being made, of further penalty for the future. 201 These are the limitations the law has prescribed. They apply equally when the Government is complainant, and whether in one capacity or the other, or both, as when others are.59 They cannot be dispensed with, separately or by conglomerating all into a single indiscriminate lump, at the suit of the Government or another, in this case or for others. To permit this would be to throw overboard the limitations prescribed by law and make the courts purely discretionary arbitrators of controversies. That cannot be done in our system. 202 The Court seemingly recognizes this, in part, in the revision it makes of the District Court's penalties. Lewis' fine is affirmed in amount but wholly changed in character. Instead of composite relief as the District Court made it, the Court makes that fine wholly a criminal penalty, thus in effect increasing the amount of his criminal imposition. The union's fine, though held excessive and 'reduced,' by what standard is not apparent, is replaced by a flat criminal fine of $700,000 plus a contingent penalty of $2,800,000 said to be entirely for civil coercion, although the strike was ended in December. Any award for civil damages allegedly sustained apparently is eliminated. 203 The Court thus purports to make separate the distinct items of relief commingled in the District Court's action. But in doing so, in my opinion, it wholly disregards the established standard for measuring criminal fines and its own as well as the District Court's function relating to them. If Lewis and the union had been convicted on indictment and jury trial in a proceeding surrounded by all the constitutional and other safeguards of criminal prosecution for violating the War Labor Disputes Act, the maximum fines which could be applied by that Act's terms would be $5,000 for each. In addition, Lewis could have been imprisoned for a year.60 204 In my opinion, when Congress prescribes a maximum penalty for criminal violation of a statute, that penalty fixes the maximum which can be imposed whether the conviction is in a criminal proceeding as such for its violation or is for contempt for violating an order of court to observe it temporarily. Gompers v. United States, 233 U.S. 604, 612, 34 S.Ct. 693, 696, 58 L.Ed. 1115. If the fine or other penalty in such a case can be multiplied twice or any other number of times, merely by bringing a civil suit, securing a temporary restraining order and then convicting the person who violates it of criminal contempt, regardless of the order's validity and of any of the usual restraints of criminal procedure, the way will have been found to dispense with substantially all of those protections relating not only to the course of the proceedings but to the penalty itself. 205 But it is in relation to the flat criminal fine of $700,000 against the union that the Court's disregard of the constitutional and other standards is most apparent. By what measuring rod this sum has been arrived at as the appropriate and lawful amount, I am unable to say, unless indeed it is simply by a rough estimate of what the union should be forced to pay on all counts. Never has a criminal fine of such magnitude been heretofore laid and sustained, so far as I am able to discover. And only for treason, with one other possible exception,61 has Congress authorized one so large. Moreover, the Court's enumeration of factors to be taken into account indicates expressly, as I read the opinion, that one is the coercive effect of the imposition for the future, though it is thoroughly settled that in contempt criminal punishment is to be l id only for past conduct.62 Gompers v. Buck's Stove & R. Co., supra, and authorities cited. 206 Thus, the Court in effect imposes double coercive penalties, in view of the additional contingent award of $2,800,000 for that specific and sole purpose. I think the criminal fine of $700,000 not only constitutionally excessive, far beyond any heretofore sustained for violation of any statute or order of court. It is also an unlawful commingling of civil coercive and criminal penalties, without the essential contingent feature in the coercive phase, under our prior decisions. 207 Moreover, it is the District Court's function, not ours, in the first instance to fix the amounts of criminal fines. In equity proceedings for coercive relief, appellate courts including this one have power to revise and fix awards for such purposes, and if damages also are sought to review amounts awarded for this purpose for consistency with the proof. Gompers v. Buck's Stove & R. Co., supra. But in a criminal proceeding which is at law even in contempt, ibid., our function is not in the first instance to fix the fines ourselves. That function is the District Court's. Ibid. We can only determine whether those imposed by it are excessive under the Eighth Amendment. 208 In its revision of the penalties therefore the Court in my opinion not only fails to unscramble the coercive and criminal elements, as the prior decisions here require to be done.63 It imposes grossly excessive criminal penalties, determined in amount by wholly arbitrary estimate related to no previously established standard legislatively or judicially fixed. And in doing so, it usurps the District Court's function. All this flows in part at least from its basic error, which is its failure to follow the rule of the Gompers and other cases that not only civil and criminal penalties, but also civil and criminal proceedings are altogether different and separate things, and under the Constitution must be kept so. 209 Much more is involved in this controversy than the issues which have been discussed. The issues in the main suit have not been determined and it would be beyond our function to intimate opinion concerning them now. But beyond this controversy as a whole lie still graver questions. They involve opposing claims concerning the right to strike and the power of the Government, as against this, to keep the nation's economy going. Those are indeed grave matters. 210 No right is absolute. Nor is any power, governmental or other, in our system. There can be no question that it provides power to meet the greatest crises. Equally certain is it that under 'a government of laws and not of men' such as we possess, power must be exercised according to law; and government, including the courts, as well as the governed, must move within its limitations. 211 This means that the courts and all other divisions or agencies of authority must act within the limits of their respective functions. Specifically it means in this case that we are bound to act in deference to the mandate of Congress concerning labor injunctions, as in judgment and conscience we conceive it to have been made. The crisis here was grave. Nevertheless, as I view Congress' action, I am unable to believe that it has acted to meet, or authorized the courts to meet, the situation which arose in the manner which has been employed. 212 No man or group is above the law. All are subject to its valid commands. So are the government and the courts. If, as I think, Congress has forbidden the use of labor injunctions in this and like cases, that conclusion is the end of our function. And if modification of that policy is to be made for such cases, that problem is for Congress in the first instance, not for the courts. 213 Mr. Justice MURPHY joins in this opinion. 1 The United States had taken possession of the mines pursuant to Executive Order 9728 of May 21, 1946, 11 F.R. 5593, in which the President, after determining that labor disturbances were interrupting the production of bituminous coal necessary for the operation of the national economy during the transition from war to peace, directed the Secretary of Interior to take possession of and operate the mines and to negotiate with representatives of the miners concerning the terms and conditions of employment. The President's action was taken under the Constitution, as President of the United States and Commander i Chief of the Army and Navy, and by virtue of the authority conferred upon him by the War Labor Disputes Act, 57 Stat. 163, 50 U.S.C.App. §§ 1501—1511, 50 U.S.C.A.Appendix, §§ 1501—1511. Section 3 of the Act authorizes the seizure of facilities necessary for the war effort if and when the President finds and proclaims that strikes or other labor disturbances are interrupting the operation of such facilities. Section 3 directs that the authority under that section to take possession of the specified facilities will terminate with the ending of hostilities and that the authority under that section to operate facilities seized will terminate six months after the ending of hostilities. The President on December 31, 1946, proclaimed that hostilities were terminated on that day. 50 U.S.C.A.Appendix, § 601 note, 12 F.R. 1. 2 The initial paragraph of the contract provided: 'This agreement between the Secretary of the Interior, acting as Coal Mines Administrator under the authority of Executive Order No. 9728 (dated May 21, 1946, 11 F.R. 5593), and the United Mine Workers of America, covers for the period of Government possession the terms and conditions of employment in respect to all mines in Government possession which were as of March 31, 1946, subject to the National Bituminous Coal Wage Agreement, dated April 11, 1945.' 3 In compliance with Executive Order No. 9728 and § 5 of the War Labor Disputes Act, the agreement had been submitted to and approved by the National Wage Stabilization Board. 4 See 330 U.S. 286, 67 S.Ct. 692, infra. 5 The saving clause was in the following form: 'Except as amended and supplemented herein, this agreement carries forward and preserves the terms and conditions contained in all joint wage agreements effective April 1, 1941, through March 31, 1943, the supplemental agreement providing for the six (6) day workweek, and all the various district agreements executed between the United Mine Workers and the various Coal Associations and Coal Companies (based upon the aforesaid basic agreement) as they existed on March 31, 1943, and the National Bituminous Coal Wage Agreement, dated April 11, 1945.' 6 The letter also charged certain breaches of contract by the Government and asserted significant changes in Government wage policy. 7 Captain Collisson also specifically denied breaches of contract on the part of the Government. 8 Conferences were carried on without prejudice to the claims of either party in this respect. 9 Secretary Krug and defendant Lewis met privately on November 13 and again on November 14. 10 Secretary Krug had been advised by the Attorney General, whose opinion had been sought, that § 15 of the 1945 agreement was no longer in force. 11 Judicial Code, § 274d, 28 U.S.C. § 400, 28 U.S.C.A. § 400. 12 The pertinent part of the order was as follows: 'Now, Therefore, it is by the Court this 18th day of November, 1946, 'Ordered, that the defendants and each of them and their agents, servants, employees and attorneys, and all persons in active concept or participation with them, be and they are hereby restrained pending further order of this Court fr m permitting to continue in effect the notice heretofore given by the defendant, John L. Lewis, to the Secretary of Interior dated November 15, 1946; and from issuing or otherwise giving publicity to any notice that or to the effect that the Krug-Lewis Agreement has been, is, or will at some future date be terminated, or that said agreement is or shall at some future date be nugatory or void at any, time during Government possession of the bituminous coal mines; and from breaching any of their obligations under said Krug-Lewis Agreement; and from coercing, instigating, inducing, or encouraging the mine workers at the bituminous coal mines in the Government's possession, or any of them, or any person, to interfere by strike, slow down, walkout, cessation of work, or otherwise, with the operation of said mines by continuing in effect the aforesaid notice or by issuing any notice of termination of agreement or through any other means or device; and from interfering with or obstructing the exercise by the Secretary of the Interior of his functions under Executive Order 9728; and from taking any action which would interfere with this Court's jurisdiction or which would impair, obstruct, or render fruitless, the determination of this case by the Court; 'And it is further ordered that this restraining order shall expire at 3 o'clock p.m. on November 27th, 1946, unless before such time the order for good cause shown is extended, or unless the defendants consent that it may be extended for a longer period; 'And it is further ordered that plaintiff's motion for preliminary injunction be set down for hearing on November 27th, 1946, at 10:00 o'clock a.m.' 13 47 Stat. 70, 29 U.S.C. § 101, 29 U.S.C.A. § 101. 14 The grounds offered for the motion were: '1. The Temporary Restraining Order is void in that this case involves and grows out of a labor dispute. Under the provisions of the Norris-LaGuardia Act (47 Stat. 70), and the provisions of Section 20 of the Clayton Act, 38 U.S.Stat.C. 323, p. 730, 29 U.S.C.A. § 52, this Honorable Court is without jurisdiction over the subject-matter of this cause. '2. Equity acts only where there is no plain, adequate, and complete remedy at law. The allegations of the Petition for the Rule purport to show a violation of the War Labor Disputes Act—a serious offense—in which field there is no place for equity intervention. '3. Observance of all the strict rules of criminal procedure is required to establish criminal contempt. It is apparent that the alleged facts set out in the unverified Petition and in the affidavit of Captain Collisson, filed in support of the Rule, are based wholly upon hearsay, information and belief and are not sufficient to sustain the Rule to Show Cause. '4. The o ject of the Petition for the Rule is necessarily punitive and not compensatory. Accordingly, it being for criminal contempt, the Petition should have been presented as an independent proceeding and not as supplemental to the original cause. '5. The Temporary Restraining Order is beyond the jurisdiction of this Honorable Court and therefore void because it contravenes the First, Fifth, and Thirteenth Amendments to the Constitution of the United States.' 15 38 Stat. 730, 738, § 20, 29 U.S.C. § 52, 29 U.S.C.A. § 52. 16 American Steel Foundries v. Tri-City Central Trades Council, 1921, 257 U.S. 184, 202, 42 S.Ct. 72, 76, 66 L.Ed. 189, 27 A.L.R. 360; Duplex Printing Press Co. v. Deering, 1921, 254 U.S. 443, 470, 41 S.Ct. 172, 177, 178, 65 L.Ed. 349, 16 A.L.R. 196. 17 United States v. Hutcheson, 1941, 312 U.S. 219, 231, 61 S.Ct. 463, 465, 466, 85 L.Ed. 788. 18 See also Allen Bradley Co. v. Local Union No. 3, International Brotherhood of Electrical Workers, 1945, 325 U.S. 797, 805, 65 S.Ct. 1533, 1538, 89 L.Ed. 1939; United States v. Hutcheson, 1941, 312 U.S. 219, 235, 236, 61 S.Ct. 463, 467, 468, 85 L.Ed. 788. 19 'Sec. 4. No court of the United States shall have jurisdiction to issue any restraining order or temporary or permanent injunction in any case involving or growing out of any labor dispute to prohibit any person or persons participating or interested in such dispute (as these terms are herein defined) from doing, whether single or in concert, any of the following acts: '(a) Ceasing or refusing to perform any work or to remain in any relation of employment; '(b) Becoming or remaining a member of any labor organization or of any employer organization, regardless of any such undertaking or promise as is described in section 3 of this Act; '(c) Paying or giving to, or withholding from, any person participating or interested in such labor dispute, any strike or unemployment benefits or insurance, or other moneys or things of value; '(d) By all lawful means aiding any person participating or interested in any labor dispute who is being proceeded against in, or is prosecuting, any action or suit in any court of the United States or of any State; '(e) Giving publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising, speaking, patrolling, or by any other method not involving fraud or violence; '(f) Assembling peaceably to act or to organize to act in promotion of their interests in a labor dispute; '(g) Advising or notifying any person of an intention to do any of the acts heretofore specified; '(h) Agreeing with other persons to do or not to do any of the acts heretofore specified; and '(i) Advising, urging, or otherwise causing or inducing without fraud or violence the acts heretofore specified, regardless of any such undertaking or promise as is described in section 3 of this Act.' 'Sec. 13. When used in this Act, and for the purposes of this Act— '(a) A case shall be held to involve or to grow out of a labor dispute when the case involves persons who are engaged in the same industry, trade, craft, or occupation; or have direct or indirect interests therein; or who are employees of the same employer; or who are members of the same or an affiliated organization of employers or employees; whether such dispute is (1) between one or more employers or associations of employers and one or more employees or associations of employees; (2) between one or more employers or associations of emp oyers and one or more employers or associations of employers; or (3) between one or more employees or associations of employees and one or more employees or associations of employees; or when the case involves any conflicting or competing interests in a 'labor dispute' (as hereinafter defined) of 'persons participating or interested' therein (as hereinafter defined). '(b) A person or association shall be held to be a person participating or interested in a labor dispute if relief is sought against him or it, and if he or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirect interest therein, or is a member, officer, or agent of any association composed in whole or in part of employers or employees engaged in such industry, trade, craft, or occupation. '(c) The term 'labor dispute' includes any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee. '(d) The term 'court of the United States' means any court of the United States whose jurisdiction has been or may be conferred or defined or limited by Act of Congress, including the courts of the District of Columbia.' 20 Lewis, Trustee v. United States, 1875, 92 U.S. 618, 622, 23 L.Ed. 513; United States v. Herron, 1873, 20 Wall. 251, 263, 22 L.Ed. 275; see Guarantee Title & Trust Co. v. Title Guaranty & Surety Co., 1912, 224 U.S. 152, 155, 32 S.Ct. 457, 458, 56 L.Ed. 706. 21 United States v. California, 1936, 297 U.S. 175, 186, 56 S.Ct. 421, 425, 80 L.Ed. 567; Green v. United States, 1869, 9 Wall. 655, 658, 19 L.Ed. 806. 22 United States v. Stevenson, 1909, 215 U.S. 190, 197, 30 S.Ct. 35, 36, 54 L.Ed. 153; United States v. American Bell Telephone Co., 1895, 159 U.S. 548, 553—555, 16 S.Ct. 69, 71, 72, 40 L.Ed. 255; Dollar Savings Bank v. United States, 1873, 19 Wall. 227, 238, 230, 239, 22 L.Ed. 80. 23 'The most general words that can be devised (for example, any person or persons, bodies politic or corporate) affect not him (the sovereign) in the least, if they may tend to restrain or diminish any of his rights or interests.' Dollar Savings Bank v. United States, 1873, 19 Wall. 227, 239, 22 L.Ed. 80. 'If such prohibition is intended to reach the government in the use of known rights and remedies, the language must be clear and specific to that effect.' United States v. Stevenson, 1909, 215 U.S. 190, 197, 30 S.Ct. 35, 36, 54 L.Ed. 153. In both these cases the question, as in the present case, was whether the United States was divested of a certain remedy by a statute or a rule of law which, without express reference to the United States, made that remedy generally unavailable. 24 'Sec. 2. In the interpretation of this Act and in determining the jurisdiction and authority of the courts of the United States, as such jurisdiction and authority are herein defined and limited, the public policy of the United States is hereby declared as follows: 'Whereas under prevailing economic conditions, developed with the aid of governmental authority for owners of property to organize in the corporate and other forms of ownership association, the individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment, wherefore, though he should be free to decline to associate with his fellows, it is necessary that he have full freedom of association, self-organization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment, and that he shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection; therefore, the following definitions of, and limitations upon, the jurisdiction and authority of the courts of the United States are hereby enacted.' 25 United States v. Cooper Corporation, 1941, 312 U.S. 600, 604, 61 S.Ct. 742, 743, 85 L.Ed. 1071; United States v. Fox, 1876, 94 U.S. 315, 321, 24 L.Ed. 192. 26 75 Cong.Rec. 5473. An amendment by Representative Beck, designed to save to the United States the right to intervene by injunction in private labor disputes, was defeated. 75 Cong.Rec. 5503, 5505. 27 75 Cong.Rec. 5503. 28 Ibid. 29 Most frequently mentioned was the Government action in connection with the railway strikes of 1894 and 1922. 30 75 Cong.Rec. 5464. 31 75 Cong.Rec. 5509. 32 Representative Schneider, at 75 Cong.Rec. 5514, stated: 'And it has also been pointed out that the enactment of this bill will not take away from the Federal Government any rights which it has under existing law to seek and obtain injunctive relief where the same is deemed by Government officials to be necessary for the functioning of the Government. 'In other words, a tremendous field in which the injunction can still be used effectively will remain after the enactment of this bill.' 33 United States v. Wrightwood Dairy Co., 1942, 315 U.S. 110, 125, 62 S.Ct. 523, 529, 86 L.Ed. 726; Duplex Printing Press Co. v. Deering, 1921, 254 U.S. 443, 444, 475, 41 S.Ct. 172, 173, 179, 65 L.Ed. 349, 16 A.L.R. 196. 34 We have been cited to no instances in which the consideration of the Senate was directed to the specific issue of the relationship between the United States and its own employees. The use of the injunction by the Government was in question, but primarily in respect to those instances in which the United States had taken action in private labor disputes, e.g., 75 Cong.Rec. 4509, 4619, 4620, 4693, 5001, 5005. Silence upon the status of the Government as employer is not inconsistent with the desires of the House to exclude from the Act those disputes in which the United States is seeking relief against its own employees. 35 United States v. American Federation of Musicians, 1943, 318 U.S. 741, 63 S.Ct. 665, 87 L.Ed. 1120; see United States v. Hutcheson, 1941, 312 U.S. 219, 227, 61 S.Ct. 463, 464, 85 L.Ed. 788. In accord is United States v. Weirton Steel Co., D.C., 1934, 7 F.Supp. 255; cf. Anderson v. Bigelow, 9 Cir., 1942, 130 F.2d 460. 36 It was upon § 3 of this Act that the President based in part the seizure of the bituminous coal mines. See note 1, supra. 37 89 Cong.Rec. 3812. The substitute bill embodied two amendments proposed by Senator Connally on the floor of the Senate. 89 Cong.Rec. 3809. 38 Section 5 of the substitute bill originally did not limit the issuance of injunctions to those sought by the Attorney General, but Senator Wagner's proposal to insert 'but solely upon application by the A torney General or under his direction' was accepted. 89 Cong.Rec. 3986. 39 A great number of the references to the Norris-LaGuardia Act were made in connection with the proposed Taft and Reed amendments. 89 Cong.Rec. 3897, 3984, 3985, 3986. 40 Senators Connally and Danahar expressed this view and other Senators were apparently in accord. 89 Cong.Rec. 3988—9. 41 See United States v. Wrightwood Dairy Co., 1942, 315 U.S. 110, 125, 62 S.Ct. 523, 529, 86 L.Ed. 726; McCaughn v. Hershey Chocolate Co., 1931, 283 U.S. 488, 493, 51 S.Ct. 510, 512, 75 L.Ed. 1183; Duplex Printing Press Co. v. Deering, 1921, 254 U.S. 443, 444, 474, 41 S.Ct. 172, 173, 179, 65 L.Ed. 349, 16 A.L.R. 196. 42 89 Cong.Rec. 3889, 3890, 3904—5. 43 Section 5, as we have noted before, would have permitted issuing injunctions to restrain violations of the Act. It is not at all clear that the rejection of a proposal in this form should, in any event, be of determinative significance in the case at bar. Here the United States resorted to the District Court for vindication of its right under a formal contract, said to be operative 'for the period of Government possession' and mutually adopted by the parties concerned as a satisfactory solution to a grave situation. The District Court, to preserve existing conditions, issued a restraining order and a preliminary injunction, effective until contractual rights could be ascertained. True, the action of the defendant Lewis in calling a strike, in addition to terminating the contract, suggests a violation of § 6 of the War Labor Disputes Act. But Senate disapproval of u ing injunctions to avert the latter event does not necessarily imply a desire to diminish the contractual rights and remedies of the United States. 44 89 Cong.Rec. 5382. 45 See, for example, 89 Cong.Rec. 5241, 5243, 5299, 5305, 5321, 5325. 46 Thus in the legislative debates Senator Connally stated: '* * * but it does seem to me that the power and authority and sovereignty of the Government of the United States are so comprehensive that when we are engaged in war and a plant is not producing, we can take it over, and that when we do take it over, it is a Government plant, just as much as if we had a fee simple title to it, * * *.' 89 Cong.Rec. 3811—3812. See also Id. at 3809, 3884, 3885, 5722. 47 War Labor Disputes Act, § 6, provided: '(a) Whenever any plant, mine, or facility is in the possession of the United States, it shall be unlawful for any person (1) to coerce, instigate, induce, conspire with, or encourage any person, to interfere, by lock-out, strike, slow-d wn, or other interruption, with the operation of such plant, mine, or facility, or (2) to aid any such lock-out, strike, slow-down, or other interruption interfering with the operation of such plant, mine, or facility by giving direction or guidance in the conduct of such interruption, or by providing funds for the conduct or direction thereof or for the payment of strike, unemployment, or other benefits to those participating therein. No individual shall be deemed to have violated the provisions of this section by reason only of his having ceased work or having refused to continue to work or to accept employment. '(b) Any person who willfully violates any provision of this section shall be subject to a fine of not more than $5,000, or to imprisonment for not more than one year, or both.' 48 Id., § 5. 49 Thus according to § 23 of the Revised Regulations for the Operation of the Coal Mines Under Government Control, issued by the Coal Mines Administrator on July 8, 1946: '* * * nothing in these regulations shall be construed as recognizing such personnel as officers and employees of the Federal Government within the meaning of the statutes relating to Federal employment.' And see § 16. Section 23 also provides, however: 'All personnel of the mines, both officers and employees, shall be considered as called upon by Executive Order No. 9728, to serve the Government of the United States. * * *' 50 After the negotiation of the Krug-Lewis agreement, the changes agreed upon therein were approved by the National Wage Stabilization Act and thereafter by the President. This procedure is provided for in § 5 of the War Labor Disputes Act. 51 Revised Regulations for the Operation of the Coal Mines under Government Control, § 15. 52 Regulations, §§ 16, 31. 53 Regulations, §§ 17, 40. 54 Regulations, § 24. 55 Ibid. 56 'If a party can make himself a judge of the validity of orders which have been issued, and by his own act of disobedience set them aside, then are the courts impotent, and what the Constitution now fittingly calls the 'judicial power of the United States' would be a mere mockery.' Gompers v. Buck's Stove & Range Co., 1911, 221 U.S. 418, 450, 31 S.Ct. 492, 501, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. 57 'It cannot now be broadly asserted that a judgment is always a nullity if jurisdiction of some sort or other is wanting. It is now held that, except in case of plain usurpation, a court has jurisdiction to determine its own jurisdiction, and if it be contested and on due hearing it is upheld, the decision unreversed binds the parties as a thing adjudged. Treinies v. Sunshine Mining Co., 308 U.S. 66, 60 S.Ct. 44, 84 L.Ed. 85; Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 403, 60 S.Ct. 907 (917), 84 L.Ed. 1263; Stoll v. Gottlieb, 305 U.S. 165, 59 S.Ct. 134, 83 L.Ed. 104. So in the matter of federal jurisdiction, which is often a close question, the federal court may either have to determine the facts, as in contested citizenship, or the law, as whether the case alleged arises under a law of the United States.' (135 F.2d 861.) 58 Howat v. Kansas, 1922, 258 U.S. 181, 42 S.Ct. 277, 66 L.Ed. 550; Russell v. United States, 8 Cir., 1936, 86 F.2d 389; Locke v. United States, 5 Cir., 1935, 75 F.2d 157; O'Hearne v. United States, 1933, 62 App.D.C. 285, 66 F.2d 933; Schwartz v. United States, 4 Cir., 1914, 217 F. 866; Brougham v. Oceanic Steam Navigation Co., 2 Cir., 1913, 205 F. 857; Blake v. Nesbet, D.C.1905, 144 F. 279; see Alemite Mfg. Corp. v. Staff, 2 Cir., 1930, 42 F.2d 832, 833. 59 See Alemite Mfg. Corp. v. Staff, 2 Cir., 1930, 42 F.2d 832, 833. 60 See Salvage Process Corp. v. Acme Tank Cleaning Process Corp., 2 Cir., 1936, 86 F.2d 727. 61 See Leman v. Krentler-Arnold Co., 1932, 284 U.S. 448, 453, 52 S.Ct. 238, 240, 76 L.Ed. 389; Bessette v. W. B. Conkey Co., 1904, 194 U.S. 324, 329, 24 S.Ct. 665, 667, 48 L.Ed. 997; McCann v. New York Stock Exchange, 2 Cir., 1935, 80 F.2d 211, 214. In accord in the case of settlement is Gompers v. Buck's Stove & Range Co., 1911, 221 U.S. 418, 451, 452, 31 S.Ct. 492, 502, 55 L.Ed. 797, 34 L.R.A.,N.S., 874: '* * * when the main cause was terminated * * * between the parties, the compl inant did not require, and was not entitled to, any compensation or relief of any other character.' 62 18 U.S.C.A. following section 687. Rule 42(b) regulates various aspects of a proceeding for criminal contempt where the contempt is not committed in the actual presence of the court: 'Disposition Upon Notice and Hearing. A criminal contempt except as provided in subdivision (a) of this rule shall be prosecuted on notice. The notice shall state the time and place of hearing, allowing a reasonable time for the praparation of the defense, and shall state the essential facts constituting the criminal contempt charged and describe it as such. The notice shall be given orally by the judge in open court in the presence of the defendant or, on application of the United States attorney or of an attorney appointed by the court for that purpose, by an order to show cause or an order of arrest. The defendant is entitled to a trial by jury in any case in which an act of Congress so provides. He is entitled to admission to bail as provided in these rules. If the contempt charged involves disrespect to or criticism of a judge, that judge is disqualified from presiding at the trial or hearing except with the defendant's consent. Upon a verdict or finding of guilt the court shall enter an order fixing the punishment.' 63 Conley v. United States, 8 Cir., 1932, 59 F.2d 929; Kelly v. United States, 9 Cir., 1918, 250 F. 947; see National Labor Relations Board v. Arcade-Sunshine Co., 1941, 74 App.D.C. 361, 122 F.2d 964, 965. 64 It could be well argued that the use of the word 'punished' in the petition and rule to show cause was in itself adequate notice, for 'punishment' has been said to be the magic word indicating a proceeding in criminal, rather than civil, contempt. Moskovitz, Contempt of Injunctions, Civil and Criminal, 43 Col.L.Rev. 780, 789, 790 (1943). But 'punishment' as used in contempt cases is ambiguous. 'It is not the fact of punishment, but rather its character and purpose * * *.' Gompers v. Buck's Stove & Range Co., 1911, 221 U.S. 418, 441, 31 S.Ct. 492, 498, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. Noteworthy also is the allegation in the affidavit that the defendants' violation of the restraining order had 'interfered with this Court's jurisdiction.' And the charge in the petition of 'willfully * * * and deliberately' disobeying the restrainorder indicates an intention to prosecute criminal contempt. 65 See point 4, note 14, supra. The points and authorities in support of the motion used similar language. 66 The rule in this respect follows the suggestion made in McCann v. New York Stock Exchange, 2 Cir., 1935, 80 F.2d 211, 214, 215. Notes to the Rules of Criminal Procedure, Advisory Committee, March, 1945, p. 34. 67 Cooke v. United States, 1925, 267 U.S. 517, 537, 45 S.Ct. 390, 69 L.Ed. 767; see Michaelson v. United States, 1924, 266 U.S. 42, 66, 67, 45 S.Ct. 18, 20, 69 L.Ed. 162, 35 A.L.R. 451. 68 Section 11 provides in part: 'In all cases arising under this Act in which a person shall be charged with contempt in a court of the United States (as herein defined), the accused shall enjoy the right to a speedy and public trial by an impartial jury of the State and district wherein the contempt shall have been committed * * *.' 69 We believe, and the Government admits, that the defendants would have been entitled to a jury trial if § 11 applied to the instant contempt proceeding and if this case arose under the Norris-LaGuardia Act. 70 'It may not be always easy to classify a particular act as belonging to either one of these two classes. It may partake of the characteristics of both.' Bessette v. W. B. Conkey Co., 1904, 194 U.S. 324, 329, 24 S.Ct. 665, 667, 48 L.Ed. 997. See Lamb v. Cramer, 1932, 285 U.S. 217, 221, 52 S.Ct. 315, 316, 76 L.Ed. 715; Merchants' Stock & Grain Co. v. Board of Trade of Chicago, 8 Cir., 1912, 201 F. 20, 24. 71 'In patent cases it has been usual to embrace in one proceeding the public and the private remedy—to punish the defendant if found worthy of punishment, and, at the same time, or as an alternative, to assess damages and costs for the benefit of the plaintiff * * *' Hendryx v. Fitzpatrick, C.C.1884, 19 F. 810, 813. Examples of this procedure appear in Union Tool Co. v. Wilson, 1922, 259 U.S. 107, 42 S.Ct. 427, 66 L.Ed. 848; Matter of Christensen Engineering Co., 1904, 194 U.S. 458, 24 S.Ct. 729, 48 L.Ed. 1072; Wilson v. Byron Jackson Co., 9 Cir., 1937, 93 F.2d 577; Kreplik v. Couch Patents Co., 1 Cir., 1911, 190 F. 565. 72 Farmers' & Mechanics' Nat. Bank v. Wilkinson, 1925, 266 U.S. 503, 45 S.Ct. 144, 69 L.Ed. 408; In re Swan, Petitioner, 1893, 150 U.S. 637, 14 S.Ct. 225, 37 L.Ed. 1207; In re Ayers, 1887, 123 U.S. 443, 8 S.Ct. 164, 31 L.Ed. 216; Merchants' Stock & Grain Co. v. Board of Trade of Chicago, 8 Cir., 1912, 201 F. 20. See Phillips Sheet & Tin Plate Co. v. Amalgamated Ass'n of Iron, Steel & Tin Workers, D.C.1913, 208 F. 335, 340. Instances in the state courts include Carey v. District Court of Jasper County, 1939, 226 Iowa 717, 285 N.W. 236; Holloway v. Peoples Water Co., 1917, 100 Kan. 414, 167 P. 265, 2 A.L.R. 161; Grand Lodge, K.P. of New Jersey v. Jansen, 1901, 62 N.J.Eq. 737, 48 A. 526. 73 We are not impressed with defendants' attack on the pleadings as insufficient to support a judgment for civil contempt. The petition, affidavit, and rule to show cause did not expressly mention civil contempt or remedial relief, but the affidavit contained allegations of interference with the operation of the mines and with governmental functions. These claims do not negative remedial or coercive relief. More significantly, the affidavit charged disobedience of the restraining order by failing to withdraw the notice of Nov. 15. We will not assume that the defendants were not instantly aware that a usual remedy in such a situation is to impose coercive sanctions until the act is performed. This is a function of civil contempt. Lamb v. Cramer, 1932, 285 U.S. 217, 221, 52 S.Ct. 315, 316, 76 L.Ed. 715; Michaelson v. United States, 1924, 266 U.S. 42, 66, 45 S.Ct. 18, 20, 69 L.Ed. 162, 35 A.L.R. 451; Gompers v. Buck's Stove & Range Co., 1911, 221 U.S. 418, 449, 31 S.Ct. 492, 501, 55 L.Ed. 797, 34 L.R.A., N.S., 874. Furthermore, defendants' counsel, in argument on the motion to vacate, remarked that the United States was proceeding upon the theory of civil contempt, and attempted only to demonstrate the inabi ity of the United States to seek this relief. And when the Government's suggestions for fines were before the Court, defendants' counsel argued the excessiveness of the fines for either civil or criminal contempt. 74 Criminal contempt was apparently tried out in the equity suit in the patent cases in note 71, supra. And this was the practice followed in Matter of Christensen Engineering Co., 1904, 194 U.S. 458, 24 S.Ct. 729, 48 L.Ed. 1072; Bessette v. W. B. Conkey Co., 1904, 194 U.S. 324, 24 S.Ct. 665, 48 L.Ed. 997; City of New Orleans v. Steamship Co., 1874, 20 Wall. 387, 22 L.Ed. 354. In none of these cases in this Court, however, has there been an affirmative discussion of the propriety of proceeding in this manner. Compare Gompers v. Buck's Stove & Range Co., 1911, 221 U.S. 418, 445, 31 S.Ct. 492, 499, 55 L.Ed. 797, 34 L.R.A.,N.S., 874; United States ex rel. West Virginia-Pittsburgh Coal Co. v. Bittner, 4 Cir., 1926, 11 F.2d 93, 95, with Nye v. United States, 1941, 313 U.S. 33, 42, 61 S.Ct. 810, 812, 85 L.Ed. 1172. 75 Cf. Nye v. United States, 1941, 313 U.S. 33, 42, 61 S.Ct. 810, 812, 85 L.Ed. 1172; Union Tool Co. v. Wilson, 1922, 259 U.S. 107, 110, 42 S.Ct. 427, 428, 66 L.Ed. 848; In re Merchants Stock & Grain Co., Petitioner, 1911, 223 U.S. 639, 642, 32 S.Ct. 339, 340, 56 L.Ed. 584; Matter of Christensen Engineering Co., 1904, 194 U.S. 458, 461, 24 S.Ct. 729, 731, 48 L.Ed. 1072. 76 In Federal Trade Commission v. A. McLean & Son, 7 Cir., 1938, 94 F.2d 802, it could not be said that the criminal element had been dominant and clear from the very outset of the case. The same is true of Norstrom v. Wahl, 7 Cir., 1930, 41 F.2d 910. 77 Rule 65(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, provides that a temporary restraining order should expire according to its terms 'unless within the time so fixed the order, for good cause shown, is extended for a like period. * * *.' There being sufficient cause for the extension, there is no conflict with the subsequent clause of Rule 65(b) requiring that 'the motion for a preliminary injunction shall be set down for hearing at the earliest possible time and takes precedence of all matters except older matters of the same character * * *.' 78 Section 24 of the Judicial Code, 28 U.S.C. § 41, 28 U.S.C.A. § 41, extends th jurisdiction of the District Courts to 'all suits of a civil nature, at common law or in equity, brought by the United States * * *.' 79 The Court in the McCrone case affirmed 9 Cir., 100 F.2d 322 and noted, 307 U.S. 61, 63, note 4, 59 S.Ct. 685, 686, 83 L.Ed. 1108, the conflict with Federal Trade Commission v. A. McLean & Son, 7 Cir., 1938, 94 F.2d 802, 804, upon which defendants now rely. 80 Leman v. Krentler-Arnold Co., 1932, 284 U.S. 448, 455, 456, 52 S.Ct. 238, 241, 76 L.Ed. 389; Gompers v. Buck's Stove & Range Co., 1911, 221 U.S. 418, 443, 444, 31 S.Ct. 492, 499, 55 L.Ed. 797, 34 L.R.A.,N.S., 874; Parker v. United States, 1 Cir., 1942, 126 F.2d 370, 380; Judelshon v. Black, 2 Cir., 1933, 64 F.2d 116; Norstrom v. Wahl, 7 Cir., 1930, 41 F.2d 910, 914. 81 See 330 U.S. 294, 295, 67 S.Ct. 696, supra. 82 Cf. Doy e v. London Guarantee & Accident Co., 1907, 204 U.S. 599, 27 S.Ct. 313, 51 L.Ed. 641. See also In re Chiles, 1874, 22 Wall. 157, 168, 22 L.Ed. 819. 1 Pound, The Future of Law (1937) 47 Yale L.J. 1, 13. 2 Since, in my view, this was not a conviction for contempt in a case 'arising under this Act' the jury provisions of § 11 of the Norris-LaGuardia Act do not apply. For obvious reasons, the petitioners do not claim that the Constitution of the United States affords them a right to trial by jury. 3 United States v. Debs, C.C., 64 F. 724; In re Debs, 158 U.S. 564, 15 S.Ct. 900, 39 L.Ed. 1092; United States v. Hayes, Unreported, D.Ind.1919; United States v. Railway Employees' Dept. A.F.L., D.C., 283 F. 479; Id., D.C., 286 F. 228; Id., D.C., 290 F. 978. 4 Compare Representative LaGuardia's reply to a proposed amendment by Representative Beck which would have exempted from the operation of the Act disputes 'where the welfare, health, or lives of a public are concerned who are not parties to such labor dispute, or where a labor dispute involves the obstruction of any instrumentality of interstate or foreign commerce.' Mr. LaGuardia claimed that the amendment was out of order because not germane to the purposes of the legislation. 'The present bill refers only to disputes between employees and employer. * * * The public is fully protected by penal and other statutes. * * *' 75 Cong.Rec. 5503. 5 See statement of Representative Schneider, 75 Cong.Rec. 5514. 6 Hearings on S. 2054 before a Subcommittee of the Committee on the Judiciary, Senate, 77th Cong., 1st Sess., p. 14. The characterization was accepted by members of the Committee which approved the Bill. Id. at pp. 16, 18, 130. Senator Connally refers to the private employer who 'will continue to operate it under the supervisions of the Governmen '. Id. at 55. See also p. 57. While at one point he referred to the United States as an employer (Id. at 120), he did so in a special context for the purposes of a discussion about collective bargaining with reference to wages. As to wages, of course, the Government would stand in loco 'employer' during its operation of the plant. The analogy of equity receivership is not inapt. In a limited sense, employees of plants in receivership in a federal court may be considered employees of the United States, since the operation of the plant is under the jurisdiction and control of a United States officer. But no one aware of the background of mischief which the Act was intended to remedy could find an intention in Congress to allow injunctions in labor disputes involving plants in receivership. Compare Brotherhood of Railroad Trainmen, Enterprise Lodge, No. 27 v. Toledo, P. & W.R. Co., 321 U.S. 50, 55, 58—61, 64 S.Ct. 413, 416, 417—419, 88 L.Ed. 534, 150 A.L.R. 810. No series of cases contributed more to the feeling that the federal courts abused their equity jurisdiction than those involving employees of railroads in equity receivership. See, e.g., 1 Gresham, Life of Walter Quintin Gresham, cc. XXIII to XXV; Gregory, Labor and the Law, 95—97; Nelles, A Strike and Its Legal Consequences—An Examination of the Receivership Precedent for the Labor Injunction (1931) 40 Yale L.J. 507, passim. If injunctions will not issue in disputes involving employees of railroads or other industries in receivership under operation by the federal courts, nothing relevant to the construction of the statute warrants the inference that Congress allowed the injunction to be available in disputes involving employees of plants in 'receivership' under operation of the Secretary of the Interior. 7 See especially the debates on a proposed amendment to the Smith-Connally Bill whereby Senator Connally sought to add the injunction as a remedy against violation of the Act. 'Mr. Connally. * * * The provision is limited to plants which the Government takes over. It would not change the Norris-LaGuardia Act in any respect, except in the one particular case. 'Mr. Langer. Mr. President, is it not true that unless section 5 is stricken from the bill that a portion of the Norris-LaGuardia Act will be repealed? 'Mr. Danaher. It would certainly be overridden; * * *.' (Emphasis supplied.) 89 Cong.Rec. 3988—89. See also the statements of Senators Taft, Vandenberg, and Wagner, and compare those of Senators Revercomb and Barkley; and see the colloquy between Senators Connally and Vandenberg, Id. at 3906, quoted infra note 10. 8 57 Stat. 163, 165—66, 50 U.S.C.App. § 1506(b), 50 U.S.C.A.Appendix, § 1506(b). 9 S.Rep. No. 147, 78th Cong., 1st Sess. 10 89 Cong.Rec. 3809. And see p. 3906: 'Mr. Vandenberg. * * * 'I am very anxious that there shall be additional statutory protection to the uninterrupted production of war necessities, but I am wondering whether in order to achieve that purpose it is necessary for me to impinge upon a very profound hostility I have always had to the use of injunctions in labor disputes. I voted for the original Norris-LaGuardia Act, and I have always felt that one of the most useful things we ever did, not only as a matter of fair play, but in respect to the status of the courts was substantially to separate from court jurisdiction the responsibility of, in effect, umpiring labor disputes. 'What I wish to ask the able Senator from Texas, if I may, is this: In his proposal, on page 4, it is provided that any person who willfully violates any provision of the act is to be guilty of a felony, and subject to a fine or imprisonment. Is not that a conclusive penalty? Is it necessary in addition to go back into all the old injunctive process in connection with labor disputes? 'Mr. Connally. That is not a legal inquiry really. Of course, it might be that we could get along without the provision. Like the Senator, I voted for the Norris-LaGuardia Act, and I favored the policy embodied therein. This provision, however, applies only to plants taken over by the Government. It seems to me that if the Government is to operate a plant, it should have the widest and the fullest authority to operate it as it wants to do and to prevent interruption. Therefore, because of the attitude of some who were interested in the bill, I inserted section 5. I do not think the bill would be very seriously crippled if it were eliminated, but I think it is improved by its remaining in. I do not think it would be fatal to strike out that provision, but I hope that will not be done. 'Mr. Vandenberg. I thank the Senator for his frank statement. When the Government has taken over the operation of a plant and it becomes in essence a Government operation, it is rather difficult to resist the argument that the Government should not be deprived of any instrumentality in the enforcement, virtually of its sovereignty. 'Mr. Connally. That is true. 'Mr. Vandenberg. Nevertheless, I apprehend that the very fact that the inju ctive process is restored in the Senator's bill is the reason why it appears in the additional amendment offered by the able Senator from Ohio, where, it seems to me, it becomes decidedly more offensive, using that word in the sense in which I have used it.' The reference is to an amendment proposed by Senator Taft authorizing injunctions in any circuit court of appeals at the request of the Attorney General in case of failure to obey orders of the War Labor Board, or whenever 'operations are hindered or reduced by lockout, strike, or otherwise'. This applied apparently to plants in private operation. 89 Cong.Rec. 3897—98. Compare the Bill passed by the House, note 14. 11 89 Cong.Rec. 3907, 3988—89. 12 Id. at 3989. 13 Id. at 3993. 14 Compare § 4(b) and (c) with § 12(a) and (b), 89 Cong.Rec. 5382—83. For the earlier seizure provisions see 54 Stat. 885, 892, 50 U.S.C.App. § 309, 50 U.S.C.A.Appendix, § 309. 15 See Conference Report on S. 796, H.R. No. 531, 78th Cong., 1st Sess. 16 89 Cong.Rec. 5754. The Senators mentioned by Mr. Connally were the managers on the part of the Senate of the bill in conference. 17 H.R. 6578, 79th Cong., 2d Sess. 18 Cong.Rec. 6166. 19 See, particularly, the statements of Senator Mead (p. 6171), Senator Morse (p. 6169), Senator Pepper (pp. 6169, 6170), Senator Wagner (p. 6170), Senator Wheeler (p. 6172), Senator Barkley (p. 6175), Senator Fullbright (p. 6171). 20 Senator Connally said: 'Mr. Lewis appeared before the Truman Committee 3 or 4 weeks ago. I happen to be a member of that committee, and when he said he did not regard his no-strike agreement as binding * * * I determined then that if I could get this bill before the Senate, I was going to bring it up and press it in order that if he did disregard the agreement, the President or the Government of the United States would have a weapon with which to meet the threat and the danger.' 89 Cong.Rec. 3886. See also H.Rep.No. 440, 78th Cong., 1st Sess., p. 6. The references to the coal situation in the debates are innumerable. See, e.g., 89 Cong.Rec. 3767, 3886, 3888, 3889, 3900—01. 1 An analogy is a taking by the Government of a leasehold interest in property in whole or in part. See United States v. Petty Motor Co., 327 U.S. 372, 66 S.Ct. 372. 2 Section 9 of the Selective Service Act, 54 Stat. 892, 50 U.S.C.App. § 309, 50 U.S.C.A.Appendix, § 309, granted power 'to take immediate possession of any * * * plant * * * and through the appropriate branch, bureau, or department of the Army or Navy to manufacture therein such product * * * as may be required * * *.' And it provides for payment: 'The compensation to be paid * * * as rental for use of any manufacturing plant while used by the United States, shall be fair and just * * *.' Section 3 of the War Labor Disputes Act, 57 Stat. 164, 50 U.S.C.App.Supp. V § 309, 50 U.S.C.A.Appendix, § 309, extended this authority to include power to take immediate possession of any 'mine * * * equipped for the manufacture, production, or mining of any articles or materials which may be required for the war effort * * * whenever the President finds * * * and proclaims that there is an interruption of the operation of such * * * mine * * * as a result of a strike or other labor disturbance * * * and that the exercise of such power and authority is necessary to insure the operation of such * * * mine * * * in the interest of the war effort.' 3 See e.g., Cooke v. United States, 267 U.S. 517, 534—537, 45 S.Ct. 390, 394, 395, 69 L.Ed. 767; Fox, Contempt of Court (1927) B; Beale, Contempt of Court, 21 Harv.L.Rev. (1908) 161, 169—170. 4 'As early as the time of Richard III it was said that the chancellor of England compels a party against whom an order is issued by imprisonment; (2 R. III, 9, pl. 22) and a little later it was said in the chancery that 'a decree does not bind the right, but only binds the person to obedience, so that if the party will not obey, then the chancellor may commit him to prison till he obey, and that it is all the chancellor can do.' (27 H. VIII, 15.) This imprisonment was by no means a punishment, but was merely to secure obedience to the writ of the king. Down to within a century it was very doubtful if the chancellor could under any circumstances inflict punishment for disobedience of a decree. If the decree commanded the defendant to transfer property, the chancellor acquired power as early as the sixteenth century to sequester the property as security for performance; but if the decree were for the doing of any other act, or were a decree for an injunction, the chancellor was helpless if he could not compel obedience by imprisonment. * * * In any case the contempt of a defendant who had violated a decree in chancery could be purged by doing the act commanded and paying costs; or, if his disobedience had been the violation of a negative injunction, he could purge himself of contempt by undoing what he had done and paying costs.' Beale, supra. 5 'In the case of contempt in violating an order or decree of a court of equity, we have an entirely different problem. * * * If the court limits itself to its proper action in such cases, namely, process of imprisonment merely to prevent the violation of the decree, and if the imprisonment is to cease as soon as the danger of disobedience has ceased, the jury, hich is thought necessary to pass upon the desert of a defendant to suffer punishment is not required. * * * So far, therefore, as popular clamor demands a trial by jury in such case, it seems to go beyond the requirements of justice; and the statutes which commit the trial of questions of fact in such process of a jury are not likely permanently to prove satisfactory. This statement, however, is to be limited to cases of merely preventive imprisonment. Where the court inflicts a definite term of imprisonment by way of punishment for the violation of its orders, the case does not differ, it would seem, from the case of criminal contempt out of court, and regular process and trial by jury should be required.' Id. 173, 174. 6 See also In re Debs, 158 U.S. 564, 15 S.Ct. 900, 39 L.Ed. 1092; Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 31 S.Ct. 492, 55 L.Ed. 797, 34 L.R.A., N.S., 874; Gompers v. United States, 233 U.S. 604, 610, 611, 34 S.Ct. 693, 695, 696, 58 L.Ed. 1115; Ex parte Grossman, 267 U.S. 87, 45 S.Ct. 332, 69 L.Ed. 527, 38 A.L.R. 131; Ex parte Hudgings, 249 U.S. 378, 383, 39 S.Ct. 337, 339, 63 L.Ed. 656, 11 A.L.R. 333; Michaelson v. United States, 266 U.S. 42, 45 S.Ct. 18, 69 L.Ed. 162, 35 A.L.R. 451; Blackmer v. United States, 284 U.S. 421, 440, 52 S.Ct. 252, 256, 76 L.Ed. 375; Nye v. United States, 313 U.S. 33, 61 S.Ct. 810, 85 L.Ed. 1172; Bridges v. State of California, 314 U.S. 252, 264, 62 S.Ct. 190, 194, 86 L.Ed. 192, 159 A.L.R. 1346; Pendergast v. United States, 317 U.S. 412, 63 S.Ct. 268, 87 L.Ed. 368; In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500. Frankfurter and Landis, Power of Congress Over Procedure in Criminal Contempts in Inferior Federal Courts, 37 Harv.L.Rev. 1010, 1043—1045 (1924) and authorities there collected; Nelles and King, Contempt by Publications in the United States, 28 Col.L.Rev. 401 (1928). 1 'Great cases, like hard cases, make bad law. For great cases are called great, not by reason of their real importance in shaping the law of the future, but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment. These immediate interests exercise a kind of hydraulic pressure which makes what previously was clear seem doubtful, and before which even well settled principles of law will bend.' Holmes, J., dissenting, in Northern Securities Co. v. United States, 193 U.S. 197, 400—401, 24 S.Ct. 436, 468, 48 L.Ed. 679. 2 'Provided, That whenever any such plant, mine, or facility has been or is hereafter so taken by reason of a strike, lock-out, threatened strike, threatened lock-out, work stoppage, or other cause, such plant, mine, or facility shall be returned to the owners thereof as soon as practicable, but in no event more than sixty days after the restoration of the productive efficiency thereof prevailing prior to the taking of possession thereof * * *.' (Emphasis added.) War Labor Disputes Act § 3, Act of June 25, 1943, 57 Stat. 163, 50 U.S.C.A.pp. §§ 1501, 1503, 50 U.S.C.A.Appendix, §§ 1501, 1503. 3 'Sec. 6(a) Whenever any plant, mine, or facility is in the possession of the United States, it shall be unlawful for any person (1) to coerce, instigate, induce, conspire with, or encourage any person, to interfere, by lock-out, strike, slow-down, or other interruption, with the operation of such plant, mine, or facility, or (2) to aid any such lock-out, strike, slow-down, or other interruption interfering with the operati n of such plant, mine, or facility by giving direction or guidance in the conduct of such interruption, or by providing funds for the conduct or direction thereof or for the payment of strike, unemployment, or other benefits to those participating therein. No individual shall be deemed to have violated the provisions of this section by reason only of his having ceased work or having refused to continue to work or to accept employment. '(b) Any person who willfully violates any provision of this section shall be subject to a fine of not more than $5,000, or to imprisonment for not more than one year, or both.' War Labor Disputes Act of 1943, § 6. 4 The issue is not avoided, nor is the effect of final legislative rejection nullified, by the easy device of resting the power said to exist upon common law rules of statutory construction which, if otherwise pertinent, were in the very teeth of Congress' positive refusal to confer the power after the fullest and most attentive consideration. That device only conceals the true issue. See also note 11. 5 Seizure witho t such ultimate control, of course, would have been only one-sided, halfway seizure, operative only against management and owners. But seizure with such control did not require or mean that the control was to be exercised by labor injunctions. There was, and is, no inconsistency whatever between conferring the one power and denying the other. For this is exactly what Congress has done with reference to all plants not subject to the seizure power. Besides imputing to Congress the purpose to do with one hand what the other denied was being done, the identification of these two very distinct things serves only to confuse and make obscure the real question. This is simply whether Congress intended to abrogate for seized plants or to continue in force the established policy against labor injunctions as a method of exercising the powers of ultimate control conferred upon the Government. 6 Section 2(c) excludes carriers as defined in Title I of the Railway Labor Act, 45 U.S.C. § 151, 45 U.S.C.A. § 151, or carriers by air as subject to Title II of the Railway Labor Act, 45 U.S.C. § 181, 45 U.S.C.A. § 181. 7 The available statistics speak in terms of 'strikes' for 1943 and 'work stoppages arising from labor-management disputes' for 1945 and 1946. For 1943, 13,500,529 man-days were lost through strikes. For 1945, 38,025,000 man-days were lost through work stoppages, and 113,000,000 man-days were so lost in 1946. In 1943 there were 3,752 strikes. In 1945 there were 4,750 work stoppages and in 1946, 4,700. See Strikes in 1943, Bull. No. 782, U.S. Bureau of Labor Statistics; Work Stoppages Caused by Labor-Management Disputes in 1945, Bull. No. 878, U.S. Bureau of Labor Statistics; Review of Labor-Management Disputes, 1946, U.S. Bureau of Labor Statistics Release, January 11, 1947. 8 See note 7. 9 See Hearings before the Committee on Military Affairs of the House of Representatives on S. 796, 78th Cong., 1st Sess., 25 26. 'The War Labor Board was set up to deal with industrial relations. While this Board may not have a perfect record, it has a very good record to its credit, particularly when we consider the great problems it must deal with.' 89 Cong.Rec. 5339. The number of War Labor Board cases resulting in plant seizures by the United States, so far as statistics are available, is as follows: Four cases from June 25, 1943, the date of the passage of the War Labor Disputes Act, to December 31, 1943; seventeen cases from January 1, 1944, to December 31, 1944; fifteen cases from January 1, 1945, to August, 1945. We are informed that in no instance of seizure, except the one under consideration, was a labor injunction issued at the behest of the Government. 10 Section 3 provides: 'Provided further, That possession of any plant, mine, or facility shall not be taken under authority of this section after the termination of hostilities in the present war, as proclaimed by the President, or after the termination of the War Labor Disputes Act; and the authority to operate any such plant, mine, or facility under the provisions of this section shall terminate at the end of six months after the termination of such hostilities as so proclaimed.' It may be noted that on December 31, 1946, the President by proclamation, No. 2714, announced the end of hostilities. 12 Fed.Reg. 1. The emergency powers conferred by the Act terminate six months thereafter. 11 If general common law rules of statutory construction were appropriate for criteria to determine such issues as this case presents for the meaning of the Act, certainly that rule would be equally applicable with any other which dictates that when a statute provides specific remedies adequate for enforcing its provisions those remedies alone are deemed to be made available. But in view of the legislative and other history, this case is not one to be turned, in my opinion, by such vague, conveniently selective and often, as here, con radictory canons of construction. 12 It is this sanction upon which Congress has chosen to rely ultimately, for instance, in the Railway Labor Acts, though provision is made for preliminary resort to processes of conciliation, mediation and voluntary arbitration before the use of ultimate economic force by strike or lockout, when the sanction of public opinion comes chiefly into play. See Brotherhood of Railway Trainmen, Enterprise Lodge, No. 27 v. Toledo, Peoria & W.R.R., 321 U.S. 50, 64 S.Ct. 413, 88 L.Ed. 534, 150 A.L.R. 810; General Committee of Adjustment of Brotherhood of Locomotive Engineers for Missouri-Kansas-Texas R. Co. v. Missouri-Kansas-Texas R. Co., 320 U.S. 323, 64 S.Ct. 146, 88 L.Ed. 76. On the whole that policy and the sanctions provided have worked successfully to eliminate stoppages in railway transportation. And as of June, 1943, it may be fairly assumed that Congress, in declining to authorize the issuance of labor injunctions, was conscious of and chose to rely upon this accepted sanction together with the specific ones then conferred by the War Labor Disputes Act. 13 More especially when account is taken of the vast liberty, called 'discretion,' which courts are said to have, and in this case are held to have, in fixing punishments for contempts. But see Part IV. 14 'The restraining order and the preliminary injunction invoked in labor disputes reveal the most crucial points of legal maladjustment. Temporary injunction relief without notice, or, if upon notice, relying upon dubious affidavits, serves the important function of staying defendant's conduct regardless of the ultimate justification of such restraint. The preliminary proceedings, in other words, make the issue of final relief a practical nullity. * * * The suspension of strike activities, even temporarily, may defeat the strike for practical purposes and foredoom its resumption, even if the injunction is later lifted.' Frankfurter and Greene, The Labor Injunction (1930) 200—201. 'Time is the essence of the strike. Keeping the injunction alive by dilatory tactics blunts the edge of the only effective instrument that labor possesses, namely, the strike. 'The bill now before us makes it well-nigh impossible to secure a restraining order except under the well-defined and limited conditions set out in sections 7 and 8.' 75 Cong.Rec. 5489. See also People ex rel. Sandnes v. Sheriff of King's County, 164 Misc. 355, 299 N.Y.Supp. 9, 16. 15 See note 14. Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117, presents another clear illustration of the type of right which would be wholly nullified by g neral application of the alleged broad conception of the Shipp doctrine. There the Circuit Court, in contravention of explicit acts of Congress as this Court found, had ordered Fisk to submit to oral examination before trial in a removed civil cause, the examination to be before a justice of the court and according to procedure prescribed by state law for the state court from which the case was removed. Fisk refused to obey the order, standing upon the Circuit Court's lack of jurisdiction to enter it, was held in contempt for this, and fined $500 and ordered imprisoned until the fine was paid. He brought habeas corpus to secure release from the imprisonment thus imposed. This Court held void both the order for examination and the order of commitment, as beyond the Circuit Court's jurisdiction, and granted petitioner's release from custody. The Court said: 'Not only is no such power (of examination) conferred, but it is prohibited by the plain language and the equally plain purpose of the acts of Congress. * * * The Circuit Court was therefore without authority to make the orders for the examination of petitioner in this case, and equally without authority to enforce these orders by process for contempt.' Pages 724, 726 of 113 U.S., page 729 of 5 S.Ct. Had Fisk submitted, as Shipp is now said to require should be done, not only would the specific commands of Congress have been nullified. His right, secured by those commands, could never have been vindicated. The statutes would have been made dead letters. 16 Indeed at least one state court has held this result to follow and in his dissenting opinion in Re Sawyer, 124 U.S. 200, 224, 8 S.Ct. 482, 494, 31 L.Ed. 402, Harlan, J., stated this to be his view of the law (see however note 19), as apparently also it was of Waite, C.J.P. 223. See Reid v. Independent Union of All Workers, 200 Minn. 599, 275 N.W. 300, 120 A.L.R. 297 (certiorari), but see the dissenting opinion, 200 Minn. at page 612, 275 N.W. at page 306; Collateral Attack Upon Labor Injunctions Issued in Disregard of Anti-Injunction Statutes (1938) 47 Yale L.J. 1136; People ex r l. Sandnes v. Sheriff of Kings County, 164 Misc. 355, 299 N.Y.S. 9. 17 See Part IV. 18 Ibid. 19 Ex parte Rowland, 104 U.S. 604, 26 L.Ed. 861; Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117; In re Ayers, 123 U.S. 443, 507, 8 S.Ct. 164, 184, 31 L.Ed. 216; In re Sawyer, 124 U.S. 200, 8 S.Ct. 482, 31 L.Ed. 402; In re Burrus, 136 U.S. 586, 10 S.Ct. 850, 34 L.Ed. 500; Thomas v. Collins, 323 U.S. 516, 65 S.Ct. 315, 89 L.Ed. 430 (arising under state law). And see Ex parte Young, 209 U.S. 123, 143, cf. pp. 135, 139, 28 S.Ct. 441, 447, 52 L.Ed. 714, 13 L.R.A.,N.S., 932, 14 Ann.Cas. 764; collecting the authorities. In the Sawyer case, supra, the Court said: 'The case cannot be distinguished in principle from that of a judgment of the common bench in England in a criminal prosecution, which was coram non judice; or the case of a sentence passed by the circuit court of the United States upon a charge of an infamous crime, without a presentment, or indictment by a grand jury. Case of the Marshalsea, 5 Coke 68, 76 (10 Rep. 68, 76); Ex parte Wilson, 114 U.S. 417, 5 S.Ct. 935 (29 L.Ed. 89); Ex parte Bain, 121 U.S. 1, 7 S.Ct. 781 (30 L.Ed. 849).' 124 U.S. at page 221, 8 S.Ct. at page 493, 31 L.Ed. 402. Hardly can it be said that the Sawyer decision went on the ground that the question of jurisdiction to enter the order was not substantial, in view of the length and detail of the Court's opinion, which gave no hint of such a suggestion, and in view also of the fact that Field, J., concurred in a separate opinion and Waite, C.J., and Harlan, J., wrote separate dissents taking the position which the Court now accepts for this case. See note 16 supra. Harlan, J., however, receded from his view in Ex parte Young, supra, where he dissented on other grounds. 209 U.S. at pages 169, 174, 28 S.Ct. at pages 457, 460, 52 L.Ed. 714, 13 L.R.A., N.S., 932, 14 Ann.Cas. 764. 20 See note 19. 21 In Ex parte Rewland, 104 U.S. 604, 26 L.Ed. 861, the county commissioners' disobedience of an order commanding them to collect a certain tax did not moot the controversy, which was whether the judgment debtor, by proceeding against the proper county official, the tax collector, could satisfy its judgment by forcing collection of the tax; and, the order being held void, their action in disobeying it was held not to be contempt. The disobedience of the petitioner in Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117, deprived the plaintiff in the suit against him of the use of his testimony but did not defeat this suit or the ability of the courts to decide whether he could be forced to submit to examination. See note 19, supra. In Ex parte Sawyer, 124 U.S. 200, 8 S.Ct. 482, 31 L.Ed. 402, the refusal of the city officials to obey an order enjoining them from removing a police judge did not vitiate judicial power to decide the issue whether the city officials possessed the removal power. The controversy remained and, as this Court pointed out, it was determinable by mandamus or quo warranto. This Court held the order invalid and the officials not guilty of contempt. In Ex parte Burrus, 136 U.S. 586, 10 S.Ct. 850, 34 L.Ed. 500, the refusal of the grandparents to give up the child upon order issued by a federal court did not destroy the power of the court, which had already been exercised, though improperly the Court held, to determine whether the child was properly in their custody or in the custody of the father. As the contempt order was held void, habeas corpus was granted. Moreover in none of these cases did the disobedience destroy the jurisdiction of the trial and appellate courts to determine jurisdiction. 22 See note 24. The order allowing appeal directed 'that all proceedings be stayed and the custody of the said appellant be retained during this appeal.' 23 See note 24. The Court was reviewing its own order, the one that was violated. 24 The statement was made in response to counsel's contention that the order allowing the appeal was void and therefore would not support a conviction for contempt. The Court rejected the premise not the conclusion. The basis of counsel's contention was that the Circuit Court lacked jurisdiction and therefore that this Court also lacked jurisdiction. His brief stated: 'The only question, therefore, is whether Johnson's proceeding in habeas corpus in the Circuit Court did or did not in fact constitute a 'case that involves the construction or application of the Constitution of the United States.' If it did, this Court had appellate jurisdiction of it and should proceed to inquire whether its order has been disobeyed. If it did not, this Court had no jurisdiction of it, and should now so hold for the purposes of this proceeding. . . .' (Emphasis added.) And elsewhere the brief stated: 'We assume that it will hardly be contended that the mere allowance of an appeal is sufficient to give the court jurisdiction of a case which from its nature is not appealable. Such action is pro forma only, and as it is necessarily had in every such case the jurisdiction of the court would always be established by an ex parte order.' In answer to these arguments the Government's brief said: 'Certainly no one would challenge the jurisdiction of this Court if the Circuit Court had jurisdiction, and accordingly the defendants here deny the jurisdiction of this court simply as a corollary to their contention that the Circuit Court did not possess jurisdiction. But the jurisdiction of this court is not dependent upon contentions, and it has jurisdiction to take the case and retain it for final determination whether it turns out that the Circuit Court has jurisdiction or not.' 25 See note 24. No argument was made that even if the Circuit Court had jurisdiction this Court did not. Thus, the statement in the opinion 'But even if the circuit court had no jurisdiction to entertain Johnson's petition, and if this court had no jurisdiction of the appeal, this court, and this court alone, could decide that such was the law,' 203 U.S. at page 573, 27 S.Ct. at page 166, 51 L.Ed. 319, 8 Ann.Cas. 265, means 'But even if the Circuit Court had no jurisdiction to entertain Johnson's petition and if for that reason this Court had no jurisdiction of the appeal,' etc. 26 It has been held that habeas corpus will not lie where the disobedience was to a lawful, but erroneous, order of a court. Ex parte Kearney, 7 Wheat. 38, 5 L.Ed. 391. See also Locke v. United States, 5 Cir., 75 F.2d 157, 159: 'Error must be corrected by appeal, and cannot be tested by disobedience. * * * Willful disobedience of an injunction, however erroneous, issued by a court having jurisdiction while such injunction is in force unreversed constitutes contempt of court.' And it has been said that if an injunction is reversed on appeal on grounds other than 'jurisdiction,' the violator may nevertheless be punished for criminal, though not for civil, contempt. Worden v. Searls, 121 U.S. 14, 7 S.Ct. 814, 30 L.Ed. 853; Salvage Process Corporation v. Acme Tank Cleaning Process Corporation, 2 Cir., 86 F.2d 727. 27 To be distinguished are cases in which Congress provides an adequate but limited opportunity for challenging the validity of administrative or other orders, but forecloses such opportunity when it is not taken as prescribed. See Yakus v. United States, 321 U.S. 414, cf. dissenting opinion, page 460, 64 S.Ct. 660, 684, 88 L.Ed. 834. See also United States v. Ruzicka, 329 U.S. 287, 67 S.Ct. 207; Falbo v. United States, 320 U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305; Estep v. United States, 327 U.S. 114, 66 S.Ct. 423; Gibson v. United States, 329 U.S. 338, 67 S.Ct. 301. That is very different from affording no opportunity whatever except by obedience. 28 Yakus v. United States, 321 U.S. 414, dissenting opinion, at page 479ff, S.Ct. 660, at page 693, 88 L.Ed. 834. 29 Thus, in some civil law countries damages, as well as other penalties, are assessed in a criminal proceeding. See Schwenk, Criminal Codification and General Principles of Criminal Law in Argentina, Mexico, Chile and the United States: A Comparative Study (1942) 4 La.L.Rev. 351, 373—374; Goirand and Thompson, The French Judicial System and Procedure in French Courts (1919) 14. See also Esmein, A History of Continental Criminal Procedure (1913) 429—430. 30 Upon the authorities, the following procedural provisions of the Bill of Rights, at least, would seem to apply to criminal contempt: The provision against double jeopardy, see In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500; the provision against self-incrimination, Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 444, 31 S.Ct. 492, 499, 55 L.Ed. 797, 34 L.R.A.,N.S., 874; the provision for due process insofar as it necessitates 'suitable notice and adequate opportunity to appear and to be heard,' Blackmer v. United States, 284 U.S. 421, 440, 52 S.Ct. 252, 256, 76 L.Ed. 375; and, although the Sixth Amendment protections have been said not to apply as such to criminal contempts, Myers v. United States, 264 U.S. 95, 104, 105, 44 S.Ct. 272, 273, 68 L.Ed. 577; Blackmer v. United States, 284 U.S. at page 440, 52 S.Ct. at page 256, 76 L.Ed. 375, but see text infra, doubtless at least the provisions for 'a speedy and public trial,' for 'compulsory process' and for the assistance of counsel, see Cooke v. United States, 267 U.S. 517, 537, 45 S.Ct. 390, 395, 69 L.Ed. 767, are implied in the due process provision of the Fifth Amendment. And it has been said that the protection against cruel and unusual punishments in the Eighth Amendment applies to criminal contempt, United States ex rel. Brown v. Lederer, 7 Cir., 140 F.2d 136, 139. There are also protections not expressly included in the Bill of Rights which apply in criminal contempt, e.g., that the defendant is presumed to be innocent and must be proved guilty beyond a reasonable doubt. Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 444, 31 S.Ct. 492, 499, 55 L.Ed. 797, 34 L.R.A., N.S., 874. And see Ex parte Hudgings, 249 U.S. 378, 383, 39 S.Ct. 337, 339, 63 L.Ed. 656, 11 A.L.R. 333: 'Existing within the limits of and sanctioned by the Constitution, the power to punish for contempt committed in the presence of the court is not controlled as to modes of accusation and methods of trial generally safeguarding the rights of the citizen. This, however, expresses no purpose to exempt judicial authority from constitutional limitations, since its great and only purpose is to secure judicial authority from obstruction in the performance of its duties to the end that means appropriate for the preservation and enforcement of the Constitution may be secured.' 31 See Part IV. 32 The confusion, at least as to the matter of indictments and jury trial, cf. note 33, has its origin in historical error exposed in Fox, The History of Contempt of Court (1927), and Frankfurter and Landis, Power of Congress over Procedure in 'Inferior' Federal Courts—A Study in Separation of Powers (1924) 37 Harv.L.Rev. 1010. 'Down to the early part of the eighteenth century cases of contempt even in and about the common-law courts when not committed by persons officially connected with the court were dealt with by the ordinary course of law, i.e. tried by jury, except when the offender confessed or when the offense was committed 'in the actual view of the court'.' Frankfurter and Landis, supra, at 1042. Until 1720 'there is no instance in the common-law precedents of punishment otherwise than after trial in the ordinary course and not by summary process.' Id., 1046. However, Wilmot, J., in 1765, influenced by Star Chamber procedure and precedents, although the Star Chamber had been abolished in 1641, stated that it was 'immemorial usage' to punish all contempts summarily. Almon's Case, Wilmot's Notes, p. 243. And although this opinion was not published until thirty-seven years later, 'there is ample evidence that as a result of private communication between Wilmot and Blackstone, Wilmot's views of 1765 found their way 'both in phrase and matter' into the four volumes of the famous Commentaries published in 1769. * * *' Frankfurter and Landis, supra, at 1046, n, 128. Wilmot's error 'has bedevilled the law of contempt both in England and in this country ever since.' Id. 1047. This history furnishes a slender thread indeed for thinking that the Constitution makers had no purpose to apply the usual procedural protections to criminal contempts. '* * * it is very doubtful whether at the date of the Constitution that doctrine (of Almon's Case, supra) did form part of the common law adopted by the United States. Mr. Justice Wilmot's undelivered judgment lay concealed until the year 1802, and, so far as is known, was not cited in an English Court until the hearing of Burdett v. Abbott in 1811. It was first cited with approval from the Bench in 1821, and was not therefore adopted as the common law of England until after the establishment of the American Constitution.' Fox, supra, at 207. 33 See note 30. It has been ruled consistently, however, that the rights to have the proceeding begun by indictment, Amend. V, and tried by jury, Amend. VI, do not apply. E.g., Eilenberger v. District Court, 134 U.S. 31, 10 S.Ct. 424, 33 L.Ed. 801; Gompers v. United States, 233 U.S. 604, 34 S.Ct. 693, 58 L.Ed. 1115; In re Debs, 158 U.S. 564, 15 S.Ct. 900, 39 L.Ed. 1092. 34 Defendants have not argued either in the District Court or in this Court that they are constitutionally entitled to a jury trial. And they expressly waived in open court whatever rights they had to an advisory jury. On the other hand if, as I think, the Norris-LaGuardia Act's provisions have been adopted for this and like cases, cf. Part I, § II of that Act of its own force secured the right of trial by jury and forbade waiver otherwise than in writing. Federal Rules of Criminal Procedure, Rule 23(a). 35 In civil cases under Rule 73 appeal is taken by filing notice thereof 'within the time prescribed by law,' and generally, though there are exceptions, the time is three months. 28 U.S.C. § 230, 28 U.S.C.A. § 230; Mosier v. Federal Reserve Bank, 2 Cir., 132 F.2d 710, 712. In criminal cases the Federal Rules now allow taking an appeal by filing notice of appeal as in civil cases. But an appeal must be taken by a defendant within 10 days after entry of judgment or after denial of motion for new trial. Rule 37(a)(2). In Nye v. United States, 313 U.S. 33, 61 S.Ct. 810, 85 L.Ed. 1172, it was held that 28 U.S.C. § 230, 28 U.S.C.A. § 230, rather than the Criminal Appeals Rules governed timeliness in a criminal contempt appeal. But the new Criminal Rules would seem to apply to criminal contempts. Moore v. United States, 10 Cir., 150 F.2d 323, 324. See Rules 42 and 54; 55 Stat. 779, 18 U.S.C. § 689, 18 U.S.C.A. § 689. On certiorari, if the Rules of Criminal Procedure govern, there is also a difference. In civil cases the time for petitioning for certiorari is three months. In criminal cases the petition must be filed within thirty days after entry of judgment. Rule 37(b)(2). Compare Nye v. United States, supra, 313 U.S. at page 42, n. 6, 61 S.Ct. at page 812, 813, as to the law prior to the new Criminal Rules. The largest present difference between appeals in civil and criminal contempts is that, 'except in connection with an appeal from a final judgment or decree, a party to a suit may not review upon appeal an order fining or imprisoning him for the commission of a civil contempt.' Fox v. Capital Co., 299 U.S. 105, 107, 57 S.Ct. 57, 58, 81 L.Ed. 67, and cases cited. Compare Lamb v. Cramer, 285 U.S. 217, 52 S.Ct. 315, 7 L.Ed. 715. On the other hand, if the contempt is criminal, it may be directly reviewed. Union Tool Co. v. Wilson, 259 U.S. 107, 42 S.Ct. 427, 66 L.Ed. 848. It has been held that where the contempt is both civil and criminal, the criminal procedure governs for purposes of review so that there may be immediate review of both the part that is civil and the part that is criminal. Union Tool Co. v. Wilson, supra, 259 U.S. at page 111, 42 S.Ct. at page 428, 529; Nye v. United States, 313 U.S. at pages 42—43, 61 S.Ct. at pages 812, 813. 36 There as here the contempt proceedings were entitled and conducted as collateral to civil litigation between the parties and the order for contempt had been grounded upon disobedience to a restraining order issued in the course of the litigation, conduct which would have sustained either civil or criminal penalty. The Court of Appeals had held the proceeding criminal. But this Court held it to be civil since it was collateral, not an independent suit at law to vindicate the public interest. Hence, it followed that the criminal penalty could not stand. Neither the Norris-LaGuardia Act nor the War Labor Disputes Act was then in force. 37 Throughout the opinion the Court insisted the two forms of relief are altogether incompatible not only for interchangeability between the two types of proceeding, but necessarily for commingling in indistinguishable conglomeration. Imprisonment as penalty for criminal contempt could be imposed for fixed terms, but in civil contempt this could not be done, the court's power being limited to remedial or coercive imprisonment, that is, until the person convicted should comply with the court's order. So also with fines, which in civil contempt can be no more in amount than is commensurate with the injury inflicted or is necessary to secure compliance and must be contingent, whereas the limitation requiring correlation to the amount of injury does not apply to fines in criminal proceedings. 221 U.S. at pages 4 2—444, 449, 31 S.Ct. at pages 498, 499, 501. The same distinction applies as to the payment of costs. 221 U.S. at page 447, 31 S.Ct. at page 500. See Part IV. As will appear, this distinction is of paramount importance in this case. And so it was in the Gompers case, for the main cause had been settled, and the Court held this required not only reversal, but dismissal of the contempt proceeding, which would not have been true in one for criminal contempt. 221 U.S. at pages 451—452, 31 S.Ct. at page 502. 38 As with the factor of relief, the opinion throughout uses alternative, not conjunctive, language concerning the two types of proceedings. Civil contempts, it said, 'are between the original parties, and are instituted and tried as a part of the main cause. But, on the other hand, proceedings at law for criminal contempt are between the public and the defendant, and are not a part of the original cause.' 221 U.S. at page 445, 31 S.Ct. at page 499. See also 221 U.S. at page 446, 31 S.Ct. at page 499. 39 For example, most frequently perhaps the methods and times for securing appellate review, which at the time of the Gompers decision included whether the case could be reviewed by writ of error or appeal. 221 U.S. at page 444, 31 S.Ct. at page 499; cf. Bessette v. W. B. Conkey Co., 194 U.S. 324, 24 S.Ct. 665, 48 L.Ed. 997. See note 40; see also note 35. 40 'The question as to the character of such proceedings has generally been raised, in the appellate court, to determine whether the case could be reviewed by writ of error or on appeal. Bessette v. W. B. Conkey Co., 194 U.S. 324, 24 S.Ct. 665, 48 L.Ed. 997. But it may involve much more than mere matters of practice. For, notwithstanding the many elements of similarity in procedure and in punishment, there are some differences between the two classes of proceedings which involve substantial rights and constitutional privileges. Without deciding what may be the rule in civil contempt, it is certain that in proceedings for criminal contempt the defendant is presumed to be innocent, he must be proved to be guilty beyond a reasonable doubt, and cannot be compelled to testify against himself. Bond v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746; United States v. Jose, C.C., 63 F. 951; State v. Davis, 50 W.Va. 100, 40 S.E. 331; King v. Ohio & M. Ry. Co., Fed.Cas.No. 7,800, 7 Biss. 529; Sabin v. Fogarty, C.C., 70 F. 482; Drakeford v. Adams, 98 Ga. (722), 724, 25 S.E. 833.' 221 U.S. at page 444, 31 S.Ct. at page 499. 41 See note 40. 42 See notes 35, 37, 39. 43 Cf. note 40. 44 'A criminal contempt except as provided in subdivision (a) of this rule shall be prosecuted on notice. The notice shall state the time and place of hearing, allowing a reasonable time for the preparation of the defense, and shall state the essential facts constituting the criminal contempt charged and describe it as such. The notice shall be given orally by the judge in open court in the presence of the defendant or, on application of the United States attorney or of an attorney appointed by the court for that purpose, by an order to show cause or an order of arrest. * * *' Rule 42(b), Federal Rules of Criminal Procedure. 45 Judge L. Hand's opinion in the McCann case reads in part as follows: '* * * The respondent will often find it hard to tell whether the prosecution is not a remedial suit, undertaken on behalf of the client. This can be made plain if the judge enters an order in limine, directing the attorney to prosecute the respondent criminally on behalf of the court, and if the papers supporting the process contain a copy of this order or allege its contents correctly. We think that unless this is done the prosecution must be deemed to be civil and will support no other than a remedial punishment. Nothing of the sort was done here, and the order must be reversed. * * * (Emphasis added.) 80 F.2d 211, 214—215. The possibilities of confusion are multiplied when the contempt is instituted in a suit in which the United States is a party, since the United States may bring civil as fell as criminal contempt proceedings. McCrone v. United States, 307 U.S. 61, 59 S.Ct. 685, 83 L.Ed. 1108. 46 The Court said: 'Inasmuch, therefore, as proceedings for civil contempt are a part of the original cause, the weight of authority is to the effect that they should be entitled therein. But the practice has hitherto been so unsettled in this respect that we do not now treat it as controlling, but only as a fact to be considered along with others, as was done in Worden v. Searls, 121 U.S. (14), 25, 7 S.Ct. 814, 30 L.Ed. (853), 857, in determining a similar question.' 221 U.S. at page 446, 31 S.Ct. at page 500. 47 'In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining Witnesses in his favor, and to have the Assistance of Counsel for his defence.' U.S.Const. Amend. VI. (Emphasis added.) 48 Not only in the ruling that reversal was required for the imposition of the criminal penalty in the proceeding held to be civil, but also in the order for dismissal on the ground that the cause, including the contempt phase, had become moot. See note 37 supra. 49 Cf. In re Michael, 326 U.S. 224, 227, 66 S.Ct. 78, 79; dissenting opinion of Holmes, J., in Toledo Newspaper Publishing Co. v. United States, 247 U.S. 402, 422, 38 S.Ct. 560, 565, 62 L.Ed. 1186; Michaelson v. United States, 266 U.S. 42, 67, 45 S.Ct. 18, 20, 69 L.Ed. 162, 35 A.L.R. 451: 'The only substantial difference between such a proceeding as we have here (criminal contempt), and a criminal prosecution by indictment or information is that in the latter the act complained of is the violation of a law and in the former the violation of a decree. In the case of the latter, the accused has a constitutional right of trial by jury; while in the former he has not.' 50 See Ex parte Hudgings, 249 U.S. 378, 383, 39 S.Ct. 337, 339, 63 L.Ed. 656, 11 A.L.R. 333, quoted in note 30 supra. 51 Blackner v. United States, 284 U.S. 421, 440, 52 S.Ct. 252, 255, 76 L.Ed. 375. The ruling was first made in Myers v. United States, 264 U.S. 95, 104, 105, 44 S.Ct. 272, 273, 68 L.Ed. 577, in connection with a statutory venue problem relating to judicial districts and divisions which is correlative constitutionally to the right of jury trial. The ruling was reasserted in Ex parte Grossman, 267 U.S. 87, 117, 45 S.Ct. 332, 335, 69 L.Ed. 527, 38 A.L.R. 131, which held that the pardoning power extended to criminal contempts. In the Grossman case the statement was obviously dictum. In the Myers case it was dictum as to all guaranties except perhaps that of trial in the district where the crime was committed, a guaranty as stated above correlated to jury trial. 52 As stated in note 37, coercive relief is civil in character, Gompers v. Buck's Stove & R. Co., 221 U.S. 418, 442, 31 S.Ct. 492, 498, 55 L.Ed. 797, 34 L.R.A.,N.S., 874, the decree being when imprisonment is imposed that the defendant stand committed unless and until he performs the act required by the court's order. When this is done the sentence is discharged, for the defendant carries the keys of his prison in his own pocket. In re Nevitt, 8 Cir., 117 F. 448, 461. The limitation is a corollary of the civil character of the remedy. This forbids imposition of fixed-term sentences for coercive purposes. Gompers v. Buck's Stove & R. Co., supra, although they have 'incidental' coercive effects. Id., 221 U.S. at page 443, 31 S.Ct. at page 498. The purpose and character of the relief, not its particular form, determine its limits. Id., 221 U.S. at page 443, 31 S.Ct. at page 498, citing Doyle v. London Guarantee & Accident Co., 204 U.S. 599, 605, 607, 27 S.Ct. 313, 314, 315, 51 L.Ed. 641. Hence, when a fine is used in substitution for coercive imprisonment, it also must be contingent, giving opportunity for compurgation. Unless this is done, the fine takes on punitive character. Doyle v. London Guarantee & Accident Co., supra. 53 It is in defining the nature and character of criminal penalties that legislative judgment and, within the authority it confers, the judgment of the trial court rather than appellate courts have the widest range. Legislative experience and judgment in this field therefore furnish a measure entitled to great and in some instances I think conclusive weight for consideration of the allowable range of punishment, as such, in criminal contempts where the penalty is undefined by statute. The only crime for which the amount of the fine has no maximum is treason, where the fine au horized is not less than $10,000. 18 U.S.C. § 2, 18 U.S.C.A. § 2. For rescue of one convicted of a capital crime while going to or during execution the fine may be not more than $25,000. 18 U.S.C. § 248, 18 U.S.C.A. § 248. Maximum fines of $20,000 are set for offering a bribe to a judicial officer and for acceptance of a bribe by a judge. 18 U.S.C. §§ 237, 238, 18 U.S.C.A. §§ 237, 238. The same maximum is set for mailing matter with intent to increase weight in order to increase the compensation of a railroad mail carrier. 18 U.S.C. § 358, 18 U.S.C.A. § 358. In some cases of embezzlement and like crimes, the fine may be the amount embezzled, e.g., 18 U.S.C. § 173, 18 U.S.C.A. § 173, and in one instance twice that amount. 18 U.S.C. § 172, 18 U.S.C.A. § 172. But ordinarily the maximum allowed by Congress has been $10,000, and often it is less. Moreover, where Congress itself has fixed a maximum fine for criminal punishment of the act held to be a contempt, that judgment would seem to furnish a standard to be applied in the contempt proceeding. See In re Michael, 326 U.S. 224, 227, 66 S.Ct. 78, 79. In this case the War Labor Disputes Act authorized a fine of not over $5000 or imprisonment for not over one year, or both. 50 U.S.C.App. § 1506(b), 50 U.S.C.A.Appendix, § 1506(b). 54 The fines in this case were flat fines imposed absolutely, without contingency for compurgation or otherwise. The court acted on the Government's recommendation, which as to the union was made on the basis of $250,000 a day for the fourteen days elapsed after the restraining orders issued and the violations occurred. No part of the fine was laid contingently upon future conduct. Both penalties therefore would seem to be strictly criminal, or criminal combined with civil damages for past conduct, not coercive in the sense of coercive relief as contemplated in the decisions, see note 52, although the amounts fixed for each fine gave it 'incidental' coercive effect in the popular sense. Ibid. 55 The Government's asserted loss in revenues, chiefly relied on for this purpose, was not only highly speculative rather than proven in amount. It was injury which would have followed from the strike had it arisen before or after seizure. Such damages may result from any strike whether the Government or another is 'employer,' and would seem to be both speculative and indirect within the rule forbidding the award of such damages. Hadley v. Baxendale, 9 Ex. 41. 56 See notes 54, 57. The order for coercive fines reads, by analogy to the order for coercive imprisonment, cf. note 52, that, unless there is obedience to the order of the court, the fine shall be paid on or before a day certain, in default of which the defendant shall be imprisoned until it is paid. See Doyle v. London Guarantee & Accident Co., 204 U.S. 599, 602, 27 S.Ct. 313, 51 L.Ed. 641. In the case of corporations or unincorporated associations, the default provision is either that the responsible officers be imprisoned, Parker v. United States, 1 Cir., 126 F.2d 370, 379, or perhaps that execution issue against the contemnor's property. See United States v. Ridgewood Garment Co., D.C., 44 F.Supp. 435, 436. Compare Rev.Stat. § 1041, 18 U.S.C. § 569, 18 U.S.C.A. § 569, with 38 Stat. 738, 28 U.S.C. § 387, 28 U.S.C.A. § 387. 57 See the opinion of the Court, 330 U.S. 258, 300, 67 S.Ct. 699, n. 74. Only in rare instances have other federal courts, after consideration, done so. See Kreplik v. Couch Patents Co., 1 Cir., 190 F. 565. See also the discussion, by way of dictum, in Hendryx v. Fitzpatrick, C.C., 19 F. 810, 811, 813. In still other instances the two types of contempt have been mingled without discussion. See Chicago Directory Co. v. United States Directory Co., C.C., 123 F. 194. And see Wilson v. Byron Jackson Co., 9 Cir., 93 F.2d 577, dismissing for jurisdictional reasons an appeal from an order adjudging the appellants guilty of civil and criminal contempt. 58 The two capacities are distinct, not identical. Each, it is true, may be exercised ultimately in the public interest. But if in the capacity of temporary 'employer' the Government is to have the benefits of that status, it should be subject also to its limitations except as Congress otherwise provides. To jumble the two c pacities as is done here is only to nullify the rights in trial and remedy of employees and others. 59 The limitations upon criminal contempt, procedural and remedial, always apply to the Government, for it alone can bring that proceeding. It cannot defeat them by mingling that proceeding and relief with civil ones, merely by virtue of being also the complaining civil litigant. 60 See note 53 supra. 61 Ibid. 62 The opinion states: 'In imposing a fine for criminal contempt, the trial judge may properly take into consideration * * * the necessity of effectively terminating the defendant's defiance as required by the public interest * * *.' 330 U.S. 303, 67 S.Ct. 701. 63 The statement in the Gompers opinion, 221 U.S. at page 443, 31 S.Ct. at page 498, 55 L.Ed. 797, 34 L.R.A.,N.S., 874, that criminal penalties have incidental coercive effects and civil ones incidental penal effects, was not intended to contradict its ruling that criminal penalties cannot be imposed in civil contempt proceedings or therefore commingled indistinguishably.

01

330 U.S. 395 67 S.Ct. 775 91 L.Ed. 973 UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICAv.UNITED STATES. BAY COUNTIES DIST. COUNCIL OF CARPENTERS OF UNITED BROTHERHOOD OF CARPENTERSAND JOINERS OF AMERICA et al. v. SAME. LUMBER PRODUCTS ASSOCIATION, Inc., et al. v. SAME. ALAMEDA COUNTY BUILDING AND CONSTRUCTION TRADES COUNCIL v. SAME. BOORMAN LUMBER CO. et al. v. SAME. Nos. 6 to 10. Reargued & Submitted Oct. 15, 1946. Decided March 10, 1947. Under provision of Norris-LaGuardia Act making liability of organization interested in labor dispute for unlawful acts of individual officers, members, or agents dependent upon clear proof of authorization of such act, requirement of 'authorization' restricts liability, although officers or members are acting within scope of their general authourity, to those organizations or members who actually participate in the unlawful acts, except upon clear proof that particular act charged, or acts generally of that type and quality, had been expressly authorized, or necessarily followed from a granted authority. Norris-LaGuardia Act, § 6, 29 U.S.C.A. § 106. [Syllabus from pages 395-397 intentionally omitted] Mr. Charles H. Tuttle, of New York City, for petitioners United Brotherhood of Carpenters, etc., in Nos. 6 and 7. Messrs. Joseph O. Carson II, of Indianapolis, Ind., Harry N. Routzohn, of Dayton, Ohio, Hugh K. McKevitt and Jack M. Howard, both of San Francisco, Cal., for petitioner Bay County District Council of Carpenters in No. 7. Mr. Maurice E. Harrison, of San Francisco, Cal., for petitioners in No. 8. Messrs. Guy C. Calden and Clarence E. Todd, both of San Francisco, Cal., for petitioner in No. 9. Mr. Morgan J. Doyle, of San Francisco, Cal., for petitioners in No. 10. Mr. Holmes Baldridge, of Washington, D.C., for respondent. Mr. Justice REED delivered the opinion of the Court. 1 These are criminal cases in which conviction of various defendants has been obtained in the District Court of the Unit d States for the Northern District of California, Southern Division, and affirmed by the Circuit Court of Appeals of the Ninth Circuit, 144 F.2d 546. They were charged with conspiracy to violate the Sherman Act, § 1.1 The parties to the alleged conspiracy were of two groups: on the one hand, local manufacturers of and dealers in the commodities affected and their incorporated trade associations and officials thereof; and, on the other, unincorporated trade unions and their officials or business agents. The indictment charged that the defendants below unlawfully combined and conspired together, successfully, to monopolize unduly a part of interstate commerce in millwork and patterned lumber. The purpose and effect of the conspiracy was alleged to be to restrain out-of-state manufacturers from shipping and selling these commodities within the San Francisco Bay area of California and to prevent the dealers in that area from freely handling them. It was alleged that the conspiracy also sought to raise the prices of the products affected. To achieve the purpose, a contract was entered into between the defendants for a wage scale for members of labor unions working on the articles involved, combined with a restrictive clause, '* * * no material will be purchased from, and no work will be done on any material or article that has had any operation performed on same by Saw Mills, Mills or Cabinet Shops, or their distributors that do not conform to the rates of wage and working conditions of this agreement,' with specified exceptions not here material. This clause, it is alleged, was enforced to the mutual advantage of the conspirators by some of the parties through conference or picketing or acquiescence in the arrangement. By means of the conspiracy, union workmen obtained better wages, the employers higher profits and manufacturers against whom the conspiracy was directed were largely prevented from sharing in the Bay Area business, all to the price disadvantage of the consumer and the unreasonable restraint of interstate commerce. The legal theory which was followed in their conviction was that conspiracies between employers and employees to restrain interstate commerce violate the Sherman Act. 2 Five petitions for certiorari were presented to this Court by different defendants either singly or jointly with others. It is sufficient for the purposes of this review to say that they raised the question of the application of § 1 of the Sherman Act to conspiracies between employers and employees to restrain commerce and, except the petitions in the employer group, the application of § 6 of the Norris-LaGuardia Act in trial of such an indictment.2 On account of the importance of the federal questions raised and asserted conflicts in the circuits, the writs of certiorari were granted.3 3 Since these cases were taken the important question of the application of the Sherman Act to a conspiracy between labor union and business groups has been decided by us. We held that such a conspiracy to restrain trade violated the Sherman Act. Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939. This holding causes us to approve the ruling of the trial and appellate courts on the first question presented by the certiorari but it left unresolved the question as to the application of § 6 of the Norris-LaGuardia Act, the point to which this decision is directed. 4 The indictment charges a conspiracy forbidden by the Sherman Act. On that issue, the power of the trial court is limited by § 6 of the Norris-LaGuardia Act. Note 2, supra. The limitations of that section are upon all courts of the United States in all matters growing out of labor disputes, covered by the Act, while may come before them. It properly is conceded that this agreement grew out of such a labor dispute and that all parties defendant participated or were interested in that dispute. See § 13, 47 Stat. 73, 29 U.S.C.A. § 113. Section 6 of the Norris-LaGuardia Act first appeared in a draft bill of the Senate Committee on the Judiciary as § 6 thereof. At that time its form was precisely the same as at present. The draft was drawn as a comprehensive substitute for S. 1482 of the 70th Congress, a bill providing only for a limitation on the jurisdiction of equity courts in the issuance of injunctions. In the 71st Congress, a similarly limited bill on the same subject, S. 2497, was reintroduced and a like comprehensive substitute proposed. Neither substitute was reported out of the Committee.4 These substitute bills are quite similar in form to the Norris-LaGuardia Act. In substance, and therefore in effectiveness, they are the same. 5 In the next, the 72d Congress, the bill, H.R. 5315, which was to become the Norris-LaGuardia Act, was introduced. Section 2 succinctly states the public policy that it was designed to further—a definition of and limitation upon the jurisdiction and authority of courts of the United States in labor disputes.5 That purpose was in accord with that behind the earlier drafts referred to above.6 As the new bill was practically identical with these long considered committee substitutes, the hearings on H.R. 5315 were short.7 But even so, the attack conti ued on § 6 as a restriction on the general law of agency in labor disputes.8 The reply of the House Committee was that it did 'not affect the general law of agency' and was necessary 'under the circumstances' so that 'the courts should know that Congress expects them not to hold officers or associations liable for the unlawful acts of a member without clear proof of actual participation in, or authorization of, any unlawful acts by the officer or association.'9 The Senate Committee was of the view that it was a 'rule of evidence,' not a 'new law of agency.' 6 'There is no provision made relieving an individual from responsibility for his acts, but provision is made that a person shall not be held responsible for an 'unlawful act' except upon 'clear proof' of participation or authorization or ratification. Thus a rule of evidence, not a rule of substantive law, is established.'10 7 We need not determine whether § 6 should be called a rule of evidence or one that changes the substantive law of agency. We hold that its purpose and effect was to relieve organizations, whether of labor or capital,11 and members of those organizations from liability for damages or imputation of guilt for lawless acts done in labor disputes by some individual officers or members of the organization without clear proof that the organization or member, charged with responsibility for the offense, actually participated, gave prior authorization, or ratified such acts after actual knowledge of their perpetration.12 8 Thus § 6 limited responsibility for acts of a co-conspirator a matter of moment to the advocates of the bill.13 Before the enactment of § 6, when a conspiracy between labor unions and their members, prohibited under the Sherman Act, was established, a widely publicized case had held both the unions and their members liable for all overt acts of their co-conspirators.14 This liability resulted whether the members or the unions approved of the acts or not or whether or not the acts were offenses under the criminal law. While of course participants in a conspiracy that is covered by § 6 are not immunized from responsibility for authorized acts in furtherance of such a conspiracy, they now are protected against liability for unauthorized illegal acts of other participants in the conspiracy. 9 The legislative history makes the intended meaning of the word 'authorization,' we think, almost equally clear. The rule of liability for acts of an agent within the scope of his authority, based on the Danbury Hatters Case, was urged as an argument against the language of § 6.15 When the Senate Committee on the Judiciary reported the bill, it dealt with this contention. 10 'But the argument is made that a man is held legally responsible for the acts of his agents taken in due course of employment. This argument is evidently based upon a doctrine of the civil law of negligence. It has no application to the criminal law. If a man is held responsible for an unlawful act, his responsibility rests on the basis of actual or implied participation. He is responsible for conspiring to do an unlawful act or for setting in motion forces intended to result, or necessarily resulting, in an unlawful act. 11 '* * * it is high time that, by legislative action, the courts should be required to uphold the long established law that guilt is personal and that men can only be held responsible for the unlawful acts of associates because of participation in, authorization or ratification of such acts. As a rule of evidence, clear proof should be required, so that criminal guilt and criminal responsibility should not be imputed but proven beyond reasonable doubt in order to impose liability.'16 12 We hold, therefore, that 'authorization' as used in § 6 means something different from corporate criminal responsibility for the acts of officers and agents in the course or scope of employment.17 We are of the opinion that the requirement of 'authorization' restricts the responsibility or liability in labor disputes of employer or employee associations, organizations or their members for unlawful acts of the officers or members of those associations or organizations, although such officers or members are acting within the scope of their general authority as such officers or members, to those associations, organizations or their officers or members who actually participate in the unlawful acts, except upon clear proof that the particular act charged, or acts generally of that type and quality, had been expressly authorized, or necessarily followed from a granted authority, by the association or non-participating member sought to be charged or was subsequently ratified by such association, organization or member after actual knowledge of its occurrence. 13 In this prosecution the United Brotherhood of Carpenters and Joiners and all the local unions who were convicted requested an instruction or instructions that embodied the above interpretation of § 6.18 A similar request was made by the individual members by requested instruction No. 58. These requested instructions were refused and instead instructions were given that stated a different concept of law as is evidenced by the excerpts in the marginal note.19 14 So far as the Unions, both local and national, are concerned, the necessity under our construction for an instruction based on § 6 is apparent. The United Brotherhood was not a party to any of the agreements. Local unions took a more definite part than the United Brotherhood. In some instances the name of a local union was signed to the agreement that contained the restrictive clause. Necessarily acts performed by or for the unions were done by their individual officers, members or agents. We do not enter into an analysis of the evidence that was relied upon to show the participation of the unions in the conspiracy. The evidence in any new trial may be quite different. No matter how strong the evidence may be of an association's or organization's participation through its agents in the conspiracy, there must be a charge to the jury setting out correctly the limited liability under § 6 of such association or organization for acts of its agents.20 For a judge may not direct a verdict of guilty no matter how conclusive the evidence.21 There is no way of knowing here whether the jury's verdict was based on facts within the condemned instructions, note 19 above, or on actual authorization or ratification of such acts, note 18.22 A failure to charge correctly is not harmless, since the verdict might have resulted from the incorrect instruction. We are of the opinion, therefore, that the judge should have instructed the jury as to the limitations upon the association's liability for the acts of its agents under § 6. The error is aggravated by the failure to give the correct charge upon request. 15 The suggestion is made that the alert and powerful unions and corporations gain the greatest degree of immuniy under our interpretation of § 6. Tha is not the case. Section 6 draws no distinction as to liability for unauthorized acts between the large and the small, between national unions and local unions, between powerful unions and weak unions, between associations or organizations and their members. And we draw no such distinctions. 16 There is no implication in what we have said that an association or organization in circumstances covered by § 6 must give explicit authority to its officers or agents to violate in a labor controversy the Sherman Act or any other law or to give antecedent approval to any act that its officers may do. Certainly an association or organization cannot escape responsibility by standing orders disavowing authority on the part of its officers to make any agreements in violation of the Sherman Act and disclaiming union responsibility for such agreements. Facile arrangements do not create immunity from the act, whether they are made by employee or by employer groups. The conditions of liability under § 6 are the same in the case of each. The grant of authority to an officer of a union to negotiate agreements with employers regarding hours, wages, and working conditions may well be sufficient to make the union liable. An illustrative but nonrestrictive example might be where there was knowing participation by the union in the operation of the illegal agreement after its execution. And the custom or traditional practice of a particular union can also be a source of actual authorization of an officer to act for and bind the union. 17 Our only point is this: Congress in § 6 has specified the standards by which the liability of employee and employer groups is to be determined. No matter how clear the evidence, they are entitled to have the jury instructed in accordance with the standards which Congress has prescribed. To repeat, guilt is determined by the jury, not the court. The problem is not materially different from one where the evidence against an accused charged with a crime is well nigh conclusive and the court fails to give the reasonable doubt instruction. It could not be said that the failure was harmless error.23 18 It is suggested that since 'conscious participation' was required for conviction by the instructions given, error as to the individual defendants cannot be found under any theory of the rule of § 6. But we think that failure to instruct the jury on the imputation of guilt from the acts of others as limited in labor disputes by § 6 affects the individuals as well as the associations. The section covers organizations and their members alike. Individuals, without association authority, may be guilty of such a conspiracy as this under the Sherman Act, but under § 6 they will not be guilty merely because they are members or officers of a guilty association. Nor are individuals guilty because of acts of other individuals in which they did not participate, or which they did not authorize or ratify. Although an illegal conspiracy under the Sherman Act was proven at the trial, the individuals are entitled to have their participation weighed by a jury under an instruction explaining the circumstances under which § 6 permits acts of other individuals or of associatians or of organizations in labor disputes to create personal liability. To instruct only that conscious participation of the individual is required leaves a jury free to weigh an individual's guilt in the light of unauthorized and unratified acts of others with whom he is associated but in whose acts he has not participated. As the evidence of any individual's activities in the alleged conspiracy is a minor part of the evidence as to the entire scheme, this delimitation of his responsib lity is important. 19 Certiorari was granted to two employer groups, Nos. 8 and 10, each containing an incorporated trade association and its officers and members, both individual and corporate. Both groups combatted the indictment by demurrer on the ground that, as the restrictive agreement was directed at the maintenance of proper working conditions, it did not state a crime under the Sherman Act. The demurrer was overruled by the trial court. Our decision in Allen Bradley Co. requires us to uphold this conclusion. Thereafter pleas of nolo contendere were entered by each defendant in the employer petitioner groups. 20 Each of the employer petitioners, if they has stood trial, as we have indicated hereinbefore, would have been entitled to the same instruction under § 6 as we have held the union group should have received. And though the failure so to charge was not excepted to, we would not be precluded from entertaining the objection.24 The erroneous charge was on a vital phase of the case and affected the substantial rights of the defendants. We have the power to notice a 'plain error' though it is not assigned or specified.25 In view of their plea of nolo contendere, does justice require that these employer groups should now be given an opportunity to stand trail in the situation created by our subsequent rulings in the Allen Bradley case and in this case? We think that it does. 21 This present decision furnishes a guide for the application of § 6 to liability for acts of agents in labor disputes. Ordinarily a plea of nolo contendere leaves open for review only the sufficiency of an indictment.26 However, in view of the then existing uncertainty as to liability for contracts between groups of employers and groups of employees that restrained interstate commerce and the application of § 6 of the Norris-LaGuardia, we conclude that in this exceptional situation the employer groups, also, should have an opportunity to make defense to the indictment.27 22 The judgments in each case are reversed and the causes remanded to the District Court. 23 Mr. Justice JACKSON took no part in the consideration or decision of this case. 24 Mr. Justice FRANKFURTER, with whom The CHIEF JUSTICE and Mr. Justice BURTON concur in result, dissenting. 25 The issue in this case is clear and simple. It is this. When officers make an arrangement on behalf of their organization, whether a corporation or a union, while acting in the regular course of business and within their general authority as such officers, is the organization liable for what these officers did if the court should subsequently find that such an arrangement is prohibited by the Sherman Law? The issue is clear and it is susceptible of a clear answer. Neither the issue nor the answer should be obscured. Either the organization is subject to the liability that the law in other respects imposes upon organizations for the acts of their agents, or the Norris-LaGuardia Act freed unions and corporations from such liability. The lower courts must apply the law as laid down by this Court and we owe them clarity of pronouncement. They cannot very well guide juries, or even themselves in equity suits, if told that the principles of the law of agency do not apply to unions and corporations under the Sherman Law, but that perhaps they 'can' apply. What the Court means to decide ought to be brought out of the twilight of ambiguity. It does not advance the administration of justice to impart new doubts to an old statute. And the Sherman Law is not merely old. It embodies, as this Court has often indicated, a vital policy. 26 By explicit language Congress forbade 'corporations and associations' no less than individuals to engage in combinations and conspiracies in restraint of interstate trade. Section 8 of the Sherman Law, 15 U.S.C.A. § 7. And it has long been settled that trade unions are 'associations' under the Sherman Law. United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344, 42 S.Ct. 570, 66 L.Ed. 975, 27 A.L.R. 762. Before the Coronado decision and since, repeated efforts were made to have Congress take trade unions from under the Sherman Law. Regardless of the political complexion of Congress, these efforts have consistently failed. Equally futile have been efforts to have this Court read the liability of trade unions out of the Sherman Law by judicial construction. This Court has undeviatingly held that trade unions are within 'the general interdict of the Sherman Law', although later enactments have withdrawn' specifically enumerated practices of labor unions' from the scope of that law. See § 20 of the Clayton Act, 38 Stat. 730, 738, 29 U.S.C. § 52, 29 U.S.C.A. § 52; United States v. Hutcheson, 312 U.S. 219, 230, 61 S.Ct. 463, 465, 85 L.Ed. 788, and Apex Hosiery Co. v. Leader, 310 U.S. 469, 487, 488, 60 S.Ct. 982, 988, 989, 84 L.Ed. 1311, 128 A.L.R. 1044. In the light of this history it would be strange indeed to find that Congress, by hitherto unsuspected indirection, had, from the point of view of effectiveness, sterilized the Sherman Law as to trade unions and particularly as to those which alone could to any serious extent unreasonably restrain commerce. It is a conclusion which can be reached only by disregarding the circumstances to which § 6 of the Norris-LaGuardia Act was addressed, and by wrenching it from the context of history in which it must be read.1 27 The construction given by the Court to § 6 is based on considerations which move in a world of unreality. The argument is quite unmindful of the way in which trade unions function—their organization, the authority of their international officers, the inevitable influence of the international office upon the affiliated locals. In short, such a construction is unmindful of the anatomy and physiology of trade union life. It is especia ly the powerful international unions who are in strategic positions to impose unreasonable restraints on commerce, and it is these that are especially rendered immune by the construction the Court gives to § 6. It is such unions that can most readily b insulated from responsibility for the acts of their leading officers, although such action be taken in furtherance of the vital concerns of the union and in every other aspect of legal responsibility be deemed within the direct authority of these officers and binding on the union. 28 It took some time for the law to catch up with reality and to hold that when men aggregated to form an entity, the entity as such acquires power and may therefore be held to responsibility in exerting its power. But it can act only through individuals. Its power is exerted, and its responsibility accrues, through the conduct of individual men entrusted with the power of the entity to achieve its purposes. This conclusion, supported alike by morality and by reason, the early law escaped through empty subtleties that seem fanciful to the modern reader. Arguments not unlike them underlie a reading of § 6 whereby the Sherman Law will be sterilized, certainly so far as national labor unions are concerned. The Court's opinion, to be sure, does not say in words that a national union is not liable under the Sherman Law for acts by its chief officers undertaken in the course of duty and for the furtherance of the union's purposes. But the conditions formulated by the Court, which must now be met before a union may be held to liability, are practically unrealizable, whether in the case of a big or a small union, a local or an international. Escape from responsibility can be easily contrived. It will be difficult to charge a union with culpability unless a convention of its membership, held perhaps every two years or even four, should knowingly authorize or approve a violation of the Sherman Law, or give carte blanche to the officers of the union by approving in advance whatever they may do, no matter what the legal significance. For instance, if the president of an international union should negotiate an agreement with employers regarding hours and wages and working conditions, his union will not be responsible for the agreement, under the rule now laid down by the Court, if it should turn out to run counter to the Sherman Law, although making agreements to promote the economic betterment of its membership is the aim of the union and the job of its president. 29 The case before us illustrates how an association like the Brotherhood pursues its objectives. The Locals took no action until the General Office of the Brotherhood offered its approval; the President of the Brotherhood himself took an active part in the contract negotiations; a representative of the Brotherhood was present at the time that the contracts were made; no union agreement was forthcoming until the General Office approved the contracts in the routine way for such approval—collective agreements are not ordinarily subject to approval at the quadrennial convention of the Brotherhood; a circular issued by the General Office requested adherence to the contracts by the members of the local. Surely here was active 'participation' by the Brotherhood in what has been found to be an outlawed combination, in the normal way in which such a union exerts its authority and 'participates' in agreements. On such evidence did the jury find the Brotherhood guilty. 30 The Court finds that there was error in not giving a requested charge which was in the language of the statute. A trial court does not discharge its duty merely by quoting a statute relevant to the conduct of the trial. The issue before an appellate court is not whether the trial judge might have given a request of abstract correctness, or even charged differently, but whether the judge's instructions were accurate and ample. It might have been wise for the judge to emphasize the counsel of care embodied in § 6. But the failure to do so or to use the statutory formula is not the Court's basis for upsetting the convictions. The Court upsets the convictions because it deems erroneous the view which the trial court took of § 6. The holding is that the view which the trial court should have taken, which all trial courts will have to take hereafter, and which whatever the language used in the charge, must control a jury's findings from the evidence, is the elucidation which the Court now gives to § 6. For practical purposes, this elucidation immunizes unions and corporate offenders for acts which their agents perform because they are agents and, as such, endowed with authority. For practical purposes, a union or a corporation could not be convicted on any evidence likely to exist, if the trial court has to charge what the Court now holds to be required by § 6. 31 The trial court repeatedly warned the jury that to find guilt they must be satisfied beyond a reasonable doubt. It instructed the jury that the guilt or innocence of labor unions should be determined in the same manner as that of corporations. On the question of authorization, it charged that 'The act of an agent done for or on behalf of a corporation and within the scope of his authority, or an act which an agent has assumed to do for a corporation while performing duties actually delegated to him, is deemed to be the act of the corporation.' That statement correctly expresses the standard of guilt of corporations and unions under all other criminal statutes. If it is not the standard for violations of the Sherman Law it is only because the Court now reads in § 6 an exception to the whole of the criminal law. Presumably trial courts will conscientiously apply the intendment of the opinion of the Court. That means that they will have to charge juries that the rules of agency do not apply in Sherman Law cases—there must be more to hold the union for the acts of its officers. And 'more' will not be found in view of the practical workings of unions, reinforced by the safeguards they will naturally take on the basis of this decision. 32 Aside from the actualities of trade union practice, the terms of § 6, read in the light of its legislative history and its purpose, repel the result reached by the Court once 'we free our minds from the notion that criminal statutes must be construed by some artificial * * * rule'. United States v. Union Supply Co., 215 U.S. 50, 55, 30 S.Ct. 15, 16, 54 L.Ed. 87. To assure immunity to powerful unions collaborating with employers' associations in disregard of the Sherman Law, was not the purpose of § 6, and the provision should not be so read. This minor provision of the Norris-LaGuardia Act was directed against decisions by some of the federal courts in litigation involving industrial controversies. The abuse was misapplication of the law of agency so that labor unions were held responsible for the conduct of individuals in whom was lodged no authority to wield the power of the union. By undue extension of the doctrine of conspiracy, whereby the act of each conspirator is chargeable to all, unions were on occasion held responsible for isolated acts of individuals, believed in some instances to have been agents provocateurs who held a spurious membership in the union during a strike. Congress merely aimed to curb such an abusive misapplication of the principle of agency. It did not mean to change the whole legal basis of collective responsibility. By talking about 'actual authorization,' Congress merely meant to emphasize that persons for whose acts a corporation or a union is to be held responsible should really be wielding authority for such corporation or union. 33 The Congressional purpose behind § 6, then, is clear.2 All that Congress sought to do was to eliminate an extraneous doctrine that had crept into some of the decisions whereby organizations were held responsible not for acts of agents who had authority to act, but for every ct committed by any member of the union merely because he was a member, or because he had some relation to the union although not authorized by virtue of his position to act for the union in what he did. And so Congress charged the federal courts with the duty to look sharply to the relation of the individual to the affairs of the organization, and not to confound individual with union unless the individual is clothed with power by the union, in the ordinary way of union operation, in doing what he does for the union. A basis for liability which has entered into the warp and woof of our law, as is true of the responsibility of collective bodies for the acts of their agents, should not be deemed to have been uprooted by an enactment which merely emphasizes that basis and rules out its distortions. 1932 was too late in the day for Congress not to have known that unions, like other organizations, act only through officers, and that unions do not, any more than do other organizations, explicitly instruct their officers to violate the Sherman Law. Neither by inadvertence nor on purpose did Congress remove the legal liability of organizations for the conduct of officials who, within the limits of their authority, wield the power of those organizations. It is not lightly to be assumed that Congress would thus turn back the clock of legal history a hundred years and disregard the practicalities of collective action by powerful organizatons. 34 Nor are the debilitating implications for Sherman Law enforcement of the construction now placed on § 6 limited to their bearing on union activities. Congress did not lay down one rule of liability for corporations and another for unions. On the contrary, it subjected both groups of organizations to the same basis and measure of liability. Both can act only through responsible agents and both are responsible as organizations only through the acts of such agents. See § 13(b) of the Norris-LaGuardia Act.3 If the liability of a union does not flow from the ac § of responsible officers acting in the due course of their authority in the pursuit of union purposes, then a corporation 'interested in a labor dispute' cannot be held liable for the acts of its responsible officers acting within their customary authority in pursuit of corporate purposes. Violations of the Sherman Law by corporate officers acting on behalf of the corporation and pursuing its economic interest are not usually explicitly authorized by a formal vote of the Board of Directors or by the stockholders in annual meeting assembled. 35 The teaching of the present case can hardly fail. To come under the Court's indulgent rule of immunity from liability for the acts of its officers, unions will not rest on a lack of affirmative authorization. To make assurance doubly sure they will, doubtless in good conscience, have standing orders disavowing authority on the part of their officers to make any agreements which may be found to be in violation of the Sherman Law. So also, corporations 'interested in a labor dispute', as, for instance, by combining to resist what they deem unreasonable labor demands, will, by the formality of a resolution at a directors' meeting, disavow and disapprove any arrangements made by their officers which run afoul of the Sherman Law. This may achieve immunity even though the officers are moving within the orbit of their normal authority and are acting solely in the interests of their corporation. 36 Words are symbols of meaning. In construing § 6, as in construing other enactments of Congress, meaning must be extracted from words as they are used in relation to their setting, with due regard to the evil which the legislation was designed to cure as well as to the mischievous and startling consequences of one construction as against another. 'Doubt, if there can be any, is not likely to survive a consideration of the mischiefs certain to be engendered * * *. The mind rebels against the notion that Congress * * * was willing to foster an opportunity for juggling so facile and so obvious.' Cardozo, J., in Woolford Realty Co. v. Rose, 286 U.S. 319, 329, 330, 52 S.Ct. 568, 570, 76 L.Ed. 1128. 37 Practically speaking, the interpretation given by the Court to § 6 serves to immunize unions, especially the more alert and powerful, as well as corporations involved in labor disputes, from Sherman Law liability. To insist that such is not the result intended by the Court is to deny the practical consequences of the Court's ruling. For those entrusted with the enforcement of the Sherman Law there may be found in the opinion words of promise to the ear, but the decision breaks the promise to the hope. 38 In our view the judgments below should be affirmed. 1 15 U.S.C. § 1, 15 U.S.C.A. § 1: 'Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal: * * * Every person who shall make any contract or engage in any combination or conspiracy declared by sections 1—7 of this title to be illegal shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.' 2 47 Stat. 70, 71, 29 U.S.C.A. § 106: 'Sec. 6. No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held responsible or liable in any court of the United States for the unlawful acts of individual officers, members, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or of ratification of such acts after actual knowledge thereof.' 3 323 U.S. 706, 707, 65 S.Ct. 430, 89 L.Ed. 569. Compare Allen Bradley Co. v. Local Union No. 3, 2 Cir., 145 F.2d 215, and United States v. International Fur Workers Union, 2 Cir., 100 F.2d 541, 547, with the opinion of the Circuit Court of Appeals in this case, 9 Cir., 144 F.2d 546. These cases were argued in the Supreme Court of the United States first on March 8, 1945. On June 18, 1945, they were restored to the docket and assigned for reargument, counsel being requested to discuss (1) the scope of § 6 of the Norris-LaGuardia Act in relation to prosecutions under the Antitrust Act; (2) the scope of § 6 in relationship to § 13 (b); (3) the scope of the words 'association or organization' appearing in § 6, in that section's relationship to § 13 (b); and (4) consideration of the Court's oral charge and written charges requested and refused involving § 6, in the light of objections and exceptions by each and all of the defendants and the state of the evidence on that issue as to each of them. Journal, Sup.Ct., U.S., October Term 1944, pp. 284—5. The cases were reargued on April 29—30. 1946, and again restored to the docket on June 10, 1946, for a third argument. 4 S.Rep.No. 1060, 71st Cong., 2d Sess., p. 4. In the hearings on the proposed substitute, the language now incorporated into § 6 of the Norris-LaGuardia Act was criticized as changing the rules of agency, so as to relieve organizations of responsibility for acts of their agents in labor disputes. It was defended as intended to apply the law of agency to labor unions. Hearings, Subcommittee of the Committee on the Judiciary, U.S. Senate, 70th Cong., 2d Sess., on S. 1482, Part 5, p. 759, et seq. 5 47 Stat. 70, 29 U.S.C.A. § 102. 6 S.Rep.No. 163, 72d Cong., 1st Sess.; H.Rep.No. 669, 72d Cong., 1st Sess.; S.Rep.No. 1060, 71st Cong., 2d Sess.; Hearings, Subcommittee of the Committee on the Judiciary, U.S. Senate, 70th Cong., 1st Sess., on S. 1482; Hearing, Subcommittee of the Committee on the Judiciary, U.S. Senate, 71st Cong., 2d Sess., on S.2497. 7 Hearing, Committee on the Judiciary, House of Representatives, 72d Cong., 1st Sess., on H.R. 5315. 8 Id., p. 16: 'But § 6 effects a revolution in the substantive law of agency. By that section no officer or member of any organization, participating in a labor dispute, and this applies equally to employers, is to be held liable in any court of the United States for the unlawful act of agents acting in such dispute, unless there by clear proof of actual participation, authorization, or ratification of the agents' acts after actual knowledge. The general law of agency is thus repealed or restricted to a labor dispute, and it applies equally to employers and employees. It applies to men who by collusion enter into agreements which may harmfully affect the public interests, and which in some instances might be violations of the antitrust act, although they may be the result, or grow out of, or involve terms of a labor dispute.' See also pp. 33 and 39. 9 H.Rep.No.669, 72d Cong., 1st Sess., p. 9. 10 S.Rep.No.163, 72d Cong., 1st Sess., p. 19. 11 'Section 6 of the bill relates to damages for unlawful acts arising out of labor disputes. It is provided that officers and members of any labor organization, and officers and members of any employers' organization, shall not be held liable for damages unless it is proven that the defendant either participated in or authorized such unlawful acts, or ratified such unlawful acts after actual knowledge therof.' S.Rep.No.163, supra, p. 19; 75 Cong.Rec. 4507; 47 Stat. 70, 73, 29 U.S.C.A. § 113(b): § 13. * * * '(b) A person or association shall be held to be a person participating or interested in a labor dispute if relief is sought against him or it, and if he or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirect interest therein, or is a member, officer, or agent of any association composed in whole or in part of employers or employees engaged in such industry, trade, craft, or occupation.' 12 See the full statement in S.Rep.No. 163, supra, pp. 19—21. Nothing has been found to give definition to the word 'organization' as used in the act. We see no reason to restrict its meaning to unincorporated entities. Apparently it was employed by the draftsmen to cover, generally, all organizations that take part in labor disputes. See note 11, supra. We so apply the word. The corporate form, as is true in this case, is frequently employed for trade groups. 13 The Danbury Hatters Case—Loewe v. Lawlor, 208 U.S. 274, 28 S.Ct. 301, 52 L.Ed. 488, 13 Ann.Cas. 815, and Lawlor v. Loewe, 235 U.S. 522, 35 S.Ct. 170, 59 L.Ed. 341—involving damages against union members for their union's acts in an unlawful conspiracy, was in their minds. Hearings on S.1482, supra, p. 760, et seq. Compare the partnership in crime theory. United States v. Kissel, 218 U.S. 601, 608, 31 S.Ct. 124, 126, 54 L.Ed. 1168; United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 253, 60 S.Ct. 811, 858, 84 L.Ed. 1129. 14 United States v. Railway Employees' Dept. of A.F.L., D.C., 283 F. 479, 492. 15 Hearings on S.1482, supra, p. 760: 'When that came before the Supreme Court of the United States Justice Holmes—I do not remember the exact language, but he had in mind that it might not be necessary to show that they knew or ought to have known or that they ought to have been warranted in their belief—that under the rule of agency as prevailing in all other activities, including bankers' associations, to which you refer, and all other associations, it is the common accepted proposition, as fundamental as any I know in Anglo-Saxon jurisprudence, that a principal may be liable for the acts of his agent, even though he never knew or heard of them and actually forbade them, provided he was acting within the general scope of his authority, in furtherance of the purpose of the association. That is the law laid down by the Supreme Court of the United States, and that is the law that I am afraid is curtailed by this provision in this section 6.' Excerpts from Lawlor v. Loewe, 235 U.S. at pages 534, 535, 35 S.Ct. at pages 171, 172, 59 L.Ed. 341, will explain the reference: 'We agree with the circuit court of appeals that a combination and conspiracy forbidden by the statute were proved, and that the question is narrowed to the responsibility of the defendants for what was done by the sanction and procurement of the societies above named. 'The court in substance instructed the jury that if these members paid their dues and continued to delegate authority to their officers unlawfully to interfere with the plaintiffs' interstate commerce in such circumstances that they knew or ought to have known, and such officers were warranted in the belief that they were acting in the matters within their delegated authority, then such members were jointly liable, and no others. It seems to us that this instruction sufficiently guarded the defen ants' rights, and that the defendants got all that they were entitled to ask in not being held chargeable with knowledge as matter of law. * * * If the words of the documents, on their face and without explanation, did not authorize what was done, the evidence of what was done publicly and habitually showed their meaning and how they were interpreted. The jury could not but find that by the usage of the unions the acts complained of were authorized, and authorized without regard to their interference with commerce among the States.' 16 S.Rep.No.163, supra, p. 20. 17 See New York Central & H.R.R. Co. v. United States, 212 U.S. 481, 494, 29 S.Ct. 304, 306, 307, 53 L.Ed. 613. These cases now being passed upon have not involved the liability of an employer, whether a member or not of an association or organization of employers, for the acts, in a labor dispute, of his or its own officers. We express no opinion upon that. 18 A fair example, requested instruction No. 56, is as follows: 'You are instructed that no labor union or organization can be found guilty in this case for an unlawful act or acts, if any, of individual officers, members or agents, unless you find upon clear proof from the evidence that such labor organization actually participated in, or actually authorized such unlawful act, if any, or ratified such an act, if any, after actual knowledge thereof.' 19 'The act of an agent done for or on behalf of a corporation and within the scope of his authority, or an act which an agent has assumed to do for a corporation while performing duties actually delegated to him, is deemed to be the act of the corporation. 'If you find that there did exist a combination and conspiracy such as is charged in the indictment, and that any defendant corporation participated therein, then I instruct you that such act of participation is deemed to be also the act of the individual director, officer or agent of such defendant corporation who authorized, ordered or did such act in whole or in part. 'Likewise, the list of defendants includes a number of labor union organizations and several members thereof. It has been stipulated in this case that these labor unions are associations. Like corporations, associations are separate entities with the meaning of the Sherman Act, and may be found guilty of violations of that act, separately and apart from the guilt or innocence of their members. 'You are to determine the guilt or innocence of the labor unions which are defendants in this case in the same manner as you determine that of the corporations, that is, by an examination of the acts of their agents. 'In this case, several individuals are named as defendants, together with a number of corporations. While these defendants have been jointly indicted and charged with the offenses contained in the indictment, each defendant is entitled to an independent consideration by you of the evidence as it relates to his conscious participation in the alleged unlawful acts, and it is your duty to determine the guilt or innocence of each individual separately.' 20 See Battle v. United States, 209 U.S. 36, 38, 28 S.Ct. 422, 423, 52 L.Ed. 670. 21 Sparf and Hansen v. United States, 156 U.S. 51, 105, dissent 173, 715, 15 S.Ct. 273, 294, 320, 39 L.Ed. 343. Compare Capital Traction Co. v. Hof, 174 U.S. 1, 13, 19 S.Ct. 580, 585, 43 L.Ed. 873. 22 Bird v. United States, 180 U.S. 356, 361, 21 S.Ct. 403, 405, 45 L.Ed. 570: 'The chief object contemplated in the charge of the judge is to explain the law of the case, to point out the essentials to be proved on the one side and the other, and to bring into view the relations of the particular evidence adduced to the particular issues involved.' See Pierce v. United States, 314 U.S. 306, 62 S.Ct. 237, 86 L.Ed. 26. 23 Weiler v. United States, 323 U.S. 606, 65 S.Ct. 548, 89 L.Ed. 495, 156 A.L.R. 496; Bruno v. United States, 308 U.S. 287, 60 S.Ct. 112, 84 L.Ed. 451. 24 Wiborg v. United States, 163 U.S. 632, 658, 16 S.Ct. 1127, 1137, 1197, 41 L.Ed. 289; Brasfield v. United States, 272 U.S. 448, 450, 47 S.Ct. 135, 136, 71 L.Ed. 345; see also United States v. Atkinson, 297 U.S. 157, 160, 56 S.Ct. 391, 392, 80 L.Ed. 555. And see Rules of the Supreme Court, Rule 27, 28 U.S.C.A. following section 354. 25 Weems v. United States, 217 U.S. 349, 362, 30 S.Ct. 544, 547, 54 L.Ed. 793, 19 Ann.Cas. 705; Mahler v. Eby, 264 U.S. 32, 45, 44 S.Ct. 283, 288, 68 L.Ed. 549; Sibbach v. Wilson & Co., 312 U.S. 1, 16, 655, 61 S.Ct. 422, 427, 428, 85 L.Ed. 479; see also Kessler v. Strecker, 307 U.S. 22, 34, 59 S.Ct. 694, 700, 83 L.Ed. 1082. And see Federal Rules of Criminal Procedure, rule 52(b), 18 U.S.C.A. following section 687. 26 Nolo contendere 'is an admission of guilt for the purposes of the case,' Hudson v. United States, 272 U.S. 451, 455, 47 S.Ct. 127, 129, 71 L.Ed. 347; United States v. Norris, 281 U.S. 619, 622, 50 S.Ct. 424, 425, 74 L.Ed. 1076. And like pleas of guilty may be reviewed to determine whether a crime is stated by the indictment. Hocking Valley R. Co. v. United States, 6 Cir., 210 F. 735, 738; Tucker v. United States, 7 Cir., 196 F. 260, 262, 41 L.R.A.,N.S., 802. 27 See Husty v. United States, 282 U.S. 694, 703, 51 S.Ct. 240, 242, 75 L.Ed. 629, 74 A.L.R. 1407; Ashcraft v. State of Tennessee, 322 U.S. 143, 155, 156, 64 S.Ct. 921, 927, 928, 88 L.Ed. 1192; Reconstruction Finance Corporation v. Prudence Securities Advisory Group, 311 U.S. 579, 582, 61 S.Ct. 331, 333, 85 L.Ed. 364; Watts, Watts & Co. v. Unione Austriaca, 248 U.S. 9, 21, 39 S.Ct. 1, 2, 63 L.Ed. 100, 3 A.L.R. 323; Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 254, 61 S.Ct. 189, 195, 196, 85 L.Ed. 147. 1 'Sec. 6. No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held responsible or liable in any court of the United States for the unlawful acts of individual officers, members, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or of ratification of such acts after actual knowledge thereof.' 47 Stat. 70, 71, 29 U.S.C. § 106, 29 U.S.C.A. § 106. 2 See the statement of Senator Blaine, a cOmmittee spokesman: a Committee spokesman: refer to which gives the purpose of this section 6. This is merely the application of the sound principles of the law of agency to labor cases. It has become necessary because the Federal courts in many cases have held the union or members not connected with the unlawful acts responsible for those acts although proof of actual authorization or ratification is wholly lacking. 'Now, that is the law of agency, and we want to apply that. We want to apply that for this reason, that if it is unjust to hold all members of the union responsible for the acts of its officers and their members merely because of such membership, similarly it is unjust to hold the officers responsible during the strike merely because they pass on questions of this kind, that an attempt is here made to recognize the rules of law of agency in labor cases.' See Hearings before Subcommittee of Senate Committee on Judiciary, S.1482, 70th Cong., 2d Sess., p. 763. The Senate Committee reported this: 'There has been a distinct conflict of opinion in the courts as to the degree of proof required. Mere ex parte affidavits establishing a certain amount of lawless conduct in the prosecution of a strike have been held in some instances to establish a 'presumption' that the entire union and its officers were engaged in an unlawful conspiracy; and, on the other hand, other courts have declined thus to substitute inference for proof, rejecting such a doctrine in language such as the following used in a New York case: 'Is it the law that a presumption of guilt attaches to a labor union association?' Various examples of these different rulings are quoted in The Labor Injunction, by Frankfurter and Greene, pp. 74 75. 'It is appropriate and necessary to define by legislation the proper rule of evidence to be followed in this matter in federal courts. That is the only object of section 6.' S.Rep.No.163, 72d Cong., 1st Sess. (1932) pp. 20—21. 3 'Sec. 13. When used in * * * this act, and for the purposes of this act—* * * (b) A person or association shall be held to be a person participating or interested in a labor dispute if relief is sought against him or it, and if he or it is engaged in the same industry, trade, craft, or occupation in which such dispute occurs, or has a direct or indirect interest therein, or is a member, officer, or agent of any association composed in whole or in part of employers or employees engaged in such industry, trade, craft, or occupation.' 47 Stat. 70, 73, 29 U.S.C. § 113(b), 29 U.S.C.A. § 113(b).

67

330 U.S. 386 67 S.Ct. 810 91 L.Ed. 967 TESTA et al.v.KATT. No. 431. Argued Feb. 14, 1947. Decided March 10, 1947. George T. Washington, Acting Solicitor General, of Washington, D.C., for petitioners. Mr. Paul M. Segal, of Washington, D.C., for respondent. Mr. Justice BLACK delivered the opinion of the Court. 1 Section 205(e)1 of the Emergency Price Control Act provides that a buyer of goods above the prescribed ceiling price may sue the seller 'in any court of competent jurisdiction' for not more than three times the amount of the overcharge plus costs and a reasonable attorney's fee. Section 205(c)2 provides that federal district courts shall have jurisdiction of such suits 'concurrently with State and Territorial courts.' Such a suit under § 205(e) must be brought 'in the district or county in which the defendant resides or has a place of business * * *.' 2 The respondent was in the automobile business in Providence, Providence County, Rhode Island. In 1944 he sold an automobile to petitioner Testa, who also resides in Providence, for $1100, $210 above the ceiling price. The petitioner later filed this suit against respondent in the State District Court in Providence. Recovery was sought under § 205(e). The court awarded a judgment of treble damages and costs to petitioner. On appeal to the State Superior Court, where the trial was de novo, the petitioner was again awarded judgment, but only for the amount of the overcharge plus attorney's fees. Pending appeal from this judgment, the Price Administrator was allowed to intervene. On appeal, the State Supreme Court reversed, 71 R.I. 472, 47 A.2d 312. It interpreted § 205(e) to be 'a penal statute in the international sense.' It held that an action for violation of § 205(e) could not be maintained in the courts of that State. The State Supreme Court rested its holding on its earlier decision in Robinson v. Norato, 1945, 71 R.I. 256, 43 A.2d 467, 468, 162 A.L.R. 362 in which it had reasoned that: A state need not enforce the penal laws of a government which is 'foreign in the international sense'; § 205(e) is treated by Rhode Island as penal in that sense; the United States is 'foreign' to the State in the 'private international' as distinguished from the 'public international' sense; hence Rhode Island courts, though their jurisdiction is adequate to enforce similar Rhode Island 'penal' statutes, need not enforce § 205(e). Whether state courts may decline to enforce federal laws on these grounds is a question of great importance. For this reason, and because the Rhode Island Supreme Court's holding was alleged to conflict with this Court's previous holding in Mondou v. New York, N.H. & H.R. Co., 223 U.S. 1, 32 S.Ct. 169, 56 L.Ed. 327, 38 L.R.A.,N.S., 44, we granted certiorari. 329 U.S. 703, 67 S.Ct. 122.3 3 For the purposes of this case, we assume, without deciding, that § 205(e) is a penal statute in the 'public international,' 'private international,' or any other sense. So far as the question of whether the Rhode Island courts properly declined to try this action, it makes no difference into which of these categories the Rhode Island court chose to place the statute which Congress has passed. For we cannot accept the basic premise on which the Rhode Island Supreme Court held that it h § no more obligation to enforce a valid penal law of the United States than it has to enforce a penal law of another state or a foreign country. Such a broad assumption flies in the face of the fact that the States of the Union constitute a nation. It disregards the purpose and effect of Article VI, § 2 of the Constitution which provides: 'This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.' 4 It cannot be assumed, the supremacy clause considered, that the responsibilities of a state to enforce the laws of a sister state are identical with its responsibilities to enforce federal laws. Such an assumption represents an erroneous evaluation of the statutes of Congress and the prior decisions of this Court in their historic setting. Those decisions establish that state courts do not bear the same relation to the United States that they do to foreign countries. The first Congress that convened after the Constitution was adopted conferred jurisdiction upon the state courts to enforce important federal civil laws,4 and succeeding Congresses conferred on the states jurisdiction over federal crimes and actions for penalties and forfeitures.5 5 Enforcement of federal laws by state courts did not go unchallenged. Violent public controversies existed throughout the first part of the Nineteenth Century until the 1860's concerning the extent of the constitutional supremacy of the Federal Government. During that period there were instances in which this Court and state courts broadly questioned the power and duty of state courts to exercise their jurisdiction to enforce United States civil and penal statutes or the power of the Federal Government to require them to do so.6 But after the fundamental issues over the extent of federal supremacy had been resolved by war, this Court took occasion in 1876 to review the phase of the controversy concerning the relationship of state courts to the Federal Government. Claflin v. Houseman, 93 U.S. 130, 23 L.Ed. 833. The opinion of a unanimous court in that case was strongly buttressed by historic references and persuasive reasoning. It repudiated the assumption that federal laws can be considered by the states as though they were laws emanating from a foreign sovereign. Its teaching is that the Constitution and the laws passed pursuant to it are the supreme laws of the land, binding alike upon states, courts, and the people, 'any-thing in the Constitution or Laws of any State to the contrary notwithstanding.'7 It asserted that the obligation of states to enforce these federal laws is not lessened by reason of the form in which they are cast or the remedy which they provide. And the Court stated that 'If an act of Congress gives a penalty to a party aggrieved, without specifying a remedy for its enforcement, there is no reason why it should not be enforced, if not provided otherwise by some act of Congress, by a proper action in a state court.' Id. 93 U.S. at page 137, 23 L.Ed. 833. And see United States v. Bank of New York & Trust Co., 296 U.S. 463, 479, 56 S.Ct. 343, 348, 80 L.Ed. 331. 6 The Claflin opinion thus answered most of the arguments theretofore advanced against the power and duty of state courts to enforce federal penal laws. And since that decision, the remaining areas of doubt have been steadily narrowed.8 There have been statements in cases concerned with the obligation of states to give full faith and credit to the proceedings of sister states which suggested a theory contrary to that pronounced in the Claflin opinion.9 But when in Mondou v. New York, N.H. & H.R. Co., supra, this Court was presented with a case testing the power and duty of states to enforce federal laws, it found the solution in the broad principles announced in the Claflin opinion. 7 The precise question in the Mondou case was whether rights arising under the Federal Employers' Liability Act, 36 Stat. 291, 45 U.S.C.A. § 51 et seq., could 'be enforced, as of right, in the courts of the states when their jurisdiction, as prescribed by local laws, is adequate to the occasion. * * *' Id. 223 U.S. at page 46, 32 S.Ct. at page 177, 56 L.Ed. 327, 38 L.R.A.,N.S., 44. The Supreme Court of Connecticut had decided that they could not. Except for the penalty feature, the factors it considered and its reasoning were strikingly similar to that on which the Rhode Island Supreme Court declined to enforce the federal law here involved. But this Court held that the Connecticut court could not decline to entertain the action. The contention that enforcement of the congressionally created right was contrary to Connecticut policy was answered as follows: 8 'The suggestion that the act of Congress is not in harmony with the policy of the State, and therefore that the courts of the state are free to decline jurisdiction, is quite inadmissible, because it presupposes what in legal contemplation does not exist. When Congress, in the exertion of the power confided to it by the Constitution, adopted that act, it spoke for all the people and all the states, and thereby established a policy for all. That policy is as much the policy of Connecticut as if the act had emanated from its own legislature, and should be respected accordingly in the courts of the state.' Mondou v. New York, N.H. & H.R. Co., supra, 223 U.S. at page 57, 32 S.Ct. at page 178, 56 L.Ed. 327, 38 L.R.A.,N.S., 44. 9 So here, the fact that Rhode Island has an established policy against enforcement by its courts of statutes of other states and the United States which it deems penal, cannot be accepted as a 'valid excuse.' Cf. Douglas v. New York, N.H. & H.R. Co., 279 U.S. 377, 388, 49 S.Ct. 355, 356, 73 L.Ed. 747.10 For the policy of the federal Act is the prevailing policy in every state. Thus, in a case which chiefly relied upon the Claflin and Mondou precedents, this Court stated that a state court cannot 'refuse to enforce the right arising from the law of the United Stat § because of conceptions of impolicy or want of wisdom on the part of Congress in having called into play its lawful powers.' Minneapolis & St. L.R. Co. v. Bombolis, 241 U.S. 211, 222, 36 S.Ct. 595, 598, 60 L.Ed. 961, L.R.A.1917A, 86, Ann.Cas.1916E, 505. 10 The Rhode Island court in its Robinson decision on which it relies cites cases of this Court which have held that states are not required by the full faith and credit clause of the Constitution to enforce judgments of the courts of other states based on claims arising out of penal statutes.11 But those holdings have no relevance here, for this case raises no full faith and credit question. Nor need we consider in this case prior decisions to the effect that federal courts are not required to enforce state penal laws. Compare State of Wisconsin v. Pelican Ins. Co., 127 U.S. 265, 8 S.Ct. 1370, 32 L.Ed. 239, with Commonwealth of Massachusetts v. State of Missouri, 308 U.S. 1, 20, 60 S.Ct. 39, 44, 84 L.Ed. 1. For whatever consideration they may be entitled in the field in which they are relevant, those decisions did not bring before us our instant problem of the effect of the supremacy clause on the relation of federal laws to state courts. Our question concerns only the right of a state to deny enforcement to claims growing out of a valid federal law. 11 It is conceded that this same type of claim arising under Rhode Island law would be enforced by that State's courts. Its courts have enforced claims for double damages growing out of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq.12 Thus the Rhode Island courts have jurisdiction adequate and appropriate under established local law to adjudicate this action.13 Under these circumstances the State courts are not free to refuse enforcement of petitioners' claim. See McKnett v. St. Louis & S.F.R. Co., 292 U.S. 230, 54 S.Ct. 690, 78 L.Ed. 1227; and compare Herb v. Pitcairn, 324 U.S. 117, 65 S.Ct. 459, 89 L.Ed. 789; Id., 325 U.S. 77, 65 S.Ct. 954, 89 L.Ed. 1483. The case is reversed and the cause is remanded for proceedings not inconsistent with this opinion. 12 Reversed. 1 '(e) If any person selling a commodity violates a regulation, order, or price schedule prescribing a maximum price or maximum prices, the person who buys such commodity for use or consumption other than in he course of trade or business may, within one year from the date of the occurrence of the violation, except as hereinafter provided, bring an action against the seller on account of the overcharge. In such action, the seller shall be liable for reasonable attorney's fees and costs as determined by the court, plus whichever of the following sums is the greater: (1) Such amount not more than three times the amount of the overcharge, or the overcharges, upon which the action is based as the court in its discretion may determine, or (2) an amount not less than $25 nor more than $50, as the court in its discretion may determine: * * * Any action under this subsection by either the buyer or the Administrator, as the case may be, may be brought in any court of competent jurisdiction. * * *' 56 Stat. 34 as amended, 58 Stat. 632, 640, 50 U.S.C.App., Supp. V, § 925(e), 50 U.S.C.A.Appendix, § 925(e). 2 'The district courts shall have jurisdiction of criminal proceedings * * * and, concurrently with State and Territorial courts, of all other proceedings under section 205 of this Act * * *.' 56 Stat. 32, as amended, 58 Stat. 632, 640, 50 U.S.C.App., Supp. V, § 925(c), 50 U.S.C.A.Appendix, § 925(c). 3 Pursuant to Rhode Island practice, the State Supreme Court remitted the case and the record to the Superior Court. That Court then entered judgment in accordance with the Supreme Court's opinion. It is the judgment of the Superior Court which petitioner asked us to review on certiorari. See Joslin Co. v. City of Providence, 262 U.S. 668, 673, 43 S.Ct. 684, 687, 67 L.Ed. 1167. 4 Judiciary Act of 1789, 1 Stat. 73, 77 (suits by aliens for torts committed in violation of federal laws and treaties; suits by the United States). 5 1 Stat. 376, 378 (1794) (fines, forfeitures and penalties for violation of the License Tax on Wines and Spirits); 1 Stat. 373, 375 (1794) (the Carriage Tax Act); 1 Stat. 452 (penalty for purchasing guns from Indians); 1 Stat. 733, 740 (1799) (criminal and civil actions for violation of the postal laws). See Warren, Federal Criminal Laws and the State Courts, 38 Harv.L.Rev. 545; Barnett, The Delegation of Federal Jurisdiction to State Courts, 3 Selected Essays on Constitutional Law 1202 (1938). 6 See e.g., Martin v. Hunter's Lessee, 1 Wheat. 304, 334—337, 4 L.Ed. 97; United States v. Bailey, 9 Pet. 238, 259, 260, 9 L.Ed. 113; Prigg v. Commonwealth of Pennsylvania, 16 Pet. 539, 615, 10 L.Ed. 1060; Fox v. State of Ohio, 5 How. 410, 438, 12 L.Ed. 213; United States v. Lathrop, 17 Johns., 1819, N.Y., 4. See also Warren, supra, 580—584. 7 U.S.Const. Art. VI, § 2. See also Ex parte Siebold, 100 U.S. 371, 392—394, 25 L.Ed. 717. 8 State of Tennessee v. Davis, 100 U.S. 257, 25 L.Ed. 648; Mondou v. New York, N.H. & H.R. Co., 223 U.S. 1, 32 S.Ct. 169, 56 L.Ed. 327, 38 L.R.A., N.S., 44; Minneapolis & St. L.R. Co. v. Bombolis, 241 U.S. 211, 36 S.Ct. 595, 60 L.Ed. 961, L.R.A.1917A, 86, Ann.Cas. 1916E, 505; McKnett v. St. Louis & S.F.R. Co., 292 U.S. 230, 54 S.Ct. 690, 78 L.Ed. 1227; Baltimore & O.R.R. v. Kepner, 314 U.S. 44, 62 S.Ct. 6, 86 L.Ed. 28, 136 A.L.R. 1222; Miles v. Illinois C.R. Co., 315 U.S. 698, 62 S.Ct. 827, 86 L.Ed. 1129, 146 A.L.R. 1104; Herb v. Pitcairn, 324 U.S. 117, 121—123, 65 S.Ct. 459, 461, 462, 89 L.Ed. 789; 325 U.S. 77, 65 S.Ct. 954, 89 L.Ed. 1483. 9 See n. 10, infra. 10 It has been observed that the historic origin of the concept first expressed in this country by Chief Justice Marshall in The Antelope, 10 Wheat. 66, 123, 6 L.Ed. 268, that 'The Courts of no country execute the penal laws of another * * *' lies in an earlier English case, Folliott v. Ogden, 1 H.Bl. 124 (1789), aff'd., Ogden v. Folliott, 3 T.R. 726 (1790), 4 Bro.P.C. 111. In that case the English courts refused to enforce an American Revolutionary statute confiscating property of loyal British subjects on the ground that English courts must refuse to enforce such penal statutes of a foreign enemy. It has been observed of this case that 'of course they could as well have spoken of local public policy, and have reached the same result as surely.' Leflar Extrastate Enforcement of Penal and Government Claims, 46 Harv.L.Rev. 193, 195 (1932). See Griffin v. McCoach, 313 U.S. 498, 61 S.Ct. 1023, 85 L.Ed. 1481, 134 A.L.R. 1462; Cf. Hines v. Lowrey, 305 U.S. 85, 59 S.Ct. 31, 83 L.Ed. 56. 11 See e.g., Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L.Ed. 1123; Anglo-American Provision Co. v. Davis Provision Co., 191 U.S. 373, 24 S.Ct. 92, 48 L.Ed. 225; Kenney v. Supreme Lodge, 252 U.S. 411, 40 S.Ct. 371, 64 L.Ed. 638, 10 A.L.R. 716. 12 Newman v. George A. Fuller Co., R.I., 48 A.2d 345. 13 Gen.Laws R.I.1938, c. 500, § 28; c. 525, § 7; c. 631, § 4.

910

330 U.S. 464 67 S.Ct. 798 91 L.Ed. 1024 AETNA CASUALTY & SURETY CO. et al.v.FLOWERS. No. 432. Argued and Submitted Feb. 13, 1947. Decided March 10, 1947. Mr. Clyde W. Key, of Knoxville, Tenn., for petitioners. Fannie M. Flowers, pro se. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 This action for death benefits under the Workmen's Compensation Law of Tennessee (Tenn. Code Ann.1934, § 6851 et seq.) was commenced in 1945 by plaintiff-respondent in the Chancery Court of Hawkins County, Tennessee. The defendants-petitioners are the former employer of her deceased husband and the employer's insurance carrier. Service was had on the insurance carrier in Hawkins County, and on the employer in Knox County. Respondent is a citizen of Tennessee, the employer is a North Carolina corporation, and the insurance carrier is a Connecticut corporation. The complaint alleged that respondent's husband died as the result of an accident occurring in the course of his employment. Burial expenses plus benefits in the amount of $5,000, the maximum under the Tennessee statute,1 were sought on behalf of respondent and her two minor children, aged twelve and fifteen. 2 On May 28, 1945, petitioners mailed a notice of intention to file a petition for removal to a federal District Court which was received by respondent's attorney on the morning of May 29. The petition for removal was filed in the Chancery Court the same day, and on June 5, the removal order issued. in the federal court the petitioners moved for dismissal on the ground that venue was not properly laid in the Hawkins County Court, so that under Tennessee law that court had lacked jurisdiction.2 Respondent sought a remand of the case to the state court, contending that the requisites of diversity jurisdiction had not been met either as to jurisdictional amount, or as to proper notice of filing of the removal petition and that the suit was not removable because not one of civil nature in law or equity. The District Court concluded that Hawkins County was not the proper venue. It thereupon dismissed the action without reaching the questions raised by respondent's motion for a remand. 3 The judgment was reversed on appeal. 154 F.2d 881. The Circuit Court of Appeals held that the jurisdictional minimum of $3,000 in controversy (Judicial Code § 24, 28 U.S.C. § 41(1), 28 U.S.C.A. § 41(1)) was not present, and therefore ordered the case remanded to the state court. In this disposition the Circuit Court of Appeals reached neither the state venue question raised by petitioners, nor respondent's contention that the required notice of the filing of the removal petition was lacking. We granted certiorari because of an apparent conflict with Brotherhood of Locomotive Firemen v. Pinkston, 293 U.S. 96, 55 S.Ct. 1, 79 L.Ed. 219, as to the jurisdictional minimum requirement. 4 First. It is suggested that a decision of a Circuit Court of Appeals ordering remand of a case to a state court is not reviewable. And it is also said that we lack power to review the action of the Circuit Court of Appeals, since the mandate of that court has issued and the District Court has remanded the cause to the state court. 5 An order of a District Court remanding a cause to the state court from whence it came is not appealable, and hence may not be reviewed either in the Circuit Court of Appeals or here. Judicial Code § 28, 28 U.S.C. § 71, 28 U.S.C.A. § 71; Kloeb v. Armour & Co., 311 U.S. 199, 61 S.Ct. 213, 85 L.Ed. 124; Metropolitan Casualty Ins. Co. v. Stevens, 312 U.S. 563, 61 S.Ct. 715, 85 L.Ed. 1044; United States v. Rice, 327 U.S. 742, 66 S.Ct. 835. But no such limitation affects our authority to review an action of the Circuit Court of Appeals, directing a remand to a state court. Gay v. Ruff, 292 U.S. 25, 54 S.Ct. 608, 78 L.Ed. 1099, 92 A.L.R. 970. Nor does the fact that the mandate of the Circuit Court of Appeals has issued defeat this Court's jurisdiction. Carr v. Zaja, 283 U.S. 52, 51 S.Ct. 360, 75 L.Ed. 836, and cases cited. 6 Second. We think that the jurisdictional amount of $3,000 was involved in this suit. The contrary conclusion of the Circuit Court of Appeals was based on the nature of the award under the Tennessee statute. The award may be paid in installments at regular intervals by the employer or by a trustee with whom the amount of the award, reduced to present value, has been deposited. Tenn. Code § 6893. Moreover, the death or remarriage of respondent, plus the death or attainment of the age of eighteen by the children, would terminate all payments. Tenn.Code § 6883. Since an award to respondent would be payable in installments, and by operation of conditions subsequent the total payments might never reach $3,000, the Circuit Court of Appeals concluded that the jurisdictional amount was lacking. 7 If this case were one where judgment could be entered only for the installments due at the commencement of the suit (cf. New York Life Ins. Co. v. Viglas, 297 U.S. 672, 678, 56 S.Ct. 615, 617, 80 L.Ed. 971), future installments could not be considered in determining whether the jurisdictional amount was involved, even though the judgment would be determinative of liability for future installments as they accrued. Wright v. Mutual Life Ins. Co., 5 Cir., 19 F.2d 117, aff'd 276 U.S. 602, 48 S.Ct. 323, 72 L.Ed. 726. Cf. Button v. Mutual Life Ins. Co., D.C., 48 F.Supp. 168. But this is not that type of case. For the Tennessee statute which creates liability for the award contemplates a single action for the determination of claimant's right to benefits and a single judgment for the award granted. See Tenn.Code §§ 6880, 6881, 6890, 6891, 6893; Shockley v. Morristown Produce & Ice Co., 171 Tenn. 591, 106 S.W.2d 562. 8 Nor does the fact that it cannot be known as a matter of absolute certainty that the amount which may ultimately be paid, if respondent prevails, will exceed $3,000, mean that the jurisdictional amount is lacking. This Court has rejected such a restrictive interpretation of the statute creating diversity jurisdiction. It has held that a possibility that payments will terminate before the total reaches the jurisdictional minimum is immaterial if the right to all the payments is in issue. Brotherhood of Locomotive Firemen v. Pinkston, supra; Thompson v. Thompson, 226 U.S. 551, 33 S.Ct. 129, 57 L.Ed. 347. Future payments are not in any proper sense contingent, although they may be decreased or cut off altogether by the operation of conditions subsequent. Thompson v. Thompson, supra, 226 U.S. p. 560, 33 S.Ct. 130. And there is no suggestion that by reason of ife expectancy or law of averages the maximum amount recoverable can be expected to fall below the jurisdictional minimum. Cf. Brotherhood of Locomotive Firemen v. Pinkston, supra, 293 U.S. p. 101, 55 S.Ct. 2. Moreover, the computation of the maximum amount recoverable is not complicated by the necessity of determining the life expectancy of respondent.3 Cf. Thompson v. Thompson, supra, 226 U.S. p. 559, 33 S.Ct. 130; Brotherhood of Locomotive Firemen v. Pinkston, 293 U.S. p. 100, 55 S.Ct. 2. 9 Third. Respondent, as is her right, United States v. Ballard, 322 U.S. 78, 88, 64 S.Ct. 882, 887, 88 L.Ed. 1148, and cases cited, seeks to support the action of the Circuit Court of Appeals on other grounds. But those questions were not passed upon by that court nor adequately presented here. So we deem it more appropriate to remand the case to the Circuit Court of Appeals so it may consider those questions. United States v. Ballard, supra. 10 Reversed. 1 Death benefits are provided in the amount of 60% of the average weekly wages of the employee (as computed in accordance with Tenn.Code § 6852(c)), but payments may not exceed $18 per week, nor continue for more than 400 weeks. § 6880; § 6883(17). In addition there is a ceiling of $5,000 on total benefits exclusive of burial and certain other expenses. § 6881. See Haynes v. Columbia Pictures Corp., 178 Tenn. 648, 162 S.W.2d 383. The complaint alleged that 60% of the average weekly wages for the statutory period would exceed $5,000. 2 The contention was that proper venue lay only in Roane County where, it was alleged, the accident occurred and the business of the employer is conducted. It was argued that service on the insurer in Hawkins County did not give the Hawkins County Court jurisdiction of the case. 3 See note 1, supra.

89

330 U.S. 446 67 S.Ct. 847 91 L.Ed. 1011 AMERICAN STEVEDORES, Inc.,v.PORELLO et al. UNITED STATES v. LAURO. Nos. 69 and 514. Argued Dec. 11, 12, 1946. Decided March 10, 1947. As Amended June 23, 1947. Answer to Certified Question Conformed to May 22, 1947. See 162 F.2d 32. [Syllabus from pages 446-448 intentionally omitted] Mr. Edward Ash, of New York City, for petitioner American stevedores. Mr. Jacob Rassner, of New York City, for respondents Rosario Porello and Lauro. Mr. J. Frank Staley, of Washington, D.C., for respondent the United states. Mr. Justice REED delivered the opinion of the Court. 1 Porello, a longshoreman, was injured in 1942 while working in the hold of the U.S.S. Thomas Stone, a public vessel of the United States. His employer, American Stevedores, Inc. (called American hereinafter), was engaged in loading the vessel under a stevedoring contract with the United States. Within two weeks of the accident which caused the injuries American's insurance carrier, in compliance with § 14 of the Longshoremen's and Harbor Workers' Compensation Act,1 33 U.S.C. §§ 901—950, 33 U.S.C.A. §§ 901—950, and without the compulsion of an award of compensation by a deputy commissioner under § 19, began compensation payments to Porello, who negotiated the checks he received. In March of 1943 Porello gave notice in accordance with § 33(a) of election to sue the United States as a third party tortfeasor rather than to receive compensation. In the same month he filed a libel, amended in November, 1943, to recover damages from the United States under the Public Vessels Act of 1925,2 46 U.S.C. § 781 et seq., 46 U.S.C.A. § 781 et seq., for the injuries to his person sustained in the accident. Exceptions to the libel being overruled, the United States answered, denying fault on its part and claiming sovereign immunity from suit. Later, by a petition charging American with fault and setting forth an indemnity provision of the stevedoring contract, the United States impleaded American.3 American then answered the libel, denying fault and asserting as an affirmative defense that, by accepting compensation payments, Porello had lost his right to sue a third party tortfeasor. 2 The District Court held that Porello was not barred from maintaining the action. At trial it appeared that a beam lying athwart a hatch had fallen into he hold and struck Porello, causing the injuries complained of. The court held that the United States was negligent in not providing a locking device on the end of the beam, and held that American was negligent through its foreman, whose orders to the operator of a cargo boom caused the beam to be dislodged. Porello was awarded damages from the United States, the United States to receive contribution from American as a joint tortfeasor to the extent of half the damage less the compensation payments received by Porello. On cross appeals by the United States and American the Circuit Court of Appeals held that American was bound by the indemnity provision of the stevedoring contract to make the United States completely whole. With that modification it affirmed the decree below. 2 Cir., 153 F.2d 605. The important issue in this proceeding is whether the Public Vessels Act makes the United States liable for damages on account of personal injuries. The Circuit Court of Appeals thought that this question was decided by the Canadian Aviator case,4 but since the issue was not squarely posed in tha case we granted certiorari in order to determine it at this time. 328 U.S. 827, 66 S.Ct. 1013 3 The Public Vessels Act provides that a 'libel in personam in admiralty may be brought against the United States * * * for damages caused by a public vessel of the United States * * *.'5 Petitioner argues that the Act only provides a remedy for damage to property. 'Damages,' however, have historically been awarded both for injury to property and injury to the person—a fact too well-known to have been overlooked by the Congress in enacting this statute.6 Nor is it easy to conceive any reason, absent intent to the contrary, not to have inserted the word 'property' in the statute, an obvious method of imposing the limitation for which the petitioner here contends. Petitioner nonetheless argues that the legislative history of the statute conclusively shows that the congressional intent was to limit redress to property damage. 4 The history of the Act may be briefly detailed. Starting in 1920 various bills were introduced which provided for liability of the Government to suit for damages caused by its vessels.7 We need only consider, however, the bills that were pending in the 68th Congress by which the present act was passed: H.R. 6989, H.R. 9075 and H.R. 9535. The first provided for suits against the United States 'for damages caused by collision by a public vessel.' The second, designed as an amendment to the Suits in Admiralty Act, and supported by the Maritime Law Association of the United States,8 would have amended that act so that it would not be limited to vessels operated by the Government as merchant vessels, and would thus have made the United States unquestionably liable to suit for personal injuries caused by public vessels.9 This bill never reached the floor of Congress. The third bill, H.R. 9535, was enacted and became the present Public Vessels Act. Although 'designed as a substitute for H.R. 6989,'10 it omitted the words 'by collision' which would have limited the liability of the United States to damages resulting from collisions by public vessels. The only discussion of any significance to the present inquiry related to the last of these bills. It is true, as petitioner points out, that the proponent of the bill in the House, Mr. Underhill, said, when the bill was introduced: 'The bill I have introduced simply allows suits in admiralty to be brought by owners of vessels whose property has been dam ged by collision or other fault of Government vessels and Government agents.'11 Further, on inquiry as to whether suit could be brought only where blame was charged to the Government, he answered: 'Not entirely; where a man's property is damaged, he can bring a suit.'12 These statements were not, however, answers to questions whether the Act would provide a remedy for injury to the person as well as to property, nor does it appear that the speaker was at the time attentive to such possible distinctions. It is also true that the Committee report said that 'the chief purpose of this bill is to grant private owners of vessels and of merchandise a right of action when their vessels or goods have been damaged as the result of a collision with any Government-owned vessel.'13 However, in the same report a letter from the Attorney General was incorporated, which, while it was addressed to the predecessor bill, H.R. 6989, serves, in the absence of contradiction by the report, as an indication of the Committee's opinion on the intended effect of the act. That letter explicitly stated that 'The proposed bill intends to give the same relief against the Government for damages * * * caused by its public vessels * * * as is now given against the United States in the operation of its merchant vessels, as provided by the suits in admiralty act of March 9, 1920.' As the right to sue for personal injuries under the Suits in Admiralty Act was clear, it may be inferred, at least as strongly as the opposite is implied by Mr. Underhill's remarks, that the Committee understood that the Act would provide a remedy to persons suffering personal injuries as well as property damage.14 Moreover, when the bill reached the floor of the Senate there was not the least indication that the members of that body believed that the Act limited relief to owners of damaged property.15 5 The passage of the Suits in Admiralty Act, the Public Vessels Act, and the Federal Tort Claims Act16 attests to the growing feeling of Congress that the United States should put aside its sovereign armor in cases where federal employees have tortiously caused personal injury or property damage. To hold now that the Public Vessels Act does not provide a remedy against the United States for personal injuries would in the future only throw this form of maritime action under the Federal Tort Claims Act; for that Act excepts from its coverage 'Any claim for which a remedy is provided by the Act * * * of March 3, 1925 (The Public Vessels Act) (U.S.C., title 46, secs. 781-790, inclusive) * * *.'17 We cannot believe that the Public Vessels Act, read in the light of its legislative history evinces a Congressional intent only to provide a remedy to the owners of damaged property. 6 This determination does not dispose of all the issues raised by the Porello case. When impleaded by the United States in the trial court, American, the petitioner here, pleaded as an affirmative defense that Porello, having accepted compensation payments from American, lost whatever right of action he had against the United States as a third party tortfeasor. The petitioner admits that § 33(b) of the Longshoremen's Act was amended in 1938 so that mere acceptance of compensation, without an award, does not operate as an assignment to the employer of the injured employee's cause of action against a third party tortfeasor, a conclusion which courts had reached under the former wording of the Act.18 But it contends that the amendment did no more, and that acceptance of compensation still operates as a conclusive election not to sue. It is quite clear that mere acceptance of compensation is not the kind of election for which provision is made by § 33(a) of the Act, which provides for notice of intention to the deputy commissioner,19 so the argument is technically imperfect. But in any event, election not to sue a third party and assignment of the cause of action are two sides of the same coin. Surely the Act was never intended and has never been held to provide that after acceptance of compensation, and until an award, neither employer nor employee could sue the third party tortfeasor. If so held, an employer who was not responsible over to the third party might lose his chance to recoup compensation payments from the third party, while the third party might escape all liability. American, in the unusual circumstances of this case, could have protected itself by controverting the employee's right to receive compensation.20 In this way it could probably have forced an award and the consequent assignment of the right of action to itself. 7 Congress has provided that unless an employer controverts the right of the employee to receive compensation, he must begin payments within two weeks of the injury.21 The employee thus receives compensation payments quite soon after his injury by force of the Act. Yet the Act does not put a time limitation upon the period during which an employee must elect to receive compensation or to sue, save the general limitation of one year upon the time to make a claim for compensation.22 The apparent purpose of the Act is to provide payments during the period while the employee is unable to earn, when they are sorely needed, without compelling him to give up his right to sue a third party when he is least fit to make a judgment of election. For these reasons we think that mere acceptance of compensation payments does not preclude an injured employee from thereafter electing to sue a third party tortfeasor. 8 American further argues that the court below, as an admiralty court, did not have jurisdiction of the indemnity provision of the stevedoring contract, and that therefore the decree granting full indemnity to the United States from American was beyond its power. A stevedoring contract is maritime. Atlantic Transport Co. v. Imbrovek, 234 U.S. 52, 62, 34 S.Ct. 733, 58 L.Ed. 1208, 51 L.R.A.,N.S., 1157; The Muskegon, 2 Cir., 275 F. 348. And although admiralty jurisdiction over contracts partly maritime and partly non-maritime in nature is doubtful, the cases raising such doubts are concerned only with contracts for the performance of partly non-maritime activities. See The Richard Winslow, 7 Cir., 71 F. 426; Pillsbury Flour Mills Co. v. Interlake S.S. Co., 2 Cir., 40 F.2d 439. To sever a contract provision for indemnity for damages arising out of the performance of wholly maritime activities would only needlessly multiply litigation. Such a provision is a normal clause in contracts to act for others and no more determines the nature of a contract than do conditions on the time and place of payment. 9 Whether the indemnity provision was rightly construed by the court below is a more difficult question. It was provided that: 10 'The Stevedore performing any service under this shcedule shall be responsible for any and all damage or injury to persons and cargo while loading or otherwise handling or stowing the same, to any ship including its apparel and equipment, wharves, docks, lighters, elevators, cars, and carfloats used in connection therewith, through the negligence or fault of the Stevedore, his employees, and servants.' 11 The Stevedore, American, contends that it is liable to indemnify the United States only if damages resulted from its negligence alone. Respondent, United States, argues and the court below held, that such an interpretation would render the provision meaningless since the United States would 'be liable only if itself at fault' and that the clear meaning of the provision is that the Stevedore would be liable so long as the accident was caused in whole or in part through its negligence. 12 American, however, insists that the clause merely stated existing law. On this record we cannot answer the contention of either party. As it stands the clause is ambiguous. Evidence might well have been taken as to the intention of the parties, but was not.23 It may be that the parties only meant American to indemnify the United States should the Government be held liable for damages solely caused by American's negligence. It may be that the intention was that American should fully reimburse the United States for all damages caused in any part by American's negligence. Finally, the parties may have intended that American, in case of the joint negligence of the parties, should be responsible for that proportion of the damages which its fault bore to the total fault. Although the usual rule in admiralty, in the absence of contract, is for each joint tortfeasor to pay the injured party a moiety of the damages, The Alabama, 92 U.S. 695, 23 L.Ed. 763; The Atlas, 93 U.S. 302, 23 L.Ed. 863; Barbarino v. Stanhope S.S. Co., 2 Cir., 151 F.2d 553, we do not believe that the last alternative, which provides for a measure of comparative negligence, is necessarily beyond the intent of the parties. Conparative negligence is not unknown to our maritime law. The Max Morris, 137 U.S. 1, 11 S.Ct. 29, 34 L.Ed. 586; The Henry S. Grove, D.C., 22 F.2d 444; see Robinson on Admiralty, p. 91. From the record it is not clear whether the District Court made any finding as to the meaning of the contract. We believe its interpretation should be left in the first instance to that court, which shall have the benefit of such evidence as there is upon the intention of the parties. If the District Court interprets the contract not to apply to the facts of this case, the court would, of course, be free to adjudge the responsibility of the parties to the contract under applicable rules of admiralty law. 13 We therefore affirm the decree of the Circuit Court of Appeals as to Porello. We reverse so much of the decree as awards indemnity to the United States under the contract and remand the case to the District Court for determination of the meaning of the contract. 14 The case of United States v. Lauro, No. 514, is here on certificate from the Circuit Court of Appeals for the Second Circuit. The certificate is quoted in full in the note.24 The only question posed by the case is whether a suit for damages for death by wrongful act will lie under the Public Vessels Act. It is settled that where death 'results from a maritime tort committed on navigable waters within a State whose statutes give a right of action on account of death' the admiralty will entertain a libel for damages sustained by t ose to whom the right is given. Western Fuel Co. v. Garcia, 257 U.S. 233, 42 S.Ct. 89, 66 L.Ed. 210. See discussion in Just v. Chambers, 312 U.S. 383, 388—391, 668, 61 S.Ct. 687, 691—693, 85 L.Ed. 903. Here the death occurred on navigable waters of New York, which has a statute granting a right of action for damages on account of wrongful death. Nor can damages suffered on account of death be distinguished from damages on account of personal injuries. Death is the supreme personal injury. For the reasons stated in the Porello case we conclude that the word 'damages' in the Public Vessels Act, § 1, 46 U.S.C. § 781, 46 U.S.C.A. § 781, means damages under §§ 130—134 of the New York Decedent Estate Law. Accordingly we answer the certificate as follows: The word 'damages' as used in 46 U.S.C. § 781, 46 U.S.C.A. § 781, includes damages under §§ 130—134 of the Decedent Estate Law of the State of New York recoverable by a personal representative because of the death of a human being. 15 Affirmed in part and reversed in part; question answered. 16 Mr. Justice FRANKFURTER, with whom The CHIEF JUSTICE concurs, dissenting. 17 Without disregarding the significance which we have heretofore attached to legislative history, I cannot give the Public Vessels Act1 the scope given it by the Court. 18 It can hardly be maintained that, in the setting of legal history, the phrase 'damages caused by a public vessel' must cover personal injuries due to failure to provide proper working conditions for a longshoreman. The problem for construction is not whether the term 'damages' may be applied to money compensation for hurt to person or property. What is to be construed is 'damages caused by a public vessel'. Standing by itself, that phrase, spontaneously read, may well mean damage inflicted by a public vessel rather than 'damages' incurred in connection with its operation. All we held in Canadian Aviator, Ltd. v. United States, 324 U.S. 215, 65 S.Ct. 639, 89 .l.Ed. 901, was that its personnel was part of the public vessel for purposes of 'causing' damage to another vessel. 19 The words do not stand alone. They are illuminated by the legislative history of the Public Vessels Act. This history has been so accurately summarized in the Government's brief that we shall avail ourselves of it: 20 'On May 29, 1924, Mr. Underhill introduced H.R. 9535, 68th Cong., 1st Sess., which became the Public Vessels Act without change so far as the present provision is concerned. At that time, there were already pending two other bills, H.R. 6989 and H.R. 9075, both of which would also have authorized suit in case of damage by a public vessel. H.R. 6989, likewise introduced by Mr. Underhill, was the successor of a series of bills introduced at each session of Congress since 1920. It provided for suit 'for damages caused by collision by a public vessel,' and had the approval of all interested Government departments. H.R. 9075, a new measure, was designed to revise the Suits in Admiralty Act and, at the same time, remove its existing limitation to only such vessels as are operated by the Government as merchant vessels. It would have resulted in making the United States liable for personal injuries by all public vessels exactly as it was already for those by its merchant vessels. H.R. 9075 had the powerful support of the Maritime Law Association of the United States and of Judge Hough, then the country's outstanding admiralty judge. It did not have the unqualified approval of the interested departments, which were insisting on important changes. 21 'The omission of H.R. 6989 and its predecessors to cover personal injuries had been the subject of criticisms, some of which are cited in the brief of respondent Porello. But protracted delays were apparent if an attempt were made to rewrite H.R. 9075 so as to meet the objections thereto. Instead of proceeding further with either H.R. 6989 or H.R. 9075, Mr. Underhill, for the Committee, introduced H.R. 9535, which, in place of limiting its grant of jurisdiction to suits 'for damages caused by collision by a public vessel,' covered all suits 'for damages caused by a public vessel.' The purpose, of this change is nowhere discussed. Mr. Underhill, in explaining the intent of the proposed legislation, stated, however (66 Cong.Rec. 2087): 'The bill I have introduced simply allows suits in admiralty to be brought by owners of vessels whose property has been damaged by collision or other fault of Government vessels and Government agents.' Never at any time in the course of the debates in the House or Senate was it expressly stated that the bill extended to suits for personal injuries. Many statements in the course of the debates, some of which are cited in petitioner's brief, seem to indicate that only relief for property damage was intended. We accordingly submit that, if decisive weight is to be given to the legislative history, it would appear that the Public Vessels Act was not intended to cover suits for personal injury.' 22 In scores of cases in recent years this Court has give 'decisive weight' to legislative history. It has done so even when the mere words of an enactment carried a clear meaning. An impressive course of decisions enjoins upon us not to disregard the legislative history of the Public Vessels Act unless it is so completely at war with the terms of the statute itself that we must deny one or the other. We can find such a conflict only by reading the Act itself with dogmatic inhospitality to the usual illuminations from without. 23 We cannot escape the conclusion that there was no jurisdiction for this libel in the District Court.2 1 44 Stat. 1424, as amended by 52 Stat. 1164. 2 43 Stat. 1112: '* * * a libel in personam in admiralty may be brought against the United States, or a petition impleading the United States, for damages caused by a public vessel of the United States, and for compensation for towage and salvage services, including contract salvage, rendered to a public vessel of the United States * * *.' 3 See Rule 56, Rules of Practice for U.S. Courts in Admiralty and Maritime Jurisdiction, 28 U.S.C.A. following section 723. 4 Canadian Aviator, Ltd., v. United States, 324 U.S. 215, 65 S.Ct. 639, 89 L.Ed. 901. 5 43 Stat. 1112, 46 U.S.C. § 781, 46 U.S.C.A. § 781. 6 It might be noted here that there is a distinction between damage and damages. Black's Law Dictionary cautions that the word 'damage,' meaning 'loss, injury, or deterioration,' is 'to be distinguished from its plural,—' damages,'—which means a compensation in money for a loss or damage.' 7 H.R. 15977, 66th Cong., 3d Sess.; H.R. 6256, 67th Cong., 1st Sess.; H.R. 6989, 68th Cong., 1st Sess., H.R. 9075, 68th Cong., 1st Sess.; H.R. 9535, 68th Cong., 1st Sess. 8 See Hearings before the Committee on the Judiciary of the House of Representatives, on H.R. 9075, 68th Cong., 1st Sess., May 21, 1924. 9 46 U.S.C. §§ 741, 742, 46 U.S.C.A. §§ 741, 742: 'No vessel owned by the United States * * * shall, in view of the provision herein made for a libel in personam, be subject to arrest or seizure by judicial process in the United States or its possessions * * *'. 'In cases where if such vessel were privately owned or operated, or if such cargo were privately owned and possessed, a proceeding in admiralty could be maintained at the time of the commencement of the action herein provided for, a libel in personam may be brought against the United States or against any corporation mentioned in section 741 of this title, as the case may be, provided that such vessel is employed as a merchant vessel or is a tugboat operated by such corporation. * * *' Johnson v. United States Shipping Board Emergency Fleet Corporation, 280 U.S. 320, 50 S.Ct. 118, 74 L.Ed. 451; Brady v. Roosevelt S.S. Co., 317 U.S. 575, 63 S.Ct. 425, 87 L.Ed. 471. 10 S.Rep.No. 941, 68th Cong., 2d Sess. 11 66 Cong.Rec. 2087. 12 66 Cong.Rec. 2088. 13 S.Rep.No. 941, 68th Cong., 2d Sess., p. 1. Of course the chief purpose of the bill was to provide a remedy for those who chiefly urged the bill—the vessel owners. But the committee, in so stating, cannot be taken to have made that purpose the only one. By that token the purpose would be to provide a remedy only for collision damages, a limitation clearly discarded by omitting the words 'by collision' from the Act. Canadian Aviator, Ltd. v. United States, supra, n. 4. 14 See note 9, supra. 15 So the only pertinent comments follow, 66 Cong.Rec. 3560: 'Mr. Robinson. I think the Senator from Delaware should state briefly to the Senate the effect of the bill. It seems to be a measure of considerable importance. 'Mr. Bayard. Mr. President, the Senator f om Arkansas is quite right; it is a measure of great importance. There are continuous applications being made to the Claims Committee of both Houses for the consideration of bills to reimburse people who have suffered damage from maritime accidents in which United States vessels are concerned, to enable them to present their suits in the various district courts. In this last Congress there were nearly 200 such claim bills introduced in the two Houses. '* * * It would give a person aggrieved because of an accident by reason of the shortcomings of a United States ship the right to go into a district court and prosecute his action. It provides for the appearance of the Attorney General of the United States, and all maritime accidents of any kind resulting from collision, and so on, are taken care of. A great deal of money would be saved to the Government. 'Incidentally, the bill would accomplish something which should have been done in this country a long time ago. It would give an opportunity to do justice when Federal employees have committed an offense against an individual. * * * 'Mr. Robinson. If enacted, it would relieve Congress of the consideration of a great many measures in the nature of private claims. 'Mr. Bayard. All claims of this nature.' 16 Public Law No. 601, 79th Cong., 2d Sess., §§ 401—424, 28 U.S.C.A. §§ 921—946. 17 Id., § 421. 18 The statute formerly provided, 44 Stat. 1440: 'Acceptance of such compensation shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person, whether or not the person entitled to compensation has notified the deputy commissioner of his election.' Under this form of the statute courts had held that acceptance of compensation precluded the employee from suing a third party tortfeasor. Sciortino v. Dimon S.S. Corporation, D.C., 39 F.2d 210, affirmed 2 Cir., 44 F.2d 1019; Toomey v. Waterman S.S. Corporation, 2 Cir., 123 F.2d 718; The Nako Maru, 3 Cir., 101 F.2d 716; Freader v. Cities Service Trans. Co., D.C., 14 F.Supp. 456. Contra, Johnsen v. American-Hwaiian S.S. Co., 9 Cir., 98 F.2d 847. As amended the statute provides, 52 Stat. 1168: 'Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person.' 19 33 U.S.C. § 933(a), 33 U.S.C.A. § 933(a): 'If on account of a disability or death for which compensation is payable under this chapter the person entitled to such compensation determines that some person other than the employer is liable in damages, he may elect, by giving notice to the deputy commissioner in such manner as the commission may provide, to receive such compensation or to recover damages against such third person.' 20 See 33 U.S.C. § 914(d) and (h), 33 U.S.C.A. § 914(d, h). 21 33 U.S.C. § 914(b), (e), 33 U.S.C.A. § 914(b, e). 22 33 U.S.C. § 913(a), 33 U.S.C.A. § 913(a). 23 American moved the Circuit Court of Appeals for an order allowing the parties to take proof and to submit it to the court as to the intent of the parties respecting the indemnity clause of the contract, or in the alternative for an order remanding the proceeding to the District Court for further hearing as to the intent and meaning of the clause. The Circuit Court of Appeals denied the motion. 24 'Statement of facts 'On May 27, 1943, Peter Lauro died as a result of injuries suffered by him on May 26, 1943, while he was employed by Marra Bros., contracting stevedores, on board respondent's vessel, designated as No. 596, which vessel was docked at Pier 4, Staten Island, New York. The death was caused by personal injuries suffered by Lauro when he fell from a hatch cover on the vessel's main deck into the hold. At the time of the accident, the vessel, No. 596, was owned by the United States of America, respondent, and had been allocated by the respondent to the United States Army. It was being loaded with cargo which was owned by the United States, and which consisted of Army and Navy property and Lend-Lease material which was being shipped to North Africa. Marra Bros., the employer of the deceased, was hired by the United States Army to load the vessel. 'Thereafter, Lauro's widow filed a libel in the United States District Court for the Eastern District of New York against United States of America to recover damages under the Public Vessels Act of 1925; 46 U.S.C. Section 781, 46 U.S.C.A. § 781, for wrongfully causing Lauro's death. In this proceeding the District Court rendered a decree awarding damages to the libelant in the sum of $25,000. From this decree an appeal was taken to this court, and the cause came on for argument on March 12, 1946. On this appeal, the respondent-appellant contended that the said Public Vessels Act of 1925 provided a remedy against the United States for damage to property only, but not for damage to a person or damage arising by reason of the death of a human being. The question thus arising is as follows: 'Question certified 'Does the word 'damages,' as it appears in the following sentence of the Public Vessels Act of 1925; 46 U.S.C. § 781, 46 U.S.C.A. § 781: 'A libel in personam in admiralty may be brought against the United States, or a petition impleading the United States, for damages caused by a public vessel of the United States, and for compensation for towage and salvage services, including contract salvage, rendered to a public vessel of the United States: Provided, That the cause of action arose after the 6th day of April, 1920' mean damages to property only, or does it mean, as well, damages under Sections 130 to 134 of the Decedent Estate Law of the State of New York, Consol.Laws, c. 13, recoverable by a personal representative because of the death of a human being? While question, arising from the facts aforesaid, is hereby submitted to the Supreme Court.' 1 43 Stat. 1112, 46 U.S.C. § 781, 46 U.S.C.A. § 781: 'That 'a libel in personam in admiralty may be brought against the United States, or a petition impleading the United States, for damages caused by a public vessel of the United States, and for compensation for towage and salvage services, including contract salvage, rendered to a public vessel of the United States: Provided, That the cause of action arose after the 6th day of April, 1920.' 2 This conclusion is reinforced by the Report of the Senate Committee that 'The chief purpose of this bill is to grant private owners of vessels and of merchandise a right of action when their vessels or goods have been damaged as the result of a collision with any Government-owned vessel'. S.Rep.No.941, 68th Cong., 2d Sess., p. 1. The Court's opinion finds overriding significance in a letter by the Attorney General commenting on the Bill, in which he stated that it 'intends to give the same relief against the Government for damages caused * * * by its public vessels' as was given by the Suits in Admiralty Act. That Act did afford the right to sue for personal injuries. To prefer the Attorney General's view to that expressed by those in charge of a measure would in itself be not the normal choice. And this letter of the Attorney General antedated the Report of the Committee and the statement of Representative Underhill. Compare United States v. Durkee Famous Foods, 306 U.S. 68, 71, 59 S.Ct. 456, 457, 458, 83 L.Ed. 492, where the Committee Report 'stated that the purpose of the bill was set out in a letter from the Attorney General which it quoted.' To reject the subsequent authoritative statements of the Congressional proponents of the legislation and to accept the view of the Attorney General to which the Government now does not even refer, is to discard in favor of dim remote light what heretofore has been deemed controlling illumination.

78

330 U.S. 422 67 S.Ct. 815 91 L.Ed. 993 JOSEPH, Comptroller of City of New York, et al.v.CARTER & WEEKES STEVEDORING CO. SAME v. JOHN T. CLARK & SON. Nos. 29 and 30. Reargued Nov. 12, 1946. Decided March 10, 1947. Mr. Isaac C. Donner, of New York City, for petitioners. Mr. Samuel M. Lane, of New York City, for respondents. Mr. Justice REED delivered the opinion of the Court. 1 These two writs of certiorari bring before this Court contentions in reg rd to the application to the respective respondents, Carter & Weekes Stevedoring Company and John T. Clark & Son, of New York City, of the general business tax laws covering, when both cases are considered, the years 1937 to 1941, inclusive.1 The character of the taxes in issue will appear from a section, set out below, of a local law imposing the tax for 1939 and 1940.2 The respective taxpayers are liable also for the general income and ad valorem taxes of the State and City of New York. Both respondents are corporations engaged in the business of general stevedoring. For these cases, the business of respondents may be considered as consisting only of taking freight from a convenient place on the pier or lighter wholly within the territorial limits of New York City and storing it properly for safety and for handling in or on the outgoing vessel alongside, or of similarly unloading a vessel on its arrival. The vessels moved in interstate or foreign commerce, without a call at any other port of New York. We do not find it necessary to consider separately interstate and foreign commerce. The Commerce Clause covers both. 2 Through statutory proceedings unnecessary to particularize, the Comptroller of the City of New York determined that the respondents were liable for percentage taxes upon the entire gross receipts from the above activities for the years in question under the provisions of the respective local laws to which reference has been made. Review of these determinations was had by respondents in the Supreme Court of New York County, Appellate Division. The determinations of the Comptroller were annulled on the authority of Puget Sound Stevedoring Company v. Tax Commission, 302 U.S. 90, 58 S.Ct. 72, 82 L.Ed. 68; Matter of Clark & Son v. McGoldrick, 269 App.Div. 685, 54 N.Y.S.2d 380, 383. These orders were affirmed by the Court of Appeals, Carter & Weekes Stevedoring Co. v. McGoldrick, 294 N.Y. 906, 908, 63 N.E.2d 112, and remittiturs issued stating that the Court of Appeals affirmed on the ground that the local laws as applied in these cases were in violation of Article I, § 8, Clause 3, of the Constitution of the United States.3 Writs of certiorari to his Court were sought and granted on the issue of whether or not this tax on these respondents constituted an unconstitutional burden on commerce. 3 Petitioners recognize the force of the Puget Sound case as a precedent. Their argument is that subsequent holdings of this Court have indicated that the reasons which underlay the decision are no longer controlling in judicial examination of the constitutionality of state taxation of the gross proceeds derived from commerce, subject to federal regulation. They cite, among others, these later decisions: Western Live Stock v. Bureau of Internal Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944; Southern Pacific Co. v. Gallagher, 306 U.S. 167, 59 S.Ct. 389, 83 L.Ed. 586; McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876; Department of Treasury of Indiana v. Wood Preserving Corporation, 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188. 4 In the Puget Sound case a state tax on gross receipts, indistinguishable from that laid by New York City in this case, was held invalid as applied to stevedoring activities exactly like those with which we are here concerned. The Puget Sound opinion pointed out, 302 U.S. at page 92 et seq., 58 S.Ct. at page 73, 82 L.Ed. 68, that transportation by water is impossible without loading and unloading. Those incidents to transportation occupy the same relation to that commerce whether performed by the crew or by stevedore, contracting independently to handle the cargo. The movement of cargo off and on the ship is substantially a continuation of the transportation. Cf. Baltimore & O.S.W.R. Co. v. Burtch, 263 U.S. 540, 44 S.Ct. 165, 68 L.Ed. 433. 5 It is trite to repeat that the want of power in the confederation to regulate commerce was a principal reason for the adoption of the Constitution. The Commerce Clause bears no limitation of power upon its face and, when the Congress acts under it, interpretation has suggested none, except such as may be prescribed by the Constitution. Gibbons v. Ogden, 9 Wheat. 1, 196, 6 L.Ed. 23; United States v. Carolene Products Co., 304 U.S. 144, 147, 58 S.Ct. 778, 780, 781, 82 L.Ed. 1234; North American Co. v. Securities and Exchange Commission, 327 U.S. 686, 704, 66 S.Ct. 785, 795, 796. On the other hand, the Constitution, by words, places no limitation upon a state's power to tax the things or activities or persons within its boundaries. What limitations there are spring from applications to state tax situations of general clauses of the Constitution. E.g., Art. I § 10, Cl. 2 and 3; New York Indians, 5 Wall. 761, 18 L.Ed. 708; Board of County Commissioners v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313; Bell's Gap R. Co. v. Pennsylvania, 134 U.S. 232, 237, 10 S.Ct. 533, 535, 33 L.Ed. 892; Lawrence v. State Tax Commission, 286 U.S. 276, 284, 52 S.Ct. 556, 558, 559, 76 L.Ed. 1102, 87 A.L.R. 374; Henderson Bridge Co. v. City of Henderson, 173 U.S. 592, 614—15, 19 S.Ct. 553, 561, 562, 43 L.Ed. 823; New York Rapid Transit Corporation v. City of New York, 303 U.S. 573, 581—82, 58 S.Ct. 721, 725, 726, 82 L.Ed. 1024. From the Commerce Clause itself, there comes, also, an abridgment of the state's power to tax within its territorial limits. This has arisen from long continued judicial interpretation that, without congressional action, the words themselves of the Commerce Clause forbid undue interferences by the states with interstate commerce4 and that this rule applies in full force to an unapportioned5 tax on the gross proceeds from interstate business,6 where the taxes were not in lieu of ad valorem taxes on property.7 6 We do not think that a tax on gross income from stevedoring, obviously a 'continuation of the transportation,' is a tax apportioned to income derived from activities within the taxing state. The transportation in commerce, at the least, begins with loading and ends with unloading. Loading and unloading has effect on transportation outside the taxing state because those activities are not only preliminary to but are an essential part of the safety and convenience of the transportation itself. 7 When we come to weigh the burden or interference of this tax on the gross receipts from interstate commerce, the purposes of that portion of the Commerce Clause—the freeing of business from unneighborly regulations that inhibit the intercourse which supplies reciprocal wants by commerce8—is a significant factor for consideration. An interpretation of the text to leave the states free to tax commerce until Congress intervened would have permitted intolerable discriminations. Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 162 A.L.R. 844, and cases collected in notes 13, 14, 15 and 16. Nevertheless, a proper regard for the authority of the states and their right to require interstate commerce to contribute by taxes to the support of the state governments which make their interstate commerce possible, has led Congress, over a long period to leave intact the judicial rulings, referred to above, that apportioned, non-discriminatory gross receipt taxes or those fairly levied in lieu of property taxes conformed to the requirements of the Commerce Clause. As the power lies in Congress under the Clause to make any desired adjustment in the taxation area, its acquiescence in our former rulings on state taxation indicates its agreement with the adjustments of the competing interests of commerce and necessary state revenues.9 There is another reason that may be the basis for the acceptance, almost complete, by Congress of the judicial interpretations in this field. This is that a wide latitude exists for permissible state taxation. This term, in an effort to show that the reach of the Circuit Court did not destroy the state's power to make commerce pay its way, we elaborated the fact that taxes on the commerce itself was not the sole source of state revenue from that commerce. Freeman v. Hewit supra, 329 U.S. 249, 254, 67 S.Ct. 274, 277, see also Adams Mfg. Co. v. Storen, supra, 304 U.S. at page 310, 58 S.Ct. at page 915, 85 L.Ed. 1365. 8 A power in a state to tax interstate commerce or its gross proceeds, unhampered by the Commerce Clause, would permit a multiple burden upon that commerce. This has been noted as ground for their invalidation. Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 255, 58 S.Ct. 546, 548, 82 L.Ed. 823, 115 A.L.R. 944. The selection of an intrastate incident as the taxable event actually carries a similar threat to the commerce but, where the taxable event is considered sufficiently disjoined from the commerce, it is thought to be a permissible state levy.10 This result generally is reached because the local incident selected is one that is essentially local and is not repeated in each taxing unit. In the present case, the threat of a multiple burden, except in the few instances in the record of interstate, in distinction to foreign, commerce, is absent. The multiple burden on interstate transportation from taxation of the gross receipts from stevedoring arises from the possibility of a similar tax for unloading. The actual effect on the cost of carrying on the commerce does not differ from that imposed by any other tax exaction—ad valorem, net income or excise. Cf. Western Live Stock v. Bureau of Revenue, supra, 303 U.S. at page 254, 58 S.Ct. at page 548, 82 L.Ed. 823, 115 A.L.R. 944. We need consider only whether or not the loading and unloading is distinct enough from the commerce to permit the tax on the gross. 9 On precedent, the Puget Sound case is controlling. It was promptly and recently cited with approval.11 It appears in Adams Mfg. Co. v. Storen12 in support of the possible double tax argument against levies on interstate commerce. In Western Live Stock v. Bureau of Revenue, supra, 303 U.S. at page 258, 58 S.Ct. at page 549, 550, 82 L.Ed. 823, 115 A.L.R. 944, it was adverted to as a case for comparison with a ruling that 'preparing, printing and publishing magazine advertising is peculiarly local and distinct from its circulation whether or not that circulation be interstate commerce.' The case was not included in the Court's opinion in Gwin, White & Prince, Inc. v. Henneford,13 where a state gross receipts tax on income from marketing fruit interstate was invalidated under the Commerce Clause, or in McGoldrick v. Berwind-White Coal Mining Co.,14 though relied upon in the concurring opinion in the first 305 U.S. at page 442, 59 S.Ct. at page 329, 83 L.Ed. 272, and the dissent in the second 309 U.S. at page 62, 60 S.Ct. at page 400, 84 L.Ed. 565, 128 A.L.R. 876. Upon examination this history gives an impression that there has been a doubt as to the continued vitality of Puget Sound. We come now face to face with the problem of overruling or approving the case. 10 Since Puget Sound there has been full consideration of how far a state may go in taxing intrastate incidents closely related in time and movement to the interstate commerce. The cases that lend strongest support to petitioners' argument for overruling the Puget Sound decision have been referred to above. We comment further upon them. The 2% excise tax levied by New Mexico on the gross receipts of publishers from advertising, upheld in Western Live Stock, was found to be an exaction for carrying on a local business.15 The Gallagher case turns expressly on our conclusion that a use tax is validly levied on an intrastate event, 'separate and apart from interstate commerce,' 306 U.S. at page 176, 59 S.Ct. at page 393, 83 L.Ed. 586, and the Wood Preserving case16 reached a similar result by reason of the fact that the taxpayer sold and delivered its ties intrastate before transportation began, 313 U.S. at page 67, 61 S.Ct. at page 887, 888, 85 L.Ed. 1188. This is likewise true of American Mfg. Co. v. City of St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084, as explained in the Storen case.17 When we examine the Berwind-White tax on the purchasers of tangible personal property for consumption, there is the same reliance upon the local character of the sale, 309 U.S. at pages 43, 47, 49, 58, 60 S.Ct. at pages 390, 392, 393, 394, 398, 84 L.Ed. 565, 128 A.L.R. 876.18 We there said, 309 U.S. at page 48, 60 S.Ct. at page 393, 84 L.Ed. 565, 128 A.L.R. 876: 11 'Certain types of tax may, if permitted at all, so readily be made the instrument of impeding or destroying interstate commerce as plainly to call for their condemnation as forbidden regulations. Such are the taxes already noted which are aimed at or discriminate against the commerce or impose a levy for the privilege of doing it, or tax interstate transportation or communication or their gross earnings, or levy an exaction on merchandise in the course of its interstate journey.' Though all of these cases were closely related to transportation in commerce both in time and movement, it will be noted that in each there can be distinguished a definite separation between the taxable event and the commerce itself. We have no reason to doubt the soundness of their conclusions. 12 Stevedoring is more a part of the commerce than any of the instances to which reference has just been made. Although state laws do not discriminate against interstate commerce or in actuality or by possibility subject it to the cumulative burden of multiple levies, those laws may be unconstitutional because they burden or interfere with commerce. See Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U.S. 761, 767, 65 S.Ct. 1515, 1519, 89 L.Ed. 1915. Stevedoring, we conclude, is essentially a part of the commerce itself and therefore a tax upon its gross receipts or upon the privilege of conducting the business of stevedoring for interstate and foreign commerce, measured by those gross receipts, is invalid. We reaffirm the rule of Puget Sound Stevedoring Company. 'What makes the tax invalid is the fact that there is interference by a State with the freedom of interstate commerce.' Freeman v. Hewit, supra, 329 U.S. 249, 256, 67 S.Ct. 274, 279. Such a rule may in practice prohibit a tax that adds no more to the cost of commerce than a permissible use or sales tax. What lifts the rule from formalism is that it is a recognition of the effects of state legislation and its actual or probable consequences. Not only does it follow a line of precedents outlawing taxes on the commerce itself but it has reason to support it in the likelihood that such legislation will flourish more luxuriant y where the most revenue will come from foreign or interstate commerce. Thus in port cities and transportation or handling centers, without discrimination against out-state as compared with local business, larger proportions of necessary revenue could be obtained from the flow of commerce. The avoidance of such a local toll on the passage of commerce through a locality was one of the reasons for the adoption of the Commerce Clause. 13 Affirmed. 14 Mr. Justice BLACK dissents. 15 Mr. Justice DOUGLAS, with whom Mr. Justice RUTLEDGE concurs, dissenting in part. 16 First. I think the tax is valid insofar as it reaches the gross receipts from loading and unloading vessels engaged in interstate commerce. 17 Puget Sound Stevedoring Co. v. Tax Commission, 302 U.S. 90, 58 S.Ct. 72, 82 L.Ed. 68, makes clear that respondents' activities in loading and unloading the vessels are interstate commerce. That case followed a long line of decisions1 when it held in 1937 that a State could not tax the privilege of engaging in interstate or foreign commerce by exacting a percentage of the gross receipts. 18 Those cases, like the present one, involved no exaction by the State of a license to engage in interstate commerce on the payment of flat license tax or otherwise. Cf. Leloup v. Port of Mobile, 127 U.S. 640, 8 S.Ct. 1380, 32 L.Ed. 311; Crutcher v. Kentucky, 141 U.S. 47, 11 S.Ct. 851, 35 L.Ed. 649; Bowman v. Continental Oil Co., 256 U.S. 642, 41 S.Ct. 606, 65 L.Ed. 1139; Cooney v. Mountain States Telephone & Telegraph Co., 294 U.S. 384, 55 S.Ct. 477, 79 L.Ed. 934; Murdock v. Pennsylvania, 319 U.S. 105, 114, 63 S.Ct. 870, 875, 891, 87 L.Ed. 1292, 146 A.L.R. 81. Nor did they, any more than the present case, concern legislation which expressed hostility to interstate commerce by discriminating against it. Cf. Best & Co. v. Maxwell, 311 U.S. 454, 61 S.Ct. 334, 85 L.Ed. 275; Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 162 A.L.R. 844. Although all or like business of a local nature was subject to the same tax, the interstate business was granted immunity. The theory, as expressed in Philadelphia & S. M. Southern S. Co. v. Pennsylvania, 122 U.S. 326, 336, 7 S.Ct. 1118, 1119, 1120, 30 L.Ed. 1200, was that taxation was one form of regulation and a tax on the gross receipts from interstate transportation would be 'a regulation of the commerce, a restriction upon it, a burden upon it. Clearly, this could not be done by the state without interfering with the power of congress.' 19 The tax in that case was a tax on the gross receipts from fares and freight for the transportation of persons and goods in interstate and foreign commerce. It was unapportioned. As we shall see, the holding in the Philadelphia & S. M. Southern S. Co. case has not been impaired. But the principle it announced—that a tax on the gross receipts was forbidden because it was a regulation of interstate or foreign commerce—was not given full scope. For soon gross receipts taxes on businesses engaged in interstate commerce (including transportation or communication) were sustained where they were not discriminatory and where they were fairly apportioned to the commerce carried on in the taxing state.2 Maine v. Grand Trunk R. Co., 142 U.S. 217, 12 S.Ct. 121, 163, 35 L.Ed. 994. Their validity was established whether they were employed as a measure of the value of a local franchise (Maine v. Grand Trunk R. Co., supra; Wisconsin & M.R. Co. v. Powers, 191 U.S. 379, 24 S.Ct. 107, 48 L.Ed. 229) or were used in lieu of all other property taxes to measure the value of the property in the State. nited States Express Co. v. Minnesota, 223 U.S. 335, 32 S.Ct. 211, 56 L.Ed. 459; Cudahy Packing Co. v. Minnesota, 246 U.S. 450, 38 S.Ct. 373, 62 L.Ed. 827; Illinois Central R. Co. v. Minnesota, 309 U.S. 157, 60 S.Ct. 419, 84 L.Ed. 670. 20 The distinction between an apportioned gross receipts tax and a tax on all the gross receipts of an interstate business, such as was involved in Philadelphia & S. M. Southern S. Co. v. Pennsylvania, supra, 122 U.S. at pages 335—336, 7 S.Ct. at pages 1119, 1120, 30 L.Ed. 1200, was explained in Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 256, 58 S.Ct. 546, 549, 82 L.Ed. 823, 115 A.L.R. 944, which was decided in 1938. The Court stated that the latter type of tax could be imposed or added to 'with equal right by every state which the commerce touches, merely because interstate commerce is being done, so that without the protection of the commerce clause it would bear cumulative burdens not imposed on local commerce. * * * The multiplication of state taxes measured by the gross receipts from interstate transactions would spell the destruction of interstate commerce and renew the barriers to interstate trade which it was the object of the commerce clause to remove.' This explanation of the vice of the unapportioned gross receipts tax had been earlier suggested in Case of the State Freight Tax, 15 Wall. 232, 280, 21 L.Ed. 146, and has been accepted by our decisions since the Western Live Stock case. Adams Mfg. Co. v. Storen, 304 U.S. 307, 311, 58 S.Ct. 913, 915, 916, 82 L.Ed. 1365; Gwin, White & Prince, Inc. v. Henneford, 305 U.S. 434, 438-440, 59 S.Ct. 325, at pages 327, 328, 83 L.Ed. 272; McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 45—46, 60 S.Ct. 388, at pages 391, 392, 84 L.Ed. 565, 128 A.L.R. 876. In both Adams Mfg. Co. v. Storen, supra, and Gwin, White & Prince Inc. v. Henneford, supra, unapportioned gross receipts taxes as applied to the receipts from interstate sales were held invalid. It was said that the vice of such a tax was that interstate commerce would be subjected 'to the risk of a double tax burden to which intrastate commerce is not exposed * * *.' Adams Mfg. Co. v. Storen, supra, 304 U.S. at page 311, 58 S.Ct. at page 915, 916, 82 L.Ed. 1365. Or as stated in Gwin, White & Prince, Inc. v. Henneford, supra, 305 U.S. at page 439, 59 S.Ct. at page 327, 328, 83 L.Ed. 272: 21 'Here the tax, measured by the entire volume of the interstate commerce in which appellant participates, is not apportioned to its activities within the state. If Washington is free to exact such a tax, other states to which the commerce extends may, with equal right, lay a tax similarly measured for the privilege of conducting within their respective territorial limits the activities there which contribute to the service. The present tax, though nominally local, thus in its practical operation discriminates against interstate commerce, since it imposes upon it, merely because interstate commerce is being done, the risk of a multiple burden to which local commerce is not exposed.' 22 As was later stated in Southern Pacific Co. v. Gallagher, 306 U.S. 167, 175, 59 S.Ct. 389, 392, 83 L.Ed. 586, as respects taxes on gross receipts from interstate transactions or interstate transportation, 'The measurement of a tax by gross receipts where it cannot result in a multiplication of the levies is upheld.' 23 Under that view the Philadelphia & S. M. Southern S. Co. case would be decided one way and the Puget Sound Stevedoring Co. case the other. As we have noted, the tax in the Philadelphia & S. M. Southern S. Co. case was a gross receipts tax on fares and freight for the transportation of persons and goods in interstate and foreign commerce. It was unapportioned. And there was the risk of multiple taxation to which local transportation, though also taxed, was not subjected. The same was true of Ratterman v. Western Union Tel. Co., 127 U.S. 411, 8 S.Ct. 1127, 32 L.Ed. 229; Western Union Telegraph Co. v. Alabama, 132 U.S. 472, 10 S.Ct. 161, 33 L.Ed. 409; and Meyer v. Wells Fargo & Co., 223 U.S. 298, 32 S.Ct. 218, 56 L.Ed. 445. 24 But in the Puget Sound case any risk of multiple taxation was absent. The same is true of the present case. For in each the activity of loading and unloading was confined exclusively to the State that imposed the tax. No other State could tax the same activity.3 The tax therefore is in its application nothing more than a gross receipts tax apportioned to reach only income derived from activities within the taxing State. The gross receipts reflect values attributed to the business or property wholly within the taxing state. Under the test of our recent decisions (Western Live Stock v. Bureau of Revenue, supra; Adams Mfg. Co. v. Storen, supra; Gwin, White & Prince, Inc. v. Henneford, supra), the tax would therefore seem to be unobjectionable. 25 It is true, however, that taxes on gross receipts of transportation companies and other interstate enterprises were held invalid in cases prior to the Puget Sound case, even though all of the activities were confined to the taxing state and could not be taxed by any other state. Galveston, Harrisburg & S.A. Ry. Co. v. Texas, 210 U.S. 217, 28 S.Ct. 638, 52 L.Ed. 1031; New Jersey Bell Tel. Co. v. State Board of Texes and Assessment 280 U.S. 338, 50 S.Ct. 111, 74 L.Ed. 463. Cf. Fargo v. Michigan, 121 U.S. 230, 7 S.Ct. 857, 30 L.Ed. 888. The explanation given in the Galveston case was that a tax on the gross receipts was a regulation of commerce, as the Philadelphia & S. M. Southern S. Co. case held. It distinguished Maine v. Grand Trunk R. Co., supra, and the other apportionment cases on the ground that they involved taxes on property, the gross receipts being taken as the measure of the value of the property. The Court said (210 U.S. at page 227, 28 S.Ct. at page 640, 52 L.Ed. 1031): 26 'It appears sufficiently, perhaps from what has been said, that we are to look for a practical rather than a logical or philosophical distinction. The state must be allowed to tax the property, and to tax it at its actual value as a going concern. On the other hand, the state cannot tax the interstate business. The two necessities hardly admit of an absolute logical reconciliation. Yet the distinction is not without sense. When a legislature is trying simply to value property it is less likely to attempt to or effect injurious regulation than when it is aiming directly at the receipts from interstate commerce. A practical line can be drawn by taking the whole scheme of taxation into account. That must be done by this court as best it can. Neither the state courts nor the legislatures, by giving the tax a particular name or by the use of some form of words, can take away our duty to consider its nature and effect. If it bears upon commerce among the states so directly as to amount to a regulation in a relatively immediate way, it will not be saved by name or form.' 27 The Galveston case, like the Philadelphia & S. M. Southern S. Co. case, involved a tax applicable to transportation companies alone.4 Whatever may be said for the proposition that a gross receipts tax, applicable only to transportation companies, may readily become the instrument for impeding or destroying interstate commerce, that consideration has no relevancy here. For in the present case, as in the Puget Sound case, all businesses are taxed alike. There is equality throughout; and interstate commerce is taxed no heavier than local business. Political restraints, perhaps lacking when a particular type of business is singled out for special taxation, would not be absent here. 28 Moreover, the difference between a tax on property measured by gross receipts and a tax on the gross receipts does not appear significant in constitutional terms when the issue is one of undue burden on interstate commerce. Either might be an instrument to that end. The apportioned gross receipts tax in Maine v. Grand Trunk R. Co., supra, was in terms 'an annual excise tax for the privilege of exercising' the corporation's franchises in the State. 142 U.S. at page 219, 12 S.Ct. at page 121, 163, 35 L.Ed. 994. The Court stated, 142 U.S. at page 228, 12 S.Ct. at page 122, 163, 35 L.Ed. 994, 'a resort to those receipts was simply to ascertain the value of the business done by the corporation, and thus obtain a guide to a reasonable conclusion as to the amount of the excise tax which should be levied * * *.' As much can be said of the present case and of the Puget Sound case. While the tax is in terms one on the privilege of doing business, resort is made to the gross receipts merely to ascertain the value of the business. No vice of extraterritoriality or multiple taxation is involved. The value taxed is attributable to business within the taxing State and may not be reached by any other State. That value is, of course, augmented by the interstate character of the business. But the same is true in any apportionment case. Galveston, Harrisburg & S.A.R. Co. v. Texas, supra, 210 U.S. at page 225, 28 S.Ct. at page 639, 52 L.Ed. 1031; Cudahy Packing Co. v. Minnesota, supra, 246 U.S. at pages 455—456, 38 S.Ct. at pages 375, 376, 62 L.Ed. 827. 29 Respondents pay other taxes to New York City, including the usual property taxes. But so long as a tax does not discriminate against interstate commerce and is fairly apportioned to the activities in the taxing state, taxing the business twice is for constitutional purposes no different than doubling a single tax. If the whole scheme of taxation adopted by a particular State were taken into account, it might be that a case of discrimination against interstate commerce could be made out. But there is no suggestion that this is such a case. Nor can we say that the system which has been adopted here bids fair to be more harmful to interstate commerce than a system designed to raise the same amount of revenue by the use of a gross receipts tax in lieu of property taxes. 30 Moreover, as noted in Gwin, White & Prince, Inc. v. Henneford, supra, 305 U.S. at page 438, 59 S.Ct. at page 327, 83 L.Ed. 272, and in Adams Mfg. Co. v. Storen, supra, 304 U.S. at pages 312-313, 58 S.Ct. at pages 916, 917, 82 L.Ed. 1365, there have been other cases sustaining a gross receipts tax on interstate enterprises where the gross receipts tax fairly measured the value of a local privilege or franchise and all risk of multiple taxation was absent. Ficklen v. Taxing District of Shelby Co., 145 U.S. 1, 12 S.Ct. 810, 36 L.Ed. 601, upheld a state license tax imposed upon the privilege of doing a brokerage business within the State and measured by the gross receipts from sales of merchandise shipped into the State for delivery after sales were made. American Mfg. Co. v. St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084, upheld a municipal license tax on the gross receipts of a manufacturer who was producing goods for interstate commerce. The tax was sustained as an excise upon the conduct of a manufacturing enterprise. Those taxes, like property taxes or taxes on activities confined solely to the taxing state (New York, Lake Erie & W.R. Co. v. Pennsylvania, 158 U.S. 431, 15 S.Ct. 896, 39 L.Ed. 1043; Utah Power & Light Co. v. Pfost, 286 U.S. 165, 52 S.Ct. 548, 76 L.Ed. 1038; Coverdale v. Arkansas-Louisiana Pipe Line Co., 303 U.S. 604, 58 S.Ct. 736, 82 L.Ed. 1043) have no cumulative effect caused by the interstate character of the business. They are apportioned to the activities taxed, all of which are intrastate. Plainly the loading and unloading involved in the present case are activities as local in character as the brokerage activities in the Ficklen case or the manufacturing business in the American Mfg. Co. case. One has as close and as immediate a relationship to interstate commerce as the other. Cf. United States v. Darby, 312 U.S. 100, 657, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430. If one gives rise to a taxable event for which the State may exact a portion of the gross receipts, it is difficult to see why the other does not. The practical effect on interstate commerce is the same in each. 31 In McGoldrick v. Berwind-White Coal Mining Co., supra, 309 U.S. at page 52, 60 S.Ct. at pages 395, 396, 84 L.Ed. 565, 128 A.L.R. 876, we held that a sales tax on the purchase of property at the end of its interstate journey was not to be distinguished from a tax on the property itself. For taxation of the sale was merely taxation of the exercise of one of the constituent elements of the property. Unless formal doctrine is to be restored to this field, the label which the tax bears should not be controlling; and the tax should be sustained unless it evinces hostility to interstate commerce or in practical operation obstructs or impedes it. Either result may obtain whether the tax be called a property tax or a gross receipts tax. As McGoldrick v. Berwind-White Coal Mining Co., supra, 309 U.S. at page 48, 60 S.Ct. at page 393, 84 L.Ed. 565, 128 A.L.R. 876, states: 32 'Certain types of tax may, if permitted at all, so readily be made the instrument of impeding or destroying interstate commerce as plainly to call for their condemnation as forbidden regulations. Such are the taxes already noted which are aimed at or discriminate against the commerce or impose a levy for the privilege of doing it, or tax interstate transportation or communication or their gross earnings, or levy an exaction on merchandise in the course of its interstate journey. Each imposes a burden which intrastate commerce does not b ar, and merely because interstate commerce is being done places it at a disadvantage in comparison with intrastate business or property in circumstances such that if the asserted power to tax were sustained, the states would be left free to exert it to the detriment of the national commerce.' 33 Measured by that test, the present tax is not invalid. 'Even interstate business must pay its way * * *.' Postal Telegraph-Cable Co. v. City of Richmond, 249 U.S. 252, 259, 39 S.Ct. 265, 266, 63 L.Ed. 590. A non-discriminatory gross receipts tax, apportioned to local activity in the taxing state, is to be judged by its practical effect. As we stated in Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444, 61 S.Ct. 246, 249, 85 L.Ed. 267, 130 A.L.R. 1229: 34 'The Constitution is not a formulary. It does not demand of states strict observance of rigid categories nor precision of technical phrasing in their exercise of the most basic power of government, that of taxation. For constitutional purposes the decisive issue turns on the operating incidence of a challenged tax. A state is free to pursue its own fiscal policies, unembarrassed by the Constitution, if by the practical operation of a tax the state has exerted its power in relation to opportunities which it has given, to protection which it has afforded, to benefits which it has conferred by the fact of being an orderly, civilized society.' 35 All local taxes on interstate businesses affect to some degree the commerce and increase the cost of doing it. Matters of form should not be decisive if the tax threatens no harm to interstate commerce. 36 Prior to McGoldrick v. Berwind-White Coal Mining Co., supra, it had long been said that 'Interstate commerce cannot be taxed at all, even though the same amount of tax should be laid on domestic commerce, or that which is carried on solely within the state.' Robbins v. Taxing District of Shelby Co., 120 U.S. 489, 497, 7 S.Ct. 592, 596, 30 L.Ed. 694. That was the philosophy of the Philadelphia & S. M. Southern S. Co. case. And see Fargo v. Michigan, supra, 121 U.S. at pages 246—247, 7 S.Ct. at page 864, 30 L.Ed. 888. But McGoldrick v. Berwind-White Coal Mining Co., supra, did not adhere to that formal doctrine. It followed Wiloil Corporation v. Pennsylvania, 294 U.S. 169, 55 S.Ct. 358, 79 L.Ed. 838, and upheld a 'non-discriminatory tax on the sale to a buyer within the taxing state of a commodity shipped interstate in performance of the sales contract, not upon the ground that the delivery was not a part of interstate commerce * * * but because the tax was not a prohibited regulation of or burden on that commerce.' Illinois Natural Gas Co. v. Central Illinois Public Service Co., 314 U.S. 498, 505, 62 S.Ct. 384, 386, 387, 86 L.Ed. 371. The test adopted was whether the tax on the local activity as a practical matter was being used to place interstate commerce at a competitive disadvantage or obstruct or impede it. That should be the approach here; 'the logic of words should yield to the logic of realities.' Mr. Justice Brandeis dissenting, Di Santo v. Pennsylvania, 273 U.S. 34, 43, 47 S.Ct. 267, 270, 271, 71 L.Ed. 524. The failure of the Court to adhere to the philosophy of our recent cases corroborates the impression which some of us had that Freeman v. Hewit, 329 U.S. 249, 67 S.Ct. 274, marked the end of one cycle under the Commerce Clause and the beginning of another. 37 Second. I think the tax is unconstitutional insofar as it reaches the gross receipts from loading and unloading vessels engaged in foreign commerce. Such a tax is repugnant to Article I, § 10, Clause 2 of the Constitution which provides that 'No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws * * *. 38 Loading and unloading are a part of 'the exporting process' which the Import-Export Clause protects from state taxation. See Thames & Mersey Marine Ins. Co. v. United States, 237 U. . 19, 27, 35 S.Ct. 496, 499, 59 L.Ed. 821, Ann.Cas.1915D, 1087. Activity which is a 'step in exportation' has that immunity. Spalding & Bros. v. Edwards, 262 U.S. 66, 68, 43 S.Ct. 485, 486, 67 L.Ed. 865. As the Court says, loading and unloading cargo are 'a 'continuation of the transportation." Indeed, the commencement of exportation would occur no later. See Richfield Oil Corp. v. State Board of Equalization, 329 U.S. 69, 67 S.Ct. 156. And the gross receipts tax is an impost on an export within the meaning of the Clause, since the incident 'which gave rise to the accrual of the tax was a step in the export process.' Richfield Oil Corp. v. State Board of Equalization, supra. 39 As we pointed out in that case, the Commerce Clause and the Import-Export Clause 'though complementary, serve different ends.' Since the Commerce Clause does not expressly forbid any tax, the Court has been free to balance local and national interests. Taxes designed to make interstate commerce bear a fair share of the cost of local government from which it receives benefits have been upheld; taxes which discriminate against interstate commerce, which impose a levy for the privilege of doing it, or which place an undue burden on it have been invalidated. But the Import-Export Clause is written in terms which admit of no exception but the single one it contains. Accordingly a state tax might survive the tests of validity under the Commerce Clause and fail to survive the Import-Export Clause. For me the present tax is a good example. 40 Mr. Justice MURPHY joins in this dissent except as to the second part, as to which he is of the opinion that the tax in relation to the gross receipts from loading and unloading vessels engaged in foreign commerce is constitutional. 1 The taxes in question were levied by the City of New York by a series of local laws, No. 22 of 1937, p. 255, No. 20 of 1938, p. 253, No. 103 of 1939, p. 240, No. 78 of 1940, p. 342, No. 47 of 1941. The local laws were passed pursuant to anthorization by the State of New York. See Laws of New York 1940, Ch. 245. There is no dispute as to the general validity of the local laws. See McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876, and New York Rapid Transit Corporation v. City of New York, 303 U.S. 573, 58 S.Ct. 721, 82 L.Ed. 1024. These cases involved other phases of these local laws. Certiorari granted McGoldrick v. Carter & Weekes Stevedoring Co., 326 U.S. 713, 66 S.Ct. 177. 2 Local Laws of the City of New York 1940, No. 78: § R41 2.0. Imposition of tax. a. For the privilege of carrying on or exercising for gain or profit within the city any trade, business, profession, vocation or commercial activity other than a financial business, or of making sales to persons within such city, for each of the periods of one year, or any part thereof, beginning on July first of the years nineteen hundred thirty-nine and nineteen hundred forty, every person shall pay an excise tax which shall be equal to one-tenth of one per centum upon all receipts received in and/or allocable to the city from such profession, vocation, trade, business or commercial activity exercised or carried on by him during the calendar year in which such period shall commence, * * *'. No problem of allocation or apportionment is involved. See subd. b. No question is raised by petitioner that any part of the tax is allocable to receipts properly attributable to doing business in New York City, if all of the receipts are not subject to the local act. § R41—3.0. 3 'The Congress shall have Power * * * To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; * * *'. 4 Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U.S. 761, 767—69, 65 S.Ct. 1515, 1519, 1520, 89 L.Ed. 1915, and cases cited; Morgan v. Commonwealth of Virginia, 328 U.S. 373, 379, 66 S.Ct. 050, 1054, and cases cited n. 17; Freeman v. Hewit, 329 U.S. 249, 67 S.Ct. 274; Richfield Oil Corp. v. State Board of Equalization, 329 U.S. 69, 67 S.Ct. 156. 5 Compare Maine v. Grand Trunk R. Co., 142 U.S. 217, 12 S.Ct. 121, 163, 35 L.Ed. 994; Meyer v. Wells, Fargo & Co., 223 U.S. 298, 301, 32 S.Ct. 218, 219, 56 L.Ed. 445; Underwood Typewriter Co. v. Chamberlain, 254 U.S. 113, 41 S.Ct. 45, 65 L.Ed. 165; Hans Rees' Sons v. North Carolina ex rel. Maxwell, 283 U.S. 123, 51 S.Ct. 385, 75 L.Ed. 879; Illinois Central R. Co. v. Minnesota, 309 U.S. 157, 60 S.Ct. 419, 84 L.Ed. 670. 6 Fargo v. Michigan, 121 U.S. 230, 7 S.Ct. 857, 30 L.Ed. 888; Ratterman v. Western Union Telegraph Co., 127 U.S. 411, 428, 8 S.Ct. 1127, 1132, 32 L.Ed. 229; Leloup v. Port of Mobile, 127 U.S. 640, 8 S.Ct. 1380, 32 L.Ed. 311; Western Union Telegraph Co. v. Alabama, 132 U.S. 472, 10 S.Ct. 161, 33 L.Ed. 409; Galveston, Harrisburg & San Antonio R. Co. v. Texas, 210 U.S. 217, 28 S.Ct. 638, 52 L.Ed. 1031; Meyer v. Wells, Fargo & Co., 223 U.S. 298, 300, 32 S.Ct. 218, 219, 56 L.Ed. 445; Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 400, 33 S.Ct. 729, 740, 57 L.Ed. 1511, 48 L.R.A., N.S., 1151, Ann.Cas.1916A, 18; Crew Levick Co. v. Pennsylvania, 245 U.S. 292, 295, 38 S.Ct. 126, 127, 62 L.Ed. 295; Fisher's Blend Station v. Tax Commission, 297 U.S. 650, 655, 56 S.Ct. 608, 610, 80 L.Ed. 956; Adams Mfg. Co. v. Storen, 304 U.S. 307, 312, 58 S.Ct. 913, 916, 82 L.Ed. 1365; Freeman v. Hewit, supra. 7 Postal Telegraph Cable Co. v. Adams, 155 U.S. 688, 698, 15 S.Ct. 268, 270, 360, 39 L.Ed. 311; United States Express Co. v. Minnesota, 223 U.S. 335, 346—48, 32 S.Ct. 211, 215, 216, 56 L.Ed. 459. 8 Federalist 7, 22, 42; Baldwin v. G. A. F. Seelig, 294 U.S. 511, 523, 55 S.Ct. 497, 500, 79 L.Ed. 1032, 101 A.L.R. 55. 9 See Clark Distilling Co. v. Western Maryland R. Co., 242 U.S. 311, 326, 37 S.Ct. 180, 185, 61 L.Ed. 326, L.R.A.1917B, 1218, Ann.Cas.1917B, 845; United States v. Hill, 248 U.S. 420, 39 S.Ct. 143, 63 L.Ed. 337; Whitfield v. Ohio, 297 U.S. 431, 56 S.Ct. 532, 80 L.Ed. 778; Kentucky Whip & Collar Co. v. Illinois Central R. Co., 299 U.S. 334, 57 S.Ct. 277, 81 L.Ed. 270; Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 430, 66 S.Ct. 1142, 1155; Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U.S. 761, 769, 65 S.Ct. 1515, 1520, 89 L.Ed. 1915; Freeman v. Hewit, 329 U.S. 249, 253, 67 S.Ct. 274, 277. 10 Western Live Stock v. Bureau of Revenue, supra, 303 U.S. at pages 258—260, 58 S.Ct. at pages 549, 550, 551, 82 L.Ed. 823, 115 A.L.R. 944; Southern Pacific Co. v. Gallagher, 306 U.S. 167, 176, 59 S.Ct. 389, 393, 83 L.Ed. 586; McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 48, 60 S.Ct. 388, 393, 84 L.Ed. 565, 128 A.L.R. 876; Department of Treasury v. Wood Preserving Corporation, 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188. 11 Coverdale v. Arkansas-Louisiana Pipe Line Co., 303 U.S. 604, 609, 58 S.Ct. 736, 738, 739, 82 L.Ed. 1043; Southern Pacific Co. v. Gallagher, 306 U.S. 167, 178, 59 S.Ct. 389, 394, 83 L.Ed. 586; Freeman v. Hewit, supra, 329 U.S. 249, 257, 67 S.Ct. 274, 279. 12 304 U.S. 307, 312, 58 S.Ct. 913, 916, 82 L.Ed. 1365. 13 305 U.S. 434, 59 S.Ct. 325, 83 L.Ed. 272. 14 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876. 15 303 U.S. at page 257, 58 S.Ct. at page 549, 82 L.Ed. 823, 115 A.L.R. 944. 'All the events upon which the tax is conditioned the preparation, printing and publication of the advertising matter, and the receipt of the sums paid for it—occur in New Mexico and not elsewhere,' 303 U.S. at page 260, 58 S.Ct. at page 550, 551. 'So far as the advertising rates reflect a value attributable to the maintenance of a circulation of the magazine interstate, we think the burden on the interstate business is too remote and too attenuated to call for a rigidly logical application of the doctrine that gross receipts from interstate commerce may not be made the measure of a tax. * * * Practical rather than logical distinctions must be sought.' 303 U.S. at page 259, 58 S.Ct. at page 550. The alternate ground, 303 U.S. at page 260, 58 S.Ct. at page 550, 551, that such a local tax cannot be taxed elsewhere is inapposite in such a foreign commerce situation as this. 16 See International Harvester Co. v. Department of Treasury, 322 U.S. 340, 348, 64 S.Ct. 1019, 1023, 88 L.Ed. 1313. 17 304 U.S. at pages 312—13, 58 S.Ct. at pages 916, 917, 82 L.Ed. 1365: 'The State court and the appellees rely strongly upon American Mfg. Co. v. (City of) St. Louis, 250 U.S. 459, 39 S.Ct. 522, 63 L.Ed. 1084, as supporting the tax on appellant's total gross receipts derived from commerce with citizens of the State and those of other states or foreign countries. But that case dealt with a municipal license fee for pursuing the occupation of a manufacturer in St. Louis. The exaction was not an excise laid upon the taxpayer's sales or upon the income derived from sales. The tax on the privilege for the ensuing year was measured by a percentage of the past year's sales. The taxpayer had during the preceding year removed some of the goods manufactured to a warehouse in another state and, upon sale, delivered them from the warehouse. It contended that the city was without power to include these sales in the measure of the tax for the coming year. The court held, however, that the tax was upon the privilege of manufacturing within the state and it was permissible to measure the tax by the sales price of the goods produced rather than by their value at the date of manufacture. If the tax there under consideration had been a sales tax the city could not have measured it by sales consummated in another state.' Cf. Freeman v. Hewit, 329 U.S. 249, 252, 67 S.Ct. 274, 276. 18 309 U.S. at page 49, 60 S.Ct. at pages 393, 394, 84 L.Ed. 565, 128 A.L.R. 876: 'Its only relation to the commerce arises from the fact that immediately preceding transfer of possession to the purchaser within the state, which is the taxable event regardless of the time and place of passing title, the merchandise has been transported in interstate commerce and brought to its journey's end. Such a tax has no different effect upon interstate commerce than a tax on the 'use' of property which has just been moved in interstate commerce, sustained in Monamotor Oil Co. v. Johnson, 292 U.S. 86, 54 S.Ct. 575, 78 L.Ed. 1141; Henneford v. Silas Mason Co., supra, (300 U.S. 577, 57 S.Ct. 524, 81 L.Ed. 814); Felt & Tarrant Mfg. Co. v. Gallagher, 306 U.S. 62, 59 S.Ct. 376, 83 L.Ed. 488; Southern Pacific Co. v. Gallagher, 306 U.S. 167, 59 S.Ct. 389, 83 L.Ed. 586, or the tax on storage or withdrawal for use by the consignee of gasoline, similarly sustained in Gregg Dyeing Co. v. Query, 286 U.S. 472, 52 S.Ct. 631, 76 L.Ed. 1232, 84 A.L.R. 831; Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U.S. 249, 53 S.Ct. 345, 77 L.Ed. 730, 87 A.L.R. 1191; Edelman v. Boeing Air Transport Co., 289 U.S. 249, 53 S.Ct. 591, 77 L.Ed. 1155, or the familiar property tax on goods by the state of destination at the conclusion of their interstate journey. Brown v. Houston, supra, (114 U.S. 622, 5 S.Ct. 1091, 29 L.Ed. 257); American Steel & Wire Co. v. Speed, 192 U.S. 500, 24 S.Ct. 365, 48 L.Ed. 538. 1 Philadelphia & S. M. Southern S. Co. v. Pennsylvania, 122 U.S. 326, 7 S.Ct. 1118, 30 L.Ed. 1200; Ratterman v. Western Union Tel. Co., 127 U.S. 411, 8 S.Ct. 1127, 32 L.Ed. 229; Western Union Tel. Co. v. Alabama, 132 U.S. 472, 10 S.Ct. 161, 33 L.Ed. 409; Galveston, Harrisburg & S.A.R. Co. v. Texas, 210 U.S. 217, 28 S.Ct. 638, 52 L.Ed. 1031; Meyer v. Wells Fargo & Co., 223 U.S. 298, 32 S.Ct. 218, 56 L.Ed. 445. 2 In Baltimore & O. Railroad Co. v. Maryland, 21 Wall. 456, 22 L.Ed. 678, the payment of a percentage of gross receipts was upheld as a condition of the corporate franchise. 3 The Court suggests that the fact that similar stevedoring activity will be required at the destination creates a risk of multiple taxation, since the State of destination would be as free to tax the unloading as New York to tax the loading. This is only multiple in the sense that each State taxes what occurs within its borders; the two taxes would not be on the same activity. It is no more relevant that stevedoring is involved in both cases, than is the fact that two States may impose property taxes on terminals or trackage within their respective borders. 4 Moreover, the tax in the Philadelphia & S. M. Southern S. Co. case was restricted not only to transportation companies but also to receipts from transportation. Those facts were emphasized by Mr. Justice Bradley (122 U.S. at pages 344—345, 7 S.Ct. at pages 1124, 1125, 30 L.Ed. 1200): 'Can the tax in this case be regarded as an income tax? and, if it can, does that make any difference as to its constitutionality? We do not think that it can properly be regarded as an income tax. It is not a general tax on the incomes of all the inhabitants of the state, but a special tax on transportation companies. Conceding, however, that an income tax may be imposed on certain classes of the community, distinguished by the character of their occupations, this is not an income tax on the class to which it refers, but a tax on their receipts for transportation only. Many of the companies included in it may and undoubtedly do have incomes from other sources, such as rents of houses, wharves, stores, and water-power, and interest on moneyed investments. As a tax on transportation, we have already seen from the quotations from the State Freight Tax Case that it cannot be supported where that transportation is an ingredient of interstate or foreign commerce, even though the law imposing the tax be expressed in such general terms as to include receipts from transportation which are properly taxable. It is unnecessary, therefore, to discuss the question which would arise if the tax were properly a tax on income. It is clearly not such, but a tax on transportation only.' Cf. United States Glue Co. v. Town of Oak Creek, 247 U.S. 321, 38 S.Ct. 499, 62 L.Ed. 1135, Ann.Cas.1918E, 748, which sustained as against an interstate enterprise a net income tax of general application.

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330 U.S. 485 67 S.Ct. 789 91 L.Ed. 1040 PACKARD MOTOR CAR CO.v.NATIONAL LABOR RELATIONS BOARD. No. 658. Argued Jan. 9, 1947. Decided March 10, 1947. Mr. Louis F. Dahling, of Detroit, Mich., for petitioner. Mr. Gerhard P. Van Arkel, of Washington, D.C., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 The question presented by this case is whether foremen are entitled as a class to the rights of self-organization, collective bargaining, and other concerted activities as assured to employees generally by the National Labor Relations Act. 29 U.S.C.A. § 151 et seq. The case grows out of c nditions of the automotive industry, and so far as they are important to the legal issues here the facts are simple. 2 The Packard Motor Car Company employs about 32,000 rank and file workmen. Since 1937 they have been represented by the United Automobile Workers of America affiliated with the Congress of Industrial Organizations. These employees are supervised by approximately 1,100 employees of foremen rank consisting of about 125 'general foremen,' 643 'foremen,' 273 'assistant foremen,' and 65 'special assignment men.' Each general foreman is in charge of one or more departments, and under him in authority are foremen and their assistant foremen. Special assignment men are described as 'trouble-shooters.' 3 The function of these foremen in general is typical of the duties of foremen in mass production industry generally. Foremen carry the responsibility for maintaining quantity and quality of production, subject, of course, to the overall control and supervision of the management. Hiring is done by the labor relations department, as is the discharging and laying off of employees. But the foremen are provided with forms and with detailed lists of penalties to be applied in cases of violations of discipline, and initiate recommendations for promotion, demotion and discipline. All such recommendations are subject to the reviewing procedure concerning grievances provided in the collectively-bargained agreement between the Company and the rank and file union. 4 The foremen as a group are highly paid and, unlike the workmen, are paid for justifiable absence and for holidays, are not docked in pay when tardy, receive longer paid vacations, and are given severance pay upon release by the Company. 5 These foremen determined to organize as a unit of the Foremen's Association of America, an unaffiliated organization which represents supervisory employees exclusively. Following the usual procedure, after the Board had decided that 'all general foremen, foremen, assistant foremen, and special assignment men employed by the Company at its plants in Detroit, Michigan, constitute a unit appropriate for the purposes of collective bargaining within the meaning of section 9(b) of the Act,'1 the Foremen's Association was certified as the bargaining representative. The Company asserted that foremen were not 'employees' entitled to the advantages of the Labor Act, and refused to bargain with the union. After hearing on charge of unfair labor practice, the Board issued the usual cease and desist order. The Company resisted and challenged validity of the order. The judgment of the court below decreed its enforcement, and we granted certiorari. 329 U.S. 707, 67 S.Ct. 357. 6 The issue of law as to the power of the National Labor Relations Board under the National Labor Relations Act is simple and our only function is to determine whether the order of the Board is authorized by the statute. 7 The privileges and benefits of the Act are conferred upon employees, and § 2(3) of the Act, so far as relevant, provides 'The term 'employee' shall include any employee * * *.' 49 Stat. 450. The point that these foremen are employees both in the most technical sense at common law as well as in common acceptance of the term, is too obvious to be labored. The Company, however, turns to the Act's definition of employer, which it contends reads foremen out of the employee class and into the class of employers. Section 2(2) reads: 'The term 'employer' includes any person acting in the interest of an employer, directly or indirectly * * *.' 49 Stat. 450. The context of the Act, we think, leaves no room for a construction of this section to deny the organizational privilege to employees because they act in the interest of an employer. Every employee, from the very fact of employment in the master's business, is required to act in his interest. He owes to the employer faithful performance of service in his interest, the protection of the mployer's property in his custody or control, and all employees may, as to third parties, act in the interests of the employer to such an extent that he is liable for their wrongful acts. A familiar example would be that of a truck driver for whose negligence the Company might have to answer. 8 The purpose of § 2(2) seems obviously to render employers responsible in labor practices for acts of any persons performed in their interests. It is an adaptation of the ancient maxim of the common law, respondeat superior, by which a principal is made liable for the tortious acts of his agent and the master for the wrongful acts of his servants. Even without special statutory provision, the rule would apply to many relations. But Congress was creating a new class of wrongful acts to be known as unfair labor practices, and it could not be certain that the courts would apply the tort rule of respondeat superior to those derelictions. Even if it did, the problem of proof as applied to this kind of wrongs might easily be complicated by questions as to the scope of the actor's authority and of variance between his apparent and his real authority. Hence, it was provided that in administering this act the employer, for its purposes, should be not merely the individual or corporation which was the employing entity, but also others, whether employee or not, who are 'acting in the interest of an employer.' 9 Even those who act for the employer in some matters, including the service of standing between management and manual labor, still have interests of their own as employees. Though the foreman is the faithful representative of the employer in maintaining a production schedule, his interest properly may be adverse to that of the employer when it comes to fixing his own wages, hours, seniority rights or working conditions. He does not lose his right to serve himself in these respects because he serves his master in others. And we see no basis in this Act whatever for holding that foremen are forbidden the protection of the Act when they take collective action to protect their collective interests. 10 The company's argument is really addressed to the undesirability of permitting foremen to organize. It wants selfless representatives of its interest. It fears that if foremen combine to bargain advantages for themselves, they will sometimes be governed by interests of their own or of their fellow foremen, rather than by the company's interest. There is nothing new in this argument. It is rooted in the misconception that because the employer has the right to wholehearted loyalty in the performance of the contract of employment, the employee does not have the right to protect his independent and adverse interest in the terms of the contract itself and the conditions of work. But the effect of the National Labor Relations Act is otherwise, and it is for Congress, not for us, to create exceptions or qualifications at odds with its plain terms. 11 Moreover, the company concedes that foremen have a right to organize. What it denies is that the statute compels it to recognize the union. In other words, it wants to be free to fight the foremen's union in the way that companies fought other unions before the Labor Act. But there is nothing in the Act which indicates that Congress intended to deny its benefits to foremen as employees, if they choose to believe that their interests as employees would be better served by organization than by individual competition.2 N.L.R.B. v. Skinner & Kennedy Stationery Co., 8 Cir., 113 F.2d 667; see N.L.R.B. v. Armour & Co., 10 Cir., 154 F.2d 570, 574. 12 There is no more reason to conclude that the law prohibits foremen as a cl §§ from constituting an appropriate bargaining unit than there is for concluding that they are not within the Act at all. Section 9(b) of the Act confers upon the Board a broad discretion to determine appropriate units. It reads, 'The Board shall decide in each case whether, in order to insure to employees the full benefit of their right to self-organization and to collective bargaining, and otherwise to effectuate the policies * * * of this act, the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit, or subdivision thereof.' 49 Stat. 453. Our power of review also is circumscribed by the provision that findings of the Board as to the facts, if supported by evidence, shall be conclusive. § 10(e), 49 Stat. 454. So we have power only to determine whether there is substantial evidence to support the Board, or its order oversteps the law. N.L.R.B. v. Link-Belt Co., 311 U.S. 584, 61 S.Ct. 358, 85 L.Ed. 368; Pittsburgh Plate Glass Co. v. N.L.R.B., 313 U.S. 146, 61 S.Ct. 908, 85 L.Ed. 1251. 13 There is clearly substantial evidence in support of the determination that foremen are an appropriate unit by themselves and there is equal evidence that, while the foremen included in this unit have different degrees of responsibility and work at different levels of authority, they have such a common relationship to the enterprise and to other levels of workmen that inclusion of all such grades of foremen in a single unit is appropriate. Hence the order insofar as it depends on facts is beyond our power of review. The issue as to what unit is appropriate for bargaining is one for which no absolute rule of law is laid down by statute, and none should be by decision. It involves of necessity a large measure of informed discretion and the decision of the Board, if not final, is rarely to be disturbed. While we do not say that a determination of a unit of representation cannot be so unreasonable and arbitrary as to exceed the Board's power, we are clear that the decision in question does not do so. That settled, our power is at an end. 14 We are invited to make a lengthy examination of views expressed in Congress while this and later legislation was pending to show that exclusion of foremen was intended. There is, however, no ambiguity in this Act to be clarified by resort to legislative history, either of the Act itself or of subsequent legislative proposals which failed to become law. 15 Counsel also would persuade us to make a contrary interpretation by citing a long record of inaction, vacillation and division of the National Labor Relations Board in applying this Act to foremen. If we were obliged to depend upon administrative interpretation for light in finding the meaning of the statute, the inconsistency of the Board's decisions would leave us in the dark.3 But there are difficult questions of policy involved in these cases which, together with changes in Board membership, account for the contradictory views that characterize their history in the Board. Whatever special questions there are in determining the appropriate bargaining unit for foremen are for the Board, and the history of the issue in the Board shows the difficulty of the problem committed to its discretion. We are not at liberty to be governed by those policy considerations in deciding the naked question of law whether the Board is now, in this case, acting within the terms of the statute. 16 It is also urged upon us most seriously that unionization of foremen is from many points bad industrial policy, that it puts the union foreman in the position of serving two masters, divides his loyalty and makes generally for bad relations between management and labor. However we might appraise the force of these arguments as a policy matter, we are not authorized to base decision of a question of law upon them. They concern the wisdom of the legislation; they cannot alter the meaning of otherwise plain provisions. The judgment of enforcement is 17 Affirmed. 18 Mr. Justice DOUGLAS, with whom The CHIEF JUSTICE and Mr. Justice BURTON concur, dissenting. 19 First. Over thirty years ago Mr. Justice Brandeis, while still a private citizen, saw the need for narrowing the gap between management and labor, for allowing labor greater participation in policy decisions, for developing an industrial system in which cooperation rather than coercion was the dominant characteristic.1 In his view, these were measures of therapeutic value in dealing with problems of industrial unrest or inefficiency. 20 The present decision may be a step in that direction. It at least tends to obliterate the line between management and labor. It ends the sanctions of federal law to unionization at all levels of the industrial hierarchy. It tends to emphasize that the basic opposing forces in industry are not management and labor but the operating group on the one hand and the stockholder and bondholder group on the other. The industrial problem as so defined comes down to a contest over a fair division of the gross receipts of industry between these two groups. The struggle for control or power between management and labor becomes secondary to a growing unity in their common demands on ownership. 21 I do not believe this is an exaggerated statement of the basic policy questions which underly the present decision. For if foremen are 'employees' within the meaning of the National Labor Relations Act, so are vice-presidents, managers, assistant managers, superintendents, assistant superintendents—indeed, all who are on the payroll of the company, including the president; all who are commonly referred to as the management, with the exception of the directors. If a union of vice-presidents applied for recognition as a collective bargaining agency, I do not see how we could deny it and yet allow the present application. But once vice-presidents, managers, superintendents, foremen all are unionized, management and labor will become more of a solid phalanx than separate factions in warring camps. Indeed, the thought of some labor leaders that if those in the hierarchy above the workers are unionized, they will be more sympathetic with the claims of those below them, is a manifestation of the same idea.2 22 I mention these matters to indicate what tremendously important policy questions are involved in the present decision. My purpose is to suggest that if Congress, when it enacted the National Labor Relations Act, had in mind such a basic change in industrial philosophy, it would have left some clear and unmistakable trace of that purpose. But I find none. 23 Second. 'Employee' is defined to include 'any' employee. § 2(3), 49 Stat. 449, 450, 29 U.S.C. § 152, 29 U.S.C.A. If we stop there, foremen are included as are all employees from the president on down. But we are not warranted in stopping there. The term 'employee' must be considered in the context of the Act. National Labor Relations Board v. Hearst Publications, 322 U.S. 111, 124, 64 S.Ct. 851, 857, 88 L.Ed. 1170; Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 191, 61 S.Ct. 845, 851, 85 L.Ed. 1271, 133 A.L.R. 1217. When it is so considered it does not appear to be used in an all-embracing sense. Rather, it is used in opposition to the term 'employer'. An 'employer' is defined to include 'any person acting in the interest of an employer'. § 2(2). The term 'employer' thus includes some employees. And I find no evidence that one personnel group may be both employers and employees within the meaning of the Act. Rather, the Act on its face seems to classify the operating group of industry into two classes; what is included in one group is excluded from the other. 24 It is not an answer to say that the two statutory groups are not exclusive because every 'employee' while on duty—whether driving a truck or stoking a furnace or operating a lathe—is 'acting in the interest' of his employer and is then an 'employer' in the statutory sense. The Act was not declaring a policy of vicarious responsibility of industry. It was dealing solely with labor relations. It put in the employer category all those who acted for management not only in formulating but also in executing its labor policies.3 25 Foremost among the latter were foremen. Trade union history shows that foremen were the arms and legs of management in executing labor policies. In industrial conflicts they were allied with management. Management indeed commonly acted through them in the unfair labor practices which the Act condemns.4 When we upheld the imposition of the sanctions of the Act against management, we frequently relied on the acts of foremen through whom management expressed its hostility to trade unionism.5 26 Third. The evil at which the Act was aimed was the failure or refusal of industry to recognize the right of workingmen to bargain collectively. In § 1 of the Act Congress noted that such an attitude on the part of industry led 'to strikes and other forms of industrial strife or unrest' so as to burden or obstruct interstate commerce. We know from the history of that decade that the frustrated efforts of workingmen, of laborers, to organize led to strikes, strife, and unrest. But we are pointed to no instances where foremen were striking; nor are we advised that managers, superintendents, or vice-presidents were doing so.6 27 Indeed, the problems of those in the supervisory categories of management did not seem to have been in the consciousness of Congress. Section 1 of the Act refers to 'wage rates', 'wage earners', 'workers'. There is no phrase in the entire Act which is descriptive of those doing supervisory work. Section 2(3) exempts from laborer'. But if 'employee' includes a the term 'employee' any 'agricultural foreman, it would be most strange to find Congress exempting 'agricultural laborers', but not 'agricultural foremen'. The inference is strong that since it exempted only agricultural 'laborers', it had no idea that agricultural 'foremen' were under the Act. 28 If foremen were to be included as employees under the Act, special problems would be raised—important problems relating to the unit in which the foremen might be represented. Foremen are also under the Act as employers. That dual status creates serious problems. An act of a foreman, if attributed to the management, constitutes an unfair labor practice; the same act may be part of the foreman's activity as an employee. In that event the employer can only interfere at his peril.7 The complications of dealing with the problems of supervisory employees strongly suggest that if Congress had planned to include them in its project, it would have made some special provision for them. But we find no trace of a suggestion that when Congress came to consider the units appropriate for collective bargaining,8 it was aware that groups of employees might have conflicting loyalties. Yet that would have been one of the most important and conspicuous problems if foremen were to be included. The failure of Congress to formulate a policy respecting the peculiar and special problems of foremen suggests an absence of purpose to bring them under the Act. And the notion is hard to resist that the very absence of a declaration by Congress of its policy respecting foremen is the reason the Board has been so much at large in the treatment of the problem under the Act. See the cases collected in note 3 of the opinion of the Court. 29 Fourth. When we turn from the Act to the legislative history, we find no trace of Congressional concern with the problems of supervisory personnel. The reports and debates are barren of any reference to them, though they are replete with references to the function of the legislation in protecting the interests of 'laborers' and 'workers'.9 30 Fifth. When we turn to other rel ted legislation, we find that when Congress desired to include managerial officials or supervisory personnel in the category of employees, it did so expressly. The Railway Labor Act of 1926, 44 Stat. 577, 45 U.S.C. § 151, 45 U.S.C.A. § 151, defines 'employee' to include 'subordinate official'. The Merchant Marine Act of 1936, 52 Stat. 953, 46 U.S.C. § 1101 et seq., 46 U.S.C.A. § 1101 et seq., which deals with maritime labor relations as a supplement to the National Labor Relations Act (see 46 U.S.C. § 1252, 46 U.S.C.A. § 1252) defines 'employee' to include 'subordinate official'. 46 U.S.C. § 1253(c), 46 U.S.C.A. § 1253(c). And the Social Security Act, 49 Stat. 620, 647, 42 U.S.C. § 1301, 42 U.S.C.A. § 1301, includes an officer of a corporation in the term employee.10 The failure of Congress to do the same when it wrote the National Labor Relations Act has some significance, especially where the legislative history is utterly devoid of any indication that Congress was concerned with the collective bargaining problems of supervisory employees. 31 Sixth. The truth of the matter is, I think, that when Congress passed the National Labor Relations Act in 1935, it was legislating against the activities of foremen, not on their behalf. Congress was intent on protecting the right of free association—the right to bargain collectively—by the great mass of workers, not by those who were in authority over them and enforcing oppressive industrial policies. Foremen were instrumentalities of those industrial policies. They blocked the wage earners' path to fair collective bargaining. To say twelve years later that foremen were treated as the victims of that anti-labor policy seems to me a distortion of history. 32 If we were to decide this case on the basis of policy, much could be said to support the majority view.11 But I am convinced that Congress never faced those policy issues when it enacted this legislation. I am sure that those problems were not in the consciousness of Congress. A decision of these policy matters cuts deep into our industrial life. It has profound implications throughout our economy. It involves a fundamental change in much of the thinking of the nation on our industrial problems. The question is so important that I cannot believe Congress legislated unwittingly on it. Since what Congress wrote is consistent with a restriction of the Act to workingmen and laborers, I would leave its extension over supervisory employees to Congress. 33 I have used the terms foremen and supervisory employees synonymously. But it is not the label which is important; it is whether the employees in question represent or act for management on labor policy matters. Thus one might be a supervisory employee without representing management in those respects. And those who are called foremen may perform duties not substantially different from those of skilled laborers. 34 What I have said does not mean that foremen have no right to organize for collective bargaining. The general law recognizes their right to do so. See American Steel Foundries v. Tri-City Council, 257 U.S. 184, 209, 42 S.Ct. 72, 78, 66 L.Ed. 189, 27 A.L.R. 360; Texas & N O.R. Co. v. Brotherhood of Railway & Steamship Clerks, 281 U.S. 548, 570, 50 S.Ct. 427, 433, 74 L.Ed. 1034. And some States have placed administrative machinery and sanctions behind that right.12 But as I read the federal Act, Congress has not yet done so. 35 Mr. Justice FRANKFURTER agrees with this opinion except the part marked 'First' as to which he expresses no view. 1 61 N.L.R.B. 26. 2 If a union of vice presidents, presidents or others of like relationship to a corporation comes here claiming rights under this Act, it will be time enough then to point out the obvious and relevant differences between the 1100 foremen of this company and corporate officers elected by the board of directors. 3 The Board had held that supervisory employees may organize in an independent union, Union Collieries Coal Co., 41 N.L.R.B. 961, 44 N.L.R.B. 165; and in an affiliated union, Godchaux Sugars, Inc., 44 N.L.R.B. 874. Then it held that there was no unit appropriate to the organization of supervisory employees. Maryland Drydock Co., 49 N.L.R.B. 733; Boeing Aircraft Co., 51 N.L.R.B. 67; Murray Corp. of America, 51 N.L.R.B. 94; General Motors Corp., 51 N.L.R.B. 457; In this case, 61 N.L.R.B. 4, 64 N.L.R.B. 1212; in L. A. Young Spring & Wire Corp., 65 N.L.R.B. 298; Jones & Laughlin Steel Corp., 66 N.L.R.B. 386, 71 N.L.R.B. 1261; and in California Packing Corp., 66 N.L.R.B. 1461, the Board re-embraced its earlier conclusions with the same progressive boldness it had shown in the Union Collieries and Godchaux Sugars cases. In none of this series of cases did the Board hold that supervisors were not employees. See Soss Manufacturing Co., 56 N.L.R.B. 348. 1 'The greater productivity of labor must not only be attainable, but attainable under conditions consistent with the conservation of health, the enjoyment of work, and the development of the individual. The facts in this regard have not been adequately established. In the task of ascertaining whether proposed conditions of work do conform to these requirements, the laborer should take part. He is indeed a necessary witness. Likewise in the task of determining whether in the distribution of the gain in productivity justice is being done to the worker, the participation of representatives of labor is indispensable for the inquiry which involves essentially the exercise of judgment.' Brandeis, Business—A Profession, pp. 52—53. 2 The Foreman Abdicates, XXXII Fortune, No. 3, p. 150, 152; Levenstein, Labor Today and Tomorrow (1946) ch. VII. 3 Daykin, The Status of Supervisory Employees under the National Labor Relations Act, 29 Iowa L.Rev. 297; Rosenfarb, The National Labor Policy (1940) pp. 54—56, 116—120; Twentieth Century Fund, How Collective Bargaining Works (1942) pp. 512—514, 547, 557 558, 628, 780. 4 See cases collected in Daykin, op. cit. supra, note 3, pp. 298—299. 5 International Association of Machinists, Tool and Die Makers v. National Labor Relations Board, 311 U.S. 72, 79, 80, 61 S.Ct. 83, 88, 85 L.Ed. 50; H. J. Heinz Co. v. National Labor Relations Board, 311 U.S. 514, 520, 521, 61 S.Ct. 320, 323, 85 L.Ed. 309. 6 It is true that for many years some unions included supervisory employees, Beatrice and Sydney Webb, Industrial Democracy (1902) p. 546, fn. 2; Union Membership and Collective Bargaining by Foremen, U.S. Department of Labor Bull. No. 7 5 (1943); Report of Panel of War Labor Board in Disputes Involving Supervisors (1945) IX; Twentieth Century Fund, op. cit. supra, note 3, pp. 67, 216; Northrup, Unionization of Foremen, 21 Harv.Bus.Rev. 496. But organization of foremen on a broad scale is a development of the last few years. Daykin, op. cit. supra, note 3, p. 314; Rosenfarb, Foremen on the March, 7 Fed.Bar.J. 168; Note, 59 Harv.L.Rev. 606, 607; Comment, 55 Yale L.J. 754, 756; Foremen's Unions, IX Advanced Management Quarterly J. 110. 7 Cf. Jones and Laughlin Steel Corp. v. National Labor Relations Board, 5 Cir., 146 F.2d 833; Comment, 55 Yale L.J. 754, 767—774; Rosenfarb, op. cit., supra, note 6. 8 Section 9(b) of the Act provides: 'The Board shall decide in each case whether, in order to insure to employees the full benefit of their right to self-organization and to collective bargaining, and otherwise to effectuate the policies * * * of this act, the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit, or subdivision thereof.' 9 See H. Rep. No. 969, 74th Cong., 1st Sess.; H. Rep. No. 972, 74th Cong., 1st Sess.; H. Rep. No. 1147, 74th Cong., 1st Sess.; S. Rep. No. 573, 74th Cong., 1st Sess., pp. 6—7; Hearings, Senate Comm. on Educ. and Labor on S. 2926, 73d Cong., 2d Sess.; Hearings, House Comm. on Labor on H.R. 6288, 74th Cong., 1st Sess.; Hearings, Senate Comm. on Educ. and Labor on S. 1958, 74th Cong., 1st Sess.; 79 Cong.Rec. 2371, 7365, 7648, 7668, 8537, 9676, 9713, 9736, 10720. 10 Cf. Federal Employers Liability Act, 35 Stat. 65, as amended, 45 U.S.C. § 51, 45 U.S.C.A. § 51, under which the term 'any employee of a carrier' has been applied to foremen. Owens v. Union Pac. R. Co., 319 U.S. 715, 63 S.Ct. 1271, 87 L.Ed. 1683; Ellis v. Union Pac. R. Co., 329 U.S. 649, 67 S.Ct. 598. 11 Daykin, op. cit. supra, note 3, p. 313; Rosenfarb, op. cit. supra, note 6; Gartenbaus, The Foreman goes Union, 113 New Republic 563: Comment 55 Yale L.J. 754; Hearings, House Comm. on Military Affairs on Bills relating to the Full Utilization of Manpower, 78th Cong., 1st Sess., p. 299; Northrup, The Foreman's Association of America, 23 Harv.Bus.Rev. 187; cf. American Management Association, Relation Between Management and Foremen in American Industry (1944); Id. The Foreman in Labor Relations (1944); Id. Should Management be Unionized? (1945). 12 The state laws are discussed in Northrup, The Foreman's Association of America, 23 Harv.Bus.Rev. 187, 199—200.

67

330 U.S. 518 67 S.Ct. 828 91 L.Ed. 1067 KOSTERv.(AMERICAN) LUMBERMENS MUT. CASUALTY CO. No. 206. Argued Dec. 19, 1946. Decided March 10, 1947. Mr. Julius Levy, of New York City, for petitioner. Mr. Stuart N. Updike, of New York City, for respondent. Mr. Justice JACKSON, delivered the opinion of the Court. 1 This is a derivative action, in equity as are all such derivative actions, begun by plaintiff as a member and policyholder of Lumbermens Mutual Casualty Company 'in the right of Lumbermen's and on behalf of all its members and policy holders.' It was brought in the United States District Court for the Eastern District of New York, of which plaintiff is a citizen. Jurisdiction rests on diversity of citizenship. The defendants are the Lumbermens Mutual Casualty Company, a nominal defendant, organized under the laws of Illinois; one James S. Kemper, president and manager thereof, a citizen of Illinois, and James S. Kemper & Co., an Illinois corporation. The relief asked is that the other defendants account to Lumbermens, for damages it has sustained and for profits they have realized on certain transactions. It is alleged that defendant Kemper, as an officer of the company, has been guilty of breaches of trust by which he, his family corporation and his friends have profited. Plaintiff charges that Kemper's salary was improvidently increased from less than $75,000 to over $251,000; that although Lumbermens was staffed and equipped to write insurance without the intervention of any agency, he employed the Kemper Company and paid it 'substantial sums' as 'commissions, fees and otherwise' to Lumbermens' prejudice and Kemper's profit, and that Kemper caused assets of Lumbermens to be sold to himself and favorites at prices less than their values. Kemper individually was never served in New York. Unless he should be found within that jurisdiction, some of the alleged causes of action cannot be tried in this action in any event for want of an indispensable party. Some of its issues could be tried without him. 2 The district court, on motion to dismiss under the doctrine of forum non conveniens,1 found that Lumbermens does business in forty-eight states, but ts home and principal place of business are in Illinois. There its directors live; there all records are kept; and no witness shown to be necessary to either side of the case resides outside of Illinois. The plaintiff himself lives in New York, but he does not appear to have attended any meetings of policyholders or to have raised objection to the acts alleged, or otherwise to have personal knowledge so that he could possibly be a witness except as to his ownership of the policy of insurance which is not denied. It would appear necessary for him to make his own case largely from books and records in Chicago and from testimony of officers and witnesses resident there. It also is evident that the legality of many of these transactions will turn on the law of Illinois, under which Lumbermens exists and within whose territory the questioned acts took place. That would be home law if the case were tried in Chicago; it would be foreign law to New York and the case, if tried there, would involve conflict of laws. It also is urged that plaintiff's total of premium payments is less than $250, which would be the maximum possible interest he personally could have in the controversy. 3 Under these circumstances, two courts below concurred in the view that the case should not be tried in New York as there was ample remedy available in the state and federal courts of Illinois. Both relied upon Rogers v. Guaranty Trust Co. of New York, 288 U.S. 123, 53 S.Ct. 295, 77 L.Ed. 652, 89 A.L.R. 720. The dissenting judge below considered that our more recent decision in Williams v. Green Bay & Western R.R., 326 U.S. 549, 66 S.Ct. 284, implies disapproval of the Rogers case and restricts application of the doctrine of forum non conveniens. We brought the case here on certiorari. 329 U.S. 700, 67 S.Ct. 61. 4 This case involves the special problems of forum non conveniens which inhere in derivative actions, and which have been little considered by this Court. Williams v. Green Bay & Western R.R., 326 U.S. 549, 66 S.Ct. 284, was not a derivative action brought in the right of a nominal defendant corporation. Rogers v. Guaranty Trust Co., 288 U.S. 123, 53 S.Ct. 295, 77 L.Ed. 652, 89 A.L.R. 720, was a derivative action, but that feature of the case was given almost no attention and the emphasis was entirely on the extent to which it involved inquiry into the 'internal affairs of a foreign corporation,' certainly not the most distinguishing feature of these actions. 5 The stockholder's derivative action, to which this policyholder's action is analogous, is an invention of equity to supply the want of an adequate remedy at law to redress breaches of fiduciary duty by corporate managers. Usually the wrongdoing officers also possess the control which enables them to suppress any effort by the corporate entity to remedy such wrongs. Equity therefore traditionally entertains the derivative or secondary action by which a single stockholder may sue in the corporation's right when he shows that the corporation on proper demand has refused to pursue a remedy, or sho facts that demonstrate the futility of such a request. With possible rare exceptions, these actions involve only issues of state law and, as in the present case, can get into federal courts only by reason of diversity in citizenship of the parties. Their existence and peculiar character were recognized by this Court in the old Equity Rules. Rule 27, 226 U.S.App., p. 8. The complexities and unique features of these actions, however, are relevant to the forum non conveniens issue, for in these, as in all other petitions for equitable relief, he who seeks equity must do equity, and the court will be alert to see that its peculiar remedial process is in no way abused. 6 The cause of action which such a plaintiff brings before the court is not his own but the corporation's.2 It is the real party in interest and he is allowed to act in protection of its interest somewhat as a 'next friend' might do for an individual, because it is disabled from protecting itself. If, however, such a case as this were treated as other actions, the federal court would realign the parties for jurisdictional purposes according to their real interests. In this case, which is typical of many, this would put Lumbermens on the plaintiff's side. Illinois corporations would then appear among plaintiffs and among defendants, and jurisdiction would be ousted. City of Indianapolis v. Chase National Bank of City of New York, 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47. But jurisdiction is saved in this class of cases by a special dispensation because the corporation is in antagonistic hands. Doctor v. Harrington, 196 U.S. 579, 25 S.Ct. 355, 49 L.Ed. 606. 7 Plaintiffs also, as in this case, often have only a small financial interest in a large controversy. Plaintiffs, like this one, if their own financial stake were the test, sometimes do not have a sufficient individual interest to make up the required jurisdictional amount. Again this class of cases is favored with the fiction that plaintiffs' possible recovery is not the measure of the amount involved for jurisdictional purposes but that the test is the damage asserted to have been sustained by the defendant corporation. Hence, although a plaintiff's own interest may be small, if the conditions laid down by Rule 23 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723, for secondary actions by shareholders are complied with and jurisdiction is established, the federal courts are empowered to entertain the case. But the peculiarities of such actions should not be overlooked. 8 Where there are only two parties to a dispute, the e is good reason why it should be tried in the plaintiff's home forum if that has been his choice. He should not be deprived of the presumed advantages of his home jurisdiction except upon a clear showing of facts which either (1) establish such oppressiveness and vexation to a defendant as to be out of all proportion to plaintiff's convenience, which may be shown to be slight or nonexistent, or (2) make trial in the chosen forum inappropriate because of considerations affecting the court's own administrative and legal problems. In any balancing of conveniences, a real showing of convenience by a plaintiff who has sued in his home forum will normally outweigh the inconvenience the defendant may have shown. But where there are hundreds of potential plaintiffs, all equally entitled voluntarily to invest themselves with the corporation's cause of action and all of whom could with equal show of right go into their many home courts, the claim of any one plaintiff that a forum is appropriate merely because it is his home forum is considerably weakened.3 Such a plaintiff often may represent an important public and stockholder interest in bringing faithless managers to book. The nature of the secondary action is such that without invitation from other stockholders and without their approval or supervision, the plaintiff volunteers in a position that itself creates something of a fiduciary relationship. 9 While, even in the ordinary action, the residence of the suitor will not fix the proper forum without reference to other considerations, it is a fact of 'high significance.' International Milling Co. v. Columbia Transportation Co., 292 U.S. 511, 520, 54 S.Ct. 797, 799, 78 L.Ed. 1396. But, in derivative actions, although the plaintiff may have a substantial interest of his own to protect, he may also be a mere phantom plaintiff with interest enough to enable him to institute the action and little more. He may have taken some active part in the corporate affairs, or have personal knowledge of them, or have had dealings in course of protest and objection which make it requisite or at least expedient for him personally to be present at the trial. Or he may, like this plaintiff, make no showing of any knowledge by which his presence would help to make whatever case can be made in behalf of the corporation. 10 To entertain such an action places the forum in a position of responsibility toward the whole class which the plaintiff assumes to represent. To prevent collusive settlements and abuses, the Court must approve dismissal or compromise and often must give notice to the other potential plaintiffs, in this case to the other members and policy holders in whose behalf plaintiff sues and who have a right to be heard on the propriety of settlement. Rule 23, Rules of Civil Procedure. It also takes on the troublesome business of fixing allowances to counsel and accountants for the plaintiff payable out of the defendant corporation's recovery against other defendants.4 Thus, such a litigation brings to the court more than an ordinary task of adjudication; it brings a task of administration; and what forum is appropriate for such a task may require consideration of its relation to the whole group of members and stockholders whom plaintiff volunteers to represent as well as to the nominal plaintiff himself. 11 The nature of the action imports other unusual considerations when trial courts are faced with applications to dismiss for reasons of forum non conveniens. It might well be that the books, records and witnesses to establish all or a part of the cause of action are in or near the chosen forum. But in other cases they may all be in some distant jurisdiction, perhaps that of the defendants, as in the case here. In the ordinary suit it is plaintiff's own books and records and transactions that are important—in the derivative action it is more likely that only the corporation's books, records and transactions will be important and only the defendant will be affected by the choice of the place of production of records. In the present case, in response to defendant's motion and supporting affidavits, which prima facie established vexation to defendant and the inappropriateness of the court, the plaintiff shows not a single fact provable by record or witness within the district or state where he has brought suit. It is undenied that every source of evidence to prove plaintiff's own case, as well as for defendant to disprove it, is in Illinois. 12 The District Court also found that 'the suit relates to the internal affairs of a foreign corporation' and for that reason also considered that the 'courts of the state of domicile of Lumbermens and the Kemper corporation are the appropriate tribunals for the determination of this case.' 64 F.Supp. 595, 599. But many kinds of cases may 'relate to internal affairs of a corporation', and that fact does not have the same significance as to the doctrine of forum non conveniens in all settings. 13 Every issue of ultra vires or proof of officers' authority in a contract action involves inquiry into internal affairs, but that inquiry is not one which must be relegated to home jurisdiction. The contracts of a corporation may make its liabilities turn on such events as realization of net earnings which submit its internal affairs to scrutiny in order to determine liability and which any court with jurisdiction may adjudicate. Williams v. Green Bay & Western R.R., 326 U.S. 549, 66 S.Ct. 284. On the other hand, private actions may involve the right of visitation or supervision, a public right existing in the state for the purpose of examining into the conduct of the corporation with a view to keeping it within its legal powers, to correct abuses of authority and nullify irregular proceedings. See Guthrie v. Harkness, 199 U.S. 148, 159, 26 S.Ct. 4, 8, 50 L.Ed. 130, 4 Ann.Cas. 433. Such cases present a more persuasive challenge to the jurisdiction of a court foreign to the corporation's domicile under the forum non conveniens doctrine. We are presented in this case 'with no problem of administration' of the affairs of a foreign corporation of the sort which would lead a court to decline jurisdiction. See dissenting opinion of Stone, J., in Rogers v. Guaranty Trust Co. of New York, 288 U.S. 123, 145, 53 S.Ct. 295, 303, 77 L.Ed. 652, 89 A.L.R. 720. 14 There is no rule of law, moreover, which requires dismissal of a suitor from the forum on a mere showing that the trial will involve issues which relate to the internal affairs of a foreign corporation. That is one, but only one, factor which may show convenience of parties or witnesses, the appropriateness of trial in a forum familiar with the law of the corporation's domicile, and the enforceability of the remedy if one be granted. But the ultimate inquiry is where trial will best serve the convenience of the parties and the ends of justice. Under modern conditions corporations often obtain their charters from states where they no more than maintain an agent to comply with local requirements, while every other activity is conducted far from the c artering state. Place of corporate domicile in such circumstances might be entitled to little consideration under the doctrine of forum non conveniens, which resists formalization and looks to the realities that make for doing justice. 15 Rogers v. Guaranty Trust Co. of New York, 288 U.S. 123, 53 S.Ct. 295, 77 L.Ed. 652, 89 A.L.R. 720, holds only that the district court '* * * was free in the exercise of a sound discretion to decline to pass upon the merits of the controversy and to relegate plaintiff to an appropriate forum. * * * Obviously no definite rule of general application can be formulated by which it may be determined under what circumstances a court will assume jurisdiction of stockholders' suits relating to the conduct of internal affairs of foreign corporations. But it safely may be said that jurisdiction will be declined whenever considerations of convenience, efficiency, and justice point to the courts of the state of the domicile as appropriate tribunals for the determination of the particular case.' 288 U.S. at pages 130, 131, 53 S.Ct. at pages 297, 298. There was disagreement in that case as to whether the facts warranted exercise of the discretion but little as to the general rule by which discretion is governed and none as to existence of the power of the court. 16 In the Williams case we reversed an exercise of discretion by a trial court, but far from laying down a rigid rule to govern discretion we said, 'Each case turns on its facts.' 326 U.S. at page 557, 66 S.Ct. at page 288. The facts in that case were quite different from those before us now. The action was a class suit brought to recover amounts alleged to be due to plaintiffs on debentures. There was a possibility that under one view as to construction of the debentures, the Court would have to review the corporate internal affairs to determine net earnings which were or should be available as dividends, and under another view, to decide whether under the applicable local law directors' discretion had been abused. In that case, as here, the plaintiffs resided in New York. But the opinion points out that the defendant, while legally domiciled elsewhere, maintained its financial office in New York; five of its six directors, all of its executive and fiscal officers except the president and general auditor, were found there; directors meetings were customarily held in New York; financial records, transfer books, minute books and the like were kept in New York. Reciting these facts, among others, we concluded 'These facts plainly indicate to us that it would not be vexatious or oppressive to entertain this suit in New York, whether the availability of witnesses or any other aspect of a trial be considered.' 326 U.S. at page 560, 66 S.Ct. at page 290. Accordingly, we held that the case should not have been dismissed. 17 Since this case is pending in New York and is a diversity case, it is appropriate to observe that the law of New York, if applicable, is to the same effect as to the considerations to govern forum non conveniens questions in this class of cases. The cases on which petitioner relies to establish his contention that in a similar suit the courts of New York would not decline jurisdiction, seem to be ones in which the corporate defendant had its principal place of business in New York or a substantial amount of property there, which would assure the effectiveness of a judgment. Miller v. Quincy, 179 N.Y. 294, 72 N.E. 166; Ramsey v. Rosenthal, 242 App.Div. 526, 275 N.Y.S. 783; Hamm v. Christian Herald Corp., 236 App.Div. 639, 260 N.Y.S. 743; Tarlow v. Archbell, Sup., 47 N.Y.S.2d 3, 7, 8, affirmed, 269 App.Div. 837, 56 N.Y.S.2d 363.5 Those cases, however, do not consider whether the actions brought are vexatious or oppressive or whether the interests of justice require that the trial be had in a more appropriate forum. Their principal attention is given to the inquiry whether the suit concerns the internal affairs of the foreign corporation and their uniform conclusion is that they do not. But in taking that view of one of the factors to be considered in applying the doctrine of forum non conveniens, they say nothing to detract from the general rule of New York as stated by Cardozo, J., in Travis v. Knox Terpezone Co., 215 N.Y. 259, 264, 109 N.E. 250, 251, L.R.A. 1916A. 542, Ann.Cas.1917A, 387: 'To trace in advance the precise line of demarcation between the controversies affecting a foreign corporation in which jurisdiction will be assumed and those in which jurisdiction will be declined would be a difficult and hazardous venture. A litigant is not, however, to be excluded because he is a stockholder, unless considerations of convenience or of efficiency or of justice point to the courts of the domicile of the corporation as the appropriate tribunals.' And in Langfelder v. Universal Laboratories, 293 N.Y. 200, 204, 56 N.E.2d 550, 553, 155 A.L.R. 1226, the court said: 'But it is well settled that jurisdiction in any case will be declined either in the absence of jurisdiction in the strict sense or where a determination of the rights of litigants involves regulation and management of the internal affairs of the corporation dependent upon the laws of the foreign State or where the court in which jurisdiction is sought is unable to enforce a decree if made or where the relief sought may be more appropriately adjudicated in the courts of the State or country to which the corporation owes its existence.' 18 Confronted with defendant's motion and supporting affidavits in this case reciting the facts earlier set forth herein, the plaintiff was utterly silent as to any reason of convenience to himself or to witnesses and as to any advantage to him in expense, speed of trial, or adequacy of remedy if the case were tried in New York. He recited only that Lumbermens and the Kemper Company had been served with process, and that Kemper individually had not, but that plaintiff proposed to serve him on his 'next visit to New York.' For the rest, he relied on a memorandum of law. That the absence from the case of Kemper makes remedy in New York inadequate, if not impossible, as to some counts is admitted. To that extent, it makes it inappropriate for a court in New York to adjudicate some closely related issues, deciding plaintiff's grievances piecemeal. Petitioner shows not a single witness or source of evidence available to him in New York and does not deny that his complaint will require exhaustive examination of the transactions of these Illinois corporations, all of which occurred in Illinois and are to be test d by its law. The plaintiff demanded trial in New York as matter of right and of law irrespective of the facts set out by defendant. This Court cannot say that the District Court abused its discretion in giving weight to the undenied sworn statements of fact in defendant's motion papers, especially in view of the failure of plaintiff's answering affidavit to advance any reason of convenience to the plaintiff. We hold only that a district court, in a derivative action, may refuse to exercise its jurisdiction when a defendant shows much harassment and plaintiff's response not only discloses so little countervailing benefit to himself in the choice of forum as it does here, but indicates such disadvantage as to support the inference that the forum he chose would not ordinarily be thought a suitable one to decide the controversy. 19 Affirmed. 20 Mr. Justice BLACK, dissenting. 21 I agree substantially with the dissent of Mr. Justice REED, but wish to add this thought. Today's decision goes far beyond the dubious doctrine announced in Rogers v. Guaranty Trust Co. of New York, 288 U.S. 123, 53 S.Ct. 295, 77 L.Ed. 652, 89 A.L.R. 720. There may be rare instances in which a federal court could decline to provide an equitable remedy against multi-state corporate defendants. A prayer for relief which requires the appointment of a receiver or the detailed and continuing supervision of the affairs of a defendant corporation whose headquarters is beyond the jurisdiction of the court would in my view constitute such a situation. Cf. Commonwealth of Pennsylvania v. Williams, 294 U.S. 176, 55 S.Ct. 380, 79 L.Ed. 841, 96 A.L.R. 1166. 22 The whole trend of recent congressional legislation has been to protect corporate stock and security holders. See e.g., Securities Act of 1933, 48 Stat. 74, 15 U.S.C. § 77a et seq., 15 U.S.C.A. § 77a et seq. But this legislation was not intended as a complete substitute for the antidote provided by stockholders' suits for the dangers inherent in the modern development of frequent conflicts of interest between corporate owners and corporate managers. See Laswell, Dean and Podell, A Non-Bureaucratic Alternative to Minority Stockholders' Suits, 43 Col.L.Rev. 1036, 1045, 1047; Koessler, The Stockholders Suit: A Comparative View, 46 Col.L.Rev. 238, 241. Yet the Court's opinion sets up almost insuperable obstacles to many stockholders who would bring such suits. A California or Florida stockholder cannot easily go to Delaware, New Jersey, or New York to press his claims. And there is no good reason, in most actions brought to curb corporate mismanagement, why a stockholder should not bring such a suit in the state where he lives, bought his stock, and where the corporation has agents and does business. To Put him to the inconvenience and disadvantage of going across the continent to the State of the managers to litigate his cause, all but nullifies his opportunity and inclination to sue to protect his interest and that of other owners. 23 Mr. Justice RUTLEDGE joins in this opinion. 24 Mr. Justice REED, dissenting. 25 For the purposes of this case we may assume, without examining New Yowk law, 2 Cir., 153 F.2d 888, 890, that a Federal District Court, in its discretion, can dismiss a cause on the ground that the forum is vexatiously inconvenient to the defendant. Still we think the exercise of such a power is not warranted in the circumstances of this case. 26 We need not restate the facts, which are amply set out by the majority. The sole inquiry is whether the exercise of discretion by the trial judge in this case was an abuse of his power. On motion of Lumbermens, joined in by no other defendant, for dismissal of the complaint on the grounds that the action would require interference by the court with the internal management of Lumbermens and that, further, an indispensable party had not been served, the trial court dismissed the complaint because it required interference with the internal affairs of a foreign corporation and because the foru was not convenient. The Circuit Court of Appeals affirmed the order of dismissal on the ground that the forum in which the action was brought was not convenient for the trial of the causes of action asserted by the complaint. 27 By a venue statute, Congress has provided that an action may be brought in the district where the plaintiff resides against defendants residing in other states than that of the forum. This plaintiff starts with a presumption in his favor that he may maintain this action at his own residence. 28 U.S.C. § 112, 28 U.S.C.A. § 112. 28 We need not tarry to consider the small interest of the plaintiff in the assets of his corporation, nor the effect of realigning the corporation on the side of the cause where its true interest lies. However interesting the implications of these facts, they have nothing to do with a dismissal on the ground of the inconvenience of the forum. The same facts would exist no matter what the forum, and they are accordingly not pertinent to our inquiry. Nor should we concern ourselves with the possibility that this may be a strike suit. Whatever the motives of the plaintiff, the only inquiry now here is whether the forum is inconvenient or not. 29 In some cases, which may at the expense of analysis be grouped under the doctrine of forum non conveniens, the convenience of the court may be important. In such cases the crowded condition of the court's calendar and its lack of familiarity with the law of another state may be weighty factors. But in those cases neither the defendant nor the plaintiff is a resident of the forum state. Western Union Telegraph Co. v. Russell, 12 Tex.Civ.App. 82, 33 S.W. 708; Robinson v. Oceanic Steam Nav. Co., 112 N.Y. 315, 19 N.E. 625, 2 L.R.A. 636; Burdick v. Freeman, 120 N.Y. 420, 24 N.E. 949; Morris v. Missouri Pacific R. Co., 78 Tex. 17, 14 S.W. 228, 9 L.R.A. 349, 22 Am.St.Rep. 17; see cases collected in 32 A.L.R. at page 34. Cf. Smith v. Empire State-Idaho Mining & Development Co., C.C., 127 F. 462. See also Davis v. Farmers Co-operative Equity Co., 262 U.S. 312, 317, 43 S.Ct. 556, 558, 67 L.Ed. 996. Such cases have the support of policy which hesitates to give an advantage to parties who do not bear the expense of supporting the courts of the forum. Douglas v. New York, N.H. & H.R. Co., 279 U.S. 377, 387, 49 S.Ct. 355, 356, 73 L.Ed. 747. But where the cause is transitory and the plaintiff a resident of the forum state, the convenience to the court would seem to be outweighed by its duty to entertain actions brought by citizens of the state of which the court is an arm. See Arizona Commercial Mining Co. v. Iron Cap Copper Co., 119 Me. 213, 110 A. 429. Cf. Mexican Nat. Ry. Co. v. Jackson, 89 Tex. 107, 33 S.W. 857, 31 L.R.A. 276, 59 Am.St.Rep. 28; Slater v. Mexican Nat. R. Co., 194 U.S. 120, 24 S.Ct. 581, 48 L.Ed. 900. This would seem particularly true of federal courts whose duty it is to entertain suits between citizens of different states. Williams v. Green Bay & W.R. Co., 326 U.S. 549, 553, 554, 66 S.Ct. 284, 286. 30 Since the plaintiff in this action is a resident of the forum state, we are only concerned with the relative convenience of the parties. It is clear that ordinarily a plaintiff may bring his suit in a forum of his choosing regardless of the inconvenience to him of making proof, so long as venue is properly laid. But here, as the Court points out, should the inconvenience to the defendant far outweigh any convenience to the plaintiff, it would not be fair to oppress the defendant, for it is not a legitimate advantage to a plaintiff to vex his opponent. We cannot agree, however, that in assessing the relative convenience of the parties the court may put a burden upon the plaintiff to make a positive showing that it is to his legitimate advantage to bring suit in the forum of his choosing. It is the defendant's burden to convince the court that the forum is both inconvenient to it and not convenient to the plaintiff. Despite the necessity of going elsewhere for ev dence, it is hardly capricious for a plaintiff to bring suit in his home state; the advantages of so-doing are usually no less real than apparent. 31 Accordingly we must judge this case from the showing made by the defendant as to the relative convenience of the parties in its affidavits in support of its motion to dismiss. The defendant's affiants urged that the suit be dismissed because all the proof would come from 'vast quantities of documents' and witnesses located in Illinois, where the main offices of Lumbermens are situated, and that transporting these documents would put the defendant to great expense. They also urged that the plaintiff had never attended any meetings of the corporation, nor ever protested to the Department of Insurance of Illinois which audited the books of Lumbermens, and that he was in a position where 'the only proof personally to come from him is the establishment of his status as a stockholder.' They also urged that the court was being asked to pass upon the internal management and affairs of Lumbermens. 32 As to the last argument: it is recognized of course that a federal court need not entertain a case which involves interference with the internal affairs of a corporation. Rogers v. Guaranty Trust Co. of New York, 288 U.S. 123, 53 S.Ct. 295, 77 L.Ed. 652, 89 A.L.R. 720, but see Williams v. Green Bay & W.R. Co., 326 U.S. 549, 66 S.Ct. 284. The Circuit Court (153 F.2d 890) was of the opinion that no interference with the internal affairs of a foreign corporation of a kind 'to make the courts of Illinois a more appropriate forum than those of New York' would be required by this action. This Court specifically concedes there is no problem of corporate administration that leads to refusal of jurisdiction in this case. This Court, however, depends upon the relation of the issues to the internal affairs of a corporation as one factor in the exercise of the court's discretion to dismiss on the ground of forum non conveniens. If corporate administration is not involved the mere fact that the issues relate to the internal affairs of the corporation does not seem significant. Almost any suit against a corporation may involve an examination into corporate affairs. Here the only inquiry, other than the alleged misconduct of the defendant Kemper, has to do with the relationship between Kemper & Co. and Lumbermens. Although this inevitably involves inquiry into internal affairs of a corporation, as does any suit brought against a corporate fiduciary for breach of trust, that inquiry is hardly an interference with corporate administration. 33 When there is no showing of interference with corporate administration, the party seeking dismissal is forced to depend upon what 'will best serve the convenience of the parties and the ends of justice.' This, we think, requires strong and clear proof to overcome the presumption that the place of trial is controlled by the venue statute. Mere inconvenience is not enough. 34 As for the expense to the defendant of bringing documents and witnesses to New York, even admitting that proof in this action will involve documentary evidence situated in Illinois or testimony of witnesses located in Illinois, it is not amiss to point out that the plaintiff must carry the burden in this action and must make his case before defense is necessary. Since both documents and witnesses are beyond the jurisdiction of the chosen forum it will be the plaintiff's expense initially to transport such records and witnesses, an inconvenience which he has determined to bear, if it is true that he has no other source of proof. But even supposing that the defendant will have to transport documents and witnesses to meet the plaintiff's proof, a bare allegation to that effect is hardly a showing of such hardship as to make it proper to dismiss this case on the grounds of forum non conveniens. The same allegation might be made in any action brought against the defendant in any state other than Illinois on any cause, contract or ort, which involves records of the company, and this even though the corporation has chosen to do business in forty-eight states. To dismiss a cause on such bare allegations without a particular showing of the hardship involved in transporting a mass of documents and witnesses not easily accessible to the forum puts a powerful weapon into the hands of corporations alleged to have improperly conducted their affairs. It has been the whole course of our law to break down barriers against calling corporations to account in all states where they may do wrong in doing business. Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437. Lumbermens qualified in New York to carry on its regular insurance business. It sold plaintiff a policy that shares in the profits of that business and it should require a showing much stronger than any here made to require this policy holder to go away from home for relief. 35 Petitioner, on behalf of Lumbermens, seeks recovery for excessive payments and services by Lumbermens to those who dominate the company, and for sales of company assets to those persons at inadequate prices. Petitioner must prove these allegations. None are now denied by defendant. That petitioner's success will result in 'monetary damage' to Lumbermens seems impossible. Petitioner's success will enrich Lumbermens at the expense of those who are alleged to have mulcted it of large sums. Petitioner speaks for the whole membership and all policy holders of Lumbermens. From this record, we do not see that an adequate basis of fact has been laid by the respondent's affidavits to overcome the right of petitioner to pursue his remedies in the District Court for the Eastern District of New York. 36 Mr. Justice BURTON joins in this dissent. 1 Some of our cases appear to hold broadly that the federal courts must exercise their jurisdiction, when they have it. Hyde v. Stone, 20 How. 170, 175, 15 L.Ed. 874; Suydam v. Broadnax, 14 Pet. 67, 10 L.Ed. 357; President, Directors & Co. of Union Bank of Tennessee v. Jolly's Adm'rs, 18 How. 503, 15 L.Ed. 472. But this is not a case in which it is urged that a state statute restricting remedy to state proceedings defeats federal diversity jurisdiction, as they were, and as was Chicot County v. Sherwood, 148 U.S. 529, 13 S.Ct. 695, 37 L.Ed. 546. In those cases, the Court held that when a state recognizes a cause of action, suit may be brought on it in federal court if diversity jurisdiction is established. That holding has nothing to do with this case. We are concerned here with the autonomous administration of the federal courts in the discharge of their own judicial duties, subject of course to the control of Congress. 2 28 U.S.C. § 112, 28 U.S.C.A. § 112, provides 'that suit by a stockholder on behalf of a corporation may be brought in any district in which suit against the defendant or defendants in said stockholders' action, other than said corporation, might have been brought by such corporation and process in such cases may be served upon such corporation in any district wherein such corporation resides or may be found.' 49 Stat. 1214. This reinforces the view that the cause of action is that of the corporation, if reinforcement is necessary. Moreover, it is obvious that the venue statute is not concerned with facilitating suit in the district of the stockholder's residence, but assures only that suit can be brought in any district in which the corporation could have sued. Greenberg v. Giannini, 2 Cir., 140 F.2d 550, 152 A.L.R. 966. When suit is brought in the district of the stockholder's residence, the venue statute does not provide for service on the corporation 'in any district wherein such corporation resides or may be found.' Since the corporation is an indispensable party, City of Davenport v. Dows, 18 Wall. 626, 21 L.Ed. 938, it must be only the chance stockholder's suit which can be maintained at the stockholder's residence. Corporations which have stockholders in many of the states may not find it necessary to qualify to do business and consent to be sued in all the states in which they have stockholders. 3 Before the decision of the circuit court in this case, a similar derivative action was begun against substantially the same defendants and on the same causes of action in the United States District Court for the Northern District of Illinois, Eastern Division. Schwartz v. Kemper, D.C.N.D.Ill.E.D., 69 F.Supp. 152. It assures that this controversy will not be barred from judicial hearing for lack of prosecution within the statutory period. All but two of the defendants in that action have entered a general appearance, and petitioner's lawyers are associated with plaintiff's counsel in that case. 4 Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157; see federal cases cited throughout Hornstein, The Counsel Fee in Stockholder's Derivative Suits, 39 Col.L.Rev. 784. Fees allowed, moreover, vary greatly with local considerations as to professional scales and other determinants of expense. 5 Of the other cases cited by petitioner, Goldstein v. Lightner, 266 App.Div. 357, 42 N.Y.S.2d 338, affirmed, 292 N.Y. 670, 56 N.E.2d 98, gave no expressed consideration to the problem of forum non conveniens, and in Jacobs v. Mexican Sugar Refining Co., 104 App.Div. 242, 93 N.Y.S. 776, the only question raised and decided was the jurisdiction of the court over the subject-matter of the suit. Cf. Ernst v. Rutherford & Boiling Springs Gas Co., 38 App.Div. 388, 56 N.Y.S. 403. In Hallenborg v. Greene, 66 App.Div. 590, 73 N.Y.S. 403, the Appellate Division reversed in part a broad decree of the Supreme Court so as to restrict the exercise of the court's power to conform to its statement of the forum non conveniens doctrine: 'When a judgment against a foreign corporation would not be effectual without the aid of the courts of a foreign country or of a sister state, and it may contravene the public policy of the foreign jurisdiction, or rest upon the construction of a foreign statute, the interpretation of which is not free from doubt,—as where the subject-matter of the litigation and the judgment would relate strictly to the internal affairs and management of the foreign corporation,—the court should decline jurisdiction, because such questions are of local administration, and should be relegated to the courts of the state or country under the laws of which the corporation was organized.' 66 App.Div. at page 597, 73 N.Y.S. at page 408.

89

330 U.S. 469 67 S.Ct. 801 91 L.Ed. 1028 CARDILLO, Deputy Com'r, U.S. Employees' Compensation Commission,v.LIBERTY MUT. INS. CO. et al. No. 265. Argued Jan. 10, 1947. Decided March 10, 1947. Mr. Philip Elman, of Washington, D.C., for petitioner. Mr. Arthur J. Phelan, of Washington, D.C., for respondents. Mr. Justice MURPHY delivered the opinion of the Court. 1 Petitioner, Deputy Commissioner of the United States Employees' Compensation Commission, issued an order under the District of Columbia Workmen's Compensation Act1 awarding compensation to the widow of one Clarence H. Ticer. It was specifically found that the injury which led to Ticer's death 'arose out of and in the course of the employment.' The propriety and effect of that finding are the main focal points of our inquiry in this case. 2 Section 1 of the District of Columbia Workmen's Compensation Act provides in part that 'The provisions of the Act entitled 'Longshoremen's and Harbor Workers' Compensation Act,' * * * shall apply in respect to the injury or death of an employee of an employer carrying on any employment in the District of Columbia, irrespective of the place where the injury or death occurs.' The Longshoremen's and Harbor Workers' Compensation Act,2 § 2(2), in turn defines the term 'injury' to include 'accidental injury or death arising out of and in the course of employment, * * *.' A finding that the injury or death was one 'arising out of and in the course of employment' is therefore essential to an award of compensation under the District of Columbia Workmen's Compensation Act. 3 In support of his order in this case the Deputy Commissioner made various findings of fact. These may be summarized as follows: 4 Ticer and his wife were residents of the District of Columbia. He had been regularly employed since about 19343 as an electrician by E. C. Ernst, Inc., a contractor engaged in electrical construction work in the District of Columbia and surrounding areas. In November, 1940, Ticer was transferred by his employer from a project in the District of Columbia to a project at the Quantico Marine Base at Quantico, Virginia. His work at the Marine Base continued for over three years until the time of his injury in December, 1943. 5 There was in effect at all times an agreement between the electrical workers' union and the employer. Section 15(b) of this agreement provided that 'Transportation and any necessary expense such as board and lodging shall be furnished (by the employer) for all work outside the District of Columbia.' The sum of $2 a day was fixed by the parties to this agreement as transportation expense and represented the approximate cost of travel from the District of Columbia to the Quantico Marine Base and return. This sum was paid to Ticer and others in addition to the regular hourly rate of pay. And it was paid in lieu of the employer's furnishing transportation. 6 Because the job site at the Marine Base was several miles away from the Quantico bus or train terminal, it was necessary for Ticer and his co-workers to drive their own automobiles to and from work. The employees formed a car pool. Each morning they started from their respective homes in their own automobiles and drove to a designated meeting place at Roaches Run, Virginia. From that point they would proceed in one car to the job site at the Marine Base. This procedure was repeated in reverse in the evening. The workers alternated in the use of the cars between Roaches Run and the job site. Non-members of the car pool each paid the car owner $1 for the round trip. 7 The employer was aware of the means of transportation being used and acquiesced therein. On December 13, 1943, Ticer was driving his car on a direct route from his place of employment to his home, following the close of the day's work. Four co-workers were riding with him, two of them being non-members of the car pool. As the car approached Fort Belvoir, Virginia, a large stone, which came from under the rear wheel of a passing truck, crashed through the windshield of the car. It struck Ticer's head, crushing his skull. Death resulted four days later. 8 Ticer's widow presented a claim for compensation. At the hearing before the Deputy Commissioner, the employer and the insurance carrier contended that the Virginia Compensation Commission had sole jurisdiction over the claim and that Ticer's injury did not arise out of or in the course of his employment. The Deputy Commissioner ruled against these contentions. After making the foregoing findings, he entered an order awarding death benefits and funeral expenses to the claimant. 9 The employer and the insurance carrier then brought this action in the District Court to set aside the order of the Deputy Commissioner. They renewed their jurisdictional objection and alleged a lack of substantial evidence to support the finding that Ticer's injury arose out of and in the course of his employment. The District Court dismissed the complaint, holding that the Deputy Commissioner's findings were supported by evidence in the record and that the compensation order was in all respects in accordance with law. On appeal, the Court of Appeals for the District of Columbia reversed, one justice dissenting. 154 F.2d 529. Without passing upon the jurisdictional issue, the court held that Ticer's injury had not arisen out of and in the course of his employment. It felt that Ticer had become entirely free of his employer's control at the close of the day's work at the Marine Base and that he had thereafter assumed his own risk in subjecting himself to the hazards of the highway. We granted certiorari on a petition alleging a conflict with the decision of this Court in Voehl v. Indemnity Ins. Co., 288 U.S. 162, 53 S.Ct. 380, 77 L.Ed. 676, 87 A.L.R. 245. 10 As noted, the Court of Appeals deemed it unnecessary to dispose of the question whether the Deputy Commissioner had jurisdiction over the instant claim. But in reviewing an administrative order, it is ordinarily preferable, where the issue is raised and where the record permits an adjudication, for a federal court first to satisfy itself that the administrative agency or officer had jurisdiction over the matter in dispute. At the same time, however, it is needless to remand this case to the Court of Appeals for a determination of the jurisdictional issue. That issue was considered and determined by the Deputy Commissioner, who was in turn sustained by the District Court. The facts pertinent to that issue are not seriously disputed and the matter has been fully briefed and argued before us. A remand under such circum tances is not warranted. We accordingly turn to a consideration of the jurisdictional issue. 11 We are aided here, of course, by the provision of § 20 of the Longshoremen's Act that, in proceedings under that Act, jurisdiction is to be 'presumed, in the absence of substantial evidence to the contrary'—a provision which applies with equal force to proceedings under the District of Columbia Act. And the Deputy Commissioner's findings as to jurisdiction are entitled to great weight and will be rejected only where there is apparent error. Davis v. Department of Labor and Industries, 317 U.S. 249, 256, 257, 63 S.Ct. 225, 229, 87 L.Ed. 246. His conclusion that jurisdiction exists in this case is supported both by the statutory provisions and by the evidence in the record. 12 The jurisdiction of the Deputy Commissioner to consider the claim in this case rests upon the statement in the District of Columbia Act that it 'shall apply in respect to the injury or death of an employee of an employer carrying on any employment in the District of Columbia, irrespective of the place where the injury or death occurs; except that in applying such provisions the term 'employer' shall be held to mean every person carrying on any employment in the District of Columbia, and the term 'employee' shall be held to mean every employee of any such person.' There is no question here but that Ticer was employed by a District of Columbia employer; the latter had its place of business in the District and engaged in construction work in the District, as well as in surrounding areas. But the contention is made that, despite the broad sweep of the statutory language, the Act applies only where the employee, during the whole of his employment, spent more time working within the District than be spent working outside the District. Using that criterion, it is said that the Act is inapplicable to this case since Ticer was employed on a construction job in Virginia continuously for over three years prior to the accident and did nothing within the District for his employer during that period. The implication is that only the Virginia workmen's compensation law is applicable. 13 But the record indicates that both Ticer and his wife were residents of the District. He had been hired in the District by his employer in 1934 and had worked on various projects in and around the District from that time until 1940, when he was assigned to the Quantico Marine Base project. While at the Marine Base, he was under orders from the District and was subject to being transferred at anytime to a project in the District. His pay was either carried to him from the District or was given to him directly in the District. And he commuted daily between his home in the District and the Marine Base project. 14 We hold that the jurisdictional objection is without merit in light of these facts. Nothing in the history, the purpose or the language of the Act warrants any limitation which would preclude its application to this case. The Act in so many words applies to every employee of an employer carrying on any employment in the District of Columbia, 'irrespective of the place where the injury or death occurs.' Those words leave no possible room for reading in an implied exception excluding those employees like Ticer who have substantial business and personal connections in the District and who are injured outside the District. Whether this language covers employees who are more remotely related to the District is a matter which we need not now discuss and any arguments based upon such hypothetical situations are without weight in this case. 15 Nor does any statutory policy suggest itself to justify the proposed exception. A prime purpose of the Act is to provide residents of the District of Columbia with a practical and expeditious remedy for their industrial accidents and to place on District of Columbia employers a limited and determinate liability. See Bradford Electric Light Co. v. Clapper, 286 U.S. 145, 159, 52 .Ct. 571, 575, 76 L.Ed. 1026, 82 A.L.R. 696. The District is relatively quite small in area; many employers carrying on business in the District assign some employees to do work outside the geographical boundaries, especially in nearby Virginia and Maryland areas. When such employees reside in the District and are injured while performing those outside assignments, they come within the intent and design of the statute to the same extent as those whose work and injuries occur solely within the District. In other words, the District's legitimate interest in providing adequate workmen's compensation measures for its residents does not turn on the fortuitous circumstance of the place of their work or injury. Nor does it vary with the amount or percentage of work performed within the District. Rather it depends upon some substantial connection between the District and the particular employee-employer relationship, a connection which is present in this case. Such has been the essence of prior holdings of the Court of Appeals. B. F. Goodrich Co. v. Britton, 78 U.S.App.D.C. 221, 139 F.2d 362; Travelers Ins. Co. v. Cardillo, 78 U.S.App.D.C. 392, 141 F.2d 362; Travelers Ins. Co. v. Cardillo, 78 U.S.App.D.C. 394, 141 F.2d 364. And as so applied, the statute fully satisfies any constitutional questions of due process or full faith and credit. Alaska Packers Ass'n v. Industrial Accident Commission, 294 U.S. 532, 55 S.Ct. 518, 79 L.Ed. 1044. Cf. Bradford Electric Light Co. v. Clapper, supra. 16 Hence we conclude that the Deputy Commissioner had jurisdiction under the District of Columbia Act to entertain a claim by the widow of an employee who had been a resident of the District, who had been employed by a District employer and who had been subject to work assignments in the District. We accordingly turn to a consideration of the propriety and effect of the Deputy Commissioner's finding that Ticer's injury arose out of and in the course of his employment. 17 Our approach to that problem grows out of the provisions of the Long-shoremen's Act, as made applicable by the District of Columbia Act. Section 19(a) of the Longshoremen's Act provides for the filing of a 'claim for compensation' and specifies that 'the deputy commissioner shall have full power and authority to hear and determine all questions in respect of such claim.' Thus questions as to whether an injury arose out of and in the course of employment necessarily fall within the scope of the Deputy Commissioner's authority. Section 21(b) then provides that compensation orders may be suspended or set aside through injunction proceedings instituted in the federal district courts 'if not in accordance with law.' 18 In determining whether a particular injury arose out of and in the course of employment, the Deputy Commissioner must necessarily draw an inference from what he has found to be the basic facts. The propriety of that inference, of course, is vital to the validity of the order subsequently entered. But the scope of judicial review of that inference is sharply limited by the foregoing statutory provisions. If supported by evidence and not inconsistent with the law, the Deputy Commissioner's inference that an injury did or did not arise out of and in the course of employment is conclusive. No reviewing court can then set aside that inference because the opposite one is thought to be more reasonable; nor can the opposite inference be substituted by the court because of a belief that the one chosen by the Deputy Commissioner is factually questionable. Voehl v. Indemnity Ins. Co., supra, 288 U.S. at page 166, 53 S.Ct. at page 381, 77 L.Ed. 676, 87 A.L.R. 245; Del Vecchio v. Bowers, 296 U.S. 280, 287, 56 S.Ct. 190, 193, 80 L.Ed. 229; South Chicago Coal & Dock Co. v. Bassett, 309 U.S. 251, 257, 258, 60 S.Ct. 544, 548, 84 L.Ed. 732; Parker v. Motor Boat Sales, 314 U.S. 244, 246, 62 S.Ct. 221, 223, 86 L.Ed. 184; Davis v. Department of Labor and Industries, supra, 317 U.S. at page 256, 63 S.Ct. at page 229, 87 L.Ed. 246. 19 It matters not that the basic facts from which the Deputy Commissioner draws this inference are undisputed rather than controverted. See Boehm v. Commissioner, 326 U.S. 287, 293, 66 S.Ct. 120, 124. It is likewise immaterial that the facts permit the drawing of diverse inferences. The Deputy Commissioner alone is charged with the duty of initially selecting the inference which seems most reasonable and his choice, if otherwise sustainable, may not be disturbed by a reviewing court. Del Vecchio v. Bowers, supra, 296 U.S. at page 287, 56 S.Ct. at page 193, 80 L.Ed. 229. Moreover, the fact that the inference of the type here made by the Deputy Commissioner involves an application of a broad statutory term or phrase to a specific set of facts gives rise to no greater scope of judicial review. National Labor Relations Board v. Hearst Publications, 322 U.S. 111, 131, 64 S.Ct. 851, 860, 88 L.Ed. 1170; Commissioner of Internal Revenue v. Scottish American Inv. Co., 323 U.S. 119, 124, 65 S.Ct. 169, 171, 89 L.Ed. 113; Unemployment Compensation Commission v. Aragan, 329 U.S. 143, 153, 67 S.Ct. 245, 250. Even if such an inference be considered more legal than factual in nature, the reviewing court's function is exhausted when it becomes evident that the Deputy Commissioner's choice has substantial roots in the evidence and is not forbidden by the law. Such is the result of the statutory provision permitting the suspension or setting aside of compensation orders only 'if not in accordance with law.' 20 Our attention must therefore be cast upon the inference drawn by the Deputy Commissioner in this case that Ticer's injury and death did arise out of and in the course of his employment. If there is factual and legal support for that conclusion, our task is at an end. 21 A reasonable legal basis for the Deputy Commissioner's action in this respect is clear. The statutory phrase 'arising out of and in the course of employment,' which appears in most workmen's compensation laws, is deceptively simple and litigiously prolific.4 As applied to injuries received by employees while traveling between their homes and their regular places of work, however, this phrase has generally been construed to preclude compensation. Voehl v. Indemnity Ins. Co., supra, 288 U.S. at page 169, 53 S.Ct. at page 382, 77 L.Ed. 676, 87 A.L.R. 245. Such injuries are said not to arise out of and in the course of employment; rather they arise out of the ordinary hazards of the journey, hazards which are faced by all travelers and which are unrelated to the employer's business. But certain exceptions to this general rule have come to be recognized. These exceptions relate to situations where the hazards of the journey may fairly be regarded as the hazards of the service. They are thus dependent upon the nature and circumstances of the particular employment and necessitate a careful evaluation of the employment terms. 22 Under the District of Columbia Workmen's Compensation Act, at least four exceptions have been recognized by the Court of Appeals: (1) where the employment requires the employee to trave on the highways; (2) where the employer contracts to and does furnish transportation to and from work; (3) where the employee is subject to emergency calls, as in the case of firemen; (4) where the employee uses the highway to do something incidental to his employment, with the knowledge and approval of the employer. Ward v. Cardillo, 77 U.S.App.D.C. 343, 135 F.2d 260, 262. See also Lake v. City of Bridgeport, 102 Conn. 337, 128 A. 782. In performing his function of deciding whether an injury, incurred while traveling, arose out of and in the course of employment, the Deputy Commissioner must determine the applicability of these exceptions to the general rule. Here he decided that the second exception was applicable, that Ticer's employer had contracted to furnish transportation to and from work and had paid the expense of transportation in lieu of actually supplying the transportation itself. We cannot say that he was wrong as a matter of law. 23 There are no rigid legal principles to guide the Deputy Commissioner in determining whether the employer contracted to and did furnish transportation to and from work. 'No exact formula can be laid down which will automatically solve every case.' Cudahy Packing Co. of Nebraska v. Parramore, 263 U.S. 418, 424, 44 S.Ct. 153, 154, 68 L.Ed. 366, 30 A.L.R. 532; Voehl v. Indemnity Ins. Co., supra, 288 U.S. at page 169, 53 S.Ct. at page 382, 77 L.Ed. 676, 87 A.L.R. 245. Each employment relationship must be perused to discover whether the employer, by express agreement or by a course of dealing, contracted to and did furnish this type of transportation. For that reason it was error for the Court of Appeals in this case to emphasize that the employer must have control over the acts and movements of the employee during the transportation before it can be said that an injury arose out of and in the course of employment. The presence or absence of control is certainly a factor to be considered. But it is not decisive. An employer may in fact furnish transportation for his employees without actually controlling them during the course of the journey or at the time and place where the injury occurs. Ward v. Cardillo, supra. And in situations where the journey is in other respects incidental to the employment, the absence of control by the employer has not been held to preclude a finding that an injury arose out of and in the course of employment. See Cudahy Packing Co. of Nebraska v. Parramore, supra; Voehl v. Indemnity Ins. Co., supra.5 24 Indeed, to import all the common law concepts of control and to erect them as the sole or prime guide for the Deputy Commissioner in cases of this nature would be to encumber his duties with all the technicalities and unrealities which have marked the use of those concepts in other fields. See National Labor Relations Board v. Hearst Publications, supra, 322 U.S. at pages 120, 121, 125, 64 S.Ct. at pages 855, 856, 857, 88 L.Ed. 1170; Hust v. Moore-McCormack Lines, 328 U.S. 707, 723—725, 66 S.Ct. 1218, 1226, 1227. That we refuse to do. 'The modern development and growth of industry, with the consequent changes in the relations of employer and employee, have been so profound in character and degree as to take away, in large measure, the applicability of the doctrines upon which rest the common-law liability of the master for personal injuries to a servant, leaving of necessity a field of debatable ground where a good deal must be conceded in favor of forms of legislation, calculated to establish new bases of liability more in harmony with these changed conditions.' Cudahy Packing Co. of Nebraska v. Parramore, supra, 263 U.S. at page 423, 44 S.Ct. at page 154, 68 L.Ed. 366, 30 A.L.R. 532. 25 Nor is there any other formal principle of law which would invalidate the choice made by the Deputy Commissioner in this instance. The fact that Ticer was not being paid wages at the time of the accident is clearly immaterial. Cudahy Packing Co. v. Parramore, supra.6 And it is without statutory consequence that the employer here carried out his contract obligation to furnish actual transportation by paying the travel costs and allowing the employees like Ticer to make the journey by whatever means they saw fit. To be sure, there are many holdings to the effect that, where the employer merely pays the costs of transportation, an injury occurring during the journey does not arise out of and in the course of employment; there must be something more than mere payment of transportation costs.7 But assuming those holdings to be correct and assuming the Deputy Commissioner's findings in this case to be justified, there is more here than mere payment of transportation costs. It was found that Ticer's employer paid the costs as a means of carrying out its contract obligation to furnish the transportation itself. Where there is that obligation, it becomes irrelevant in this setting whether the employer performs the obligation by supplying its own vehicle, hiring the vehicle of an independent contractor, making arrangements with a common carrier, reimbursing employees for the use of their own vehicles, or reimbursing employees for the costs of transportation by any means they desire to use. In other words, where the employer has promised to provide transportation to and from work, the compensability of the injury is in no way dependent upon the method of travel which is employed.8 From the statutory standpoint, the employer is free to carry out its transportation obligation in any way the parties desire; and the rights of the employees to compensation are unaffected by the choice made. 26 Turning to the factual support for the Deputy Commissioner's inference that Ticer's injury arose out of and in the course of employment, we find ample sustaining evidence. Ticer's employment was governed by the terms of a long-standing agreement between Local Union No. 26, International Brotherhood of Electrical Workers (of which Ticer was a member) and the Institute of Electrical Contractors of the District of Columbia, Inc. (of which the employer was a member). Rule 15(b) of the agreement provided that 'Transportation and any ecessary expense such as board and lodging shall be furnished for all work outside the District of Columbia.' 27 The employer carried out in different ways this obligation to furnish transportation. On certain construction jobs in the past, it actually furnished a station wagon or a passenger car of its own to transport the employees. At other times, however, it paid the employees an allowance to cover the cost of transportation in lieu of furnishing an automobile. Where the latter course was followed, the written contract was not amended or changed in any way, the employer simply communicating with the union to ascertain the amount necessary to defray the cost of transportation. The amount agreed upon affected all contractors in the Institute; and the cost of transportation was determined before the contractors made their respective bids. 28 On the Quantico Marine Base project, the sum of $2 per day was agreed upon as the transportation allowance in lieu of furnishing an automobile. This amount was fixed after investigation into the cost of transportation by railroad and was paid to each employee, irrespective of his rate of pay, to cover the cost of transportation to and from the Marine Base. No change was made in the written contract. 29 There was also evidence that the distant location of the Marine Base project, the hours of work and the inadequacy of public transportation facilities all combined to make it essential, as a practical matter, that the employer furnish transportation in some manner if employees were to be obtained for the job. This was not a case of employees traveling in the same city between home and work. Extended cross-country transportation was necessary. And it was transportation of a type that an employer might fairly be expected to furnish. Such evidence illustrates the setting in which the contract was drawn. 30 The Court of Appeals felt, however, that the original contract to furnish transportation was not followed and that a new oral contract to pay transportation expenses was substituted in its place. We need not decide whether that view is justified by the record. It is enough that there is sufficient evidence to support the Deputy Commissioner's view that the payment of transportation costs was merely one way of carrying out the original contract obligation to furnish the transportation itself. 31 We therefore hold that, under the particular circumstances of this case, the Deputy Commissioner was justified in concluding that Ticer's injury and death arose out of and in the course of his employment. And since the Deputy Commissioner had jurisdiction over this case, the resulting award of compensation should have been sustained. 32 Reversed. 33 Mr. Justice FRANKFURTER concurs in the result. 34 Mr. Justice JACKSON and Mr. Justice BURTON dissent. 1 Act of May 17, 1928, 45 Stat. 600, D.C.Code, 1940, Title 36, Chap. 5, § 1, 33 U.S.C.A. § 901 note. 2 Act of March 4, 1927, c. 509, 44 Stat. 1424, 33 U.S.C. § 901 et seq., 33 U.S.C.A. § 901 et seq. 3 There was one exception. For a period of about 6 months in 1938 or 1939 he worked for the United States Government. 4 'The few and seemingly simple words 'arising out of and in the course of the employment' have been the fruitful (or fruitless) source of a mass of decisions turning upon nice distinctions and supported by refinements so subtle as to leave the mind of the reader in a maze of confusion. From their number counsel can, in most cases, cite what seems to be an authority for resolving in his favour, on whichever side he may be, the question in dispute.' Lord Wrenbury in Herbert v. Fox & Co. (1916) 1 A.C. 405, 419. See also Dodd, Administration of Workmen's Compensation (1936), pp. 680—687; Horovitz, 'Modern Trends in Workmen's Compensation,' 21 Ind.L.J. 473, 497—564; Horovitz, Injury and Death Under Workmen's Compensation Laws (1944), pp. 93—173; Brown, "Arising out of and in the course of the employment' in Workmen's Compensation Laws,' 7 Wis.L.Rev. 15, 67, 8 Wis.L.Rev. 134, 217. 5 See also Gagnebin v. Industrial Accident Commission, 140 Cal.App. 80, 34 P.2d 1052; Keely v. Metropolitan Edison Co., 157 Pa.Super. 63, 41 A.2d 420; McKinney v. Dorlac, 48 N.M. 149, 146 P.2d 867; Exelbert v. Klein & Kavanagh, 243 App.Div. 839, 278 N.Y.S. 377. 6 'Nor is it ('in the course of employment') limited to the time for which wages are paid. Indeed the fact that the workman is paid wages for the time when the accident occurs is of little, if any, importance.' Bohlen, 'A Problem in the Drafting of Workmen's Compensation Acts.' 25 Harv.L.Rev. 328, 401, 402. Turner Day & Woolworth Handle Co. v. Pennington, 250 Ky. 433, 63 S.W.2d 490. 7 Public Service Co. of Northern Illinois v. Industrial Commission, 370 Ill. 334, 18 N.E.2d 914; Guenesa v. Ralph V. Rulon, Inc., 124 Pa.Super. 569, 189 A. 524; Republic Underwriters v. Terrell, Tex.Civ.App., 126 S.W.2d 752; Orsinie v. Torrance, 96 Conn. 352, 113 A. 924; Kowalek v. New York Consolidated R. Co., 229 N.Y. 489, 128 N.E. 888; Tallon v. Interborough Rapid Transit Co., 232 N.Y. 410, 134 N.E. 327, 21 A.L.R. 1218; Keller v. Reis & Donovan, Inc., 195 App.Div. 45, 185 N.Y.S. 741; Levchuk v. Krug Cement Products Co., 246 Mich. 589, 225 N.W. 559. See annotations in 20 A.L.R. 319, 49 A.L.R. 454, 63 A.L.R. 469, 87 A.L.R. 250, 100 A.L.R. 1053. Cf. Netherton v. Coles, 1945, 1 All E.R. 227. 8 See In re Donovan, 217 Mass. 76, 104 N.E. 431, Ann.Cas.1915C, 778; Breland v. Traylor Engineering & Mfg. Co., 52 Cal.App.2d 415, 126 P.2d 455; Lehigh Nav. Coal Co. v. McGonnell, 120 N.J.L. 428, 199 A. 906; Burchfield v. Department of Labor and Industries, 165 Wash. 106, 4 P.2d 858; Swanson v. Latham & Crane, 92 Conn. 87, 101 A. 492; Cary v. State Industrial Commission, 147 Okl. 162, 296 P. 385; Williams v. Travelers Ins. Co. of Hartford, Conn., La.App., 19 So.2d 586; Turner Day & Woolworth Handle Co. v. Pennington, 250 Ky. 433, 63 S.W.2d 490.

78

330 U.S. 501 67 S.Ct. 839 91 L.Ed. 1055 GULF OIL CORPORATIONv.GILBERT. No. 93. Argued Dec. 18, 19, 1946. Decided March 10, 1947. Messrs. Bernard A. Golding and Archie D. Gray, both of Houston, Tex., for petitioner. Mr. Max J. Gwertzman, of New York City, for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 The questions are whether the United States District Court has inherent power to dismiss a suit pursuant to the doctrine of forum non conveniens and, if so, whether that power was abused in this case. 2 The respondent-plaintiff brought this action in the Southern District of New York, but resides at Lynchburg, Virginia, where he operated a public warehouse. He alleges that the petitioner-defendant, in violation of the ordinances of Lynchburg, so carelessly handled a delivery of gasoline to his warehouse tanks and pumps as to cause an explosion and fire which consumed the warehouse building to his damage of $41,889.10, destroyed merchandise and fixtures to his damage of $3,602.40, caused injury to his business and profits of $20,038.27, and burned the property of customers in his custody under warehousing agreements to the extent of $300,000. He asks judgment of $365,529.77 with costs and disbursements, and interest from the date of fire. The action clearly is one in tort. 3 The petitioner-defendant is a corporation organized under the laws of Pennsylvania, qualified to do business in both Virginia and New York, and it has designated officials of each state as agents to receive service of process. When sued in New York, the defendant, invoking the doctrine of forum non conveniens, claimed that the appropriate place for trial is Virginia where the plaintiff lives and defendant does business, where all events in litigation took place, where most of the witnesses reside, and where both state and federal courts are available to plaintiff and are able to obtain jurisdiction of the defendant. 4 The case, on its merits, involves no federal question and was brought in the United States District Court solely because of diversity in citizenship of the parties. Because of the charact r of its jurisdiction and the holdings of and under Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, the District Court considered that the law of New York as to forum non conveniens applied and that it required the case to be left to Virginia courts.1 It therefore dismissed. 5 The Circuit Court of Appeals disagreed as to the applicability of New York law, took a restrictive view of the application of the entire doctrine in federal courts and, one judge dissenting, reversed.2 The case is here on certiorari. 328 U.S. 830, 66 S.Ct. 1123. I. 6 It is conceded that the venue statutes of the United States permitted the plaintiff to commence his action in the Southern District of New York and empower that court to entertain it.3 But that does not settle the question whether it must do so. Indeed the doctrine of forum non conveniens can never apply if there is absence of jurisdiction or mistake of venue. 7 This Court, in one form of words or another, has repeatedly recognized the existence of the power to decline jurisdiction in exceptional circumstances. As formulated by Mr. Justice Brandeis the rule is: 'Obviously, the proposition that a court having jurisdiction must exercise it, is not universally true; else the admiralty court could never decline jurisdiction on the ground that the litigation is between foreigners. Nor is it true of courts administering other systems of our law. Courts of equity and of law also occasionally decline, in the interest of justice, to exercise jurisdiction, where the suit is between aliens or nonresidents, or where for kindred reasons the litigation can more appropriately be conducted in a foreign tribunal.' Canada Malting Co., Ltd., v. Paterson Steamships, Ltd., 285 U.S. 413 422, 423, 52 S.Ct. 413, 415, 76 L.Ed. 837. 8 We later expressly said that a state court 'may in appropriate cases apply the doctrine of forum non conveniens.' Broderick v. Rosner, 294 U.S. 629, 643, 55 S.Ct. 589, 592, 79 l.Ed. 1100, 100 A.L.R. 1133; Williams v. State of North Carolina, 317 U.S. 287, 294, n. 5, 63 S.Ct. 207, 87 L.Ed. 279, 143 A.L.R. 1273. Even where federal rights binding on state courts under the Constitution are sought to be adjudged, this Court has sustained state courts in a refusal to entertain a litigation between a nonresident and a foreign corporation or between two foreign corporations. Douglas v. New York, N.H. & H.R. Co., 279 U.S. 377, 49 S.Ct. 355, 73 L.Ed. 747; Anglo-American Provision Co. v. Davis Provision Co. No. 1, 191 U.S. 373, 24 S.Ct. 92, 48 L.Ed. 225. It has held the use of an inappropriate forum in one case an unconstitutional burden on interstate commerce. Davis v. Farmers' Co-operative Equity Co., 262 U.S. 312, 43 S.Ct. 556, 67 L.Ed. 996. On substantially forum non conveniens grounds we have required federal courts to relinquish decision of cases within their jurisdiction where the court would have to participate in the administrative policy of a state. Railroad Commission of Texas v. Rowan & Nichols Oil Co., 311 U.S. 570, 61 S.Ct. 343, 85 L.Ed. 358; Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424; but cf. Meredith v. Winter Haven, 320 U.S. 228, 64 S.Ct. 7, 88 L.Ed. 9. And most recently we decided Williams v. Green Bay & Western R. Co., 326 U.S. 549, 66 S.Ct. 284, in which the Court, without questioning the validity of the doctrine held it had been applied in that case without justification.4 9 It is true that in cases under the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq., we have held that plaintiff's choice of a forum cannot be defeated on the basis of forum non conveniens. But this was because the special venue act under which those cases are brought was believed to require it. Baltimore & Ohio R. Co. v. Kepner, 314 U.S. 44, 62 S.Ct. 6, 86 L.Ed. 28, 136 A.L.R. 1222; Miles v. Illinois Central R. Co., 315 U.S. 698, 62 S.Ct. 827, 86 L.Ed. 1129, 146 A.L.R. 1104. Those decisions do not purport to modify the doctrine as to other cases governed by the general venue statutes. 10 But the court below says that 'The Kepner case * * * warned against refusal of jurisdiction in a particular case controlled by congressional act; here the only difference is that congressional act, plus judicial interpretation (under the Neirbo case), spells out the result.' 153 F.2d at page 885. The Federal Employers' Liability Act, however, which controlled decision in the Kepner case, specifically provides where venue may be had in any suit on a cause of action arising under that statute. What the court below refers to as 'congressional act, plus judicial interpretation,' is the general statute of venue in diversity suits, plus our decision that it gives the defendant 'a personal privilege respecting the venue, or place of suit, which he may assert, or may waive, at his election,' Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 308 U.S. 165, 168, 60 S.Ct. 153, 154, 84 L.Ed. 167, 128 A.L.R. 1437. The Federal Employers' Liability Act, as interpreted by Kepner, increases the number of places where the defendant may be sued and makes him accept the plaintiff's choice. The Neirbo case is only a declaration that if the defendant, by filing consent to be sued, waives its privilege to be sued at its place of residence, it may be sued in the federal courts at the place where it has consented to be sued. But the general venue statute plus the Neirbo interpretation do not add up to a declaration that the court must respect the choice of the plaintiff, no matter what the type of suit or issues involved. The two taken together mean only that the defendant may consent to be sued, and it is proper for the federal court to take jurisdiction, not that the plaintiff's choice cannot be questioned. The defendant's consent to be sued extends only to give the court jurisdiction of the person; it assumes that the court, having the parties before it, will apply all the applicable law, including, in those cases where it is appropriate, its discretionary judgment as to whether the suit should be entertained. In all cases in which the doctrine of forum non conveniens comes into play, it presupposes at least two forums in which the defendant is amenable to process; the doctrine furnishes criteria for choice between them. II. 11 The principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute. These statutes are drawn with a necessary generality and usually give a plaintiff a choice of courts, so that he may be quite sure of some place in which to pursue his remedy. But the open door may admit those who seek not simply justice but perhaps justice blended with some harassment. A plaintiff sometimes is under temptation to resort to a strategy of f rcing the trial at a most inconvenient place for an adversary, even at some inconvenience to himself. 12 Many of the states have met misuse of venue by investing courts with a discretion to change the place of trial on various grounds, such as the convenience of witnesses and the ends of justice.5 The federal law contains no such express criteria to guide the district court in exercising its power. But the problem is a very old one affecting the administration of the courts as well as the rights of litigants, and both in England and in this country the common law worked out techniques and criteria for dealing with it.6 13 Wisely, it has not been attempted to catalogue the circumstances which will justify or require either grant or denial of remedy. The doctrine leaves much to the discretion of the court to which plaintiff resorts, and experience has not shown a judicial tendency to renounce one's own jurisdiction so strong as to result in many abuses.7 14 If the combination and weight of factors requisite to given results are difficult to forecast or state, those to be considered are not difficult to name. An interest to be considered, and the one likely to be most pressed, is the private interest of the litigant. Important considerations are the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive. There may also be questions as to the enforcibility of a judgment if one is obtained. The court will weigh relative advantages and obstacles to fair trial. It is often said that the plaintiff may not, by choice of an inconvenient forum, 'vex,' 'harass,' or 'oppress' the defendant by inflicting upon him expense or trouble not necessary to his own right to pursue his remedy.8 But unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed. 15 Factors of public interest also have place in applying the doctrine. Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself. 16 The law of New York as to the discretion of a court to apply the doctrine of forum non conveniens, and as to the standards that guide discretion is, so far as here involved, the same as the federal rule. Murnan v. Wabash Ry. Co., 246 N.Y. 244, 158 N.E. 508, 54 A.L.R. 1522; Wedemann v. United States Trus Co. of New York, 258 N.Y. 315, 179 N.E. 712, 79 A.L.R. 1320; see Gregonis v. Philadelphia & Reading Coal & Iron Co., 235 N.Y. 152, 139 N.E. 223, 32 A.L.R. 1. It would not be profitable, therefore, to pursue inquiry as to the source from which our rule must flow. III. 17 Turning to the question whether this is one of those rather rare cases where the doctrine should be applied, we look first to the interests of the litigants. 18 The plaintiff himself is not a resident of New York, nor did any event connected with the case take place there, nor does any witness with the possible exception of experts live there. No one connected with that side of the case save counsel for the plaintiff resides there, and he has candidly told us that he was retained by insurance companies interested presumably because of subrogation. His affidavits and argument are devoted to controvering claims as to defendant's inconvenience rather than to showing that the present forum serves any convenience of his own, with one exception. The only justification for trial in New York advanced here is one rejected by the district court and is set forth in the brief as follows: 'This Court can readily realize that an action of this type, involving as it does a claim for damages in an amount close to $400,000, is one which may stagger the imagination of a local jury which is surely unaccustomed to dealing with amounts of such a nature. Furthermore, removed from Lynchburg, the respondent will have an opportunity to try this case free from local influences and preconceived notions which make it difficult to procure a jury which has no previous knowledge of any of the facts herein.' 19 This unproven premise that jurors of New York live on terms of intimacy with $400,000 transactions is not an assumption we easily make. Nor can we assume that a jury from Lynchburg and vicinity would be 'staggered' by contemplating the value of a warehouse building that stood in their region, or of merchandise and fixtures such as were used there, nor are they likely to be staggered by the value of chattels which the people of that neighborhood put in storage. It is a strange argument on behalf of a Virginia plaintiff that the community which gave him patronage to make his business valuable is not capable of furnishing jurors who know the value of the goods they store, the building they are stored in, or the business their patronage creates. And there is no specification of any local influence, other than accurate knowledge of local conditiions, that would make a fair trial improbable. The net of this is that we cannot say the District Court was bound to entertain a provincial fear of the provincialism of a Virginia jury. That leaves the Virginia plaintiff without even a suggested reason for transporting this suit to New York. 20 Defendant points out that not only the plaintiff, but every person who participated in the acts charged to be negligent, resides in or near Lynchburg. It also claims a need to interplead an alleged independent contractor which made the delivery of the gasoline and which is a Virginia corporation domiciled in Lynchburg, that it cannot interplead in New York. There also are approximately 350 persons residing in and around Lynchburg who stored with plaintiff the goods for the damage to which he seeks to recover. The extent to which they have left the community since the fire and the number of them who will actually be needed is in dispute. The complaint alleges that defendant's conduct violated Lynchburg ordinances. Conditions are said to require proof by firemen and by many others. The learned and experienced trial judge was not unaware that litigants generally manage to try their cases with fewer witnesses than they predict in such motions as this. But he was justified in concluding that this trial is likely to be long and to involve calling many witnesses, and that Lynchburg, some 400 miles from New York, is the source of all proofs for either side with possible exception of e perts. Certainly to fix the place of trial at a point where litigants cannot compel personal attendance and may be forced to try their cases on deposition, is to create a condition not satisfactory to court, jury or most litigants. Nor is it necessarily cured by the statement of plaintiff's counsel that he will see to getting many of the witnesses to the trial and that some of them 'would be delighted to come to New York to testify.' There may be circumstances where such a proposal should be given weight. In others the offer may not turn out to be as generous as defendant or court might suppose it to be. Such matters are for the District Court to decide in exercise of a sound discretion. 21 The court likewise could well have concluded that the task of the trial court would be simplified by trial in Virginia. If trial was in a state court, it could apply its own law to events occurring there. If in federal court by reason of diversity of citizenship, the court would apply the law of its own state in which it is likely to be experienced. The course of adjudication in New York federal court might be beset with conflict of laws problems all avoided if the case is litigated in Virginia where it arose. 22 We are convinced that the District Court did not exceed its powers or the bounds of its discretion in dismissing plaintiff's complaint and remitting him to the courts of his own community. The Circuit Court of Appeals took too restrictive a view of the doctrine as approved by this Court. Its judgment is reversed. 23 Reversed. 24 Mr. Justice REED and Mr. Justice BURTON dissent. They do not set out the factual reasons for their dissent since the Court's affirmance of Koster v. (American) Lumbermens Mutual casualty Co., 330 U.S. 518, 67 S.Ct. 828, would control. 25 Mr. Justice BLACK (dissenting). 26 The defendant corporation is organized under the laws of Pennsylvania, but is qualified to do business and maintains an office in New York. Plaintiff is an individual residing and doing business in Virginia. The accident in which plaintiff alleges to have been damaged occurred in Lynchburg, Virginia. Plaintiff brought this action in the Federal District Court in New York. Section 11 of the Judiciary Act of 1789, 1 Stat. 78, carried over into the Judicial Code, § 24, 28 U.S.C. § 41(1), 28 U.S.C.A. § 41(1), confers jurisdiction upon federal district courts of all actions at law between citizens of different states. The Court does not suggest that the federal district court in New York lacks jurisdiction under this statute or that the venue was improper in this case. 28 U.S.C. § 112, 28 U.S.C.A. § 112. Cf. Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437. But it holds that a district court may abdicate its jurisdiction when a defendant shows to the satisfaction of a district court that it would be more convenient and less vexatious for the defendant if the trial were held in another jurisdiction. Neither the venue statute nor the statute which has governed jurisdiction since 1789 contains any indication or implication that a federal district court, once satisfied that jurisdiction and venue requirements have been met, may decline to exercise its jurisdiction. Except in relation to the exercise of the extraordinary admiralty and equity powers of district courts, this Court has never before held contrary to the general principle that 'the courts of the United States are bound to proceed to judgment and to afford redress to suitors before them in every case to which their jurisdiction extends. They cannot abdicate their authority or duty in any case in favor of another jurisdiction.' Hyde v. Stone, 20 How. 170, 175, 15 L.Ed. 874, quoted with approval in Chicot County v. Sherwood, 148 U.S. 529, 534, 13 S.Ct. 695, 697, 37 L.Ed. 546. See also Dennick v. Railroad Co., 103 U.S. 11, 26 L.Ed. 439; Baltimore & O.R. Co. v. Kepner, 314 U.S. 44, 62 S.Ct. 6, 86 L.Ed. 28, 136 A.L.R. 1222; Evey v. Mexican Cent. R. Co., 5 Cir., 81 F. 294.1 Never until today has this Court held, in actions for money damages for violations of common law or statutory rights, that a district court can abdicate its statutory duty to exercise its jurisdiction for the alleged convenience of the defendant to a lawsuit. Compare Slater v. Mexican National R. Co., 194 U.S. 120, 24 S.Ct. 581, 48 L.Ed. 900. 27 For reasons peculiar to the special problems of admiralty and to the extraordinary remedies of equity, the courts exercising admiralty and equity powers have been permitted at times to decline to exercise their jurisdiction. Canada Malting Co. v. Paterson S.S. Co., 285 U.S. 413, 52 S.Ct. 413, 76 L.Ed. 837; Rogers v. Guaranty Trust Co., 288 U.S. 123, 53 S.Ct. 295, 77 L.Ed. 652, 89 A.L.R. 720; cf. Williams v. Green Bay & W.R. Co., 326 U.S. 549, 66 S.Ct. 284. This exception is rooted in the kind of relief which these courts grant and the kinds of problems which they solve. See Meredith v. Winter Haven, 320 U.S. 228, 235, 64 S.Ct. 7, 11, 88 L.Ed. 9; Burford v. Sun Oil Co., 319 U.S. 315, 333 n. 29, 63 S.Ct. 1098, 1107, 87 L.Ed. 1424. Courts of equity developed to afford relief where a money judgment in the common law courts provided no adequate remedy for an injured person.2 From the beginning of equitable jurisdiction up to now, the chancery courts have generally granted or withheld their special remedies at their discretion; and 'courts of admiralty * * * act upon enlarged principles of equity.' O'Brien v. Miller, 168 U.S. 287, 297, 18 S.Ct. 140, 144, 42 L.Ed. 469. But this Court has, on many occasions, severely restricted the discretion of district courts to decline to grant even the extraordinary equitable remedies. Meredith v. Winter Haven, supra, and cases there cited, 320 U.S. at pages 234, 235, 64 S.Ct. at page 11, 88 L.Ed. 9. Previously federal courts have not generally been allowed the broad and indefinite discretion to dispose even of equity cases solely on a trial court's judgment of the relative convenience of the forum for the parties themselves. For a major factor in these equity decisions has been the relative ability of the forum to shape and execute its equitable remedy. Cf. Rogers v. Guaranty Trust Co., supra. 28 No such discretionary authority to decline to decide a case, however, has, before today, been vested in federal courts in actions for money judgments deriving from statutes or the common law.3 To engraft the doctrine of forum non conveniens upon the statutes fixing jurisdiction and proper venue in the district courts in such actions, seems to me to be far more than the mere filling in of the interstices of those statutes.4 29 It may be that a statute should be passed authorizing the federal district courts to decline to try so-called common law cases according to the convenience of the parties. But whether there should be such a statute, and determination of its scope and the safeguards which should surround it, are, in my judgment, questions of policy which Congress should decide. There are strong arguments presented by the Court in its opinion why federal courts exercising their common law jurisdiction should have the discretionary powers which equity courts have always possessed in dispensing equitable relief. I think equally strong arguments could be advanced to show that they should not. For any individual or corporate defendant who does part of his business in states other than the one in which he is sued will almost invariably be put to some inconvenience to defend himself. It will be a poorly represented multistate defendant who cannot produce substantial evidence and good reasons fitting the rule now adopted by this Court tending to establish that the forum of action against him is most inconvenient. The Court's new rule will thus clutter the very threshold of the federal courts with a preliminary trial of fact concerning the relative convenience of forums. The preliminary disposition of this factual question will, I believe, produce the very kind of uncertainty, confusion, and hardship which stalled and handicapped persons seeking compensation for maritime injuries following this Court's decision in Southern Pacific Co. v. Jensen, 244 U.S. 205, 37 S.Ct. 524, 61 L.Ed. 1086, L.R.A. 1918C, 451, Ann.Cas. 1917E, 900. The broad and indefinite discretion left to federal courts to decide the question of convenience from the welter of factors which are relevant to such a judgment, will inevitably produce a complex of close and indistinguishable decisions from which accurate prediction of the proper forum will become difficult, if not impossible. Yet plaintiffs will be asked 'to determine with certainty before bringing their actions that factual question over which courts regularly divide among themselves and within their own membership. As penalty for error, the injured individual may not only suffer serious financial loss through the delay and expense of litigation, but discover that his claim has been barred by the statute of limitations in the proper forum while he was erroneously pursuing it elsewhere.' Davis v. Department of Labor & Industries, 317 U.S. 249, 254, 63 S.Ct. 225, 228, 87 L.Ed. 246. 30 This very case illustrates the hazards of delay. It must be begun anew in another forum after the District Court, the Circuit Court of Appeals, and now this Court, have has their time-consuming say as to the relative convenience of the forum in which the plaintiff chose to seek redress. Whether the statute of limitations has run against the plaintiff, we do not know. The convenience which the individual defendant will enjoy from the Court's new rule of forum non conveniens in law actions may be thought to justify its inherent delays, uncertainties, administrative complications and hardships. But in any event, Congress has not yet said so; and I do not think that this Court should, 150 years after the passage of the Judiciary A t, fill in what it thinks is a deficiency in the deliberate policy which Congress adopted.5 Whether the doctrine of forum non conveniens is good or bad, I should wait for Congress to adopt it. 31 Mr. Justice RUTLEDGE joins in this opinion. 1 Gilbert v. Gulf Oil Corp., D.C., 62 F.Supp. 291. 2 Gilbert v. Gulf Oil Corp., 2 Cir., 153 F.2d 883. 3 See 28 U.S.C. § 112, 28 U.S.C.A. § 112; Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437. 4 The doctrine did not originate in federal but in state courts. This Court in recognizing and approving it by name has never indicated that it was rejecting application of the doctrine to law actions which had been an integral and necessary part of evolution of the doctrine. And cf. Slater v. Mexican National R. Co., 194 U.S. 120, 24 S.Ct. 581, 48 L.Ed. 900. Wherever it is applied in courts of other jurisdictions, its application does not depend on whether the action is at law, Collard v. Beach, 93 App.Div. 339, 87 N.Y.S. 884; Murnan v. Wabash Ry. Co., 246 N.Y. 244, 158 N.E. 508, 54 A.L.R. 1522; Jackson & Sons v. Lumbermen's Mutual Casualty Co., 86 N.H. 341, 168 A. 895; or in equity, Langfelder v. Universal Laboratories, 293 N.Y. 200, 56 N.E.2d 550, 155 A.L.R. 1226; Egbert v. Short, 1907, 2 Ch. 250. See footnote 1 Koster v. (American) Lumbermens Mutual Casualty Co., 330 U.S. 518, 67 S.Ct. 828. 5 See Foster, Place of Trial—Interstate Application of Intrastate Methods of Adjustment, 44 Harv.L.Rev. 41, 47, 62. 6 See Logan v. Bank of Scotland, (1906) 1 K.B. 141; cf. La Socie te du Gaz de Paris v. La Socie te Anonyme de Navigation 'Les Armateurs Francais.' (1926) Sess.Cas. (H.L.) 13. Collard v. Beach, 93 App.Div. 339, 87 N.Y.S. 884; Jackson & Sons v. Lumbermen's Mutual Casualty Co., 86 N.H. 341, 168 A. 895; see Pietraroia v. New Jersey & Hudson R.R. & Ferry Co., 197 N.Y. 434, 91 N.E. 120; Great Western Railway Co. of Canada v. Miller, 19 Mich. 305. 7 See Dainow, The Inappropriate Forum, 29 Ill.L.Rev. 867, 889. 8 See Blair, The Doctrine of Forum Non Conveniens in Anglo-American Law, 29 Col.L.Rev. 1. 1 In Mondou v. New York, N.H. & H.R. Co., 223 U.S. 1, 58, 32 S.Ct. 169, 178, 56 L.Ed. 327, 38 L.R.A.,N.S., 44, it was stated that: 'The existence of the jurisdiction creates an implication of duty to exercise it, and that its exercise may be onerous does not militate against that implication.' Cf. Douglas v. New York, N.H. & H.R. Co., 279 U.S. 377, 388, 49 S.Ct. 355, 356, 73 L.Ed. 747. 2 Although the distinction between actions at law and suits in equity in federal courts has been abolished by the adoption of the single form of civil action, Rule 2, F.R.C.P., 28 U.S.C.A. following section 723c, see 1 Moore, Federal Practice (1938) c. 2, there remains to federal courts the same discretion, no more and no less, in the exercise of special equitable remedies as existed before the adoption of the federal rules. Neither the rules, the statutes, tradition, nor practical considerations justify application of equitable discretion to actions for money judgments based on common law or statutory rights. 3 This Court, whose jurisdiction is primarily appellate, has held that it need not exercise its constitutionally granted original jurisdiction even at common law where there is another suitable forum. State of Georgia v. Pennsylvania R. Co., 324 U.S. 439, 464, 465, 65 S.Ct. 716, 729, 89 L.Ed. 1051. But the Constitution, not Congress, fixes this Co rt's jurisdiction. And it was this Court's duty to interpret its constitutional jurisdiction. It is the duty of Congress to fix the jurisdiction of the district courts by statute. It did so. It is not the duty of this Court to amend that statute. 4 'I recognize without hesitation that judges do and must legislate, but they can do so only interstitially; they are confined from molar to molecular motions.' Holmes, J., dissenting in Southern Pacific Co. v. Jensen, 244 U.S. 205, 218, 221, 37 S.Ct. 524, (530), 531, 61 L.Ed. 1086, L.R.A.1918C, 451, Ann.Cas. 1917E, 900. See also dissenting opinion, State Tax Commission v. Aldrich, 316 U.S. 174, 185, 202, n. 23, 62 S.Ct. 1008, 1013, 1021, 86 L.Ed. 1358, 139 A.L.R. 1436, and authorities there collected. 5 The very law review articles which are relied upon to document this theory of a federal rule of forum non conveniens reveal that judicial adoption of this theory without a new act of Congress would be an unwarranted judicial innovation. Foster, Place of Trial—Interstate Application of Intrastate Methods of Adjustment, 44 Harv.L.Rev. 41, 52; Blair, The Doctrine of Forum Non Conveniens in Anglo-American Law, 29 Col.L.Rev. 1, 18. For Instance, it is stated that 'No matter how little dispute there is as to the desirability of such legislation, there is comparatively little chance of overcoming legislative inertia and securing its passage unless some accident happens to focus attention upon it. The best hope is that the courts will feel free to take appropriate action without specific legislation authorizing them to do so.' Foster, supra at 52.

89

330 U.S. 539 67 S.Ct. 891 91 L.Ed. 1082 UNITED STATES DEPARTMENT OF AGRICULTURE, EMERGENCY CROP AND FEED LOANS,v.REMUND. No. 417. Argued and Submitted Feb. 5, 1947. Decided March 17, 1947. Mr. Paul A. Sweeney, of Washington, D.C., for petitioner. Mr. Dwight Campbell, of Aberdeen, S.D., for respondent. Mr. Justice MURPHY delivered the opinion of the Court. 1 We are faced here with the problem of whether, in a state probate proceeding, a claim asserted by the Farm Credit Administration through certain of its officials for and on behalf of the United States is entitled to priority under § 3466 of the Revised Statutes, 31 U.S.C. § 191, 31 U.S.C.A. § 191. 2 The Governor of the Farm Credit Administration, pursuant to the Acts of February 23, 1934,1 and June 19, 1934,2 extended emergency feed and crop loans totalling $370.00 to Wilhelm Buttke, a South Dakota farmer. Most of these loans remained unpaid. On December 26, 1941, Buttke died intestate, leaving an estate insufficient to pay all of his debts. Respondent was appointed administrator of the estate. On March 2, 1942, an authorized agent of the Governor of the Farm Credit Administration filed in the County Court of Roberts County, South Dakota, a claim against the estate for $523.80, the amount of the unpaid indebtedness plus interest. This claim was made 'for and on behalf of the United States of America' and a priority therefor on behalf of the United States was asserted under § 3466 of the Revised Statutes. 3 The County Court denied preference to this claim. But it did allow the claim in the amount of $79.53, which represented the pro rata share of a common creditor's claim. Th § decision was affirmed by the Circuit Court of the Fifth Judicial Circuit of South Dakota and by the Supreme Court of South Dakota. 23 N.W. 2d 281. The latter court felt that the Acts of February 23, 1934, and June 19, 1934, created an exception to § 3466 and that the claimed priority should accordingly be refused on the authority of United States v. Guaranty Trust Co., 280 U.S. 478, 50 S.Ct. 212, 74 L.Ed. 556. We granted certiorari because of the important problems thereby raised. 329 U.S. 703, 67 S.Ct. 122. 4 The relevant portion of § 3466 of the Revised Statutes provides that '* * * whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied * * *' 5 Initially, it is suggested that § 3466 is inapplicable since the claim in issue is not a debt due to the United States. The claim grows out of the seven notes executed by the deceased to 'the Governor of the Farm Credit Administration, or order, at Washington, D.C.' These notes stated that they were 'given as evidence of a loan made by the Governor of the Farm Credit Administration.' On the premise that the Farm Credit Administration is an entity separate and distinct from the United States Government, the argument is made that obligations due the Farm Credit Administration fall outside the priority established by § 3466. We cannot agree. 6 The Farm Credit Administration is plainly one of the many administrative units of the United States Government, established to carry out the functions delegated to it by Congress. It bears none of the features of a government corporation with a legal entity separate from that of the United States, whatever difference that might make as to the application of § 3466. Cf. Sloan Shipyards Corp. v. United States, etc., Fleet Corp., 258 U.S. 549, 42 S.Ct. 386, 66 L.Ed. 762. It had its inception in 1933 as an independent agency, assuming the functions of the Federal Farm Board and the Federal Farm Loan Board. Executive Order No. 6084, 12 U.S.C.A. note preceding section 636. In 1939, it was transferred to the Department of Agriculture and placed under the general supervision and direction of the Secretary of Agriculture. Reorganization Plan No. 1, § 401(a), 53 Stat. 1429, 5 U.S.C.A. § 133t note, 4 Fed.Reg. 2730. Its functions, personnel and property were then consolidated in 1942 with those of certain other agencies to form the Food Production Administration of the Department of Agriculture. Executive Order No. 9280, 50 U.S.C.A. Appendix, § 601 note, 7 Fed.Reg. 10179. At no time has the Farm Credit Administration been other than an unincorporated agency of the United States Government, administering and lending funds appropriated by Congress out of the United States Treasury and returning the money to the Treasury upon repayment. In short it is an integral part of the governmental mechanism. And the use of a name other than that of the United States cannot change that fact. United States v. Fontenot, D.C., 33 F.Supp. 629; In re Wilson, D.C., 23 F.Supp. 236; Federal Reserve Bank of Dallas v. Smylie, Tex.Civ.App., 134 S.W.2d 838; Helms v. Emergency Crop & Seed Loan Office, 216 N.C. 581, 5 S.E.2d 822. See also North Dakota-Montana Wheat Growers' Ass'n v. United States, 8 Cir., 66 F.2d 573, 92 A.L.R. 1484. Hence any debt owed the Farm Credit Administration is a debt owed the United States within the meaning of § 3466. 7 Moreover, the priority given by § 3466 to a debt due to the United States is unaffected by the fact that a claim based upon that debt is filed in the name of an agency of the United States or an authorized officer of such an agency. It is enough that there is an obligation owed the United States. Whether the claim is filed in the name of the United States or in the name of an officer or agency is immaterial; in the latter instance, the claim is necessarily filed on behalf of the United States and the leg l effect is the same as if it had been filed in that name. Nothing in the language or policy of § 3466 justifies any other conclusion. It follows that the method of filing in this case cannot be questioned. The claim was filed in the name of the Governor of the Farm Credit Administration 'for and on behalf of the United States of America'—an explicit recognition of the legal realities involved. 8 The main contention, however, is that the purpose of the statutes under which the loans were made is inconsistent with § 3466, thereby rendering it inapplicable. The Acts of February 23, 1934, and June 19, 1934, authorized feed and crop loans to farmers in drought and storm-stricken areas of the nation. It is said that the prime purpose of these Acts was to restore the credit of the farmers and that to give effect to § 3466 would impair that credit. Reliance is placed upon United States v. Guaranty Trust Co., supra. This Court there held that § 3466 was inapplicable to the collection of loans made by the Government to railroad carriers to rehabilitate and maintain their credit status; it was felt that to give priority under such circumstances would defeat the purpose of the legislation by impairing the credit of the railroads. See also Cook County National Bank v. United States, 107 U.S. 445, 2 S.Ct. 561, 27 L.Ed. 537. 9 But it is manifest that the purpose of the Acts of February 23, 1934, and June 19, 1934, was to give emergency relief to distressed farmers rather than to restore their credit status. These were but two of a series of emergency seed and crop loan statutes3 enacted at various times from 1921 to 1938, a period when farmers were the victims of repeated crop failures and adverse economic conditions. Their credit was often impaired, but their most urgent need was for money to purchase feed and to plant crops; without such money, distress and unemployment might have been their lot. It was to meet that urgent need that Congress passed these statutes. 10 More specifically, the two Acts under consideration were designed to make loans available to those farmers who were unable to secure credit from the Production Credit Associations, organized pursuant to the Farm Credit Act of 1933.4 It was recognized that many farmers could not qualify for loans from those Associations. Some method of lending aid and assistance to those who had no credit and no money with which to buy feed for their livestock and seeds for their crops was essential in the absence of a more direct form of Government relief. S.Rep. 148, 73d Cong., 2d Sess.; H.Rep. 521, 73d Cong.2d Sess. As was said by Representative Kerr, 'Let it be remembered that the Government is not seeking to make an investment; this is simply an endeavor to finance the farmers of this country who are utterly unable to finance themselves.' 78 Cong.Rec. 1959. See United States v. Thomas, 5 Cir., 107 F.2d 765, 766; Person v. United States, 8 Cir., 112 F.2d 1, 2. 11 We conclude that there is no irreconcilable conflict between giving emergency loans to distressed farmers and giving priority to the collection of these loans pursuant to § 3466. Such priority could in no way impair the aid which the farmers sought through these loans; nor could it embarrass the farmers in their daily operations. Moreover, these loans called for a first lien on crops growing or to be grown, or on livestock. The conditions prevailing in 1934 made this type of security uncertain and there is no indication that Congress meant such a lien to be the sole security to which the Government could look for repayment. 12 We reiterate what was said in United States . Emory, 314 U.S. 423, 433, 62 S.Ct. 317, 322, 86 L.Ed. 315, 'Only the plainest inconsistency would warrant our finding an implied exception to the operation of so clear a command as that of § 3466.' In this case, as in that, we think such inconsistency is wholly wanting. United States v. Guaranty Trust Co., supra, is therefore inapposite. 13 Reversed. 14 Mr. Justice DOUGLAS would affirm the judgment on the authority of United States v. Guaranty Trust Co., 280 U.S. 478, 50 S.Ct. 212, 74 L.Ed. 556. 1 48 Stat. 354. 2 48 Stat. 1021, 1056. 3 41 Stat. 1347; 42 Stat. 467; 43 Stat. 110; 44 Stat. 1245, 1251; 45 Stat. 1306, as amended by 46 Stat.3; 46 Stat. 78, as amended by 46 Stat. 254; 46 Stat. 1032, as amended by 46 Stat. 1160; 46 Stat. 1276; 47 Stat. 5, 15 U.S.C.A. § 601 et seq.; 47 Stat. 795; 48 Stat. 354; 48 Stat. 1056; 49 Stat. 28; 50 Stat. 5; 52 Stat. 27. 4 48 Stat. 257, 12 U.S.C.A. § 1131 et seq.

1112

330 U.S. 622 67 S.Ct. 886 91 L.Ed. 1140 INDUSTRIAL COMMISSION OF WISCONSIN et al.v.McCARTIN et al. No. 270. Argued Jan. 17, 1947 Decided March 31, 1947. Mr. Mortimer Levitan, of Madison, Wis., for petitioner. Mr. Lawrence E. Hart, of Madison, Wis., for respondents. Mr. Justice MURPHY delivered the opinion of the Court. 1 In Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 64 S.Ct. 208, 88 L.Ed. 149, 150 A.L.R. 413, this Court had occasion to consider the effect of the full faith and credit clause of the Constitution of the United States, U.S.Const. art. 4, § 1, where awards are sought under the workmen's compensation laws of two states. This case presents another facet of that problem. 2 The facts are undisputed. Leo Thomas Kopp worked as a bricklayer for E. E. McCartin. Both were residents of Illinois. Pursuant to a contract made in Illinois, Kopp worked for McCartin on a building job in Wisconsin. He drove back and forth between his home in Illinois and his work in Wisconsin. While thus employed in Wisconsin, Kopp suffered an injury to his left eye. On June 7, 1943, he filed an application for adjustment of claim with the Industrial Commission of Wisconsin. McCartin and his insurance carrier entered an objection to the jurisdiction of the Wisconsin Commission to hear the claim. Then on July 20, 1943, Kopp filed an application for adjustment of claim with the Industrial Commission of Illinois, in which the general nature of the dispute was given as 'Whether Illinois or Wisconsin has jurisdiction in my case.' 3 Under date of October 11, 1943, the Wisconsin Commission wrote the insurance carrier that Kopp had been informed that, so far as Wisconsin law was concerned, he was entitled to proceed under the Illinois Workmen's Compensation Act (Ill.Rev.Stat.1943, Ch. 48, §§ 138—172) and thereafter claim compensation under the Wisconsin Workmen's Compensation Act (Wis.Stat.1945, Ch. 102), with credit to be given for the amount paid him pursuant to the Illinois Act. A copy of this letter was sent to Kopp. Counsel for the insurance carrier replied on November 3, 1943. It was there stated that the insurance carrier understood that if payments were made by it to Kopp under the Illinois statute credit would be given for those payments in the event an award was made to Kopp under the Wisconsin Act; and with that understanding, the insurance carrier was proceeding to pay Kopp compensation under the Illinois statute. 4 On November 3, 1943, a settlement contract was signed by Kopp and McCartin. The parties therein agreed that the sum of $2,112 was to be paid to Kopp in full and final settlement of any and all claims arising out of Kopp's injury by virtue of the Illinois Workmen's Compensation Act. The contract also stated: 'This settlement does not affect any rights that applicant may have under the Workmen's Compensation Act of the State of Wisconsin.' 5 The settlement contract and a petition by Kopp that the amount due be paid to him in a lump sum were filed with the Illinois Commission on November 29, 1943. A hearing was held before a Commissioner on December 3, in the course of which attention was called to the reservation of rights in Wisconsin. The presiding Commissioner informed Kopp that he did not know what effect the reservation had or what Kopp's rights were under the Wisconsin statute. Kopp replied that he would appreciate receiving the lump sum under the Illinois law and that he would 'take chances on Wisconsin.' Following the hearing, the Commissioner approved the settlement contract and the petition for a lump sum payment. Kopp received payment on December 7 in the amount specified in the settlement contract plus a small additional sum for temporary disability. Thereafter, on January 10, 1944, a formal order was entered by the Illinois Commission directing payment of the lump sum of $2,112. The circumstances of the entry of this later order, after payment had been made in fact, are not disclosed. No petition to review the settlement contract or lump sum payment was filed and no action to secure a review of the formal order was taken. 6 In the meantime, on December 20, 1943, this Court's decision in Magnolia Petroleum Co. v. Hunt, supra, was rendered. The Wisconsin Commission then held a hearing on February 20, 1944, on Kopp's application before it. McCartin and the insurance carrier filed an amended answer, contending that under the full faith and credit clause the Wisconsin proceedings were barred by the award and payment under the Illinois Act; reliance was placed upon the Magnolia Petroleum Co. case. The Commission overruled this objection and ordered the payment to Kopp of certain benefits, after giving credit for the sums paid under the Illinois Act. 7 The Circuit Court for Dane County, Wisconsin, set aside the Wisconsin Commission's order on the authority of the Magnolia Petroleum Co. case. On appeal, the Supreme Court of Wisconsin affirmed the lower court's Judgment on the same authority. McCartin v. Industrial Commission, 248 Wis. 570, 22 N.W.2d 522. We granted certiorari to determine the applicability of the full faith and credit clause, as interpreted in the Magnolia Petroleum Co. case, to the facts of this case. 8 It is clear, in the absence of a prior award in Wisconsin, that the compensation paid to the employee under the Illinois Workmen's Compensation Act was constitutionally proper from the full faith and credit standpoint. Illinois was the state where the parties entered into the employment contract and its legitimate concern with that employer-employee relationship permitted it to apply its own statute even though the injury occurred elsewhere. Alaska Packers Ass'n v. Industrial Accident Commission, 294 U.S. 532, 55 S.Ct. 518, 79 L.Ed. 1044; Cardillo v. Liberty Mutual Ins. Co., 330 U.S. 469, 67 S.Ct. 801. At the same time, in view of the fact that the accident took place in Wisconsin, any full faith and credit questions that might have been raised had compensation first been awarded under the Wisconsin Workmen's Compensation Act are answered by Pacific Employers Ins. Co. v. Industrial Accident Commission, 306 U.S. 493, 59 S.Ct. 629, 83 L.Ed. 940. The troublesome problem that arises here is whether the compensation paid under the Illinois statute raises a full faith and credit bar to a subsequent award in Wisconsin for an additional amount. 9 If it were apparent that the Illinois award was intended to be final and conclusive of all the employee's rights against the employer and the insurer growing out of the injury, the decision in the Magnolia Petroleum Co. case would be controlling here. The Court there found that the compensation award under the Texas Workmen's Compensation Law, Vernon's Ann.Civ.St.Art. 8306 et seq., was made explicitly in lieu of any other recovery for injury to the employee, precluding even a recovery under the laws of another state. See Bradford Electric Light Co. v. Clapper, 286 U.S. 145, 153, 52 S.Ct. 571, 573, 76 L.Ed. 1026, 82 A.L.R. 696. And since the Texas award had the degree of finality contemplated by the full faith and credit clause, it was held that Louisiana was constitutionally forbidden from entering a subsequent award under its statute. But we do not believe that the same situation exists in this case, the Illinois award being different in its nature and effect from the Texas award in the Magnolia case. 10 The Illinois Workmen's Compensation Act was concededly applicable under the circumstances of this case. Section 3 of that Act provides that it shall apply automatically and without election to all employers and employees engaged in businesses or enterprises such as those involving the erection or construction of any structure. At the time when he was injured, Kopp was doing mason work for his employer in connection with the erection of houses. Section 5 then provides that the term 'employee' includes those persons 'whose employment is outside of the State of Illinois where the contract of hire is made within the State of Illinois.' Kopp was such an employee, having been hired in Illinois and injured while empl yed in Wisconsin. 11 Section 6 states that 'No common law or statutory right to recover damages for injury or death sustained by any employe while engaged in the line of his duty as such employe, other than the compensation herein provided, shall be available to any employe who is covered by the provisions of this act * * *.' This section has been interpreted to mean that, in situations to which the Act applies, the right of action against the employer under the Illinois common law or under the Illinois Personal Injuries Act (Ill.Rev.Stat. 1943, Ch. 70, §§ 1, 2) has been abolished. Mississippi River Power Co. v. Industrial Commission, 289 Ill. 353, 124 N.E. 552; Faber v. Industrial Commission, 352 Ill. 115, 185 N.E. 255. To that extent, the Act provides an exclusive remedy. 12 But there is nothing in the statute or in the decisions thereunder to indicate that it is completely exclusive, that it is designed to preclude any recovery by proceedings brought in another state for injuries received there in the course of an Illinois employment. Cf. Bradford Electric Light Co. v. Clapper, supra; Cole v. Industrial Commission, 353 Ill. 415, 187 N.E. 520, 90 A.L.R. 116. And in light of the rule that workmen's compensation laws are to be liberally construed in furtherance of the purpose for which they were enacted, Baltimore & Philadelphia Steamboat Co. v. Norton, 284 U.S. 408, 414, 52 S.Ct. 187, 189, 76 L.Ed. 366, we should not readily interpret such a statute so as to cut off an employee's right to sue under other legislation passed for his benefit. Only some unmistakable language by a state legislature or judiciary would warrant our accepting such a construction. Especially is this true where the rights affected are those arising under legislation of another state and where the full faith and credit provision of the United States Constitution is brought into play. See Ohio v. Chattanooga Boiler Co., 289 U.S. 439, 53 S.Ct. 663, 77 L.Ed. 1307. 13 We need not rest our decision, however, solely upon the absence of any provision or construction of the Illinois Workmen's Compensation Act forbidding an employee from seeking alternative or additional relief under the laws of another state. There is even stronger evidence that the employee is free to ask for additional compensation in Wisconsin. That evidence is in the Illinois award itself, an award which is acknowledged to have been made in compliance with the Illinois statute. 14 Here the employer and the employee entered into a settlement contract fixing the amount of compensation to which the employee was entitled under the Illinois statute, thereby avoiding the expense and delay of litigating the matter. This contract, together with the employee's petition for a lump sum payment, was approved by one of the Commissioners of the Illinois Industrial Commission. By that approval, the agreement became 'in legal effect an award.' Hartford Accident & Indemnity Co. v. Industrial Commission, 320 Ill. 544, 151 N.E. 495, 496; Michelson v. Industrial Commission, 375 Ill. 462, 31 N.E.2d 940. Under Illinois law, such awards are described as res judicata on the matters thus adjudicated and agreed upon, precluding the Commission from subsequently reviewing the awards or setting them aside. Centralia Coal Co. v. Industrial Commission, 297 Ill. 451, 130 N.E. 727; Stromberg Motor Device Co. v. Industrial Commission, 305 Ill. 619, 137 N.E. 462; Lewin Metals Corporation v. Industrial Commission, 360 Ill. 371, 196 N.E. 482; Trigg v. Industrial Commission, 364 Ill. 581, 5 N.E.2d 394, 108 A.L.R. 153. 15 One of the provisions in the settlement contract which became the award was the statement that 'This settlement does not affect any rights that applicant may have under the Workmen's Compensation Act of the State of Wisconsin.' That statement was made a part of the contract at the request of the employee, who had been informed by the Wisconsin Commission that he was entitled to claim an additional amount of compensation in Wiscons n after recovering in Illinois. See Interstate Power Co. v. Industrial Commission, 203 Wis. 466, 234 N.W. 889; Salvation Army v. Industrial Commission, 219 Wis. 343, 263 N.W. 349, 101 A.L.R. 1440; Wisconsin Bridge & Iron Co. v. Industrial Commission, 222 Wis. 194, 268 N.W. 134. The employer's insurance carrier was likewise informed, and all the parties proceeded on the assumption that the employee was attempting to recover compensation under the statutes of both Illinois and Wisconsin, with credit to be given in Wisconsin for any sum recovered in Illinois. In furtherance of this common understanding, the above statement was inserted in the Illinois settlement contract and was brought to the attention of the Industrial Commissioner before he approved the contract. The Commissioner confessed that he did not know the meaning of this provision, but he did not order it stricken. Rather he approved it for whatever it was worth. 16 This contract provision saving the rights of the employee in Wisconsin thus became part of the Illinois award, an award which has achieved finality in the absence of a timely appeal. This provision means more than might be implied in the case of an ordinary judgment or decree. Any party, of course, has the right to seek another judgment or decree, however inconsistent or futile such an attempt might be; and it takes no reservation in the original judgment or decree to give him that right. But when the reservation in this award is read against the background of the Illinois Workmen's Compensation Act, it becomes clear that the reservation spells out what we believe to be implicit in that Act namely, that an Illinois workmen's compensation award of the type here involved does not foreclose an additional award under the laws of another state. And in the setting of this case, that fact is of decisive significance. 17 Since this Illinois award is final and conclusive only as to rights arising in Illinois, Wisconsin is free under the full faith and credit clause to grant an award of compensation in accord with its own laws. Magnolia Petroleum Co. v. Hunt, supra, thus does not control this case. 18 Reversed. 19 Mr. Justice RUTLEDGE concurs in the result.

1011

330 U.S. 610 67 S.Ct. 903 91 L.Ed. 1133 PEOPLE OF STATE OF NEW YORK ex rel. HALVEYv.HALVEY. No. 384. Argued Feb. 5, 1947. Decided March 31, 1947. Mr. B. E. Hendricks, of Miami, Fla., for petitioner. Mr. Samuel Shapiro, of New York City, for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 The Halveys were married in 1937 and lived together in New York until 1944. In 1938 a son was born. Marital troubles developed. In 1944 Mrs. Halvey, without her husband's consent, left home with the child, went to Florida, and established her residence there. In 1945 she instituted a suit for divorce in Florida. Service of process on Mr. Halvey was had by publication, he making no appearance in the action. The day before the Florida decree was granted, Mr. Halvey, without the knowledge or approval of his wife, took the child back to New York. The next day the decree was entered by the Florida court, granting Mrs. Halvey a divorce and awarding her the permanent care, custody, and control of the child. 2 Thereupon she brought his habeas corpus proceeding in the New York Supreme Court, challenging the legality of Mr. Halvey's detention of the child. After hearing, the New York court ordered (1) that the custody of the child remain with the mother; (2) that the father have rights of visitation including the right to keep the child with him during stated vacation periods in each year, and (3) that the mother file with the court a surety bond in the sum of $5,000, conditioned on the delivery of the child in Florida for removal by the father to New York for the periods when he had the right to keep the child with him. 185 Misc. 52, 55 N.Y.S.2d 761. Both the Appellate Division, 269 App.Div. 1019, 59 N.Y.S.2d 396 and the Court of Appeals, 295 N.Y. 836, 66 N.E.2d 851, affirmed without opinion. The case is here on a petition for a writ of certiorari which we granted because it presented an important problem under the Full Faith and Credit Clause of the Constitution. Article IV, § 1. 3 The custody decree was not irrevocable and unchangeable; the Florida court had the power to modify it at all times.1 Under Florida law the 'welfare of the child' is the 'chief consideration' in shaping the custody decree or in subsequently modifying or changing it. Frazier v. Frazier, 109 Fla. 164, 169, 147 So. 464, 466; See Phillips v. Phillips, 153 Fla. 133, 134, 135, 13 So.2d 922, 923. But 'the inherent rights of parents to enjoy the society and association of their offspring with reasonable opportunity to impress upon them a father's or a mother's love and affection in their upbringing, must be regarded as being of an equally important, if not controlling, consideration in adjusting the right of custody as between parents in ordinary cases.' Frazier v. Frazier, 109 Fla. at page 169, 147 So. at page 466. Facts which have arisen since the original decree are one basis for modification of the custody decree. Frazier v. Frazier, 109 Fla. at page 168, 147 So. at page 464; Jones v. Jones, 156 Fla. 524, 23 So.2d 623, 625. But the power is not so restricted. It was held in Meadows v. Meadows, 78 Fla. 576, 83 So. 392, 393, that 'the proper custody of the minor child is a proper subject for consideration by the chancellor at any time, even if facts in issue could have been considered at a previous hearing, if such facts were not presented or considered at a former hearing.' (Italics added.) Or, as stated in Frazier v. Frazier, 109 Fla. at page 168, 147 So. at page 465, a custody decree 'is not to be materially amended or changed afterward, unless on altered conditions shown to have arisen since the decree, or because of material facts bearing on the question of custody and existing at the time of the decree, but which were unknown to the court, and then only for the welfare of the child.' The result is that custody decrees of Florida courts are ordinarily not res judicata either in Florida or elsewhere, except as to the facts before the court at the time of judgment. Minick v. Minick, 111 Fla. 469, 490, 491, 149 So. 483, 492. 4 Respondent did not appear in the Florida proceeding. What evidence was adduced in that proceeding bearing on the welfare of the child does not appear. But we know that the Florida court did not see respondent nor hear evidence presented on his behalf concerning his fitness or his claim 'to enjoy the society and association' of his son. Frazier v. Frazier, 109 Fla. at page 169, 147 So. at page 469. It seems to us plain, therefore, that under the rule of Meadows v. Meadows, supra, the Florida court would have been empowered to modify the decree in the interests of the child and to grant respondent the right of visitation, if he had applied to it rather than to the New York court and had presented his version of the controversy for the first time in his application for modification. 5 So far as the Full Faith and Credit Clause is concerned, what Florida could do in modifying the decree, New York may do. Article IV, § 1 of the Constitution provides that 'Full Faith and Credit shall be given in each State to the public Acts, Records, and Judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such acts, Records and Proceedings shall be proved, and the Effect thereof.' Congress by the Act of May 26, 1790, c. 11, as amended, R.S. § 905, 28 U.S.C. § 687, 28 U.S.C.A. § 687, declared that judgments 'shall have such faith and credit given to them in every court within the United States as they have by law or usage in the courts of the State from which they are taken.' The general rule is that this command requires the judgment of a sister State to be given full, not partial, credit in the State of the forum. See Davis v. Davis, 305 U.S. 32, 59 S.Ct. 3, 83 L.Ed. 26, 118 A.L.R. 1518; Williams v. State of North Carolina, 317 U.S. 287, 63 S.Ct. 207, 87 L.Ed. 279, 143 A.L.R. 1273. But a judgment has no constitutional claim to a more conclusive or final effect in the State of the forum than it has in the State where ren ered. See Reynolds v. Stockton, 140 U.S. 254, 264, 11 S.Ct. 773, 775, 35 L.Ed. 464. If the court of the State which rendered the judgment had no jurisdiction over the person or the subject matter, the jurisdictional infirmity is not saved by the Full Faith and Credit Clause. See Thompson v. Whitman, 18 Wall. 457, 21 L.Ed. 897; Griffin v. Griffin, 327 U.S. 220, 66 S.Ct. 556. And if the amount payable under a decree—as in the case of a judgment for alimony—is discretionary with the court which rendered it, full faith and credit does not protect the judgment. Sistare v. Sistare, 218 U.S. 1, 17, 30 S.Ct. 682, 686, 54 L.Ed. 905, 28 L.R.A., N.S., 1068, 20 Ann.Cas. 1061. Whatever may be the authority of a State to undermine a judgment of a sister State on grounds not cognizable in the State where the judgment was rendered (Cf. Williams v. State of North Carolina, 325 U.S. 226, 230, 65 S.Ct. 1092, 1095, 89 L.Ed. 1577, 157 A.L.R. 1366), it is clear that the State of the forum has at least as much leeway to disregard the judgment, to qualify it, or to depart from it as does the State where it was rendered. 6 In this case the New York court, having the child and both parents before it, had a full hearing and determined that the welfare of the child and the interests of the father warranted a modification of the custody decree. It is not shown that the New York court in modifying the Florida decree exceeded the limits permitted under Florida law. There is therefore a failure of proof that the Florida decree received less credit in New York than it had in Florida. 7 The narrow ground on which we rest the decision makes it unnecessary for us to consider several other questions argued, e.g., whether Florida at the time of the original decree had jurisdiction over the child,2 the father having removed him from the State after the proceedings started but before the decree was entered; whether in absence of personal service the Florida decree of custody had any binding effect on the husband; whether the power of New York to modify the custody decree was greater than Florida's power; whether the State which has jurisdiction over the child may, regardless of a custody decree rendered by another State, make such orders concerning custody as the welfare of the child from time to time requires. On all these problems we reserve decision. 8 Affirmed. 9 Mr. Justice JACKSON concurs in the result on the ground that the record before us does not show jurisdiction in the Florida court. 10 Mr. Justice FRANKFURTER, concurring. 11 Conflicts arising out of family relations raise problems and involve considerations very different from controversies to which debtor-creditor relations give rise. Such cardinal differences in life are properly reflected in law. And so, the use of the same legal words and phrases in enforcing full faith and credit for judgments involving the two types of relations ought not to obliterate the great difference between the interests affected by them, and should not lead to an irrelevant identity in result. 12 The constitutional policy formulated by the Full Faith and Credit Clause cannot be fitted into tight little categories or too abstract generalities. That policy was the nation-wide restriction of litigiousness, to the extent that States, autonomous for certain purposes, should not be exploited to permit repetitive litigation. In substance, the Framers deemed it against the national welfare for a controversy that was truly litigated on one State to be relitigated in another. Such limitation does not foreclose inquiry in o what was litigated and what was adjudicated. The scope of the Full Faith and Credit Clause is bounded by its underlying policy and not by procedural considerations unrelated to it. Thus, in judgments affecting domestic relations technical questions of 'finality' as to alimony and custody seem to me irrelevant in deciding the respect to be accorded by a State to a valid prior judgment touching custody and alimony rendered by another State. See the concurring opinion in Barber v. Barber, 323 U.S. 77, 86, 65 S.Ct. 137, 141, 89 L.Ed. 82, 157 A.L.R. 163, and the dissenting opinions in Griffin v. Griffin, 327 U.S. 220, at pages 236 and 248, 66 S.Ct. 556, at pages 564 and 570. Compare Yarborough v. Yarborough, 290 U.S. 202, 54 S.Ct. 181, 78 L.Ed. 269, 90 A.L.R. 924. 13 Which brings me to the present case. If there were no question as to the power of Florida to provide for the custody of this child in the manner in which the Florida decree of divorce did, I think New York would have to respect what Florida decreed, unless changed conditions affecting the welfare of the child called for a change in custodial care. New York could respond to such changed circumstances. The child's welfare must be the controlling consideration whenever a court which can actually lay hold of a child is appealed to on behalf of the child. Short of that, a valid custodial decree by Florida could not be set aside simply because a New York court, on independent consideration, has its own view of what custody would be appropriate. 14 Here the lower New York court did not provide for the child's custody on the basis of changed circumstances. While it professed to respect the Florida custody decree, the court acted as though it had independent authority because of the dispersion of the family. Its action seemed to be controlled by the father's right, on the assumption that that was the test of the child's welfare in the circumstances. The order of the lower court was affirmed by the Appellate Division, but that court specifically noted that it did 'not adopt in their entirety the views expressed' by the court below. The intermediate tribunal was, in turn, affirmed by the Court of Appeals. Of course, if the Florida decree is entitled to no respect, it is not for us to upset the custodial provisions sanctioned by the highest court of New York. Although we are not afforded the guidance that an opinion would give as to the considerations that moved the New York Court of Appeals to sustain the custodial decree, on the slim record before us I am not justified in finding that the New York Court of Appeals was unmindful of its duty under the Full Faith and Credit Clause to respect a valid Florida judgment. 15 In determining whether the New York judgment should stand or fall account must be taken of two competing considerations. There is first the presumptive jurisdiction of the court of a sister State—here Florida—to render the judgment for which full faith and credit is asked. The other is the power of a State court—here New York—which has actual control of the child to make provision for the child's welfare. Where, as here, both considerations cannot prevail one must yield. Since the jurisdiction of the Florida court in making the custodial decree is doubtful, New York was justified in exercising its power in the interest of the child. Williams v. State of North Carolina, 325 U.S. 226, 65 S.Ct. 1092, 89 L.Ed. 1577, 157 A.L.R. 1366. 16 A close analysis of the precise issue before us seems to me to require this conclusion. The problem before this Court is the validity of New York judgment providing for the custody of a child subject to its jurisdiction because within its power. It is our duty to sustain that judgment unless there is clear ground for upsetting it. Apart from the effect of what Florida had previously done, New York's authority to enter this judgment is unquestioned. New York's power is qualified only by her duty under the Full Faith and Credit Clause to respect a Florida judgmen . But this duty arises only if there was legal power in the Florida Court to enter the custodial decree, and if in the Florida courts themselves the decree was not subject to the kind of modification which New York here made. On the basis of the meager record before us and in view of the uncertainties of Florida law, we do not have the necessary assurance that Florida had jurisdiction to issue the custodial decree, or that the Florida courts could not enter a modifying decree precisely like the New York decree before us. So long as there is this uncertainty, we are not justified in finding that New York's judgment was vitiated because of a failure in her duty under the Full Faith and Credit Clause. A full record of the Florida proceedings in the light of applicable Florida law, more securely ascertained than by our independent inquiry, might lead to a different conclusion. As it is, I concur in affirmance of the judgment. 17 Mr. Justice RUTLEDGE, concurring. 18 I join in the judgment dubitante, in the view that under Florida law res judicata has no application to an award of custody1 and the decree therefore is lacking in any qualify of finality which would prevent the court rendering it, or another acquiring jurisdiction of the child's status, from altering it.2 19 The result seems unfortunate in that, apparently, it may make possible a continuing round of litigation over custody, perhaps also of abduction, between alienated parents. That consequence hardly can be thought conducive to the child's welfare. And, if possible, I would avoid such a distressing result, since I think that the controlling consideration should be the best interests of the child, not only for disposing of such cases as a matter of local policy, as it is in Florida and New York,3 but also for formulating federal policies of full faith and credit as well as of jurisdiction and due process in relation to such dispositions. 20 I am not sure but that the effect of the decision may be that the mother, once the child has been returned to Florida,4 will then be able to secure another decree there nullifying the father's rights of visitation and custody given by the New York decree,5 or that in such an event he might lawfully repeat the abduction and secure restoration of those rights in New York. If so, the effect of the decision may be to set up an unseemly litigious competition between the states and their respective courts as well as between parents. Sometime, somehow, there should be an end to litigation in such matters. 21 But our function here is limited to application of the full faith and credit clause. I agree that technical notions of finality applied generally to other types of judgment for such purposes have no proper strict application to these decrees.6 But, even so, full faith and credit is concerned with finality and only with finality when the question arises in relation to the binding effects of judgments. And the law is clearly settled that while generally the clause requires other states to give judgments as much effect as they have where rendered, it does not require them to give more.7 22 Accordingly, if the state rendering the judgment gives it no final effect to prevent its alternation, I am unable to see how others having jurisdiction of the parties and the subject matter may be required to give it finality in this respect by virtue of the provision for full faith and credit.8 But this is what we would have to require, in view of the state of Florida law, in order to hold that New York could not make the changes which were incorporated in its judgment. 23 Whether Florida will be bound to observe those changes, in the event of another application by Mrs. Halvey, is a question upon which however I desire to reserve judgment, along with the other questions reserved in the Court's opinion. 1 'In any suit for divorce or alimony, the court shall have power at any stage of the cause to make such orders touching the care, custody and maintenance of the children of the marriage, and what, if any, security to be given for the same, as from the circumstances of the parties and the nature of the case may be fit, equitable and just, and such order touching their custody as their best spiritual as well as other interests may require.' Fla.Stats.1941, § 65.14, F.S.A. 2 The legal domicile of the child is usually the domicile of his father. Minick v. Minick, 111 Fla. at page 490, 149 So. at page 483; Dorman v. Friendly, 146 Fla. 732, 738, 1 So.2d 734, 736. The power of the Florida courts to award custody of a child is dependent either on the child being legally domiciled in Florida or physically present there. Dorman v. Friendly, supra; State ex rel. Clark v. Clark, 14, Fla. 452, 4 So.2d 517. 1 In Minick v. Minick, 111 Fla. 469, 491, 149 So. 483, 492, the Florida Supreme Court quoted with approval the statement in Schouler on Marriage and Divorce (6th ed.) § 1896: 'These judgments (of custody) are necessarily provisional and temporary in character, and are ordinarily not res judicata, either in the same court or that of a foreign jurisdiction, except as to facts before the court at the time of the judgment.' See also Meadows v. Meadows, 78 Fla. 576, 83 So. 392. 2 The trial court in New York gave lip service to observing the Florida award of custody to the mother, but awarded the father rights 'of visitation' not allowed under the Florida decree; and these included not only visitation during specified hours while the child is to remain in the mother's custody, but also the right to have the custody during more than three months of each year, during which time the mother was given specified visiting rights. The New York appellate courts affirmed the award as made by the trial court. 3 See Fla.Stat.Ann. § 65.14; Jones v. Jones, 156 Fla. 524, 527, 23 So.2d 623; Green v. Green, 137 Fla. 359, 361, 188 So. 355. See Matter of Rich v. Kaminsky, 254 App.Div. 6, 3 N.Y.S.2d 689; Matter of Bull, 266 App.Div. 290, 42 N.Y.S.2d 53, affirmed 291 N.Y. 792, 53 N.E.2d 368; see also N.Y.Domestic Relations Law, Consol.Laws, c. 14, § 70; Finlay v. Finlay, 240 N.Y. 429, 433, 148 N.E. 624, 40 A.L.R. 937. 4 The New York judgment permits the mo her to take the child to Florida during the time she is to have custody, see note 2, but requires her to give a surety bond conditioned upon her surrendering the child to the father at the beginning of the periods prescribed for his having custody. The mother therefore consistently with the New York decree may lawfully remove the child to Florida. Once he is physically and lawfully present there, it would seem that the courts of that state would be able to acquire jurisdiction over his status and to make further awards concerning it, unless indeed personal service of process upon the father is required for that purpose. 5 See notes 2, 4. The question would remain whether the Florida courts by making a further decree could relieve the mother of the compulsion of the surety bond. 6 See the opinion dissenting in part in Griffin v. Griffin, 327 U.S. 220, at page 247, 66 S.Ct. 556, at page 569; also the concurring opinion in Barber v. Barber, 323 U.S. 77, at page 86, 65 S.Ct. 137, at page 141, 89 L.Ed. 82, 157 A.L.R. 163. 7 Rev.Stat. § 905, 28 U.S.C. § 687, 28 U.S.C.A. § 687, and cases cited in Griffin v. Griffin, 327 U.S. 220, 236, 66 S.Ct. 556, 564, Note 1. 8 Commentators who have suggested that full faith and credit be given to custody decrees have assumed that such awards could be modified only on the basis of new facts occurring subsequent to the original custody decree. See, e.g., Effect of Custody Decree in a State Other Than Where Rendered (1933) 81 U.Pa.L.Rev. 970, 972. As the opinion of the Court points out the power of Florida to modify such a decree is not limited to change of circumstance. See also note 1.

1011

330 U.S. 631 67 S.Ct. 874 91 L.Ed. 1145 HAUPTv.UNITED STATES. No. 49. Argued Nov. 21, 22, 1943. Decided March 31, 1947. Rehearing Denied April 28, 1947. See 331 U.S. 864, 67 S.Ct. 1195. Mr. Paul A. F. Warnholtz, of Chicago, Ill. (Frederick J. Bertram, of Chicago, of counsel), for petitioner. Mr. Frederick Bernays Wiener, of Providence, R.I., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 Petitioner, Hans Max Haupt was indicted for treason, convicted and sentenced to life imprisonment and to pay a fine of $10,000. From this judgment of the District Court for the Northern District of Illinois he appealed to the United States Circuit Court of Appeals for the Seventh Circuit, which by a divided court affirmed. 152 F.2d 771. A previous conviction of the same offense predicated on the same acts had been reversed. United States v. Haupt, 7 Cir., 136 F.2d 661. 2 Petitioner is the father of Herber Haupt, one of the eight saboteurs convicted by a military tribunal. See Ex parte Quirin, 317 U.S. 1, 63 S.Ct. 1, 2, 87 L.Ed. 3. Sheltering his son, assisting him in getting a job, and in acquiring an automobile, all alleged to be with knowledge of the son's mission, involved defendant in the treason charge. 3 The background facts are not in dispute. The defendant is a naturalized citizen, born in Germany. He came to this country in 1923 and lived in or near Chicago. In 1939 the son, Herbert, who had also been born in Germany, worked for the Simpson Optical Company in Chicago which manufactured lenses for instruments, including parts for the Norden bomb sight. In the spring of 1941 Herbert went to Mexico and, with the aid of the German Consul, from there to Japan and thence to Germany where he entered the employ of the German Government and was trained in sabotage work. 4 On the 17th of June 1942, Herbert returned to the United States by submarine. His mission was to act as a secret agent, spy and saboteur for the German Reich. He was instructed to proceed to Chicago, to procure an automobile for the use of himself and his confederates in their work of sabotage and espionage, to obtain reemployment with the Simpson Optical Company where he was to gather information, particularly as to the vital parts and bottlenecks of the plant, to be communicated to his coconspirators to guide their attack. He came with various other instructions, equipped with large sums of money, and went to Chicago. 5 After some six days there, Herbert was arrested on June 27, 1942, having been under surveillance by Government agents during his entire stay in Chicago. This petitioner was thereafter taken into custody and was arraigned on July 21, 1942. He later asked to talk to an F.B.I. agent, two of whom were summoned, and he appears to have volunteered considerable information and to have given more in answer to their questions. He blamed certain others for the predicament of his son and wanted to testify against them. For this purpose, he disclosed that he had been present when Herbert had told the complete story of his trip to Mexico, Japan, his return to the United States by submarine, and his bringing large sums of money with him. During his confinement in the Cook County jail he also talked with two fellow prisoners concerning his case and they testified as to damaging admissions made to them. 6 The indictment alleged twenty-nine overt acts of treason. Its sufficiency ws challenged by demurrer which was overruled and by a motion to quash which was denied. The defendant, at the close of the Government's case and again at the close of all the evidence, made motions for a directed verdict generally and also specifically as to each overt act charged, all of which were denied. Seventeen of the overt acts were withdrawn before submission and twelve were submitted to the jury. Generally stated, the overt acts submitted fall into three groups of charges: First, the charge that this defendant accompanied his son to assist him in obtaining employment in a plant engaged in manufacturing the Norden bomb sight; second, the charge of harboring and sheltering Herbert Haupt; and third, the charge of accompanying Herbert to an automobile sales agency, arranging, making payment for and purchasing an automobile for Herbert. Each of these was alleged to be in aid of Herbert's known purpose of sabotage. 7 The defendant argues here that the overt acts submitted do not constitute acts of treason, but that each is commonplace, insignificant and colorless, and not sufficient even if properly proved to support a conviction. We have held that the minimum function of the overt act in a treason prosecution is that it show action by the accused which really was aid and comfort to the enemy. Cramer v. United States, 325 U.S. 1, 34, 65 S.Ct. 918, 934, 89 L.Ed. 1441. This is a separate inquiry from that as to whether the acts were done because of adherence to the enemy, for cts helpful to the enemy may nevertheless be innocent of treasonable character. 8 Cramer's case held that what must be proved by the testimony of two witnesses is a 'sufficient' overt act. There the only proof by two witnesses of two of the three overt acts submitted to the jury was that the defendant had met and talked with enemy agents. We did not set aside Cramer's conviction because two witnesses did not testify to the treasonable character of his meeting with the enemy agents. It was reversed because the Court found that the act which two witnesses saw could not on their testimony be said to have given assistance or comfort to anyone, whether it was done treacherously or not. To make a sufficient overt act, the Court thought it would have been necessary to assume that the meeting or talk was of assistance to the enemy, or to rely on other than two-witness proof. Here, on the contrary, such assumption or reliance is unnecessary—there can be no question that sheltering, or helping to buy a car, or helping to get employment is helpful to an enemy agent, that they were of aid and comfort to Herbert Haupt in his mission of sabotage. They have the unmistakable quality which was found lacking in the Cramer case of forwarding the saboteur in his mission. We pointed out that Cramer furnished no shelter, sustenance or supplies. 325 U.S. 1, 37, 65 S.Ct. 918, 936, 89 L.Ed. 1441. The overt acts charged here, on the contrary, may be generalized as furnishing harbor and shelter for a period of six days, assisting in obtaining employment in the lens plant and helping to buy an automobile. No matter whether young Haupt's mission was benign or traitorous, known or unknown to defendant, these acts were aid and comfort to him. In the light of his mission and his instructions, they were more than casually useful; they were aid in steps essential to his design for treason. If proof be added that the defendant knew of his son's instructions, preparation and plans, the purpose to aid and comfort the enemy becomes clear. All of this, of course, assumes that the prosecution's evidence properly in the case is credited, as the jury had a right to do. We hold, therefore, that the overt acts laid in the indictment and submitted to the jury do perform the functions assigned to overt acts in treason cases and are sufficient to support the indictment and to sustain the convictions if they were proved with the exactitude required by the Constitution. 9 The most difficult issue in this case is whether the overt acts have been proved as the Constitution requires, and several grounds of attack on the conviction disappear if there has been compliance with the constitutional standard of proof. The Constitution requires that 'No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act * * *.' Art. III, § 3. We considered the application of this provision to the problems of proof in the Cramer case. Defendant claims this case in two respects falls short of the requirements there laid down as to all the overt acts which comprise harboring and sheltering the saboteur: First, that there was no direct proof that the saboteur was actually in the defendant's apartment, and second, that there is no direct proof that the defendant was in the apartment at any time when the saboteur was there. Both of these we find to be without merit. 10 The act to be proved is harboring and sheltering in the house at No. 2234 North Fremont Street. The defendant and his wife lived there in a third floor front apartment, which had but one bedroom. Federal Bureau of Investigation agents, never less than two, had the place under continuous surveillance from 10:30 a.m., June 22 to the arrest of the saboteur on June 27, and at least two testified in minute detail to each of repeated arrivals and departures of the saboteur, in some occasions accompanied by the defendant, on others by the defendant's wife, and on some by both. He entered each night and left each day. On so e occasions he came out wearing different clothes from those he wore when he went in. When he went in at night the lights in the defendant's apartment were turned on and after a time extinguished. Two witnesses who were callers at the apartment testified that on one occasion defendant and Herbert were there together at supper time, the three Haupts being together in the kitchen, Herbert later coming into the parlor and one of the guests going into the kitchen. The defendant contends that this does not constitute the required two witnesses' direct proof that the saboteur was harbored and sheltered in the defendant's apartment. It is true that the front entrance, where all of this testimony shows the saboteur to have entered, connected with two other apartments. The occupants of each of the other apartments, two witnesses as to each, testified that the saboteur did not at any time occupy their respective apartments. 11 It is sufficiently proved by direct testimony of two witnesses that the saboteur stayed in the house where the father lived and with the latter's knowledge. But it is said that this is not enough, that it fails because the two witnesses did not see him enter his parents' apartment therein. But the hospitality and harboring did not begin only at the apartment door. It began when he entered the building itself where he would have no business except as a guest or member of the family of one of the tenants. It is not necessary to show that he slept in the defendant's bed. Herbert was neither trespasser nor loiterer. He entered as the licensee of his father, and was under the privileges of the latter's tenancy even in parts of the building used in common with other tenants. His entrance to and sojourn in the building were made possible by the defendant, and the saboteur slept and stayed in some part of it with the father's knowledge and by his leave. We think the proof is sufficient to comply with the constitutional requirement that two witnesses testify to the overt acts in that group which charges harboring and sheltering of the saboteur. 12 The other group of submitted overt acts as to which it is claimed there is a deficiency of testimony relates to assistance which the defendant rendered to the saboteur in purchasing an automobile as alleged in Acts Nos. 15 and 16 of the indictment. According to the testimony of an automobile salesman, Farrell, the defendant came to his salesroom and said he wanted to buy a good used car of late model. Defendant selected a 1941 model Pontiac and asked about installment payments. After considerable discussion of terms, defendant paid $10 deposit on the price of $1045 and said he would come in next day to make a further payment. He signed an order for the car and gave financial references. On the next day, defendant came to the salesroom and paid an additional $405, executing notes and finance contract. The son took the car and drove it away. 13 A second witness, Vinson, sales manager, corroborated the earlier parts of this transaction, but defendant claims his testimony is not sufficiently comprehensive to comply with the two-witness rule, especially as to overt acts 15 and 16, relating to events of the second day. Vinson at first said he did not see defendant and his son on that day. The trial court allowed counsel to refresh Vinson's recollection from his testimony given at the former trial of defendant. Vinson then testified that he did see the defendant and his son come in together and be together in the salesroom that evening but did not talk with them; that he received 'the money that had been put down' on that evening and the note signed by the defendant. By approval of his answers at the former trial he affirmed that he receipted for the money. He also saw the invoice made that evening for the purchase and identified a copy of the bill of sale of the car to the defendant. He testified Farrell was there when the Haupts were. 14 It is said that Vinson's testimony falls short because it is not explici as to who paid the money. Taking the testimony as a whole, Vinson his corroborated Farrell's testimony that the defendant came that night to the automobile salesroom, that he was accompanied by the saboteur, that a purchase of the automobile had been started and was pending. The partially completed transaction was one in which defendant himself became purchaser, signed his own name to the purchase note and furnished his own, not his son's, financial references. Vinson's testimony shows that this pending transaction was consummated on the latter night. It involved 'a further payment in cash toward the purchase' and completing 'arrangements for the purchase' which are alleged as the sixteenth act. Vinson said that he received the money. Whoever actually handed over the money, it was apparently in defendant's presence and was paid on account of his obligation incurred the previous evening in signing the purchase contract. 15 The testimony of Vinson in its interpretation most favorable to the jury's verdict seems clearly to have been testimony to the same overt act as that by Farrell. Defendant's counsel made no effort to correct any ambiguity in it by cross-examination. The defense of course is under no duty to do so; it may rely upon weakness in the prosecution's case. But it takes the risk, when it relies on an ambiguity rather than on a complete lack of legal proof, that the jury will resolve the meaning in favor of the prosecution. When enough has been shown to make a case for the jury we may not impeach the verdict by differing from them on equally reasonable views of a witness' meaning. We think the court was justified in submitting this overt act and the jury was justified in finding it proved. 16 The Constitution requires testimony to the alleged overt act and is not satisfied by testimony to some separate act from which it can be inferred that the charged act took place. And while two witnesses must testify to the same act, it is not required that their testimony be identical. Most overt acts are not single, separable acts, but are combinations of acts or courses of conduct made up of several elements. It is not easy to set by metes and bounds the permissible latitude between the testimony of the two required witnesses. It is perhaps easier to say on which side of the line a given case belongs than to draw a line that will separate all permisible disparities from forbidden ones. Concrete even if hypothetical cases may illustrate this. 17 One witness might hear a report, see a smoking gun in the hand of defendant and see the victim fall. Another might be deaf, but see the defendant raise and point the gun, and see a puff of smoke from it. The testimony of both would certainly be 'to the same overt act,' although to different aspects. And each would be to the overt act of shooting, although neither saw the movement of a bullet from the gun to the victim. It would still be a remote possibility that the gun contained only a blank cartridge and the victim fell of heart failure. But it is not required that testimony be so minute as to exclude every fantastic hypothesis that can be suggested. 18 We think two witnesses testified to these overt acts and petitioner cannot seriously contend that two did not testify to each of the overt acts comprising the group of charges on obtaining a job. Since this was the constitutional measure of evidence as to each overt act submitted to the jury we do not reach the question whether the conviction could stand on some sufficiently proven acts, if others failed in proof.1 19 It is urged that the conviction cannot be sustained because there is no sufficient proof of adherence to the enemy, the acts of aid and comfort being natural acts of aid for defendant's own son. Certainly that relationship is a fact for the jury to weigh along with others, and they were correctly instructed that if they found that defendants' intention was not to injure the United States but merely to aid his son 'as an individual, as distinguished from assisting him in his purpose, if such existed, of aiding the German Reich, or of injuring the United States, the defendant must be found not guilty.' The defendant can complain of no error in such a submission. It was for the jury to weigh the evidence that the acts proceeded from parental solicitude against the evidence of adherence to the German cause. It is argued that Haupt merely had the misfortune to sire a traitor and all he did was to act as an indulgent father toward a disloyal son. In view however of the evidence of defendant's own statements that after the war he intended to return to Germany, that the United States was going to be defeated, that he would never permit his boy to join the American Army, that he would kill his son before he would send him to fight Germany, and others to the same effect, the jury apparently concluded that the son had the misfortune of being a chip off the old block—a tree inclined as the twig had been bent metaphors which express the common sense observation that parents are as likely to influence the character of their children as are children to shape that of their parents. Such arguments are for the jury to decide. 20 It is also urged that errors were made in admission of evidence. Some of this concerned conversations and occurrences long prior to the indictment which were admitted to prove intent. They consisted of statements showing sympathy with Germany and with Hitler and hostility to the United States. Such testimony is to be scrutinized with care to be certain the statements are not expressions of mere lawful and permissible difference of opinion with our own government or quite proper appreciation of the land of birth. But these statements were explicit and clearly were admissible on the question of intent and adherence to the enemy. Their weight was for the jury. 21 Evidence of F.B.I. agents and of defendant's fellow prisoners as to conversations is also said to be inadmissible. The Constitution requires that 'No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court.' It is claimed that the statements of defendant were confessions, and as they were not made in open court were inadmissible as evidence. If there were not the required two-witness testimony and it was sought to supply that defect by confession, we would have a different question. But having found the legal basis for the conviction laid by the testimony of two witnesses, we find nothing in the text or policy of the Constitution to preclude using out-of-court admissions or confessions. 22 It may be doubted whether the Constitutional reference to confession in open court has application to any admission of a fact other than a complete confession to guilt of the crime. The statements of defendant did not go so far. They were admissions of specific acts and knowledge as to which, insofar as they were overt acts charged, the required two witnesses also testified. There has been no attempt to convict here on such admissions alone, or to use the admissions to supply defects in the Constitutional measure of proof. If such an attempt were made we would be faced with a novel question. But here the admissions are merely corroborative of a legal basis laid by testimony and the Constitution does not preclude using out-of-court admissions or confessions in this way. Cf. Respublica v. Roberts, 1 Dall. 39, 1 L.Ed. 27; Case of Fries, 9 Fed.Cas. pages 826, 909, No. 5,126. 23 There are many other complaints about the conduct of the trial, such as permitting the indictment to go to the jury room, allowing the jury to have a typewritten copy of the court's charge, holding the jury together for a long time, reading the testimony of certain witnesses to the jury at its request and failing to order a special verdict. We find nothing in any of them to warrant the inference of unfairness or irregularity in the trial. It is also claimed that the prosecution made improper appeals to passion. Unfortunately it is the nature of the charge of betrayal that it easily stirs feelings, and that is one of the reasons such safeguards have been thrown around its trial. But we find no such conduct as would invalidate the conviction. 24 Haupt has been twice tried and twice found guilty. The law of treason makes and properly makes conviction difficult but not impossible. His acts aided an enemy of the United States toward accomplishing his mission of sabotage. The mission was frustrated but defendant did his best to make it succeed. His overt acts were proved in compliance with the hard test of the Constitution, are hardly denied, and the proof leaves no reasonable doubt of the guilt. 25 The judgment is affirmed. 26 Affirmed. 27 Mr. Justice DOUGLAS. 28 There is a close parallel between this case and Cramer v. United States, 325 U.S. 1, 65 S.Ct. 918, 89 L.Ed. 1441. 29 Two witnesses saw Cramer talking with an enemy agent. So far as they knew the conversation may have been wholly innocent, as they did not overhear it. But Cramer, by his own testimony at the trial, explained what took place: he knew or had reason to believe that the agent was here on a mission for the enemy and arranged, among other things, to conceal the funds brought here to promote the project. Thus there was the most credible evidence that Cramer was guilty of 'adhering' to the enemy, giving him 'aid and comfort'. Article III, § 3 of the Constitution. And the overt act which joined him with the enemy agent was proved by two witnesses. Cramer's conviction, however, was set aside because two witnesses did not testify to the treasonable character of Cramer's meeting with the enemy agent. 30 Two witnesses saw the son enter Haupt's apartment house at night and leave in the morning. That act, without more, was an innocent as Cramer's conversation with the agent. For nothing would be more natural and normal, or more 'commonplace' (325 U.S. at page 34, 65 S.Ct. at page 934, 89 L.Ed. 1441), or less suspicious, or less 'incriminating' (325 U.S. at page 35, 65 S.Ct. at page 935, 89 L.Ed. 1441), than the act of a father opening the family door to a son. That act raised, therefore, no more implication that the father was giving his son aid and comfort in a treasonable project than did the meeting of the defendant with the enemy agent in the Cramer case. But that act, wholly innocent on its face, was shown to be of a treasonable character, not by the two witnesses, but by other evidence: that Haupt was § mpathetic with the Nazi cause, that he knew the nature of his son's mission to this country. Haupt's conviction is sustained, though the conversion of an innocent appearing act into a treasonable act is not made by two witnesses. The Constitution provides: 31 'Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court.' Article III, § 3. 32 As the Cramer case makes plain, the overt act and the intent with which it is done are separate and distinct elements of the crime. Intent need not be proved by two witnesses but may be inferred from all the circumstances surrounding the overt act. But if two witnesses are not required to prove treasonable intent, two witnesses need not be required to show the treasonable character of the overt act. For proof of treasonable intent in the doing of the overt act necessarily involves proof that the accused committed the overt act with the knowledge or understanding of its treasonable character. 33 The requirement of an overt act is to make certain a treasonable project has moved from the realm of thought into the realm of action. That requirement is undeniably met in the present case, as it was in the case of Cramer. 34 The Cramer case departed from those rules when it held that 'The two-witness principle is to interdict imputation of incriminating acts to the accused by circumstantial evidence or by the testimony of a single witness.' 325 U.S. at page 35, 65 S.Ct. at page 935, 89 L.Ed. 1441. The present decision is truer to the constitutional definition of treason when it forsakes that test and holds that an act, quite innocent on its face, does not need two witnesses to be transformed into an incriminating one. 35 Mr. Justice MURPHY, dissenting. 36 This case grows out of a singular set of circumstances that, when combined with the serious nature of the alleged crime, warrants extraordinary scrutiny. Petitioner's son was tried as a saboteur before a military tribunal, convicted and executed. See Ex parte Quirin, 317 U.S. 1, 63 S.Ct. 1, 2, 87 L.Ed. 3. Petitioner, his wife and four others were then jointly tried for treason. All were convicted, petitioner being sentenced to death and his wife to 20 years' imprisonment. United States v. Haupt, D.C., 47 F.Supp. 832; Id., D.C., 47 F.Supp. 836. These convictions, however, were reversed upon appeal. United States v. Haupt, 7 Cir., 136 F.2d 661. Petitioner has now been retried separately for treason; again he has been found guilty, with the sentence being reduced to life imprisonment and a $10,000 fine. 7 Cir., 152 F.2d 771. 37 Petitioner was charged with having committed three general types of overt acts of treason: (1) Harboring and sheltering his son; (2) assisting his son in obtaining reemployment; (3) accompanying and assisting his son in the purchase of an automobile. All of these alleged overt acts were contained in a single count of the indictment and the jury's verdict was a general one. The Court indicates that a fatal deficiency as to any of the alleged overt acts under such circumstances invalidates the conviction. Since the acts relating to the harboring and sheltering of petitioner's son did not, in my opinion, amount to overt acts of treason, I would accordingly reverse the judgment below, regardless of the sufficiency of the other acts. 38 The high crime of treason, as I understand it, consists of an act rendering aid and comfort to the enemy by one who adheres to the enemy's cause. Cramer v. United States, 325 U.S. 1, 65 S.Ct. 918, 89 L.Ed. 1441. The act may be one which extends material aid; or it may be one which merely lens comfort and encouragement. The act may appear to be innocent on its face, yet prove to be treasonable in nature when examined in light of its purpose and context. 39 It does not follow, howeve , that every act that gives aid and comfort to an enemy agent constitutes an overt act of treason, even though the agent's status is known. The touch of one who aids is not Midaslike, giving a treasonable hue to every move. An act of assistance may be of the type which springs from the well of human kindness, from the natural devotion to family and friends, or from a practical application of religious tenets. Such acts are not treasonous, however else they may be described. They are not treasonous even though, in a sense, they help in the effectuation of the unlawful purpose. To rise to the status of an overt act of treason, an act of assistance must be utterly incompatible with any of the foregoing sources of action. It must be an act which is consistent only with a treasonable intention and with the accomplishment of the treasonable plan, giving due consideration to all the relevant surrounding circumstances. Thus an act of supplying a military map to a saboteur for use in the execution of his nefarious plot is an overt act of treason since it excludes all possibility of having been motivated by non-treasonable considerations. But an act of providing a meal to an enemy agent who is also one's son retains the possibility of having a non-treasonable basis even when performed in a treasonable setting; accordingly, it cannot qualify as an overt act of treason. 40 It is true that reasonable doubts may be raised as to whether or not the prime motive for an act was treasonous. Yet the nature of some acts is such that a non-treasonous motive cannot be completely dismissed as a possibility. An overt act of treason, however, should rest upon something more substantial than a reasonable doubt. Treason is different from ordinary crimes, possessing unique and difficult standards of proof which confine it within narrow spheres. It has such serious connotations that its substance cannot be left to conjecture. Only when the alleged overt act manifests treason beyond all reasonable doubt can we be certain that the traitor's stigma will be limited to those whose actions constitute a real threat to the safety of the nation. 41 Tested by that standard, the conviction in the instant case cannot be sustained. Petitioner, it is said, had the misfortune to sire a traitor. That son lived with petitioner and his wife in their Chicago apartment. After a sojourn in Germany for training as a saboteur, the son returned to the Chicago apartment and began to make preparations to carry out his mission of sabotage. It is claimed that petitioner knew of his son's activities and desired to help him. For six days prior to his arrest, the son lived in petitioner's apartment; he was not secreted in any way, coming and going as he normally would have done. 42 The indictment alleged that petitioner committed an overt act of treason by sheltering and harboring his son for those six days. Concededly, this was a natural act for a father to perform; it is consistent with parental devotion for a father to shelter his son, especially when the son ordinarily lives with the father. But the Court says that the jury might find, under appropriate instructions, that petitioner provided this shelter, not merely as an act of an indulgent father toward a disloyal son, but as an act designed to injure the United States. A saboteur must be lodged in a safe place if his mission is to be effected and the jury might well find that petitioner lodged his son for that purpose. 43 But the act of providing shelter was of the type that might naturally arise out of petitioner's relationship to his son, as the Court recognizes. By its very nature, therefore, it is a non-treasonous act. That is true even when the act is viewed in light of all the surrounding circumstances. All that can be said is that the problem of whether it was motivated by treasonous or non-treasonous factors is left in doubt. It is therefore not an overt act of treason, regardless of how unlawful it might otherwise be. 1 When speaking of a general verdict of guilty in Cramer v. United States, 325 U.S. 1, 36, 65 S.Ct. 918, 935, 89 L.Ed. 1441, Note 45, we said 'Since it is not possible to identify the grounds on which Cramer was convicted, the verdict must be set aside if any of the separable acts submitted was insufficient' of course we did not hold that one overt act properly proved and submitted would not sustain a conviction if the proof of other overt acts was insufficient. One such act may prove treason, and on review the conviction would be sustained, provided the record makes clear that the jury convicted on that overt act. But where several acts are pleaded in a single count and submitted to the jury, under instructions which allow a verdict of guilty on any one or more of such acts, a reviewing court has no way of knowing that any wrongly submitted act was not the one convicted upon. If acts were pleaded in separate counts, or a special verdict were required as to each overt act of a single count, the conviction could be sustained on a single well-proved act. As the acts were here pleaded in a single count, and the jury were instructed that they could convict on any one, we would have no reverse if any act were insufficient or insufficiently proved. Cf. Stromberg v. People of State of California, 283 U.S. 359, 368, 51 S.Ct. 532, 535, 75 L.Ed. 1117, 73 A.L.R. 1484; Williams v. State of North Carolina, 317 U.S. 287, 292, 63 S.Ct. 207, 210, 87 L.Ed. 279, 143 A.L.R. 1273 and Cramer v. United States, supra.

01

330 U.S. 649 67 S.Ct. 931 91 L Ed. 1158 LEVINSONv.SPECTOR MOTOR SERVICE. No. 22. Reargued Oct. 21, 22, 1946. Decided March 31, 1947. Mr. Harry L. Yale, of Chicago, Ill., for petitioner. [Argument of Counsel from page 650 intentionally omitted] Mr. Jeter S. Ray, of Washington, D.C., for Administrator of the Wage and Hour Division, U.S. Dept. of Labor, amicus curiae, by special leave of Court. Mr. Daniel W. Knowlton, of Washington, D.C., for the United States and Interstate Commerce Commission, amicus curiae, by special leave of Court. Mr. Roland Rice, of Washington, D.C., for respondent. Mr. Justice BURTON delivered the opinion of the Court. 1 This case presents the question whether the Interstate Commerce Commission has the power, under § 204 of the Motor Carrier Act, 1935,1 to establish qualifications and maximum hours of service with respect to any 'checker' or 'terminal foreman,' a substantial part of whose activities in that capacity consists of doing, or immediately directing, the work of one or more 'loaders' of freight for an interstate motor carrier as such class of work is defined by the Interstate Commerce Commission in Ex parte No. MC—2, 28 M.C.C. 125, 133, 134,2 although the rest of his activities do not affect the safety of operation of any such motor carrier.3 2 We hold that the Commission has that power and that § 13(b)(1) of the Fair Labor Standards Act4 therefore expressly excludes any such employee from a right to the increased pay for overtime service prescribed by § 7 of that Act.5 3 In this action, brought in the Municipal Court of Chicago, pursuant to § 16(b) of the Fair Labor Standards Act,6 the petitioner recovered judgment against his employer, the respondent, for $487.44 for unpaid overtime compensation for petitioner's services, as a 'checker' or 'terminal foreman,' computed in accordance with § 7 of that Act. In addition, the judgment included $487.44, as liquidated damages, and $175 as an attorney's fee, making a total of $1,149.88 and costs. The defense was that, under § 13(b)(1), the provisions of § 7 did not apply to the petitioner's service. On that ground, the judgment was reversed by the Appellate Court of Illinois and the cause remanded with directions to enter judgment, with costs, for the respondent. 323 Ill.App. 505, 56 N.E.2d 142. The Supreme Court of Illinois affirmed. 389 Ill. 466, 59 N.E.2d 817. We granted certiorari because of the importance of the question in interpreting the Motor Carrier Act and Fair Labor Standards Act. 326 U.S. 703, 66 S.Ct. 30. It was argued at the October Term, 1945, of this Court and, on January 2, 1946, was restored to the docket for reargument before a full bench at this Term. It was so argued on October 21 and 22, 1946. In addition to the briefs and arguments on behalf of the parties, we have had the benefit of those presented, at our request, on behalf of amici curiae. These were from the Administrator of the Wage and Hour Division, United States Department of Labor, who supported the position of the petitioner, and, on the other hand, from the Interstate Commerce Commission which claimed that it possessed, under the Motor Carrier Act, the power to establish qualifications and maximum hours of service with respect to the petitioner. he Solicitor General, also at our request, filed a memorandum. In it he supported the petition for certiorari and took what he has described as 'a position somewhat between that of the Commission and that of the Wage and Hour Administrator.' 4 The respondent is a Missouri corporation, licensed in Illinois and engaged in interstate commerce as a motor carrier of freight. It does not appear whether the respondent is a common carrier, contract carrier or private carrier of property. The result, however, does not turn upon differences between those classifications. The petitioner was employed by the respondent from October 1, 1940, through October 6, 1941, in one or more capacities which he designates generally as those of a 'checker' or 'terminal foreman.' While the evidence is conflicting as to some of his duties, there is ample to sustain the judgment of the Supreme Court of Illinois on the basis that a substantial part of his activities consisted of doing, or immediately directing, the work of one or more 'loaders' of freight for an interstate motor carrier as that class of work is defined by the Interstate Commerce Commission. The Supreme Court of Illinois accepted the Appellate Court's description of petitioner's activities.7 The power of the Commission to establish qualifications and maximum hours of service with respect to such 'loaders' has been defined and delimited by it in a series of well-considered decisions, dating from the extension of its jurisdiction, in 1935, so as to include motor carriers. 5 The history of the development of the congressional safety program in interstate commerce, up to and including the enactment of the Motor Carrier Act in 1935 and the Fair Labor Standards Act in 1938, tells the story. 6 In comparable fields, Congress previously had prescribed safety equipment, limited maximum hours of service and imposed penalties for violations of its requirements.8 In those Acts, Congress did not rely upon increases in rates of pay for overtime service to enforce the limitations it set upon hours of service. While a requirement of pay that is higher for overtime service than for regular service tends to deter employers from permitting such service, it tends also to encourage employees to seek it. The requirement of such increased pay is a remedial measure adapted to the needs of an economic and social program rather than a police regulation adapted to the rigid enforcement required in a safety program. Overnight Motor Co. v. Missel, 316 U.S. 572, 577, 578, 62 S.Ct. 1216, 1219, 1220, 86 L.Ed. 1682. 7 By 1935, 40 states had attempted to regulate safety of operation of carriers by motor vehicle. Some had established qualifications and maximum hours of service for drivers and helpers. Increased interstate movements of motor carriers then made necessary the Motor Carrier Act, 1935, approved August 9, 1935, as Part II of the Interstate Commerce Act, 49 Stat. 543. This Act vested in the Interstate Commerce Commission power to establish reasonable requirements with respect to qualifications and maximum hours of service of employees and safety of operation and equipment of common and contract carriers by motor vehicle. § 204(a)(1)(2). Similar, but not identical, language was used as to private carriers of property by motor vehicle. § 204(a)(3). The Act expressly superseded 'any code of fair competition for any industry embracing motor carriers.' § 204(b). Section 203(b) listed many types of motor carriers which were exempted in general from the Act but that Section signficantly applied to all of them the provisions of § 204 as to qualifications, maximum hours of service, safety of operation and equipment.9 8 It is even more significant that in 1942, several years after enactment of the Fair Labor Standards Act of 1938, Congress slightly, but expressly, expanded the jurisdiction of the Commission over these subjects of qualifications, maximum hours of service, safety of operation and equipment and thereby restricted, to a corresponding degree, the application of the compulsory overtime provisions of the Fair Labor Standards Act.10 9 In 1940, this Court, in United States v. American Trucking Ass'ns, 310 U.S. 534, 60 S.Ct. 1059, 1068, 84 L.Ed. 1345, recognized the emphasis given by Congress to the clause 'qualifications and maximum hours of service' in §§ 204(a) and 203(b). That decision reviewed the legislative history of the Act and held 'that the meaning of employees in section 204(a)(1) and (2) is limited to those employees whose activities affect the safety of operation. The Commission has no jurisdiction to regulate the qualifications or hours of service any others.' Id., 310 U.S. at page 553, 60 S.Ct. at page 1069. The opinion dealt with employees who devoted themselves exclusively to their respective assignments, such as those of drivers on the one hand or of clerks on the other. It demonstrated that § 204(a)(1) and (2) related to the former but not to the latter.11 It did not discuss its relation to employees who, as in the present case, are required to divide their activities between those affecting safety of operation and those not affecting it. 10 In Southland Co. v. Bayley, 319 U.S. 44, 63 S.Ct. 917, 87 L.Ed. 1244, this Court applied similar reasoning to an employee of a private carrier of property under § 204(a)(3). It recognized the Commission's power to find a need for its action and, having found it, to establish qualifications and maximum hours of service for employees of private motor carriers of property affecting the safety of operation of such carriers. It held that, under § 3(b)(1) of the Fair Labor Standards Act, the Commission's mere possession of that power, whether exercised or not, necessarily excluded all employees, with respect to whom the power existed, from the benefits of the compulsory overtime provisions of § 7 of that Act. The present case involves a comparable situation in that the Commission has found here that it has the power to establish qualifications and maximum hours of service for those doing the work of loaders for common or contract motor carriers or private motor carriers of property, but it has not found it advisable, as yet, to establish qualifications and maximum hours of service for that work. 11 The logic of the situation is that Congress, as a primary consideration, has preserved intact the safety program which it and the Interstate Commerce Commission have been developing for motor carriers since 1936. To do this, Congress has prohibited the overlapping of the jurisdiction of the Administrator of the Wage and Hour Division, United States Department of Labor, with that of the Interstate Commerce Commission as to maximum hours of service. Congress might have done otherwise. It might have permitted both Acts to apply. There is no necessary inconsistency between enforcing rigid maximum hours of service for safety purposes and at the same time, within those limitations, requiring compliance with the increased rates of pay for overtime work done in excess of the limits set in § 7 of the Fair Labor Standards Act. Such overlapping, however, has not been authorized by Congress12 and it remains for us to give full effect to the safety program to which Congress has attached primary importance, even to the corresponding exclusion by Congress of certain employees from the benefits of the compulsory overtime pay provisions of the Fair Labor Standards Act. When examined from the point of view of the Motor Carrier Act alone, much light is thrown on the meaning of its § 204 by the interpretation given to it and the applications made of it by the Interstate Commerce Commission. 12 The reports and regulations of that Commission, issued under authority of Part II of the Interstate Commerce Act, both before and after the enactment of the Fair Labor Standards Act, deal so thoroughly and expertly with the safety of operation of interstate motor transportation as to entitle them to especially significant weight in the interpretation of this Act, the enforcement of which has been committed by Congress solely to that Commission. 13 The principal reports and regulations of the Commission, bearing upon the present controversy, are the following:13 14 December 23, 1936. 1 M.C.C. 1. Ex parte No. MC—4 established qualifications for drivers of interstate, common or contract carriers by motor vehicle, outlined a long term safety program and issued regulations as to safety of operation and equipment, constituting Parts, I, II, III and IV of motor carrier safety regulations. 15 December 29, 1937. 3 M.C.C. 665. Ex parte No. MC—2 established maximum hours of service for drivers of interstate, common or contract carriers by motor vehicles, Part V of such regulations. 16 July 9, 1938. 8 M.C.C. 162. Ex parte No. MC—4 modified Part III of such regulations as to safety glass. 17 July 12, 1938. 6 M.C.C. 557. Ex parte No. MC—2, in the light of current experience, modified Part V of the regulations as to maximum hours of service for such drivers. 18 December 3, 1938. 10 M.C.C. 533. Ex parte No. MC—4 adapted the Commission's general qualifications and regulations to those types of carriers which were exempted from the Motor Carrier Act by § 203(b), but which had remained subject to the jurisdiction of the Commission, under § 204, as to qualifications and maximum hours of service of employees, safety of operation and equipment. 19 January 27, 1939. 11 M.C.C. 203. Ex parte No. MC—2 further modified Part V of regulations as to maximum hours of service of drivers for common and contract carriers by motor vehicle. 20 May 9, 1939. 13 M.C.C. 481. Ex parte No. MC—28 interpreted § 204(a) as giving the Commission authority to prescribe qualifications and maximum hours of service of employees of common, contract and private carriers of property by motor vehicle only as to those employees whose activities affected safety of operation. It said: 21 'Our experience and the study we necessarily made in connection with the administration of the Motor Carrier Act qualify us to prescribe such regulations (i.e., as to drivers), to promote safety of operation. Quite the contrary would be true if we were called upon to prescribe general qualifications for all employees of such carriers.' Id. at 485. 22 Clerks, salesmen and executives were named as not being within the Commission's jurisdiction. Referring further to its power to prescribe qualifications and maximum hours of service with respect to drivers and others, the Commission said: 23 'That power undoubtedly extends to drivers of such vehicles. It may well be that the activities of some employees other than drivers likewise affect the safety of operation of motor vehicles engaged in interstate and foreign commerce. If common and contract carriers, or private carriers of property, or their employees believe that the activities of employees other than drivers affect the safety of operation of motor vehicles engaged in interstate and foreign commerce, they may file an appropriate petition, asking that a hearing be held and the question determined.' Id. at 488. 24 May 27, 1939. 14 M.C.C. 669. Ex parte No. MC—4. The 'Motor Carrier Safety Regulations, revised,' were found to be 'reasonable requirements with respect to qualifications of employees and safety of operation and equipment of common carriers and contract carriers subject to the Motor Carrier Act, 1935, and that said revised regulations should be approved, adopted and prescribed.' Id. t 683. These revisions strengthened the provisions as to qualifications of drivers, for common and contract carriers, as to eyesight, physical condition, age, and ability to read and speak English. They extended the maximum hours of service regulations to drivers for the 'exempt carriers' enumerated in § 203(b), excepting only those referred to in subparagraph (4a) relating to farmers.14 25 June 15, 1939. 16 M.C.C. 497. No. MC—C—139. Upon petition of American Trucking Associations, Incorporated, et al., the Commission reaffirmed its decision of May 9, 1939, in Ex parte No. MC—28, and stated the negative side of the proposition there established. It said that § 204(a) 'does not empower us to prescribe maximum hours of service for employees of motor carriers whose activities do not affect the safety of operation.' Id. at 497. 26 May 1, 1940. 23 M.C.C. 1. Ex parte No. MC—3. Following extended hearings, the Commission made findings that are important here. First, it found, as required by § 204(a)(3), that 'there is need for Federal regulation of private carriers of property to promote safety of operation of motor vehicles used by such carriers in the transportation of property in interstate or foreign commerce.' Id. at 42. With comparatively few exceptions, such as those relating to farm trucks and industry trucks, the Commission then applied to drivers for private carriers of property by motor vehicle in interstate and foreign commerce the same qualifications, maximum hours of service and regulations as to safety of operation and equipment that it previously had prescribed, by its orders in Ex parte No. MC—2, supra, and Ex parte No. MC—4, supra, for drivers of common and contract carriers. Id. at 22, 42. 27 The significance of this action in relation to the present case is that, in considering the classes of work done by drivers for private motor carriers, the Commission found many instances where only a part of the driver's activities related to driving or to other operations affecting safety of transportation. For example, the Commission dealt with drivers of farm trucks. Section 203(b) (4a) of the Motor Carrier Act exempts farm trucks, for most purposes, from the provisions of that Act. Nevertheless, § 204 retains them within the jurisdiction of the Commission with respect to the qualifications and maximum hours of service of employees whose activities affect the safety of operation of interstate carriers by motor vehicle. The Commission recognized that such drivers have many duties unrelated to those of driving or safety of operation; that farm trucks, to a large extent, do not travel public highways; that the work is not a year-round operation but generally is confined to the harvest season; but that, nevertheless, whenever such a truck is being operated in interstate transportation on the public highway, the hazards involved in such operation are comparable to those faced by drivers who devote their entire time to interstate truck driving of all kinds. With appropriate modifications, the Commission thereupon prescribed for drivers of farm trucks qualifications and maximum hours of service different from, but comparable to, those it had prescribed for drivers of common and contract carrier trucks in general. Instead of its standard minimum requirement of 21 years of age, it set the minimum age requirement for drivers of farm trucks at 18, when the gross weight of the vehicle and load combined did not exceed 10,000 pounds. It declined to approve a minimum age of 16, although that had been accepted by some states. It eliminated the usual physical examinations. It relaxed its rule against transportation of passengers. It eliminated its requirement of keeping a driver's log showing a written record of the trips and stops made by each driver. It retained, however, its restriction against driving more than 10 hours in any one day and, in place of the prohibition against a total of more than 60 hours on duty in a week, it limit d the total hours of driving, as distinguished from other duties, to 50 hours in a week. Ex parte No. MC—3, 23 M.C.C. 1, 27—28, 43. 28 The Commission took comparable action as to industry trucks. It recognized, for example, that a bakery driver-salesman devotes much of his effort and time to selling baked goods rather than to activities affecting the safety of operation of his truck. The Commission, however, did not relinquish jurisdiction over the qualifications of driver-salesmen nor did it refrain from regulating their driving time. It modified its usual rule by providing that, if a driver-salesman 'spends more than 50 percent of his time in selling and less than 50 percent in performing such duties as driving, loading, and unloading,' he may be permitted to exceed the usual limit of 60 hours on duty in any week of 168 consecutive hours, provided only that 'his hours of driving are limited to a total of not more than 40 in any such week.' Id. at 44, and see 31 (recommending 50 hours). This use by the Commission of a percentage of the driver's time as a basis for the adjustment of his permissible maximum hours of service is to be distinguished from the suggestion of the Administrator of the Wage and Hour Division, United States Department of Labor, that the entire power of the Commission over safety regulations must be denied as a matter of law whenever, in any given week, an employee has devoted over 50% of his working time to activities not affecting safety, although he may have devoted the rest of his working time to driving a common carrier truck in interstate commerce.15 It is essential to the Commission's safety program whenever and wherever hazardous activities are engaged in that affect safety of operation of an interstate motor carrier, that those who engage in them shall be qualified to do so and that maximum hours of service affecting such safety of operation shall be established and enforced. This means retaining and using, rather than relinquishing, the Commission's jurisdiction over partial-duty drivers and partial-duty loaders, a substantial part of whose activities affects the safety of interstate motor carrier operations, although the rest of their activities may not affect the safety of such operations. 29 Recognizing its potential jurisdiction over others than drivers, the Commission, in that proceeding, invited private carriers of property or their employees who 'believe that the activities of employees other than drivers affect the safety of operation of motor vehicles engaged in interstate or foreign commerce' to institute proceedings in order that the question be determined. Id. at 44. 30 March 4, 1941. 28 M.C.C. 125, Ex parte Nos. MC—2 and MC—3. In the light of the foregoing experience and hearings, together with the decision of this Court in United States v. Amer. Trucking Ass'ns, supra, the Commission, in this latest and most informative decision, found that the classes of activities which it defined as those of mechanics, loaders and helpers affect the safety of operation of motor vehicles and that, therefore, employees engaging in such classes of activities are subject to the Commission's power to prescribe their qualifications and maximum hours of service, pursuant to § 204(a).16 As related to loaders, the Commission announced the following findings of fact which are significant in the present case: 31 'Findings of fact.—* * * 32 '2. That loaders, as above defined,17 employed by common and contract carriers and private carriers of property by motor vehicle subject to part II of the Interstate Commerce Act devote a large part of their time to activities which directly affect the safety of operation of motor vehicles in interstate or foreign commerce. 33 '4. That no employees of common and contract carriers or private carriers of property by motor vehicle subject to part II of the Interstate Commerce Act, other than drivers and those classes of employees covered by the three preceding findings of fact (mechanics, loaders and helpers), perform duties which directly affect safety of operation.' Ex parte No. MC—2, 28 M.C.C. 125, 138—139. 34 These findings of fact are squarely within the jurisdiction of the Commission. They state affirmatively that, in the opinion of the Commission, the activities of loaders as described by the Commission do affect the safety of operation of motor vehicles in interstate or foreign commerce. They include also a finding that such loaders 'devote a large part of their time to activities which directly affect the safety of operation of motor vehicles in interstate or foreign commerce.' In the absence of any discussion or classification, on a time basis, of the several activities of loaders described by the Commission, this additional finding amounts to another way of saying that a large part of the loader's activities affect such safety of operation. There is nothing to indicate that it uses the element of time other than as representative of the continuing work period during all of which the loader is devoting himself to the activities of his job as loader. It amounts, therefore, merely to a finding as to the character of a large part of the activities of loaders, in accordance with the main purpose of the Commission's proceeding which was to determine to what extent, if any, the activities of loaders affect safety of operation. 35 This additional finding, however, is material from another point of view. It recognizes tacitly that even a full-duty loader may engage in some activities which do not affect safety of operation. Such 'non-safety' activities may make up another 'large part' of the loader's total activities. They may constitute an even larger part of his activities than his safety-affecting activities. In the present case it was shown by the courts below that, in addition to his activities in clerical checking, etc., a 'substantial part' of the petitioner's activities consisted of the very kind of activities of a loader which Commission has described as directly affecting safety of operation. If it be suggested that significance should be attached to the Commission's use of the word 'large' rather than the lower courts' use of the word 'substantial' in this connection, such significance disappears completely when it is seen that the Commission itself substitutes the word 'substantial' for the word 'large' in its conclusion of law which is quoted below. 36 While the indefiniteness of the terms 'large' or 'substantial' is obvious, nevertheless, those are the words which the Commission has chosen to use in dealing with this subject. Arbitrary or sharp lines of distinction do not lend themselves readily to supplying that extra margin of security which is natural in safety engineering. The fundamental test is simply that the employee's activities affect safety of operation. This is the test prescribed by this Court in United States v. American Trucking Ass'ns, supra. The verb 'affect' is itself incapable of exact measurement. Furthermore, we are dealing here not with the final application of the power of the Commission, but rather with the limits of its discretionary power to establish the qualifications and maximum hours of service when and where deemed by it to be needed. In issuing its regulations, the Commission itself can supply whatever definiteness the occasion shall require. From the point of view of the safety program under the Motor Carrier Act, there is no need for a sharply drawn limit to the power of the Commission to make regulations with respect to employees whose activities affect the safety of operation of motor vehicles in interstate or foreign commerce. 37 Turning to the conclusions of law which were reached by the Commission in the same roceeding we find the following: 38 'Conclusions of laws.—* * * 39 '2. That our jurisdiction to prescribe qualifications and maximum hours of service for employees of common and contract carriers and private carriers of property by motor vehicle is limited to those employees who devote a substantial part of their time to activities which directly affect the safety of operation of motor vehicles in the transportation of passengers or property in interstate or foreign commerce. 40 '3. That we have power, under section 204(a) of said part II, to establish qualifications and maximum hours of service for the classes of employees covered by findings of fact numbered 1, 2, and 3 above (mechanics, loaders and helpers), and that we have no such power over any other classes of employees, except drivers. 41 'A further hearing will be held to determine what regulations, if any, should be prescribed for those employees, other than drivers, whom we have found subject to our jurisdiction. No order is necessary at this time.' Ex parte No. MC 2, 28 M.C.C. 125, 139. 42 As conclusions of law, these do not have the same claim to finality as do the findings of fact made by the Commission. However, in the light of the Commission's long record of practical experience with this subject and its responsibility for the administration and enforcement of this law, these conclusions are entitled to special consideration. Conclusion of law No. 2 must be read in close connection with finding of fact No. 2 and conclusion of law No. 3. It is apparent that, in conclusion of law No. 2, the phrase 'employees who devote a substantial part of their time to activities which directly affect the safety of operation of motor vehicles' is intended to match the corresponding phrase in finding of fact No. 2 as to loaders who 'devote a large part of their time to activities which directly affect the safety of operation of motor vehicles.' This is made still more clear by conclusion of law No. 3 which finds that the Commission has jurisdiction to establish qualifications and maximum hours of service for the loaders included in both paragraphs. Here again there is no classification of the respective activities of loaders on the basis of the time devoted to each activity. The phrase closely follows a discussion of full-duty loaders and its reference to a 'substantial part of their time' is but another way of saying a 'substantial part of their activities as loaders.' 43 Addressing ourselves to the questions of law presented by the case before us, we reaffirm our position in United States v. American Trucking Ass'ns, 310 U.S. 534, 60 S.Ct. 1059, 84 L.Ed. 1345, and Southland Co. v. Bayley, 319 U.S. 44, 63 S.Ct. 917, 87 L.Ed. 1244. We recognize the Interstate Commerce Commission as the agency charged with the administration and enforcement of the Motor Carrier Act and especially charged with the establishment of qualifications and maximum hours of service of employees of common and contract carriers and private carriers of property by motor vehicle in interstate and foreign commerce. We see no reason to question its considered conclusion that the activities of full-duty drivers, mechanics, loaders and helpers, as defined by it, affect safety of operation of the carriers by whom they are employed. In harmony with our reasoning in Southland Co. v. Bayley, supra, and with that of the Interstate Commerce Commission in Ex parte No. MC—3, 23 M.C.C. 1, as to employees of private carriers, and in Ex parte Nos. MC—2 and MC—3, 28 M.C.C. 125, as to mechanics, loaders and helpers in general, we hold that the Commission has the power to establish qualifications and maximum hours of service under § 204(a) with respect to full-duty employees engaged in doing the work of loaders, although the Commission has not exercised that power affirmatively by establishing qualifications and maximum hours of service with respect to loaders. 44 In harmoney with our decision in United States v. American Trucking Ass'ns, supra, and of the Interstate ommerce Commission in Ex parte No. MC—28, 13 M.C.C. 481, we recognize that the Commission has such power over all employees of such carriers whose activities affect safety of operation and that the Commission does not have such power over employees whose activities do not affect safety of operation. In the American Trucking Associations case it was not determined that it was necessary for any employee to devote all, or any precise share of his working time or of his activities, to a particular class of work in order for such class of work to be held to affect safety of operation. It was assumed, for the purposes of that case, that the employee devoted his entire working time and activities to the single class of work under consideration. 45 It has been noted, however, that the Commission, in defining the class of work, as a whole, of loaders, recognized, in its findings of fact, that that class of work in its nature included duties other than those directly affecting safety of operation. It said: 'We conclude that loaders devote a large part of their time to activities which directly affect the safety of operation of motor vehicles in interstate or foreign commerce, and hence that we have power to establish qualifications and maximum hours of service for such employees under said section 204(a).' Ex parte No. MC—2, 28 M.C.C. 125, 134, and see 139. This means that the nature of the duties of even a full-duty 'loader' is such that it is not essential that more than a 'large part' of his time or activities be consumed in activities directly affecting the safety of operation of motor vehicles—for example—loading distributing and making secure heavy or light parcels of freight on board a truck so as to contribute as much as possible to the safety of the trip. On the other hand, it means also that more than half of the time or activities of a full-duty 'loader' may be consumed in activities not directly affecting the safety of operation of motor vehicles—for example—in placing freight in convenient places in the terminal, checking bills of lading, etc. From the point of view of the Commission and its jurisdiction over safety operations, this indicates that it is not a question of fundamental concern whether or not it is the larger or the smaller fraction of the employee's time or activities that is devoted to safety work. It is the character of the activities rather than the proportion of either the employee's time or of his activities that determines the actual need for the Commission's power to establish reasonable requirements with respect to qualifications, maximum hours of service, safety of operation and equipment. This line of reasoning is consistent with that applied throughout this case. It results in keeping within the jurisdiction of the Commission's safety program partial-duty loaders, as well as full-duty loaders, provided only that the class of work done by them affects safety of operation, regardless of whether or not in any particular week they may have devoted more hours and days to activities not affecting safety of operation than they may have devoted to those affecting such safety of operation. The Commission uses similar language in asserting its jurisdiction over mechanics and helpers. This reasoning also resembles that by which the Commission imposes upon a 'driver' a maximum total of 60 hours of service 'on duty' of any kind, in a 'week' of 168 consecutive hours, as well as a maximum of 10 hours, in the aggregate, of driving or operating of a motor vehicle in any period of 24 consecutive hours. Ex parte No. MC—2, 3 M.C.C. 665, 6 M.C.C. 557, 11 M.C.C. 203. For example, the Commission has recognized expressly that, in charter operations, the driver of a chartered bus may be on duty for long hours, but often may spend as little as one-half of that time actually driving. Ex parte No. MC—2, 3 M.C.C. 665, 679. All of these conclusions recognize that an employee who is engaged in a class of work that affects safety of operation is not neces arily engaged during every hour or every day in activities that directly affect safety of operation. While the work of a full-duty driver may affect safety of operation during only that part of the time while he is driving, yet, as a practical matter, it is essential to establish reasonable requirements with respect to his qualifications and activities at all times in order that the safety of operation of his truck may be protected during those particular hours or days when, in the course of his duties as its driver, he does the particular acts that directly affect the safety of its operation.18 46 We have set forth the Commission's record of supervision over this field of safety of operation to demonstrate not only the extent to which the Commission serves Congress in safeguarding the public with respect to qualifications, maximum hours of service, safety of operation and equipment of interstate motor carriers, but to demonstrate the high degree of its competence in this specialized field which justifies reliance upon its findings, conclusions and recommendations. 47 Before examining further the new issue presented by the facts of this case, it is important to recognize that, by virtue of the unique provisions of § 13(b) (1) of the Fair Labor Standards Act, we are not dealing with an exception to that Act which is to be measured by regulations which Congress has authorized to be made by the Administrator of the Wage and Hour Division. United States Department of Labor.19 Instead, we are dealing here with the interpretation of the scope of the safety program of the Interstate Commerce Commission, under § 204 of the Motor Carrier Act, which in turn is to be interpreted in the light of the regulations made by the Interstate Commerce Commission pursuant to that Act. Congress, in the Fair Labor Standards Act, does not attempt to impinge upon the scope of the Interstate Commerce Commission safety program. It accepts that program as expressive of a pre-existing congressionally approved project. Section 13(b)(1) of the Fair Labor Standards Act thus requires that we interpret the scope of § 204 of the Motor Carrier Act in accordance with the purposes of the Motor Carrier Act and the regulations issued pursuant to it. It is only to the extent that the Interstate Commerce Commission does not have power to establish qualifications and maximum hours of service pursuant to said § 204, that the subsequent Fair Labor Standards Act has been made applicable or its Administrator has been given congressional authority to act. This interpretation puts safety first, as did Congress. It limits the Administrator's authority to those 'employees of motor carriers whose activities do not affect the safety of operation.' No. MC—C—139, 16 M.C.C. 497. 48 Accordingly, we should approach the issue of the partial-duty driver and the partial-duty loader squarely from the point of view of the safety program of the Interstate Commerce Commission, as developed under § 204 of the Motor Carrier Act, apart from the Fair Labor Standards Act. The principle to be applied is the same in the case of the loader as in that of the driver, although the issue is more obvious when the test of jurisdiction is applied to the driver than when applied to any other class of employees of the motor carrier. This is because the driver's work more obviously and dramatically affects the safety of operation of the carrier during every moment that he is driving than does the work of the loader who loaded the freight which the driver is transporting. Furthermore, in the case of the driver, the Commission not only has found that it has the power to establish, but it actually has established, tested and revised, a set of qualifications for his service and a maximum limitation on the aggregate number of hours during which he safely may be permitted to drive during any period of 24 consecutive hours. It also has established a maximum limitation on the number of hours during any 'week' of 168 consecutive hours during which such a driver safely may be permitted to be 'on duty', even though many of his activities and much of his time while 'on duty' may not affect safety of operation of the carrier.20 49 In the present case, the issue is whether the Commission has the power to establish qualifications and maximum hours of service with respect to partialduty loaders comparable to the petitioner. It is not necessary, as a condition precedent, to find that the Commission has exercised, or should exercise, such power by actually establishing qualifications and maximum hours of service with respect to loaders in general, corresponding to those established for drivers in general. The existence of the power is enough. The fact that the Commission has found it necessary to establish qualifications and maximum hours of service which cover not only drivers, but also partialduty drivers, is an indication that, in the opinion of the Commission, its power, under the Motor Carrier Act, extends to partial-duty as well as to full-duty employees engaged in activities affecting the safety of operation of interstate motor carriers. 50 The principle can be tested by the use of a partial-duty driver as an example. His activities are such that the exclusion of them from the Commission's safety program would have serious consequences. In the case of the full-duty driver, there is no question as to the power of the Commission to establish reasonable requirements with respect to his qualifications and and hours of service.21 Regulations on these subjects were in effect throughout the period with which this case is concerned. In the class of work referred to by the Commission as that of driver-salesmen of industry trucks, the regulations which have been issued have been mentioned above.22 These were adapted expressly to drivers who devoted less than 50% of their time to driving. The effect thus given by the Commission to the fact that such employees devote less than one-half of their time to driving is not to exclude such partial-duty drivers from any of its required qualifications. These qualifications include those relating to eyesight, physical condition, age, or ability to read or speak English, etc., which are deemed by it to be imp rtant for drivers in general. On the other hand, this fact that certain employees devote a part, rather than all, of their time to driving has brought forth from the Commission an appropriate modification of its safety regulations to fit that fact. The modification takes the form of eliminating the Commission's limitation on the total maximum hours that the employee can remain on duty in a week of 168 consecutive hours but limiting his hours of actual driving to an aggregate of not more than 50 in any such week. This requirement, established by the agency which is recognized by Congress as the one body authorized to establish qualifications and maximum hours of service applicable to drivers of motor carriers in interstate commerce is a demonstration that such agency has found it necessary to make active use of its powers of regulation in this field of part-time driving. It follows, as a matter of principle, that, if such power exists with respect to full-duty drivers and partial-duty drivers because they affect the safety of operation of the interstate motor carriers, the power exists also with respect to full-duty loaders and partial-duty loaders because they too affect such safety of operation, although not in precisely the same manner. 51 From a safety standpoint, a partial-duty driver who drives 30 hours continuously and then drives no more during that week creates a greater hazard than the man who drives 10 hours daily for 6 days a week. The hazard of continuous driving is not measured adequately by the total hours during which the driver is employed during the week, nor is it eliminated by a law which entitles him merely to an increased rate of pay for whatever time, above 40 hours per week, he shall work in any one workweek. The loading of any truck load of mixed freight requires that the general qualifications of the loader be adequate, regardless of the proportion of his working time that may have been devoted to this activity or to other activities in that particular week. Similarly, his hours of continuous work during a day of heavy loading may render him unfit for loading the last truck on that day even though, for the entire balance of that week, he may engage in no activities whatever or may engage in only such activities as are unrelated to safety of operation. 52 We have in this case an employee working full time throughout his employment as a 'checker' or 'terminal foreman.' If he had worked full time as a 'loader' as defined by the Commission he would have been unquestionably within the jurisdiction of the Commission to the extent necessary to exclude him from § 7 of the Fair Labor Standards Act. Under the conclusions of law of the Commission in Ex parte No. MC—2, 28 M.C.C. 125, 139, a full-duty 'loader' does not have to devote more than a 'substantial part' of his time to activities directly affecting safety of operation in order to be subject to the power of the Commission to establish qualifications and maximum hours of service with respect to him. So here it is enough for the purposes of this case that a substantial part of the petitioner's activities consisted of the doing or immediate direction of the very kind of activities of a loader that are described by the Commission as directly affecting safety of operation. The petitioner's activities thus affected safety of operation, although it doe not appear what fraction of his time was spent in activities affecting safety of operation. As a consequence, he comes within the power of the Commission to establish qualifications and maximum hours of service with respect to him and, by the express terms of § 13(b)(1) of the Fair Labor Standards Act he is excluded, automatically, from the benefits of § 7 of that Act. 53 Recognizing that it is the intent of the Fair Labor Standards Act to give full recognition to the safety program of the Motor Carrier Act, this conclusion does not conflict with the meaning or purpose of the Fair Labor Standards Act, although it does reduce the scope of application of the compulsory overtime compensation provisions of § 7 of that Act. 54 The contrary position which has been taken as to partial-duty drivers, mechanics, loaders and helpers by the Administrator of the Wage and Hour Division, United States Department of Labor, requires mention. This position no doubt arose from a desire to give wide effect to the Fair Labor Standards Act in an effort to comply with its remedial character. Generally, an expansion of the jurisdiction of the Act does not conflict with jurisdictions established under other Acts of Congress whereas here every expansion of the jurisdiction of the Act through interpretation of § 13(b)(1) cuts down the jurisdiction of the Commission under § 204 of the Motor Carrier Act. Furthermore, in seeking a practical method of resolving other administrative difficulties such as that of determining the degree of interstate activity or administrative service which should be the measure of the jurisdiction of the Act or of exemption from it, the Administrator has found it practical to fix upon a specific proportion of time devoted to a particular kind of activity and to make that proportion decisive. In some instances in regulations, he has used 20% as a test of substantiality.23 55 In an attempt to resolve the present difficulty in a similar manner, the Administrator at one time proposed that, if an employee in any given week devoted 20% or more of his time to activities not affecting safety of operation, he would be entitled to the benefits of the overtime provisions of § 7 of the Fair Labor Standards Act.24 He soon abandoned this, but he has attempted to answer the question on a 50% basis in Interpretative Bulletin No. 9, Wage and Hour Division, Office of the Administrator, November, 1943, 1944—1945 WH Man. 520, 523, as follows: 56 '4. * * * 57 '(b) It should be noted that any truck driver, drivers' helper, mechanic or loader employed by a common, contract, or private carrier who spends the greater part of his time during any workweek on non-exempt activities (such as producing, processing, or manufacturing goods, warehouse or clerical work, or other type of work which does not affect safety of operations) is not within the scope of the exemption contained in Section 13(b)(1). It is the opinion of the Division that Congress did not intend that this exemption should be available as a vehicle to exempt employees who spend most of their time in work other than that which forms the basis of the exemption.' In paragraph 2 of this Bulletin he recognizes the limited legal effect to which this interpretation is entitled, especially insofar as it concerns the meaning of § 204 of the Motor Carrier Act.25 58 Such an interpretation conflicts, however, with the Commission's safety program. It conflicts directly, for example, with the regulation of the Commission as to partial-duty drivers of industry trucks of private carriers in interstate commerce.26 59 The fundamental and ever recurring difficulty with the Administrator's interpretation of the scope of § 7 of the Fair Labor Standards Act is that to the extent that he expands the jurisdiction of the Fair Labor Standards Act he must reduce the jurisdiction of the Commission under the Motor Carrier Act, whereas he has no authority to do so.27 60 Our conclusion is that, under the Motor Carrier Act, the Interstate Commerce Commission has power to establish qualifications and maximum hours of service for those employees whose service affects the safety of transportation of common carriers, contract carriers or private carriers of property in interstate and foreign commerce; that such Commission has been charged with the administration and enforcement of that Act; and that in the course of performance of its duties and after extended hearings on the subject, it has found that the work of loaders, as defined by it, affects safety of motor carrier operation. Furthermore, we conclude, upon the findings of the lower courts in this case, that the petitioner was employed by a motor carrier of interstate freight within the meaning of the Motor Carrier Act and that, throughout the period at issue, a substantial part of his activities consisted of doing, or immediately directing, the work of one or more loaders as defined by the Interstate Commerce Commission and affecting the safety of operation of motor vehicles in interstate or foreign commerce; that, accordingly, the Commission, with respect to him, had power to establish qualifications and maximum hours of service; and that, by virtue of § 13(b)( ) of the Fair Labor Standards Act, the provisions of § 7 of that Act as to overtime pay were rendered inapplicable to him. The judgment of the Supreme Court of Illinois therefore is affirmed. 61 Affirmed. 62 Mr. Justice RUTLEDGE, dissenting. 63 As the Court's opinion says, there is no necessary inconsistency between enforcing Interstate Commerce Commission regulations concerning 'qualifications and maximum hours of service of employees' affecting safety, 49 Stat. 543, 546, 49 U.S.C.A. § 304(a), and at the same time, within those limitations, requiring compliance with the Fair Labor Standards Act's provisions for overtime pay. Indeed the latter would reinforce the former. Ordinarily, when statutes are not inherently conflictng, the rule applied in construing them is to give each as much room for operation as is consistent with its terms and purposes, rather than to create conflict unnecessarily between them. 64 Nothing in the Motor Carrier Act forbids or inhibits the operation of § 7 of the Fair Labor Standards Act. The latter statute, it has been held repeatedly, is to be broadly and liberally applied, in order to achieve its prime objects of distributing and raising standards of employment and living.1 The Act however contains certain exempting provisions, which are to be narrowly construed in the light of and in order to accomplish the same statutory purposes.2 65 Among these is § 13(b)(1). It reads: 'The provisions of section 7 of this title shall not apply with respect to (1) any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act, 1935 * * *.' 52 Stat. 1060, 1068, 29 U.S.C.A. § 213(b)(1). It is the meaning and effect of § 13(b)(1) which we have now to determine in relation to employees who do some work affecting safety in operations and some not affecting it.3 66 Read literally, in the light of the Southland decision,4 the section would exempt all employees who do any work affecting safety operations, as the Illinois Court of Appeals held in this case.5 For, factually speaking, not the amount of time an employee spends in work affecting safety, but what he may do in the time thus spent whether it be large or small determines the effect on safety. Ten minutes of driving by an unqualified driver may do more harm on the highway than a month or a year of constant driving by a qualified one. 67 It would seem essential therefore to effective safety control by the Commission that it should have power to determine the qualifications and maximum hours of service of all employees whose work substantially affects safety, whether or not they spend what may be found to be less than a 'substantial' amount of time in that sort of work. Anything less than this would open the door to the greatest danger to motor traffic from casual, unqualified drivers or other employees whose work affects safety. 68 There is or may be in some circumstances a relation between time spent in such work and substantial effects upon safety, but it is by no means an exclusive or controlling one. Time affects the duration and scope, not necessarily the existence, of the risk. 69 I accept the 'safety first' view of the Commission's power. And this requires acceptance of the view that, in relation to some kinds of work, the Commission has power to prescribe the qualifications of all employees who engage in it to any extent, though the time thus spent is not five minutes daily or weekly. 'Substantial effect' in these instances has little if any relation, negatively speaking, to 'substantial time.' Driving and the work of mechanical repair of trucks are obvious examples. Loading may be another, less obviously as the Court says, but depending upon the circumstances under which it is done.6 So with the work of helpers in these three functions. 70 Notwithstanding the Commission's contrary finding,7 this means that all employees who do any part of certain kinds of work, for however short a time, regularly or casually, fall within the Commission's power. It means, for instance, that a person who spends ten minutes a day or an hour a week in driving or in mechanically repairing trucks, and the remaining 39 hours of a 40-hour week in work having no effect upon safety falls within the Commission's authority. For, in such circumstances, it cannot be held that the comparatively minute amount of time spent in work affecting safety is trivial or inconsequential in its possible effects upon safety. And in the Court's view, as I understand it, the result is not only that the Commission has power to prescribe the qualifications of all such employees,8 but also that they are thereby exempted from the overtime pay provisions of the Fair Labor Standards Act. 71 It is from the latter conclusion that I dissent. I cannot believe that Congress, when it incorporated § 13(b)(1) in the statute, intended to exclud from those provisions every employee who might spend ten minutes a day in work substantially affecting safety and seven hours and fifty minutes in work having no effect whatever upon it. An exactly literal application of § 13(b)(1), it is true, would lead to this result. But we are frequently told that rigidly literal application of a statute may be ruinous to achieving its purposes.9 It is especially so in this instance, in view of the nature and purposes of the Act we are construing, for a variety of reasons. 72 The legislative history shows, in my judgment, that Congress did not have in mind so expansive and destructive an exemption as literal application of § 13(b)(1) and the Court's ruling10 would produce. Congress clearly intended to exempt some employees who do not devote all their time to such work. But at the time it acted its primary concern and that of the Commission11 were with fulltime employees, principally drivers, so engaged. In view of that fact, it cannot be taken that Congress intended every employee assigned for a few minutes daily or weekly to work substantially affecting safety to be eliminated from the overtime pay provisions. Such a view in practical effect would nullify the Act's broad and inclusive purposes for large numbers of employees as to whom, at the time, the Commission had shown no concern in exercising its safety power or in its representations to Congress, and as to whom therefore there was no sound reason for or purpose of exemption. 73 Moreover, acceptance of such a construction would set up an easy mode for evasion of the Fair Labor Standards Act's requirements. An employer so minded readily could assign to nonsafety employees whom he desired to remove from the overtime pay requirements work affecting safety for minute portions of their total service. Committing the Act's coverage in all such possible situations to a determination of the employer's good faith could only invite continuous litigation upon his motive, a result in itself tending strongly to defeat the rights given by the Act. I do not think Congress intended such consequences for the statute's effective operation when it included § 13(b)(1). 74 The difficulty lies of course not only in the rigidly literal interpretation given to that section, but in the corollary assumption of intended complete mutual exclusiveness of the Commission's power and the Fair Labor Standards Act's applicability drawn from it. As I do not think Congress intended the one, in relation to the problem now presented, so I do not believe it had the other in mind. And if this was true, then the problem for us becomes, as it most often does in such situations, one of making accommodation between the two statutes in a manner which will give to each its maximum effect without nullifying Congress' manifest intention.12 75 If the spirit and purposes of the statutes are taken into account, we are not inescapably compelled to choose between the equally untenable alternatives of a completely literal application of § 13(b)(1) and a construction which would nullify the Commission's power concerning the great bulk of employees to which it rightfully extends. Although the exemption of § 13(b)(1) is not among those which specifically empower the Administrator to determine their scope by regulations,13 he is charged with the duty of administering it and his experience is entitled to weight when he formulates conclusions from it for the purpose of applying the Act's provisions, albeit they are not conclusive. The present problem has not been without difficulty for the Administrator,14 but his final ruling, resulting from his experience, presents in my opinion both the most workable solution and the one most consistent with Congress' purpose and intent relating to the operation of both Acts. It is that the exemption is inapplicable to any employee 'who spends the greater part of his time during any workweek on non-exempt activities (such as producing, processing or manufacturing goods, warehouse or clerical work, or other type of work which does not affect safety of operations).' 76 Such a standard is more consistent with the Act's purposes than the one applied by the Court, not only in the light of the legislative history, but also in that it is more definite, more easily applied, and not invitingly conducive to litigation. For these reasons, and because I do not believe a totally literal application of § 13(b)(1) was comprehended for the situations now presented, I think a line so drawn most nearly consistent with what Congress had in mind to accomplish by the exemption. 77 However, since there is no essential inconsistency in the two statutes or their operation, I do not think it necessarily follows that part-time employees thus not excluded from the Fair Labor Standards Act's coverage are thereby excluded from the Commission's safety power. That power I would leave unqualified as to them, since nothing in either statute compels qualification, as to employees not exempted, of the authority given the Commission to regulate 'qualifications and hours of service of employees' whose work affects safety. The two statutes clearly are mutually exclusive, though not essentially inconsistent, as to employees primarily engaged in operations affecting safety. They are not necessarily or, I think, by virtue of Congress' intent or command, thus exclusive as to others. 78 I therefore agree that 'substantial effect' upon safety rather than 'substantial time' spent in doing work affecting it determines the scope of the Interstate Commerce Commission's safety power. However, in accepting this conclusion, though not the further one that all employees so covered are within the exemption of § 13(b)(1), I do so not upon the basis of the Commission's own determination, which expressly adopts the criterion of 'substan ial time' and is therefore both narrower than and inconsistent with the Court's ruling as to the extent of its power.15 The Commission's determination tends strongly to support the Administrator's position as to the scope of the exemption intended to be created by § 13(b)(1). But its voice is only persuasive, not conclusive upon the question of the scope of its power. In adopting 'substantial time' rather than 'substantial effect,' I agree that the Commission has ruled too narrowly. Indeed, its brief in this case maintains as much.16 Accordingly I conclude, independently of its formal determination, that the full and adequate performance by the Commission of the safety function conferred by the Motor Carrier Act requires the larger scope which the Court's ruling allows for its operation. 79 The views expressed in this opinion, of course, would apply also in Pyramid Motor Freight Corp. v. Ispass, 330 U.S. 695, 67 S.Ct. 954, but in view of the decision in this case it is not necessary of file a separate dissent in the companion one. 80 Mr. Justice BLACK and Mr. Justice MURPHY join in this dissent. 1 The material parts of § 204 are: 'Sec. 204(a) It shall be the duty of the Commission— '(1) To regulate common carriers by motor vehicle as provided in this part, and to that end the Commission may establish reasonable requirements with respect to continuous and adequate service, transportation of baggage and express, uniform systems of accounts, records, and reports, preservation of records, qualifications and maximum hours of service of employees, and safety of operation and equipment. '(2) To regulate contract carriers by motor vehicle as provided in this part, and to that end the Commission may establish reasonable requirements with respect to uniform systems of accounts, records, and reports, preservation of records, qualifications and maximum hours of service of employees, and safety of operation and equipment. '(3) To establish for private carriers of property by motor vehicle, if need therefor is found, reasonable requirements to promote safety of operation, and to that end prescribe qualifications and maximum hours of service of employees, and standards of equipment. * * *' (Italics supplied.) 49 Stat. 546, 49 U.S.C. § 304(a)(1)(2)(3), 49 U.S.C.A. § 304(a)(1—3). 2 '(2) Loaders.—* * * 'The large carriers, * * * particularly those who have important operations from terminal to terminal, employ men variously called loaders, dockmen, or helpers, and hereinafter called loaders, whose sole duties are to load and unload motor vehicles and transfer freight between motor vehicles and between the vehicles and the warehouse. 'The evidence makes it entirely clear that a motor vehicle must be properly loaded to be safely operated on the highways of the country. If more weight is placed on one side of the vehicle than on the other, there is a tendency to tip when rounding curves. If more weight is placed in the rear of the vehicle, the tendency is to raise the front wheels and make safe operation difficult. Further, it is necessary that the load be distributed properly over the axles of the motor vehicle. 'Proper loading is not only necessary when heavy machinery, steel, and other like commodities are being transported, but is of importance when normal package freight is handled. If several packing cases weighing from 150 to 200 pounds are loaded on one side of a motor vehicle or at one end thereof, and lighter freight on the other side or at the other end, safe operation is difficult. The great majority, if not all, of the carriers whose operations are of sufficient size or character to justify the employment of loaders handle freight of such weight that proper loading is necessary.' Ex parte No. MC—2, 28 M.C.C. 125, 133—134. 3 Throughout this case i has been recognized that it was within the power of the Commission to establish the qualifications and maximum hours of service for the regular 'loaders' who served under the immediate direction of the petitioner. No claim has been made on their behalf to the benefits of § 7 of the Fair Labor Standards Act, 29 U.S.C.A. § 207. The present controversy is limited to the status of the petitioner himself. His status is referred to throughout this opinion as that of a 'partial-duty loader,' except where he is referred to by his own designation of himself as a 'checker' or 'terminal foreman.' The term 'partial-duty loader' is used in preference to that of 'part-time loader,' so as to avoid the implication that time spent in certain activities, rather than the character of those activities, is to be the conclusive factor in deciding whether or not the individual is subject to the jurisdiction of the Commission. 4 '§ 13. * * * '(b) The provisions of section 7 of this title shall not apply with respect to (1) any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act, 1935; * * *.' 52 Stat. 1068, 29 U.S.C. § 213(b)(1), 29 U.S.C.A. § 213(b)(1). 5 'Sec. 7. (a) No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce— '(1) for a workweek longer than forty-four hours during the first year from the effective date of this section, '(2) for a workweek longer than forty-two hours during the second year from such date, or '(3) for a workweek longer than forty hours after the expiration of the second year from such date, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and onehalf times the regular rate at which he is employed.' 52 Stat. 1063, 29 U.S. § 207(a), 29 U.S.C.A. § 207(a). 6 'Sec. 16. * * * '(b) Any employer who violates the provisions of * * * section 7 of this act shall be liable to the employee or employees affected in the amount of * * * their unpaid overtime compensation, * * * and in an additional equal amount as liquidated damages. * * * The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.' 52 Stat. 1069, 29 U.S.C. § 216(b), 29 U.S.C.A. § 216(b). 7 See note 2 for the Commission's general definition of the work of 'loaders.' The Appellate Court of Illinois described the petitioner's activities as follows: 'Plaintiff (petitioner) contends he is a checker, not a loader, and therefore, not within the Commission's interpretation. We believe that his duties—not the name given his position—are determinative. * * * 'Defendant Terminal at 600 West 25th Street, Chicago, is the scene of three phases of motor carrier business—inbound freight, outbound freight and local freight. Trucks carrying freight originating locally and in foreign cities and States, are unloaded by gangs of defendant's employees. A gang usually consists of 3 or 4 men—a checker, caller, sorter and packer. The checker directs the gang's operation. Day and night foremen supervise the activities of all the gangs. Incoming freight is unloaded and deposited according to its destination on the dock in various sections at the direction of the checker; likewise under the direction of the checker, it is removed from these sections and loaded on appropriate outgoing trucks. It is loaded according to size and weight; heavy weighted or 'bottom freight' being distributed in the lower part of the truck and lighter weighted or 'balloon freight' is placed at the top. This plan is followed in the interest of safety of equipment and of freight. Testimony pertinent to the issue on the merits is that, as checker, plaintiff supervised and directed the unloading and disposition of incoming freight and the collecting and loading of the out-going freight and that he watched the disposition of the weight of the freight in loading. The dispute in the testimony arises as to the quantity of plaintiff's activities devoted to these particular duties. Plaintiff says that most of the outbound freight was handled at night, while he worked mostly days; that not much loading was done during his hours, but that, whatever took place, was under his direct charge. The defense testimony is that inbound and outbound freight was equally divided during the day—inbound usually during the night and outbound between 8 A.M. and midnight. '* * * There is no question that some part of plaintiff's work week was devoted to the direction and supervision of the loading of interstate motor freight carriers. There is no question either that the loaders in his gang were exempted from Section 7 of the Fair Labor Standards Act. We think, therefore, that with greater force, plaintiff comes within the exemption for, if the loaders are exempt because the manner in which they work affects the safety of the operation of defendant's motor vehicles, certainly the duties of plaintiff, who planned and directed the loading, affect that safety. Considering the purpose of the Motor Carriers Act, we believe that the true determinant is whether an employee performs any duties which substantially affect the safety of operation, rather than whether the duties affecting safety are substantial.' Levinson v. Spector Motor Service, 323 Ill.App. 505, 507, 508, 509, 56 L.Ed.2d 142, 143, 144. The Supreme Court of Illinois said: 'We think the question of fact to be properly determined in this case is whether or not a substantial part of plaintiff's work affects safety of operation of motor vehicles, and that this question of fact controls this case. If it be determined from the evidentiary facts that plaintiff, in a substantial part of his work, was engaged in safety of operation of motor vehicles, or the cargo thereof, he would be exempted from the Fair Labor Standards Act, as a matter of law. '* * * under the facts as found by the (Appellate) court, the employee came within the same exemption as loaders, dockmen and helpers.' Levinson v. Spector Motor Service, 389 Ill. 466, 473, 474, 59 N.E.2d 817, 820. 8 The Safety Appliance Acts, approved March 2, 1893, 27 Stat. 531; March 2, 1903, 32 Stat. 943; April 14, 1910, 36 Stat. 298; and February 28, 1920, 41 Stat. 499; see Title 45, U.S.C. § 1 et seq., 45 U.S.C.A. § 1 et seq.—Railroads, and 49 U.S.C. § 26, 49 U.S.C.A. § 26 all relate to railroads and are enforced by the Interstate Commerce Commission. The Hours of Service Act, approved March 4, 1907, 34 Stat. 1415, 45 U.S.C. § 61, 45 U.S.C.A. § 61, requires the Interstate Commerce Commission to enforce maximum hours of service for railroad employees engaged in the movement of trains. It includes also operators, train dispatchers and others having much to do with the safety of train movements although not riding the trains. The Seamen's Act, approved March 4, 1915, 38 Stat. 1164, see 46 U.S.C. § 673, 46 U.S.C.A. § 673, prescribes maximum hours of service at sea and at anchor for sailors, firemen, oilers and others engaged in sailing or managing vessels. It establishes qualifications for seamen and prescribes crew requirements, safety equipment and sanitary facilities for certain types of vessels. 9 'Sec. 203. * * * '(b) Nothing in this part, except the provisions of section 204 relative to qualifications and maximum hours of service of employees and safety of operation or standards of equipment shall be construed to include (1) motor vehicles employed solely in transporting school children and teachers to or from school; or (2) taxicabs, or other motor vehicles performing a bona fide taxicab service, having a capacity of not more than six passengers and not operated on a regular route or between fixed termini; or (3) motor vehicles owned or operated by or on behalf of hotels and used exclusively for the transportation of hotel patrons between hotels and local railroad or other common carrier stations; or (4) motor vehicles operated, under authorization, regulation, and control of the Secretary of the Interior, principally for the purpose of transporting persons in and about the national parks and national monuments; or (4a) motor vehicles controlled and operated by any farmer, and used in the transportation of his agricultural commodities and products thereof, or in the transportation of supplies to his farm; or (4b) motor vehicles controlled and operated by a cooperative association as defined in the Agricultural Marketing Act, approved June 15, 1929, as amended; or (5) trolley busses operated by electric power derived from a fixed overhead wire, furnishing local passenger transportation similar or street-railway service; or (6) motor vehicles used exclusively in carrying livestock, fish (including shell fish), or agricultural commodities (not including manufactured products thereof); or (7) motor vehicles used exclusively in the distribution of newspapers; nor, unless and to the extent that the Commission shall from time to time find that such application is necessary to carry out the policy of Congress enunciated in section 202, shall the provisions of this part, except the provisions of section 204 relative to qualifications and maximum hours of service of employees and safety of operation or standards of equipment apply to: (8) The transportation of passengers or property in interstate of foreign commerce wholly within a municipality or between contiguous municipalities or within a zone adjacent to and commercially a part of any such municipality or municipalities, except when such transportation is under a common control, management, or arrangement for a continuous carriage or shipment to or from a point without such municipality, municipalities, or zone, and provided that the motor carrier engaged in such transportation of passengers over regular or irregular route or routes in interstate commerce is also lawfully engaged in the intrastate transportation of passengers over the entire length of such interstate route or routes in accordance with the laws of each State having jurisdiction; or (9) the casual, occasional, or reciprocal transportation of passengers of property in interstate r foreign commerce for compensation by any person not engaged in transportation by motor vehicle as a regular occupation or business.' (Italics supplied.) 49 Stat. 545, 49 U.S.C. § 303(b), 49 U.S.C.A. § 303(b). 10 A new § 202(c) was inserted in the Motor Carrier Act by the Transportation Act of 1940, 54 Stat. 920, so as to exclude from the Motor Carrier Act certain motor vehicle pickup and delivery service within terminal areas. This exclusion automatically put certain employees, who were engaged in that service, beyond the power of the Interstate Commerce Commission to establish their qualifications and maximum hours of service under § 204 of the Motor Carrier Act. The Administrator of the Wage and Hour Division, United States Department of Labor, thereupon regarded some of them as entitled to the benefits of § 7 of the Fair Labor Standards Act as to compulsory overtime pay. However, when this new § 202(c) was amended by the Act of May 16, 1942, 56 Stat. 300, 49 U.S.C.Supp. V, § 302(c), 49 U.S.C.A. § 302(c), to include freight forwarders, Congress also added to it a general clause to the effect that 'the provisions of section 204 relative to qualifications and maximum hours of service of employees and safety of operation and equipment' should apply to the exempted operations. This amendment was an express recognition by Congress of the need for control by the Commission over the qualifications and maximum hours of service of these employees in the interests of public safety, although its provision for that control automatically deprived those employees of their recently acquired private rights to higher overtime pay under § 7 of the Fair Labor Standards Act. 11 In Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682, an employee who served an interstate motor carrier as a rate clerk and performed other incidental duties, none of which were connected with safety of operation, was given judgment for the overtime compensation prescribed by § 7 of the Fair Labor Standards Act. 12 See note 27, infra. 13 Shortly after the Act became effective, the Commission, on its own motion, instituted the Ex parte proceedings listed below. These resulted in many hearings, examiners' reports and divisional and Commission reports thoroughly and comprehensively covering the subjects investigated. Further comparable investigations directed by the Section of Safety of the Bureau of Motor Carriers of the Interstate Commerce Commission are pending. One of these is to determine what, if any, qualifications and maximum hours of service should be established by the Commission for mechanics, loaders and helpers. Ex parte No. MC—2, Order of July 30, 1936. This related to maximum hours of service of employees engaged in motor carrier transportation and to regulations as to such hours of service pursuant to § 204(a)(1)(2) and (3). See 3 M.C.C. 665, 666. It dealt with drivers for common and contract carriers. It led to the holding that mechanics, loaders and helpers are within the jurisdiction of the Commission because of their activities affecting the safety of motor carrier transportation. 28 M.C.C. 125. Ex parte No. MC—3, Orders of July 30, 1936, December 23, 1936, and July 12, 1938. This related to qualifications, maximum hours of service of employees, safety of operation and equipment of private carriers of property by motor vehicle. 23 M.C.C. 1, and see 1, M.C.C. 1, 16. Ex parte No. MC—4, O der of August 21, 1936. This related to qualifications of employees, safety of operation and equipment of common and contract motor carriers. It dealt especially with drivers. 1 M.C.C. 1. Ex parte No. MC—28, Order of November 2, 1938. This related to the jurisdiction of the Commission over the establishment of qualifications and maximum hours of service of employees of common, contract and private carriers of property by motor vehicle under § 204(a). The decision limited such jurisdiction to employees affecting safety of operation by motor vehicles. 13 M.C.C. 481. The results of these proceedings are summarized in the text of this opinion in the order in which such results have been announced. 14 See note 9, supra. 15 See Interpretative Bulletin No. 9, Wage and Hour Division, Office of the Administrator, par. 4(b), November, 1943. 1944—1945 WH Man. 520, 523, discussed at note 24, infra. 16 See note 2, supra, for the Commission's definition of the work of loaders. 17 Ibid. 18 See Richardson v. James Gibbons Co., 4 Cir., 132 F.2d 627, 628, argued and affirmed with Southland Gasoline Co. v. Bayley, 319 U.S. 44, 63 S.Ct. 917, 87 L.Ed. 1244. In that case the Commission's power, under § 204(a)(3), was upheld as to an employee who testified that he was employed 'twenty-five per cent of the time as a truck driver and seventy-five per cent of the time as a distributor-operator' of liquid asphalt, and whose employer testified that the same employee 'was employed approximately thirty per cent of the time in distributing asphalt and seventy per cent in transporting same.' Id., 132 F.2d at page 628. Apparently his work was accepted as affecting safety of operation, although only 25 to 70% of his time was spent as a driver and the balance of his time was spent in work not affecting safety of operation. 19 Section 13(b)(1), in this particular, is in sharp contrast with § 13(a)(1) which provides as follows for the definition and delimitation of that exemption by the Administrator: 'Sec. 13. (a) The provisions of sections 6 and 7 of this title shall not apply with respect to (1) any employee employed in a bona fide executive, administrative, professional, or local retailing capacity, or in the capa ity of outside salesman (as such terms are defined and delimited by regulations of the Administrator); * * *.' 52 Stat. 1067, 29 U.S.C. § 213(a)(1), 29 U.S.C.A. § 213(a)(1). See also, §§ 213(a)(7), 213(a)(10) and 214. 20 Safety Regulations for Carriers by Motor Vehicle, 47 CFR, Cum.Supp., Part 190—General Definitions; Part 191—Hours of Service; Part 192—Qualifications of Drivers; Part 193—Driving of Motor Vehicles; Part 194—Necessary and Accessories; Part 195 Accident Reports; Part 196—Inspection and Maintenance. 21 See 47 CFR, Cum.Supp., Parts 191 and 192. 22 Discussed at pages 16, 17, supra. Ex parte No. MC—3, 23 M.C.C. 1, 31, 44. '* * * no driver salesman employed by a private carrier of property who devotes more than 50 percent of his time to selling and less than 50 percent to such work as driving, loading, unloading, and the like, shall be permitted or required to drive or operate a motor vehicle for more than an aggregate of 50 hours in any week as defined in said § 191.1(e).' (Such a 'week' is defined as 'any period of 168 consecutive hours beginning at the time the driver reports for duty, * * *.') 47 CFR, Cum.Supp., § 191.3(b). 23 29 CFR, Cum.Supp., §§ 541.(f), 541.1(a)(4), 541.4(b), and 541.5(b). See also Ralph Knight, Inc. v. Mantel, 8 Cir., 135 F.2d 514. 24 Interpretative Bulletin No. 9, Wage and Hour Division, Office of the Administrator, March, 1942, par. 5(b), 1943, WH Man. 186, 189. 25 '2. The scope of the exemption provided in section 13(b)(1) involves the interpretation not only of the Fair Labor Standards Act but also of section 204 of the Motor Carrier Act, 1935. The Act confers no authority upon the Administrator to extend or restrict the scope of the exemption provided in section 13(b)(1) or even to impose legally binding interpretations as to its meaning. This bulletin is merely intended to indicate the course which the Administrator will follow in the performance of his administrative duties until otherwise required by the authoritative rulings of the courts. It is nevertheless to be noted that the Supreme Court has held that the interpretations expressed in bulletins of this Division are entitled to great weight.' 26 See note 22, supra. 27 In 1945, upon the recommendation of the Administrator of the Wage and Hour Division, United States Department of Labor, S. 1349 was introduced proposing many amendments to the Fair Labor Standards Act. That Bill, as introduced and as recommended for passage by the Senate Committee on Education and Labor, proposed expressly to expand somewhat the scope of the Fair Labor Standards Act without reducing the jurisdiction of the Commission under the Motor Carrier Act, by amending § 13(b)(1) to read: 'Sec. 13. * * * '(b) The provisions of section 7 shall not apply with respect to (1) any employee who during the greater part of any workweek is engaged in work with respect to which the Interstate Commerce Commission has established qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act, 1935; * * *.' Hearings on S. 1349 before the Subcommittee of the Senate on Education and Labor. September 25, 1945, pp. 4, 249, et seq.; Sen. Rep. No. 1012, 79th Cong., 2d Sess., pp. 3, 11, 17; Part 2, pp. 5, 135. This Amendment, however, was eliminated on the floor of the Senate, 92 Cong.Rec. 2704, 3154, 3155, 3247, before passage of the Bill, April 5, 1946. Furthermore, it was not included in the companion Bill, H.R. No. 4130, as reported to the House of Representatives by the Committee on Labor June 16, 1946, H.R. Rep. No. 2300, 79th Cong., 2d Sess., although it was recommended in the minority report of that Committee. Id. at 7, 15, 19. See also, Hearings before the Committee on Labor of the House of Representatives, 1945, pp. 864, 905. Congress adjourned without taking final action on either Bill, but, when Congress adjourned, neither pending measure contained the proposal. 1 Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 597, 64 S.Ct. 698, 702, 88 L.Ed. 949, 152 A.L.R. 1014; A. H. Phillips, Inc. v. Walling, 324 U.S. 490, 493, 65 S.Ct. 807, 808, 89 L.Ed. 1095, 157 A.L.R. 876. Calaf v. Gonzalez, 1 Cir., 127 F.2d 934, 937. 2 A. H. Phillips, Inc. v. Walling, supra; Calaf v. Gonzalez, supra. 3 As to employees engaged full time in such work, Southland Gasoline Co. v. Bayley, 319 U.S. 44, 63 S.Ct. 917, 87 L.Ed. 1244, held that the existence of power in the Commission, whether or not exercised, to prescribe qualifications and hours of service, excludes them under § 13(b)(1) from coverage under the Fair Labor Standards Act's terms. Cf. note 11. 4 Ibid. 5 The court said: '* * * We believe that the true determinant is whether an employee performs any duties which substantially affect the safety of operation, rather than whether the duties affecting safety are substantial.' 323 Ill.App. 505, 509, 56 N.E.2d 142, 144. (Emphasis added.) This is also the Commission's position taken in the brief and at the argument in this cause. See note 16. The Illinois Supreme Court found the test in 'a substantial part of plaintiff's work.' 389 Ill. 466, 473, 59 N.E.2d 817, 820. 6 Thus, one who has the sole responsibility of loading or of directing loading, where weight of the articles carried is unequal and its distribution may affect safety, would seem clearly to be within the classification whether the time spent is large or small. On the other hand, if the worker is merely a helper, loading under direct and active supervision of another, with no responsibility other than to obey his superior's orders as to placement, it would seem clear that his work does not affect safety. 7 See text infra at noe 15; and note 16. 8 The opinion puts the matter in various ways. E.g., 'The fundamental test is simply that the employee's activities affect safety of operations.' 'The term 'partial-duty loader' is used * * * so as to avoid the implication that time spent in certain activities, rather than the character of those activities, is to be the conclusive factor. * * *' Note 3. 'It is essential to the Commission's safety program whenever and wherever hazardous activities are engaged in that affect safety * * * that those who engage in them shall be qualified. * * *' 'We recognize that the Commission has such power over all employees * * * whose activities affect safety. * * *' 'It is the character of the activities rather than the proportion of either the employer's time or of his activities that determines the actual need for the Commission's power. * * *' 'The loading of any truck load of mixed freight requires that the general qualifications of the loader be adequate, regardless of the proportion of his working time that may have been devoted to this activity. * * *' 'The petitioner's activities thus affected safety of operation, although it does not appear what fraction of his time was spent in activities affecting safety of operation.' 9 Cf. note 12. 'All construction is the ascertainment of meaning. And literalness may strangle meaning.' Utah Junk Co. v. Porter, 328 U.S. 39, 44, 66 S.Ct. 889, 892; Markham v. Cabell, 326 U.S. 404, 409, 66 S.Ct. 193, 195; Church of the Holy Trinity v. United States, 143 U.S. 457, 12 S.Ct. 511, 36 L.Ed. 226. 10 See note 8 and text infra at noe 15. 11 The exemption made by § 13(b)(1) was suggested to Congress originally by the Interstate Commerce Commission. United States v. American Trucking Ass'ns, 310 U.S. 534, 549, 60 S.Ct. 1059, 1067, 84 L.Ed. 1345. The legislative history shows that the section 'was adopted to free operators of motor vehicles from the regulation by two agencies of the hours of drivers,' Southland Gasoline Co. v. Bayley, 319 U.S. 44, 48, 49, 63 S.Ct. 917, 919, 920, 87 L.Ed. 1244, upon the understanding that the Interstate Commerce Commission 'had already acted upon maximum hours for drivers * * *.' Id., 319 U.S. at page 49, n. 5, 63 S.Ct. 917, 920, 87 L.Ed. 1244. (Emphasis added.) See also note 16. 12 'The problem of statutory construction * * * should not be solved simply by a literal reading of the exemption section of the Fair Labor Standards Act and the delegation of power section of the Motor Carriers Act. Both sections are parts of important general statutes and their particular language should be construed in the light of the purposes which led to the enactment of the entire legislation.' Southland Gasoline Co. v. Bayley, 319 U.S. 44, 47, 63 S.Ct. 917, 919, 87 L.Ed. 1244. 13 See §§ 13(a)(1), 13(a)(7), 13(a)(10), 14, 29 U.S.C.A. §§ 213(a)(1, 7, 10), 214. 14 The Administrator originally interpreted the exemption to be inapplicable to any employee who spent a substantial amount of his time in nonexempt work. Subsequently 'substantial' was explained to mean more than twenty per cent of the employee's time. Interpretative Bulletin, No. 9, March, 1942, Wage & Hour Manual (1943 ed.) 186, 189. Later the ruling was changed so that the exemption was given its present form as stated in the text, infra. Interpretative Bulletin No. 9, October, 1943, Wage & Hour Manual (1944—1945 ed.) 520, 523. 15 The Court purports to adopt the Commission's basis for determining what employees are within the safety power, especially as made in Ex parte Nos. MC—2 and MC—3, 28 M.C.C. 125. But since the test the Court now prescribes is apparently one of 'substantial effect' rather than 'substantial time,' see note 8, it differs from the basis of the Commission's ruling. The Commission's findings of fact and conclusions of law are set forth in the text of the majority opinion. The quoted finding is that loaders 'devote a large part of their time to activities which directly affect the safety of operation.' 28 M.C.C. at 139. And the conclusion of law is stated in terms of time, namely, 'that our jurisdiction * * * is limited to those employees who devote a substantial part of their time to activities which directly affect safety of operation,' and 'that we have power * * * to establish qualifications * * * for the classes of employees' covered by the findings of fact, and 'that we have no such power over any other classes of employees, except drivers.' Ibid. (Emphasis added.) This necessarily excluded employees of the classes covered not devoting a substantial part of their time to work affecting safety, in view of the findings. 16 The difference in the Commission's findings and conclusions, as made in Ex parte Nos. MC—2 and MC—3, see note 15, and the position taken here by counsel in its behalf was the occasion for some difficulty, if not embarrassment, at the argument. The brief and argument, by contrast with the findings and conclusions, maintained: '* * * it seems clear that, regardless of the amount of time devoted to the work by an individual loader (or loader foreman), he is expected to be fitted, and in fit condition, to perform it when occasion arises and therefore intended to be subject to the Commission's authority over qualifications and hours of service.' Reliance was placed squarely upon the position taken in this case by the Illinois Court of Appeals. See note 5. Able counsel for the Commission sought to avoid the effect of the findings and conclusions by restricting it to classes of employees without reference to individual employees. It was not satisfactorily explained, however, how an individual employee could be brought within the class without being brought within the outer boundary prescribed by the Commission for defining the class.

67

330 U.S. 567 67 S.Ct. 894 91 L.Ed. 1102 INTERSTATE COMMERCE COMMISSIONv.MECHLING et al. No. 72. Argued Feb. 12, 13, 1947. Decided March 31, 1947. Appeal from the District Court of the United States for Northern District of Illinois. [Syllabus from pages 567-569 intentionally omitted] Mr. Daniel H. Kunkel, of Washington, D.C., for appellant. Mr. David O. Mathews, of Washington, D.C., for appellees, U.S. and Secy. of Agriculture. Mr. Edward B. Hayes, of Chicago, Ill., for appellee, A. L. Mechling. Mr. Nuel D. Belnap, of Chicago, Ill., for appellee, Inland Waterways Corp. Mr. Justice BLACK delivered the opinion of the Court. 1 A District Court of three judges enjoined in part an order of the Interstate Commerce Commission, and the case is here on appeal under 28 U.S.C. §§ 47, 47a, and 345, 28 U.S.C.A. §§ 47, 47a, 345. The Commission order specifically relates to the railroad rate for grain transported from Chicago, Illinois, to New York and other eastern points,1 after that grain has been transported to Chicago from the west by connecting rail or water carriers on through bills of lading. In such through shipments the through rate is a combination of distinctly separate rates charged respectively for shipments from the west to Chicago and from Chicago to the east. The charge fixed for the last leg of the shipment is called, in railroad parlance, a 'reshipping' or 'proportional' rate. It is lower from Chicago to the east than a 'local' rate charged for a shipment from Chicago to the east which originates in Chicago. See Atchison, T. & S.F.R. Co. v. United States, 279 U.S. 768, 771, 49 S.Ct. 494, 495, 73 L.Ed. 947. 2 For many years eastern railroads have carried grain east from Chicago at reshipping rates 8 1/2 cents per hundred pounds lower than local rates. Up to 1939 this Chicago-to-the-east reshipping rate had been identical for grain, whether brought to Chicago by a connecting railroad, connecting lake steamer, or connecting barge. Although barge lines were much slower than railroads, they were less expensive to operate and therefore could afford to transport freight much more cheaply than railroads. The result was that the barge-rail rate from a point in the west to eastern destinations was considerably cheaper than the all-rail rate from that point—the difference being measured by the relative cheapness of shipping over the barge leg of the through route. Because of the cheaper barge rates, much of the railroads' grain freight business from localities which could be served by either barge or rail shifted to the barges2 after 1933 when barge service from western grain localities to Chicago was resumed.3 This was the barge versus rail competitive situation which existed when in 1939 the eastern railroads filed schedules with the Commission which imposed on ex-barge grain the local rate from Chicago east, but allowed ex-rail and exlake grain the benefit of the 8 1/2 cent lower 'reshipping' rates on the eastern haul. The result of this rate schedule would have b en that, although barge lines could still have carried grain from the west to Chicago much more cheaply than the railroads could, by the time the grain had been reshipped to New York or other eastern points, the barge-rail carriage would have been more expensive to the shipper than all-rail carriage. This would have put the barge lines at a competitive disadvantage with railroads in barge-served localities. At the Commission hearing to test the validity of the higher ex-barge grain rates, a railroad representative candidly stated that the purpose of the proposal was to 'drive this business off the water and back onto the rails where it belongs.' 248 I.C.C. 307, 321. This purpose would most probably have been accomplished had the high ex-barge reshipping rates gone into effect. 3 The Commission, after a hearing, made an order which left the railroad-proposed higher rates in effect, but stated that 'in a proper proceeding we might prescribe proportional rates on the ex-barge traffic lower than local rates or joint barge-rail rates lower than the combinations.' 248 I.C.C. 307, 311. A District Court set aside the Commission's order on the ground that fixing higher rates for ex-barge grain than for ex-rail and ex-lake grain rates 'discriminates against water competition by the users of barges.' Cargill, Inc., v. United States, D.C., 44 F.Supp. 368, 375. On appeal this Court reversed, saying that its decision carried 'no implication of approval of any rates here involved.' Interstate Commerce Commission v. Inland Waterways Corp., 319 U.S. 671, 691, 63 S.Ct. 1296, 1307, 87 L.Ed. 1655. It reserved for future consideration in a proceeding before the Commission the amount, if any, which the eastern railroads could increase 'reshipping' rates for ex-barge over those for ex-lake and ex-rail grain. Id. at pages 687, 688, 691, 63 S.Ct. at pages 1305, 1307, 87 L.Ed. 1655. 4 The Commission has now considered and decided that question in a proper proceeding. 262 I.C.C. 7. It found the originally proposed 8 1/2 cent higher rates for ex-barge grain to be unlawful and required the eastern roads to cancel the schedules fixing those increased reshipping rates. This part of the Commission's order has not been challenged. But it also concluded that ex-barge grain rates east from Chicago would be reasonable and lawful even though they were 3 cents per hundred pounds higher than rates for ex-rail and ex-lake grain. Consequently, the Commission provided that its order cancelling the scheduled reshipping rate increase was 'without prejudice to the filing of new schedules in conformity with the findings herein.' Thus, the effect of the whole order was to permit, if not require, the railroads to charge higher reshipment rates for ex-barge than for ex-lake and ex-rail grain. Under these rates, barge-rail grain shipments would be a trifle less expensive than all rail transportation between the same points.4 But the through barge-rail transportation would cost more than it would have if the through rates had accurately reflected the cheaper in-bound barge rates. The Commission considered these higher rates for ex-barge grain, which resulted in higher through rates, justified so long as there remained to ex-barge grain 'a fair opportunity to move in competition with lake-rail and all-rail traffic.' 5 Appellees5 then filed this action in the District Court against the Commission and the United States to cancel, annul, and enjoin enforcement of the order, insofar as it permitted the railroads to put these new higher ex-barge grain rates into effect. The complaints charged that the order was in violation of the Interstate Commerce Act, as amended by the Transportation Act of 1940, 54 Stat. 898. It was contended that the order was void because it approved railroad rates which penalized ex-barge grain to the extent of 3 cents perhundred pounds, solely because the grain had been transported to Chicago in barges, and without evidence or adequate findings that it cost the railroads 3 cents more to transport ex-barge than it cost to transport ex-rail or ex-lake grain. The United States, represented by the Department of Justice, appearing as a defendant, admitted these allegations. The Interstate Commerce Commission intervened and defended the order. After a hearing, the District Court found that the allegations were sustained. Accordingly, it set aside and enjoined enforcement of the order to the extent that it permitted the 3 cent extra charge.6 The result of the District Court's judgment was to leave in effect the long-existing eastern railroad rates which provide the same rates for carrying ex-barge, ex-lake, and ex-rail grain east from Chicago. 6 Judicial review of the findings of fact and the expert judgments of the Interstate Commerce Commission where the Commission acts within its statutory authority is extremely limited. And § 307(d) of the 1940 Act7 authorizes the Commission 'in the case of a through route' to 'prescribe such reasonable differentials as it may find to be justified between all-rail rates and the joint rates in connection with such common carrier by water.' Cf. United States v. Chicago Heights Trucking Co., 310 U.S. 344, 352, 353, 60 S.Ct. 931, 935, 936, 84 L.Ed. 1243; Board of Trade of Kansas City v. United States, 314 U.S. 534, 546, 62 S.Ct. 366, 372, 86 L.Ed. 432. But the congressional debates and committee reports on the 1940 Act and the statutory provisions which emerged from this legislative background show that Congress enunciated positive policies and specific limiting standards which it expected the Commission to follow in fixing rates, including 'differentials' between all-rail and water-rail rates. The provisions of the Transportation Act of 1940 which brought water carriers under Interstate Commerce Commission jurisdiction were vigorously opposed in Congress by those who feared that the Commission might raise barge rates in order to enable railroads better to compete with inherently cheaper water transportation. These opponents were repeatedly assured by sponsors of the 1940 Act who advocated Commission regulation of water ransportation that the questioned legislation unequivocally required the Commission to fix rates which would preserve for shippers the inherent advantages of barge transportation: lower cost of equipment, operation, and therefore service.8 As Senator Wheeler, spokesman of the Interstate Commerce Committee of which he was chairman, pointed out on the floor of the Senate, the 1940 Act contains at least three separate provisions, a prime purpose of which is to protect the water carrier's natural advantages.9 The Act's declaration of policy emphasizes that the Act must be 'so administered as to recognize and preserve the inherent advantages' of 'all modes of transportation subject to the provisions of this Act.' 54 Stat. 898, 899, 49 U.S.C. notes preceding §§ 1, 301, 901, 49 U.S.C.A. notes preceding sections 1, 301, 901. In order that the inherent advantages might be preserved § 305(c), 54 Stat. 898, 935, 49 U.S.C. § 905(c), 49 U.S.C.A. § 905(c), provided that 'Differences in * * * rates * * * and practices of a water carrier in respect of water transportation from those in effect by a rail carrier with respect to rail transportation shall not be deemed to constitute unjust discrimination * * * or an unfair or destructive competitive practice * * *.' And § 307(f), 54 Stat. 898, 938, 49 U.S. § 907(f), 49 U.S.C.A. § 907(f), requiring the Commission, in fixing rates, to consider 'the effect of rates upon the movement of traffic by the * * * carriers for which the rates are prescribed' emphasized that the Commission must consider in fixing rates '* * * the need, in the public interest, of adequate and efficient water transportation service at the lowest cost consistent with the furnishing of such service.' In addition § 3(4) of the preexisting Act which forbade carriers 'to * * * discriminate in their rates, fares, and charges between connecting lines,' 41 Stat. 479, ws amended by the 1940 Act specifically to include water carriers, such as these barge lines, within the definition of connecting carriers. 54 Stat. 898, 903, 904, 49 U.S.C. § 3(4), 49 U.S.C.A. § 3(4). Finally § 2 of the pre-existing Act has long forbidden the Commission to authorize railroads to charge one person more than another for 'a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions.' 24 Stat. 379, 380, 49 U.S.C. § 2, 49 U.S.C.A. § 2. 7 The foregoing provisions flatly forbid the Commission to approve barge rates or barge-rail rates which do not preserve intact the inherent advantages of cheaper water transportation, but discriminate against water carriers and the goods they transport. Concretely, the provisions mean in this case that Chicago-to-the east railroads cannot lawfully charge more for carrying ex-barge than for carrying exlake or ex-rail grains to and from the same localities, unless the eastern haul of the ex-barge grain costs the eastern railroads more to haul than does ex-rail or ex-lake grain. And § 307(d) authorizing the Commission to fix differentials as between through water-rail and through all-rail rates, does not authorize the Commission to neutralize the effective prohibitions of the other provisions which were strengthened in 1940 expressly to prevent a discrimination against water carriers. 8 The basic error of the Commission here is that it seemed to act on the assumption that the congressional prohibitions of railroad rate discriminations against water carriers were not applicable to such discriminations if accomplished by through rates. But this assumption would permit the destruction or curtailment of the advantages to shippers of cheap barge transportation whenever the transported goods were carried beyond the end of the barge line. This case proves that. For while Chicago is a great grain center, it cannot consume all barge-transported grain. That grain, like other grain coming to Chicago for marketing or processing, is reshipped to distant destinations. To penalize its transportation in barges by charging discriminatory rates from Chicago to its final destination has precisely the same consequence as would follow from raising barge rates inbound to Chicago. Recognizing that it could not require these barge carriers to raise these inbound rates which it accepted as reasonable,10 the Commission has here approved an order which would bring about the same prohibited result by raising the railroad rates charged by eastern roads for ex-barge grain shipments east from Chicago. Congress has forbidden this. 9 The Commission did not approve increases in these reshipping rates on the ground that the eastern roads were not receiving a fair return for carrying ex-barge grain. And the grounds on which the Commission rested its order do not support the rates approved. Most of the argument of the Commission in support of its conclusions and order treated matters which had no relation to what the reshipping rates from Chicago should be. The length of the total barge-rail haul emphasized by the Commission, however significant it might be under other circumstances, has no relevance here. For the lower rates allowed ex-rail and ex-lake grains include carriage for distances identical with the ex-barge hauls. Nor is the Commission's order supported by its conclusion that it is 'inequitable' for the barges to charge a much lower rate for the inbound grain haul than the competitive western railroads can afford to charge for the same haul, resulting in barge-rail rates lower than all-rail rates from the same localities.11 For this is no reason for authorizing a higher rate to eastern railroads which do not compete with the barges at all. If the western railroads need relief from the com etition of barges, that is a question wholly unrelated to the rates of eastern roads. Furthermore, Congress has decided this question of equitable rates as between railroads and barges. It has declared in unmistakable terms that the 'inherent advantage' of the lower cost of barge carriage as compared with that of railroads must be passed on to those who ship by barge. It is therefore not within the province of the Commission to adjust rates, either to equalize the transportation cost of barge shippers with that of shippers who do not have access to barge service or to protect the traffic of railroads from barge competition. For Congress left the Commission no discretionary power to approve any type of rates which would reduce the 'inherent advantage' of barge transportation in whole or in part. Cf. Mitchell v. United States, 313 U.S. 80, 97, 61 S.Ct. 873, 878, 85 L.Ed. 1201. 10 Related to the question just discussed, is the Commission's contention here that permitting reshipping rates for ex-barge grain to remain equal to the rates for ex-rail and ex-lake grain will cause 'incurable chaos' in and disrupt the national rail rate structure which reflects many interrelated conditions governing the transportation of grain from west of Chicago to eastern markets. The Commission does not show how any possible disruption of railroad rates structure arises from giving shippers the full inherent advantage of cheaper barge rates, other than that competing railroads have lost traffic to the barge lines. As we have pointed out, Congress knew that barge line rates were cheaper than rail rates, wanted the shippers to get full benefit of them, and left the Commission no power to take that benefit away from shippers by adjusting rail-barge traffic competition or rates. But we note incidentally that these rates had been equal prior to 1939 without any apparent disruption of the total structure. The possibility of such a disruption does not remotely justify discriminations against barge traffic which actually deprive shippers and the barge companies of the inherent advantages of water transportation guaranteed to them by Congress. See United States v. Chicago, M. & St. P.R. Co., 294 U.S. 499, 506 510, 55 S.Ct. 462, 465—467, 79 L.Ed. 1023. Nor is the fact that barge-rail rates, from certain places in the west through Chicago to the e st, are less than local rail rates from Chicago east, and adequate reason for increasing the east-of-Chicago part of the through barge-rail rate. The initiation of new rates with such a disparity in through rail rates as compared with local rail rates would, of course, be forbidden by § 4 of the Act as amended in the absence of Commission approval.12 But, insofar as the inherent cheapness of the barge leg of the through route produces a disparity between barge-rail rates and local rail rates, Congress has said that the Act must be so administered as to preserve, not eliminate or reduce the disparity. 11 Carriage of ex-barge grain by eastern roads may conceivably entail more service and therefore greater costs than are involved in carrying ex-rail or ex-lake grain. If so, the eastern roads may, in certain circumstances, be justified in receiving an extra charge for that extra service wherever it is rendered. But the extra service must fit the extra charge and cannot justify lump sum rate increases which cut into the inherent advantages of cheaper barge transportation which Congress intended to guarantee to shippers. Here the Commission found in broad general terms, without limitation to the localities where barge and rail compete, that 'on the average' ex-rail grain from all the west requires less terminal and transit service east of Chicago than does grain moving by barge from the relatively few barge terminals.13 As to terminal service, it noted that some rail grain traffic going through Chicago without stopping receives no terminal service at all, whereas all barge grain shipments must be unloaded in Chicago and reloaded on freight cars. But all ex-lake grain reshipped from Chicago and an unspecified amount of ex-rail grain stopped in Chicago for processing requires exactly the same terminal service as is rendered there for ex-barge grain.14 Yet there is no greater rate charged for ex-barge and ex-rail grain which receives this same terminal service. The formula used here which lumps all through rail grain rates, irrespective of the services rendered, to give rail-carried grain a preferred rate over barge-carried grain, is indistinguishable in cause and consequence from an order which directly raises barge rates to relieve the railroads from barge competition. In any event, there has been no showing by the Commission as to how much, if any, of the 3 cent reshipping rate increase is attributable to the fact that ex-barge grain requires more terminal service on the average than does ex-rail grain. 12 The Commission also pointed out in its decision that rail rates from the west to Chicago (which we must assume on this record are fair and reasonable for the services performed) permit three transit stops west of Chicago without extra charge. Thus some ex-rail grain, unlike ex-barge and ex-lake grain, has already been processed en route to or in Chicago before it ever reaches the eastern lines, reducing the likelihood that it will require further tra sit service on the route from Chicago to the east.15 But ex-lake grain which enjoys the proportional rates with the approval of the Commission apparently is not processed before arriving at Chicago, or before reshipment on the eastern lines, and consequently requires the same transit service on the eastern haul as is required by ex-barge grain. Similar transit service is required for the unspecified amounts of ex-rail grain not processed east of Chicago. But the Commission made no finding that the eastern reshipping rates permit transit service east of Chicago without extra charge. Probably the reason that it did not make such a finding is that carriers usually make a specific extra charge for transit service. See Central R. Co. of New Jersey v. United States, 257 U.S. 247, 42 S.Ct. 80, 66 L.Ed. 217; Atchison, T. & S.F.R. Co. v. United States, supra, 279 U.S. at pages 777, 780, 49 S.Ct. at pages 497, 498, 73 L.Ed. 947. And the record here shows that eastern railroads make extra charges for transit service rendered ex-barge grain east of Chicago. The Commission makes no showing why, if the existing railroad charges for each individual transit operation is insufficient to cover that operation's costs, those charges cannot be adjusted alike for the ex-rail, ex-lake, and ex-barge shipments which require this service. In any event, partial compensation of eastern roads for additional transit costs cannot be made in a manner which singles out ex-barge grain for discriminatory treatment in violation of the Interstate Commerce Act.16 13 To justify increasing the reshipping rates of ex-barge grain the Commission would have to make findings supported by evidence to show how much greater is the cost to the eastern roads of reshipping ex-barge grain than of ex-lake or ex-rail grain moving from the same localities and requiring the same service as does the ex-barge grain. Cf. State of Florida v. United States, 282 U.S. 194, 212, 51 S.Ct. 119, 124, 75 L.Ed. 291; State of North Carolina v. United States, 325 U.S. 507, 520, 65 S.Ct. 1260, 1267, 89 L.Ed. 1760. The unsifted averages put forward by the Commission do not measure the allegedly greater costs nor indeed show that they exist. 14 Affirmed. 15 Mr. Justice FRANKFURTER would sustain the order of the Interstate Commerce Commission, because he deems it amply supported by adequate findings of the Commission differentiating the average circumstances and conditions surrounding all-rail and lake-rail transportation from those affecting barge-rail transportation, 262 I.C.C. 27—28, and these findings are not without support in evidence. 16 Mr. Justice JACKSON, dissenting. 17 It appears to me that the Court in this case not only ignores findings of fact by the Interstate Commerce Commission contrary to our own oft-repeated pronouncements about the finality of administrative findings, but it also legislates out of the Transportation Act of 1940 at least two specific provisions which Congress put in and departs from the policy laid down in § 1 of the Act, 49 U.S.C.A. note preceding section 901. Whether the Congressional law or the Court's amendments are the better for the country is a complicated problem of policy which, in my conception of our judicial function, I am not privileged to decide. 18 In the Transportation Act of 1940, 54 Stat. 937 et seq., Congress authorized the Commission to establish through rates by water and rail carriers. It also said, 'In the case of a through route, where one of the carriers is a common carrier by water, the Commission shall prescribe such reasonable differentials as it may find to be justified between all-rail rates and the joint rates in connection with such common carrier by water.' § 307(d), 49 U.S.C.A. § 907(d). The Court reads this discretionary power out of the statute and holds that the Commission may not establish any differential other than that created by the carriers themselves; that is to say, the only permissible differential is the difference between barge rates and rail rates for the water leg of the through journey. 19 The statute also says that in the exercise of its rate making power 'the Commission shall give due consideration, among other factors, to the effect of rates upon the movement of traffic by the carrier or carriers for which the rates are prescribed.' § 307(f). The Commission has done so and finds that a greater differential than that prescribed would create unjust advantages and diversions of traffic. But the Court ignores the effect of what it orders on existing rate structures and on grain producing regions and shippers other than barge users. It simply writes in 'shall not consider' where Congress said 'shall consider.' 20 Because this decision seems to me to deprive the Commission of these discretionary powers to adjust through rates to general shipping conditions and rate structures I dissent. 21 Mr. Justice FRANKFURTER joins in this opinion. 1 The eastern points are in New York and adjacent states and in New England. It is around shipments from Chicago to this territory that this rate controversy chiefly revolves. The proposed new rate increases also related to grain shipments from Chicago to the so-called central territory. The reasons supporting the conclusion we reach apply equally to the central territory increases, and consequently we need not treat them separately. 2 See 246 I.C.C. 353, 361, 364, 383; 262 I.C.C. 7, 41. 3 There was barge service from the grain section west of Chicago to that city from 1886 to 1907 when it was discontinued. Such barge service was resumed in 1933. See 262 I.C.C. 7, 20. 4 The ex-barge proportionals fixed by the Commission were uniformly 5.5 cents lower than local rates from Chicago to the east and 3 cents higher than exbarge and ex-lake proportionals. 5 Appellees are (1) A. L. Mechling, a barge water carrier between Chicago and points in Illinois, Missouri, and Iowa; (2) Inland Waterways corporation which transports grain by barges between, among other points, Kansas City and Chicago; (3) the Secretary of Agriculture, who is authorized by statute to make complaints to the Interstate Commerce Commission, and to seek judicial relief with respect to rates and charges for the transportation of farm products. 6 Two procedural points are raised by the Commission which need not be discussed at length. The first is that the District Court's preliminary injunction was too broad because it enjoined the Commission from permitting the controversial rates to become effective. This question is now moot, but see Inland Steel Co. v. United States, 306 U.S. 153, 159, 160, 59 S.Ct. 415, 418, 419, 83 L.Ed. 557. The second procedural point urged relates to the District Court's order requiring the Commission to serve notice of appeal on the United States. We see no error in this, and even if there were, it could not be prejudicial in connection with the Commission's rights on this appeal. Since the United States was necessarily a party in the District Court, 28 U.S.C. 46, 28 U.S.C.A. § 46, Lambert Run Coal Co. v. Baltimore & O.R. Co., 258 U.S. 377, 382, 42 S.Ct. 349, 351, 66 L.Ed. 671, we think the District Court cannot be held in error for requiring service of the notice of the Commission's appeal. 7 54 Stat. 899, 937, 49 U.S.C. § 907(d), 49 U.S.C.A. § 907(d). In the original proceedings before the Commission, the last evidence was heard and the record was closed before the 1940 Transportation Act became a law. Interstate Commerce Commission v. Inland Waterway Corp., 319 U.S. 671, 678, 63 S.Ct. 1296, 1300, 87 L.Ed. 1655. The present proceedings are fully governed by the 1940 Act. 8 Illustrative of the attitude of Congress is this exchange between Senator Lucas and Senator Wheeler, Chairman of the Interstate Commerce Committee: 'Mr. Lucas. * * * The town in which I live is a focal point for the transportation of wheat and corn down the Illinois. The price of wheat and corn at the elevator there is always 2 or 3 cents higher than it is at elevators some 25 or 30 miles farther inland because of the difference between the rates by rail and those by water. 'Under the bill, as I understand it, the Interstate Commerce Commission would have the power, and it would be its duty, to fix rates on the Illinois River with respect to the transportation of that wheat and corn. Would it be possible for the Interstate Commerce Commission to fix the rate the same as the railroad rate from that point to St. Louis? 'Mr. Wheeler. Not if the Commission does its duty, because the bill specifically provides that it must take into consideration the inherent advantages of the water carrier. Everyone agrees that goods can be shipped more cheaply by water than by rail.' 84 Cong.Rec. 5879 (1940). Chairman Lea of the House Committee on Interstate Commerce stated in debate t at: 'The bill very plainly, about as plainly as language can be written, provides for the protection of the inherent advantages of water transportation as contrasted with other means of transportation. In fixing rates the water carrier is assured the advantages of the cheaper rate at which he can transport property.' 84 Cong.Rec. 9862 (1940). See also 84 Cong.Rec. 5883, 6126—6128, 6131, 6149 (1940), and Conference Report, 86 Cong.Rec. 10172 (1940). 9 84 Cong.Rec. 5873—5876, 5883, 6131 (1940). 10 The Commission stated that 'The barge rates yield fair returns to the barge carriers, and for the purpose of this proceeding, may be accepted as reasonable.' 262 I.C.C. 7, 19. 11 The Commission expressed concern that 'the barge-rail rates are far below the all-rail rates from the same and other Illinois origins. This is an inequitable situation giving rise to requests for reductions in the all-rail rates from the Illinois and central territory origins and it is difficult to see, with such extreme disparities, how such requests could properly be denied. * * * (T)here is a substantial production of corn in the central territory. While the farmers therein did not appear at the hearing to show that they were hurt by this situation, such evidence was adduced by others in the same relative position. * * * This is what is meant by the statement * * * that the present ex-barge proportionals from Chicago jeopardize the all-rail rate structure.' In United States v. Chicago, M. & St. P.R. Co., 294 U.S. 499, 509, 55 S.Ct. 462, 466, 79 L.Ed. 1023, this Court said of an earlier Commission rate decision made on the basis of preserving the over-all rate structure from disruption: 'We are warned * * * that a change once permitted has a tenancy to spread. The acceptance of the new schedule for Milwaukee will lead, it is said, to requests for proportionate reductions by other lines in Indiana * * * in Illinois and even in Keutucky, the outcome being characterized in the argument of counsel, though not in the report, as a rate war between the roads. * * * The point of the decision is not that present rates are sound, but that they must be maintained, even if unsound, for fear of a rate war which might spread beyond control. The danger is illusory. The whole situation is subject to the power of the commission, which may keep the changes within bounds.' 12 See § 6, Transportation Act of 1940, 54 Stat. 898, 904, 49 U.S.C. § 4, 49 U.S.C.A. § 4. 13 The Commission stated that 'on the average, as compared with the ex-barge grain, the movement under the ex-rail proportionals * * * requires less terminal service at the gateway * * * less transit service at intermediate points in official territory, and less line haul service to the southern points.' 14 The Commission's statement was that 'Like the lake-rail traffic, the barge-rail traffic requires transfer of lading and a full origin terminal service at the interchange port * * *. (I)t never moves in continuous through transportation.' 262 I.C.C. 7, 21. A similar precise statement does not appear in the Commission's decision with reference to terminal services rendered ex-rail grain. It assumed throughout its discussion, however, as shown by its reliance on averages, that a large but unspecified amount of all-rail grain shipments receive the same terminal services as does ex-barge grain. 15 There is apparently no processing of barge carried grain in Chicago. The railroads there charge 3.25—4.5 cents per hundred lbs. to switch barge grain at Chicago from riverside elevators to processing plants. 262 I.C.C. 7, 24. 16 It is noteworthy that in its previous consideration of these same ex-barge grain reshipment rates, the Commission was satisfied that 'the physical carriage beyond the reshipping point is substantially the same' in ex-rail, ex-lake, and ex-barge shipments, 248 I.C.C. 307, 311.

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330 U.S. 552 67 S.Ct. 910 91 L.Ed. 1093 KOTCH et al.v.BOARD OF RIVER PORT PILOT COM'RS FOR PORT OF NEW ORLEANS et al. No. 291. Argued Feb. 5, 6, 1947. Decided March 31, 1947. Rehearing Denied April 28, 1947 See 331 U.S. 864, 67 S.Ct. 1196. Messrs. Charles A. O'Niell, Jr., and M. A. Grace, both of New Orleans, La., for appellants. Mr. Arthur A. Moreno, of New Orleans, La., for appellees. Mr. Justice BLACK delivered the opinion of the Court. 1 Louisiana statutes provide in general that all seagoing vessels moving between New Orleans and foreign ports must be navigated through the Mississippi River approaches to the port of New Orleans and within it, exclusively by pilots who are State Officers.1 New State pilots are appointed by the governor only upon certification of a State Board of River Pilot Commissioners, themselves pilots.2 Only those who have served a six month apprenticeship under incumbent pilots and who possess other § ecific qualifications may be certified to the governor by the board.3 Appellants here have had at least fifteen years experience in the river, the port, and else where, as pilots of vessels whose pilotage was not governed by the State law in question.4 Although they possess all the statutory qualifications except that they have not served the requisite six months apprenticeship under Louisiana officer pilots,5 they have been denied appointment as State pilots. Seeking relief in a Louisiana state court, they alleged that the incumbent pilots, having unfettered discretion under the law in the selection of apprentices, had selected with occasional exception, only the relatives and friends of incumbents; that the selections were made by electing prosepective apprentices into the pilots' association, which the pilots have formed by authority of State law;6 that since 'membership * * * is closed to all except those having the favor of the pilots' the result is that only their relatives and friends have and can become State pilots.7 The Supreme Court of Louisiana has held that the pilotage law so administered does not violate the equal protection clause of the Fourteenth Amendment, 209 La. 737, 25 So.2d 527. The case is here on appeal from that decision under 28 U.S.C. § 344(a), 28 U.S.C.A. § 344(a). 2 The constitutional command for a state to afford 'equal protection of the laws' sets a goal not attainable by the invention and application of a precise formula. This Court has never attempted that impossible task. A law which affects the activities of some groups differently from the way in which it affects the activities of other groups is not necessarily banned by the Fourteenth Amendment. See e.g., Tigner v. State of Texas, 310 U.S. 141, 147, 60 S.Ct. 879, 882, 84 L.Ed. 1124, 130 A.L.R. 1321. Otherwise, effective regulation in the public interest could not be provided, however essential that regulation might be. For it is axiomatic that the consequence of regulating by setting apart a classified group is that those in it will be subject to some restrictions or receive certain advantages that do not apply to other groups or to all the public. Atchison, T. & S.F.R. Co. v. Matthews, 174 U.S. 96, 106, 19 S.Ct. 609, 613, 43 L.Ed. 909. This selective application of a regulation is discrimination in the broad sense, but it may or may not deny equal protection of the laws. Clearly, it might offend that constitutional safeguard if it rested on grounds wholly irrelevant to achievement of the regulation's objectives. An example would be a law applied to deny a person a right to earn a living or hold any job because of hostility to his particular race, religion, beliefs, or because of any other reason having no rational relation to the regulated activities. See American Sugar Refining Co. v. State of Louisiana, 179 U.S. 89, 92, 21 S.Ct. 43, 45, 45 L.Ed. 102. 3 The case of Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220, relied on by appellants, is an illustration of a type of discrimination which is incompatible with any fair conception of equal protection of the laws. Yick Wo was denied the right to engage in an occupation supposedly open to all who could conduct their business in accordance with the law's requirements. He could meet these requirements, but was denied the right to do so solely because he was Chinese. And it made no difference that under the law as written Yick Wo would have enjoyed the same protection as all others. Its unequal application to Yick Wo was enough to condemn it. But Yick Wo's case, as other cases have demonstrated, was tested by the language of the law there considered and the administration there shown. Cf. Crowley v. Christensen, 137 U.S. 86, 93, 94, 11 S.Ct. 13, 16, 17, 34 L.Ed. 620; Gundling v. City of Chicago, 177 U.S. 183, 20 S.Ct. 633, 44 L.Ed. 725; People of State of New York ex rel. Lieberman v. Van De Carr, 199 U.S. 552, 26 S.Ct. 144, 50 L.Ed. 305; Engel v. O'Malley, 219 U.S. 128, 137, 31 S.Ct. 190, 192, 55 L.Ed. 128. So here, we must consider the relationship of the method of appointing pilots to the broad objectives of the entire Louisiana pilotage law. See Grainger v. Douglas Park Jockey Club, 6 Cir., 148 F. 513, and cases there cited. In so doing we must view the appointment system in the context of the historical evolution of the laws and institution of pilotage in Louisiana and elsewhere. Cf. Otis Co. v. Ludlow Mfg. Co. 201 U.S. 140, 154, 26 S.Ct. 353, 355, 50 L.Ed. 696; Jackman v. Rosenbaum, 260 U.S. 22, 31, 43 S.Ct. 9, 10, 67 L.Ed. 107; Bayside Fish Flour Co. v. Gentry, 297 U.S. 422, 428 430, 56 S.Ct. 513, 515—517, 80 L.Ed. 388. And an important factor in our consideration is that this case tests the right and power of a state to select its own agents and officers. Taylor v. Beckham, 178 U.S. 548, 20 S.Ct. 1009, 44 L.Ed. 1187; Snowden v. Hughes, 321 U.S. 1, 11—13, 64 S.Ct. 397, 402—404, 88 L.Ed. 497. 4 Studies of the long history of pilotage reveal that it is a unique institution and must be judged as such.8 In order to avoid invisible hazards, vessels approaching and leaving ports must be conducted from and to open waters by persons intimately familiar with the local waters. The pilot's job generally requires that he go outside the harbor's entrance in a small boat to meet incoming ships, board them and direct their course from open waters to the port. The same service is performed for vessels leaving the port. Pilots are thus indispensable cogs in the transportation system of every maritime economy. Their work prevents traffic congestion and accidents which would impair navigation in and to the ports. It affects the safety of lives and cargo, the cost and time expended in port calls, and in some measure, the competitive attractiveness of particular ports. Thus, for the same reasons that governments of most maritime communities have subsidized, regulated, or have themselves operated docks and other harbor facilities and sought to improve the approaches to their ports, they have closely regulated and often operated their ports' pilotage system.9 5 The history and practice of pilotage demonstrate that, although inextricably geared to a complex commercial economy, it is also a highly personalized calling.10 A pilot does not require a formalized technical education so much as a detailed and extremely intimate, almost intuitive, knowledge of the weather, waterways and conformation of the harbor or river which he serves. This seems to be particularly true of the approaches to New Orleans through the treacherous and shifting channel of the Mississippi River.11 Moreover, harbor entrances where pilots can most conveniently make their homes and still be close to places where they board incoming and leave outgoing ships are usually some distance from the port cities they serve.12 These 'pilot towns' have begun, and generally exist today, as small communities of pilots perhaps near, but usually distinct from the port cities.13 In these communities young men have an opportunity to acquire special knowledge of the weather and water hazards of the locality and seem to grow up with ambitions to become pilots in the traditions of their fathers, relatives, and neighbors.14 We are asked, in effect, to say that Louisiana is without constitutional authority to conclude that apprenticeship under persons specially interested in a pilot's future is the best way to fit him for duty as a pilot officer in the service of the State. 6 The States have had full power to regulate pilotage of certain kinds of vessels since 1789 when the first Congress decided that then existing state pilot laws were satisfactory and made federal regulation unnecessary. 1 Stat. 53, 54 (1789), 46 U.S.C. § 211, 46 U.S.C.A. § 211; Olsen v. Smith, 195 U.S. 332, 341, 25 S.Ct. 52, 53, 49 L.Ed. 224; Anderson v. Pacific Coast S.S. Co., 225 U.S. 187, 32 S.Ct. 626, 56 L.Ed. 1047. Louisiana legislation has controlled the activities and appointment of pilots since 1805—even before the Territory was admitted as a State.15 The State pilotage system, as it has evolved since 1805, is typical of that which grew up in most seaboard states and in foreign countries.16 Since 1805 Louisiana pilots have been State officers whose work has been controlled by the State.17 That Act forbade all but a limited number of pilots appointed by the governor to serve in that capacity. The pilots so appointed were authorized to select their own deputies.18 But pilots, and through them, their deputies, were literally under the command of the master and the wardens of the port of New Orleans, appointed by the governor. The master and wardens were authorized to make rules governing the practices of pilots, specifically empowered to order pilots to their stations, and to fine them for disobedience to orders or rules. And the pilots were required to make official bond for faithful performance of their duty. Pilots' fees were fixed;19 ships coming to the Mississippi were required to pay pilotage whether they took on pilots or not.20 The pilots were authorized to organize an association whose membership they controlled in order 'to enforce the legal regulations, and add to the efficiency of the service required thereby.'21 Moreover, efficient and adequate service was sought to be insured by requiring the Board of Pilot Commissioners to report to the governor and authorizing him simmarily to remove any pilot guilty of 'neglect of duty, habitual intemperance, carelessness, incompetency, or any act of conduct * * * showing' that he 'ought to be removed.' La.Act. No. 113, § 20 (1857). These provisions have been carried over with some revision into the present comprehensive Louisiana pilotage law. 6 La.Gen.Stat., cc. 6, 8 (1939). Thus in Louisiana, as elsewhere, it seems to have been accepted at an early date that in pilotage, unlike other occupations, competition for appointment, for the opportunity to serve particular ships and for fees, adversely affects the public interest in pilotage.22 7 It is within the framework of this longstanding pilotage regulation system that the practice has apparently existed of permitting pilots, if they choose, to select their relatives and friends as the only ones ultimately eligible for appointment as pilots by the governor. Many other states have established pilotage systems which make the selection of pilots on this basis possible.23 Thus it was noted thirty years ago in a Department of Commerce study of pilotage that membership of pilot associations 'is limited to persons agreeable to those already members, generally relatives and friends of the pilots. Probably in pilotage more than in any other occupation in the United States the male members of a family follow the same work from generation to generation.'24 8 The practice of nepotism in appointing public servants has been a subject of controversy in this country throughout our history. Some states have adopted constitutional amendments25 or statutes,26 to prohibit it. These have reflected state policies to wipe out the practice. But Louisiana and most other states have adopted no such general policy. We can only assume that the Louisiana legislature weighed the obvious possibility of evil against whatever useful function a closely knit pilotage system may serve. Thus the advantages of early experience under friendly supervision in the locality of the pilot's training, the benefits to morale and esprit de corps which family and neighborly tradition might contribute, the close association in which pilots must work and live in their pilot communities and on the water, and the discipline and regulation which is imposed to assure the State competent pilot service after appointment, might have prompted the legislature to permit Louisiana pilot officers to select those which whom they would serve. 9 The number of people, as a practical matter, who can be pilots is very limited. No matter what system of selection is adopted, all but the few occasionally selected must of necessity be excluded. Cf. Olsen v. Smith, supra, 195 U.S. at pages 344, 345, 25 S.Ct. at pages 54, 55, 49 L.Ed. 224.27 We are aware of no decision of this Court holding that the Constitution requires a state governor, or subordinates responsible to him and removable by him for cause, to select state public servants by competitive tests or by any other particular method of selection. The object of the entire pilotage law, as we have pointed out, is to secure for the State and others interested the safest and most efficiently operated pilotage system practicable. We cannot say that the method adopted in Louisiana for the selection of pilots is unrelated to this objective. See Olsen v. Smith, supra; cf. Carmichael v. Southern Coal Co., 301 U.S. 495, 509, 510, 57 S.Ct. 868, 872, 873, 81 L.Ed. 1245, 109 A.L.R. 1327. We do not need to consider hypothetical questions concerning any similar system of selection which might conceivably be practiced in other professions or businesses regulated or operated by state governments. It is enough here that considering the entirely unique institution of pilotage in the light of its history in Louisiana, we cannot say that the practice appellants attack is the kind of discrimination which violates the equal protection clause of the Fourteenth Amendment. 10 Affirmed. 11 Mr. Justice RUTLEDGE, dissenting. 12 The unique history and conditions surrounding the activities of river port pilots, shortly recounted in the Court's opinion, justify a high degree of public regulation. But I do not think they can sustain a system of entailment for the occupation. If Louisiana were to provide by statute in haec verba that only members of John Smith's family would be eligible for the public calling of pilot, I have no doubt that the statute on its face would infringe the Fourteenth Amendment. And this would be true, even though John Smith and the members of his family had been pilots for generations. It would be true also if the right were expanded to include a number of designated families. 13 In final analysis this is, I think, the situation presented on this record. While the statutes applicable do not purport on their face to restrict the right to become a licensed pilot to members of the families of licensed pilots, the charge is that they have been so administered. And this charge not only is borne out by the record but is accepted by the Court as having been sustained.1 14 The result of the decision therefore is to approve as constitutional state regulation which makes admission to the ranks of pilots turn finally on consanguinity. Blood is, in effect, made the crux of selection. That, in my opinion, is forbidden by the Fourteenth Amendment's guaranty against denial of the equal protection of the laws. The door is thereby closed to all not having blood relationship to presently licensed pilots. Whether the occupation is considered as having the status of 'public officer' or of highly regulated private employment, it is beyond legislative power to make entrance to it turn upon such a criterion. The Amendment makes no exception from its prohibitions against state action on account of the fact that public rather than private employment is affected by the forbidden discriminations. That fact simply makes violation all the more clear where those discriminations are shown to exist. 15 It is not enough to avoid the Amendment's force that a familial system may have a tendency or, as the Court puts it, a direct relationship to the end of securing an efficient pilotage system. Classification based on the purpose to be accomplished may be said abstractly to be sound. But when the test adopted and applied in fact is race or consanguinity, it cannot be used constitutionally to bar all except a group chosen by such a relationship from public employment. That is not a test; it is a wholly arbitrary exercise of power. 16 Conceivably the familial system would be the most effective possible scheme for training many kinds of artisans or public servans, sheerly from the viewpoint of securing the highest degree of skill and competence. Indeed, something very worth while largely disappeared from our national life when the once prevalent familial system of conducting manufacturing and mercantile enterprises went out and was replaced by the highly impersonal corporate system for doing business. 17 But that loss is not one to be repaired under our scheme by legislation framed or administered to perpetuate family monopolies of either private occupations or branches of the public service. It is precisely because the Amendment forbids enclosing those areas by legislative lines drawn on the basis of race, color, creed, and the like, that, in cases like this, the possibly most efficient method of securing the highest development of skills cannot be established by law. Absent any such bar, the presence of such a tendency or direct relationship would be effective for sustaining the legislation. It cannot be effective to overcome the bar itself. The discrimination here is not shown to be consciously racial in character. But I am unable to differentiate in effects one founded on blood relationship. 18 The case therefore falls squarely within the ruling in Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220,2 not only with relation to the line of discrimination employed, but also in the fact that unconstitutional administration of a statute otherwise valid on its face incurs the same condemnation as if the statute had incorporated the discrimination in terms. Appellants here are entitled, in my judgment, to the same relief as was afforded in the Yick Wo case. 19 Mr. Justice REED, Mr. Justice DOUGLAS and Mr. Justice MURPHY join in this dissent. 1 A ship entering the Mississippi River from the Gulf of Mexico is piloted the twenty mile distance from the mouth of the river to 'pilot town' by one of a group of pilots specially familiar with the 'entrance' to the Mississippi through the so-called 'passes.' La.Acts 1880, No. 99, § 2, La.Acts 1908, No. 55, § 1; La.Acts 1910, No. 26, § 1, 6 La.Gen. Stat. §§ 9141, 9163 (1939). Between pilot town and New Orleans, a distance of approximately ninety miles, ships are piloted exclusively by so-called river port pilots. La.Acts 1908, No. 54, § 1, 6 La.Gen.Stat. c. 8 (1939). By an amendment in 1942 the exclusive jurisdiction of the river port pilots was extended to the piloting of seagoing vessels within the port of New Orleans. La.Acts 1942, No. 134, 6 La.Gen.Stat. §§ 9155, 9156 (Supp.1946). Appellants here sought appointment as river port pilots. 2 Sections 2 and 3 of the Act of 1908 provided for the appointment and commissioning of twenty-eight pilots by the governor and prescribed that thereafter there should not be less than twenty. 6 La.Gen.Stat. §§ 9155, 9156 (1939). The statement of the Louisiana court in this case that pilots so appointed are considered State officers has long been the established State rule. Williams v. Payson, 1859, 14 La.Ann. 7, 8; State of Louisiana v. Follet, 1881, 33 La.Ann. 228, 230; Levine v. Michel, 1883, 35 La.Ann. 1121, 1124. From among the pilots the governor was required to appoint three River Port Pilot Commissioners. La.Acts 1908, No. 54, § 1, 6 La.Gen.Stat. § 9154 (1939). 3 'Whenever there exists a necessity for more pilots * * * the * * * Board of River Port Pilot Commissioners shall hold examinations, under such rules and regulations, and with such requirements as they shall have provided, with the Governor's approval, provided that no applicant shall be considered by said Board, unless he submits proper evidence of moral character and is a voter of this State, and shall have served six months' apprenticeship in his proposed calling, and upon the certificate of the Board to the Governor that the applicant has complied with the provisions of this act, the Governor may, in his discretion, appoint to existing vacancies.' La.Acts 1908, No. 54, § 4. 6 La.Gen.Stat. § 9157 (1939). 4 Appellants were licensed to pilot coastwise vessels to and through the port under federal law which excludes states from controlling pilotage of coastal shipping. Rev.Stat. §§ 4401, 4444, 46 U.S.C. §§ 364, 215, 46 U.S.C.A. §§ 364, 215. Also prior to the passage of La.Acts 1942, No. 134, they had piloted all classes of vessels within the port of New Orleans. That Act deprived appellants of authority to pilot within the port and conferred it exclusively upon State river port pilots. Thus appellants allege they have been deprived of an opportunity to make a living unless they can obtain appointment as river port pilots under the pilotage law. 5 While the Act does not specifically require that the apprenticeships be performed uner incumbent officer pilots, the State Supreme Court has so construed it. 6 La.Rev.Stat. § 2707 (1869), reenacted in § 4 of La.Acts 1928, No. 198, 6 La.Gen.Stats. § 9149 (1939). 7 Appellants' complaint was dismissed for failure to state a cause of action. Therefore we consider their allegations as facts for the purpose of this decision. Appellants' prayer had sought an injunction against interference with their serving as pilots, and, in the alternative, sought mandamus to compel the Board to examine appellants as required by law and to certify them to the Governor. The Louisiana Supreme Court affirmed the trial court's refusal to compel the board to examine appellants because they did not possess the qualifications required to take examinations specifically, they had not served apprenticeships. 8 See generally, Report of Departmental Committee on Pilotage (London, 1911); Pilotage in the United States Special Agents Series, Department of Commerce (1917). 9 See Cooley v. Board of Wardens, 12 How. 299, 308, 312, 316, 326, 13 L.Ed. 996; Ex parte McNiel, 13 Wall. 236, 238, 239, 20 L.Ed. 624. 10 For an excellent description of a pilot's life and duty, see Kane, Deep Delta Country, c. 10 (1944). 11 See Kane, op. cit. supra, note 10. See also Hearings before Committee on the Merchant Marine and Fisheries on H.R. 9678, 64th Cong., 1st Sess., 106, 214, 229, 279 (1916) (compulsory barge pilotage). 12 See Gieseke, American Commercial Legislation before 1789, 118 (1910); Kane, op. cit. supra, note 10. 13 See Kane, op. cit. supra, note 10. A Louisiana statute provides that 'no license shall be granted any person to keep a tavern * * * at the Balize, South West Pass or any other station for pilots, nor within three miles of such station, unless the person applying for such license shall be recommended in writing by a majority of the branch pilots.' La.Rev.Stat. § 2704 (1869), 6 La.Gen.Stat. § 9166 (1939). 14 See Kane op. cit. supra, note 10, 128; see also Pilotage in the United States, pp. 8, 16, op. cit. supra, note 8. 15 La.Acts (Territory of New Orleans) 1805, c. 24; see also Surrey, Commerce of Louisiana, 1699—1763, c. III (1916). 16 Almost all the maritime states, some as colonies before the Revolution, adopted comprehensive pilotage laws which included unrestricted apprenticeship provisions. Mass.Laws, c. 13, § 2 (1783), Mass.Rev.Stat. c. 32, §§ 5—42 (1836); New York Laws, c. XVIII, §§ I, VII, X, XII (1819); Pa.Stats. at Large, c. 536, § VI (1766); N.J.Rev.Laws, Tit. 37, c. 7, § 18 (1847); 1 Laws of Md. (Dorsey) c. 63, §§ 2, 20, 23 (1803); Code of Virginia, Tit. 27, c. 92, §§ 4, 9 (1849); N.C.Rev.Stat. c. 88, §§ 1, 5, 14 (1837). See also Report of Departmental Committee on Pilotage, op. cit. supra, note 8, Part I. 17 See note 2 supra. 18 The 1805 Act required deputies to obtain a certificate from the master and wardens as a condition precedent to their appointment. But § 1 of La.Acts 1806, No. 26, gave pilots blanket authority to app int their own deputies. Pilots were, however, made responsible for the neglect or misconduct of their deputies. 19 La.Acts 1805, c. 24, § 20; La.Acts 1837, No. 106, § 9. 20 La.Acts 1805, c. 24, § 17. 21 Levin v. Michel, supra, 35 La.Ann. at page 1125; see also note 6 supra. 22 See Kane, op. cit. supra, n. 10 at 126—126; all of the State and colonial statutes set out in note 10, supra, provided for limitation on the number of pilots and fixed the fees they might charge. This is generally true today. See n. 23 infra. The Department of Commerce Report, supra note 8 at 28 observed that: 'The formation of pilots' associations was largely a result of the intense competition that formerly prevailed among the pilots, * * *. Little efforts was made to maintain definite pilot stations. Instead, the desire to be the first to speak a ship frequently led the pilots to cruise great distances from the port. 'One of the unfortunate results of the intense competition of pilots was the fact that frequently pilots could not be had when wanted, although they might be far out to sea in quest of business. Another drawback was that pilots unnecessarily exposed themselves to danger. And a third important disadvantage was that it made the earnings precarious; a pilot might earn a great deal this month and very little the next. * * * The pilots themselves were the first to see the disadvantages of the free of competitive system and to take steps toward the organization of associations. These associations soon developed into strong working combinations that eliminated competition and placed on an amicable basis matters that formerly produced much sharp rivalry. 'From the evidence at hand it would appear that the shipping interests as well as the insurance and commercial interests of the ports encouraged the pilots in the formation of these associations. The advantages of a well-organized pilotage system were as apparent to these interests as to the pilots themselves, for the commerce of the port was not only facilitated and expedited but made much safer by reason of the better organization of the pilotage system, which came with the elimination of competition. 'Since associations have been formed along the present lines pilotage grounds have been established. * * * These grounds are well known to mariners, who may safely count on finding there at practically all times and in all conditions of weather a pilot boat with a sufficient number of pilots aboard to accommodate any reasonable number of vessels that may come. There is little chance nowadays that a vessel will fail to find a pilot when needed. * * * 'Still another advantage of the present organization of pilotage systems is that it permits the maintenance of a central office which is in constant touch with the pilot boat and arranges for the rotation of pilots. The association generally employs an agent to look after the routine business of the office.' 23 See N.J.Laws. 1898, c. 31, N.J.Stat.Ann. Title 12, c. 8 (1938); Pa.P.L. 542 of 1803, Pa.Stats.Ann. (Purdon) Title 55, c. 2 (1930); Md.Ann.Code (Flack), Art. 74 (1939); Del.Rev.Code, c. 35 (1935); Va.Code, c. 142 (1942); Ala. Laws, 1931, p. 154, Ala.Code, Title 38, c. 2 (1940); Ore, Comp.Laws nn., Title 105, c. 2 (1940). See also note 16, supra. 24 Pilotage in the United States, supra, note 8, p. 8. 25 See e.g., Mo.Const., Art. 14, § 13 (1924), Mo.R.S.A. 26 See e.g., Idaho Sess.Laws, 1915, c. 10, Idaho Code Ann., § 57-701 1932); Fla.Laws, 1933, c. 16088, Fla.Stats.Ann. §§ 116.10, 116.11 (1943); Neb.Laws 1919, c. 190, § 6, Neb.Rev.Stat. § 81-108 (1943); Tex.Acts 1909, p. 85, Tex.Penal Code (Vernon) arts. 432 438 (1938). 27 In Olsen v. Smith, the constitutionality of a Texas statute, Vernon's Ann.Civ.St. Art. 8264 et seq., forbidding all but pilots appointed by the governor to serve was challenged by one who had not been appointed and had been enjoined from serving as a pilot. Yick Wo v. Hopkins, supra, was relied on as authority for a contention that he had been denied rights protected by the Fourteenth Amendment including equal protection of the laws. Id., 195 U.S. at page 334, 25 S.Ct. 52, 49 L.Ed. 224. But this Court in sustaining the constitutionality of the statute, did not specifically discuss the question here raised. Therefore we do not depend upon Olsen v. Smith as a necessarily controlling authority for our decision here. 1 The record shows that a in a few instances over a course of several years nonrelatives of licensed pilots have received appointment as apprentices and qualified. But the general course of administration has been that such appointments are limited to relatives. 2 To like effect is Alston v. School Board of City of Norfolk, 4 Cir., 112 F.2d 992, 130 A.L.R. 1506; cf. Burt v. City of New York, 2 Cir., 156 F.2d 791; Remedies for Discrimination by State and Local Administrative Bodies (1946) 60 Harv.L.Rev. 271.

12

330 U.S. 585 67 S.Ct. 918 91 L.Ed. 1117 PENFIELD CO. OF CALIFORNIA et al.v.SECURITIES & EXCHANGE COMMISSION. No. 453. Argued Jan. 16, 1947. Decided March 31, 1947. Rehearing Denied May 5, 1947. See 331 U.S. 865, 67 S.Ct. 1301. [Syllabus from pages 585-587 intentionally omitted] Mr. Morris Lavine, of Los Angeles, Cal., for petitioners. Mr. Roger S. Foster, of Washington, D.C., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 The Securities and Exchange Commission, acting pursuant to its authority under § 20(a) of the Securities Act of 1933, 48 Stat. 74, 86, 15 U.S.C. § 77t, 15 U.S.C.A. § 77t(a), issued orders directing an investigation to determine whether Penfield Company had violated the Act in the sale of stock or other securities. In the course of that investigation it directed a subpoena duces tecum to Young, as an officer of Penfield, requiring him to produce certain books of the corporation covering a four year period ending in April, 1943. See § 19(b) of the Act, 15 U.S.C.A. § 77s(b). Upon Young's refusal to appear and produce the books and records, the Commission filed an application with the District Court for an order enforcing the subpoena.1 After a hearing, the court ordered Young, as an officer of Penfield, to produce them.2 Young persisted in his non-compliance. The Commission then applied to the District Court for a rule to show cause why Young should not be adjudged in contempt—a proceeding which, as we shall see, was one for civil contempt. The District Court delayed action on the motion until after disposition of a criminal case involving Young, Penfield, and others. When that case was concluded, the court, after hearing, adjudged Young to be in contempt. It refused, however, to grant any coercive relief designed to force Young to produce the documents but instead imposed on him a flat, unconditional fine of $50.00 which he paid.3 2 That was on July 2, 1945. On September 24, 1945, the Commission filed a notice of appeal in the District Court and subsequently a statement of points challenging as error the action of the District Court in imposing the $50.00 fine, instead of a remedial penalty calculated to make Young produce the documents. The Circuit Court of Appeals reversed, holding that the District Court erred in imposing the fine and directing that Young be ordered imprisoned until he produced the documents. 9 Cir., 157 F.2d 65. The case is here on a petition for a writ of certiorari filed by Penfield Co. and Young. Neither the District Court nor the Circuit Court of Appeals rendered judgment against Penfield. Nor is any relief sought by or against it here. Accordingly the writ is dismissed as to Penfield. 3 First. It is argued that since no application for an allowance of an appeal was made, the Circuit Court of Appeals had no jurisdiction to entertain it.4 If the appeal was in a suit of a civil nature, the filing of the notice of appeal with the District Court was adequate under the Federal Rules of Civil Procedure.5 4 It is the nature of the relief asked that is determinative of the nature of the proceeding. Lamb v. Cramer, 285 U.S. 217, 220, 52 S.Ct. 315, 316, 76 L.Ed. 715. This was not a proceeding in which the United States was a party and in which it was seeking to vindicate the public interest. See Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 445, 31 S.Ct. 492, 499, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. The contempt proceedings were instituted as a part of the proceedings in which the Commission sought enforcement of a subpoena. The relief which the Commission sought was production of the documents; and the only sanction asked was a penalty designed to compel their production. Where a fine or imprisonment imposed on the contemnor is 'intended to be remedial by coercing the defendant to do what he had refused to do', Gompers v. Bucks Stove & Range Co., supra, 221 U.S. at page 442, 31 S.Ct. at page 498, 55 L.Ed. 797, 34 L.R.A.,N.S., 874, and remedy is one for civil contempt. United States v. United Mine Workers, 330 U.S. 258, 67 S.Ct. 677. Then 'the punishment is wholly remedial, serves only the purposes of the complainant, and is not intended as a deterrent to offenses against the public.' McCrone v. United States, 307 U.S. 61, 64, 59 S.Ct. 685, 686, 83 L.Ed. 1108. One who is fined, unless by a day certain he produces the books, has it in his power to avoid any penalty. And those who are imprisoned until they obey the order, 'carry the keys of their prison in their own pockets.' In re Nevitt, 8 Cir., 117 F. 448, 461. Fine and imprisonment are then employed not to vindicate the public interest but as coercive sanctions to compel the contemnor to do what the law made it his duty to do. See Doyle v. London Guarantee Co., 204 U.S. 599, 27 S.Ct. 313, 51 L.Ed. 641; Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 73 L.Ed. 419; Fox v. Capital Co., 299 U.S. 105, 57 S.Ct. 57, 81 L.Ed. 67; McCrone v. United States, supra. 5 The Act gives the Commission authority to require the production of books and records in the course of its investigations. And in absence of a basis for saying that its demand exceeds lawful limits (Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494), it is entitled to the aid of the court in obtaining them.6 A refusal of the court to enforce its prior order for the production of the documents denies the Commission that statutory relief. The issue thus raised poses a problem in civil, not criminal, contempt.7 6 Where a judgment of contempt is embodied in a single order which contains an admixture of criminal and civil elements, the criminal aspect of the order fixes its character for purposes of procedure on review. Union Tool Co. v. Wilson, 259 U.S. 107, 42 S.Ct. 427, 66 L.Ed. 848. But there was no such admixture here. The District Court refused to grant any remedial relief to the Commission. The denial of that relief was the ground of the Commission's appeal. The order of denial being final, was appealable, Lamb v. Cramer, supra, 285 U.S. at pages 220, 221, 52 S.Ct. at pages 316, 317, 76 L.Ed. 715, and the right to appeal from it was in no way dependent on an appeal from the imposition of the fine. 7 Second. The question on the merits is two-fold: (1) whether the Circuit Court of Appeals erred in granting the Commission remedial relief by directing that Young be required to produce the documents; and (2) whether that court exceeded its authority in reversing the judgment which imposed the fine and in substituting a term of imprisonment conditioned on continuance of the contempt. 8 As we have already noted, the Act requires the production of documents demanded pursuant to lawful orders of the Commission and lends judicial aid to obtain them. There is no basis in the record before us for saying that the demand of the Commission exceeded lawful limits. There is, however, a suggestion that the District Court was warranted in denying remedial relief since the contempt hearing came after a criminal trial of petitioners in another case, during the course of which many of Penfield's books and records were examined. The thought apparently is that the Commission had probed enough into Penfield's affairs. But the District Court did not hold that the Commission's request had become moot, that the documents produced satisfied its legitimate needs, or that the additional ones sought were irrelevant to its statutory functions.8 We agree with the Circuit Court of Appeals that at least in absence of such a finding, the refusal of the District Court to grant the full remedial relief which the Act places behind the orders of the Commission was an abuse of discretion. The records might well disclose other offenses against the Securities Act of 1933 which the Commission administers. The history of this case reveals a long, persistent effort to defeat the inves igation. The fact that Young paid the fine and did not appeal indicates that the judgment of contempt may have been an easy victory for him. On the other hand, the dilatory tactics employed suggest that if justice was to be done, coercive sanctions were necessary. 9 When the Circuit Court of Appeals substituted imprisonment for the fine, it put a civil remedy in the place of a criminal punishment. For the imprisonment authorized would be suffered only if the documents were not produced or would continue only so long as Young was recalcitrant. On the other hand, the fine imposed by the District Court, unlike that involved in Fox v. Capital Co., supra, 299 U.S. at pages 106, 107, 57 S.Ct. at page 58, 81 L.Ed. 67, was unconditional and not relief of a coercive nature such as the Commission sought. It was solely and exclusively punitive in character. Cf. Nye v. United States, 313 U.S. 33, 42, 43, 61 S.Ct. 810, 812, 813, 85 L.Ed. 1172. 10 As already noted, Young did not appeal from the order holding him in contempt and subjecting him to a fine. Young maintains, however, that once the fine was imposed and paid, the jurisdiction of the court was exhausted; that the Circuit Court of Appeals was without authority to substitute another penalty or to add to the one already imposed and satisfied. That argument rests on the statute granting federal courts the power to punish contempts of their authority, Judicial Code § 268, 28 U.S.C. § 385, 28 U.S.C.A. § 385, and the decisions construing it. The statute gives the federal courts power 'to punish, by fine or imprisonment, at the discretion of the court, contempts of their authority,' including violations of their lawful orders. At least in a criminal contempt proceeding both fine and imprisonment may not be imposed since the statute provides alternative penalties. In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500. Hence if a fine is imposed on a contemnor and he pays it, the sentence may not thereafter be amended so as to provide for imprisonment. The argument here is that after a fine for criminal contempt is paid, imprisonment may not be added to, or substituted for the fine, as a coercive sanction in a civil contempt proceeding. If that position is sound, then the statutory limitation of 'fine or imprisonment' would preclude a court from imposing a fine as a punitive measure and imprisonment as a remedial measure, or vice versa. 11 The dual function of contempt has long been recognized—(1) vindication of the public interest by punishment of contemptuous conduct; (2) coercion to compel the contemnor to do what the law requires of him. Gompers v. Bucks Stove & Range Co., supra, 221 U.S. at pages 441 et seq., 31 S.Ct. at page 498, 55 L.Ed. 797, 34 L.R.A., N.S., 874; United States v. United Mine Workers, supra. As stated in Bessette v. W. B. Conkey Co., 194 U.S. 324, 327, 24 S.Ct. 665, 666, 48 L.Ed. 997, 'The purpose of contempt proceedings is to uphold the power of the court, and also to secure to suitors therein the rights by it awarded.' 12 We assume, arguendo, that the statute allowing fine or imprisonment governs civil as well as criminal contempt proceedings. If the statute is so construed, we find in it no barrier to the imposition of both a fine as a punitive exaction and imprisonment as a coercive sanction, or vice versa.9 That practice has been approved. Kreplik v. Couch Patents Co., 1 Cir., 190 F. 565, 571. And see Phillips Sheet & Tin Plate Co. v. Amalgamated Ass'n, D.C., 208 F. 335, 340. When the court imposes a find as a penalty, it is punishing yesterday's contemptuous conduct. When it adds the coercive sanction of imprisonment, it is announcing the consequences of tomor ow's contumacious conduct. At least in that situation the offenses are not the same. And the most that the statute forbids is the imposition of both fine and imprisonment for the same offense. 13 Young raises objections that go to the merits of the judgment of contempt. These were considered and determined against him by the District Court. Since he did not appeal from the adverse judgment, he is precluded from renewing the objections at this stage. Le Tulle v. Scofield, 308 U.S. 415, 421, 422, 60 S.Ct. 313, 316, 317, 84 L.Ed. 355; Helvering v. Pfeiffer, 302 U.S. 247, 250, 251, 58 S.Ct. 159, 160, 161, 82 L.Ed. 231. 14 There is a difference of view among us whether the portion of the order of the Circuit Court of Appeals which set aside the unconditional fine of $50 imposed on Young is here for review. But if we assume that it is, a majority of the Court is of the opinion that the Circuit Court of Appeals was correct in setting it aside, since the fine was imposed in a civil contempt proceeding. See Gompers v. Bucks Stove & Range Co., supra. 15 Affirmed. 16 Mr. Justice RUTLEDGE (concurring). 17 But for the decision in United States v. United Mine Workers, 330 U.S. 258, 67 S.Ct. 677, I should have no difficulty in concluding with the Court that this contempt proceeding was exclusively civil in character and that, consequently, no criminal penalty could be imposed, coercive relief alone being allowable in such a case. Gompers v. Bucks Stove & Range Co., 221 U.S. 418,1 31 S.Ct. 492, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. That decision held that the imposition of criminal punishment in a civil contempt proceeding 'was as fundamentally erroneous as if in an action of 'A vs. B, for assault and battery,' the judgment entered had been that the defendant be confined in prison for twelve months.' 221 U.S. at page 449, 31 S.Ct. at page 501, 55 L.Ed. 797, 34 L.R.A., N.S., 874. 18 By every test applied in the Gompers case this proceeding was civil, not criminal in character. Here as there the proceeding was entitled, instituted and conducted as collateral to civil litigation. It sought only remedial relief, namely, the production of specified books and records.2 And issuance of the citation was grounded upon disobedience of the court's lawful order for their production.3 19 This act, like the act of disobedience in the Gompers case, constituted conduct which would have sustained either civil or criminal penalty in appropriate proceedings. But the unequivocal ruling of that case was that criminal penalties cannot be applied in civil contempt proceedings. 221 U.S. at pages 444, 449, 451, 452, 31 S.Ct. at pages 499, 501, 502, 55 L.Ed. 797, 34 L.R.A., N.S., 874. Not only the result, but the whole tenor of the opinion was of the effect that the character of the proceeding as a whole, whether as civil or criminal, must be correlated with the character of the penalty imposed, and that the two cannot be scrambled, regardless of the fact that the conduct constituting the contempt would support the imposition of either type of relief in a proceeding appropriate to the kind of relief given.4 Not simply the remedy sought but the character of the proceeding in which it is pursued, it was held, determines the validity of the relief afforded.5 20 This ruling, as I have previously maintained, was one not only of historical grounding but of constitutional compulsion.6 Moreover, it recently has been reinforced by Rule 42(b) of the Federal Rules of Criminal Procedure, requiring that the notice prescribed for instituting the proceeding 'shall state the essential facts constituting the criminal contempt charged and describe it as such.'7 (Emphasis added.) 21 Hence, under the rule of the Gompers case and others following it, it is clear that the district judge had no power in this case to impose the criminal penalty of a flat $50 fine and it is equally clear, on the record,8 that he exceeded his power in denying the Commission civil coercive relief altogether.9 22 Moreover, I think it is clear that both of these problems are presented for our determination on the state of the record here. It is true that Young did not appeal from the District Court's judgment to the Circuit Court of Appeals, and that he paid the fine. But the Commission appealed from that judgment in its entirety, as it had a right to do,10 unless the payment of the fine exhausted all judicial power to deal further with the proceeding. This indeed is a basis upon which Young maintains that the Circuit Court of Appeals had no power to reverse the District Court's judgment.11 23 But clearly, as the Court holds, such power could not be wanting, if the litigation was exclusively civil in character. On the contrary the action of the Circuit Court of Appeals was exactly in accordance with the ruling in the Gompers case and was required by it. In both cases the proceedings were wholly civil in character In both a criminal penalty was imposed. And in both the judgment laying it was reversed and the cause was remanded to the trial court for further proceedings looking only to the giving of civil relief. 24 The only difference is that in the Gompers case the contemnors had not entered upon the service of the void criminal sentence of imprisonment but appealed from it, while here Young paid the fine and did not appeal. That action on his part, however, cannot oust the Commission of its statutory right of appeal and review or of its right to civil relief.12 If the contempt proceeding were criminal in character, a different question might be presented.13 But compliance with a void criminal penalty, void because imposed in a wholly civil proceedings, cannot make it valid or oust either the courts of their civil jurisdiction in matters of relief or opposing parties of their rights in that respect. 25 In short, the Commission was forced to appeal from the judgment rendered, if it was not to acquiesce in what the court had done and thereby suffer unauthorized thwarting of its statutory investigating power. That judgment was rightfully taken in its entirety to the Circuit Court of Appeals, was reviewed by that court, and was reversed not partially but completely.14 Our action in granting certiorari brought here for review the entire judgment of the Circuit Court of Appeals, including its reversal of the criminal judgment rendered by the District Court as well as its mandate for civil relief.15 Hence in my opinion we are forced to take action upon the judgment as a whole, in both civil and criminal phases. 26 Since I am in agreement with the Court's view that the Gompers ruling and others in accord with it are controlling in this case, I think the judgment of the Circuit Court of Appeals should be affirmed, though with modification in one respect.16 I ind it difficult, however, to reconcile the action taken here with what was done in the Mine Workers decision. A majority there held, as I thought contrary to the Gompers ruling, that civil and criminal contempt could be prosecuted in a single contempt proceeding conducted according to the rules of procedure applicable in equity causes,17 and that both types of relief, civil and criminal, could be imposed in such a mixed proceeding. It was also held that on review the appellate court is free to substitute its own judgment concerning the nature and extent of both types of relief for that of the trial court, and therefore that in remanding the cause for further proceedings there was no necessity to leave room for the further exercise of the trial court's discretion in relation to either type of relief. 27 If in that case a single mixed proceeding could suffice without regard to the requirements of Rule 42(b) and the Gompers line of decisions concerning procedures to be followed in instituting and conducting contempt proceedings, for the imposition of both civil and criminal penalties, I see no valid reason why the same thing could not be done in this cause or why both the criminal fine imposed by the District Court and the civil relief given by the Circuit Court of Appeals should not be allowed to stand. 28 It is true that if the proceeding is to be taken as having been both civil and criminal a serious question would be presented on the terms of § 268 of the Judicial Code whether imposition and payment of the fine here did not exhaust judicial power to deal further with the proceeding, more especially in its criminal phase.18 But that question too, I take it, necessarily would be settled if the Mine Workers ruling were to govern here. 29 It is also true that in this case the United States was not a party by that name, as it was in the Mine Workers case, to the civil litigation in which the contempt proceeding arose or to the contempt proceeding itself. But the Commission was the moving party in both, representative as such of the public interest as the trial court pointed out.19 And, in view of the vast liberality allowed by the Mine Workers decision concerning matters of procedure and relief in contempt proceedings, it hardly can be a solid ground for distinguishing the cases that in one the public interest was represented, as to the criminal phase, eo nomine United States, in the other under the name of the Securities and Exchange Commission. Cf. In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500. 30 Notwithstanding these difficulties, since the Court rests the decision in this cause upon the Gompers rule, which in my opinion represents the settled law, I join in the affirmance of the judgment of the Circuit Court of Appeals, both insofar as it reversed the District Court's judgment because of the denial of coercive relief and in relation to its reversal of the criminal penalty imposed by the District Court. 31 But, while there can be no question of the Court of Appeals' power in proper cases to review and revise civil relief given in the District Court, in this case no such relief had been awarded. In my opinion the question of the character and scope of that relief was a matter, in the first instance, for the District Court's judgment rather than for the Court of Appeals. Accordingly, I would modify the judgment of reversal in the civil phase so that the cause would be remanded to the District Court with directions to exercise its discretion in framing the relief adequate and appropriate to make effective the Commission's right to disclosure.20 32 Mr. Justice FRANKFURTER, with whom concurs Mr. Justice JACKSON, dissenting. 33 Beginning with the Interstate Commerce Act in 1887, 49 U.S.C.A. § 1 et seq., it became a conventional feature of Congressional regulatory legislation to give administrative agencies authority to issue subpoenas for relevant information. Congress has never attempted, however, to confer upon an administrative agency itself the power to compel obedience to such a subpoena. It is beside the point to consider whether Congress was deterred by constitutional difficulties. That Congress should so consistently have withheld powers of testimonial compulsion from administrative agencies discloses a policy that speaks with impressive significance. 34 Instead of authorizing agencies to enforce their subpoenas, Congress has required them to resort to the courts for enforcement. In the discharge of that duty courts act as courts and not as administrative adjuncts. The power of Congress to impose on courts the duty of enforcing obedience to an administrative subpoena was sustained precisely because courts were not to be automata carrying out the wishes of the administrative. They were discharging judicial power with all the implications of the judicial function in our constitutional scheme. Interstate Commerce Commission v. Brimson, 154 U.S. 447, 14 S.Ct. 1125, 38 L.Ed. 1047; Id., 155 U.S. 3, 15 S.Ct. 19, 39 L.Ed. 49. Accordingly, an order directing obedience to a subpoena by the Securities and Exchange Commission, like a subpoena of any other federal agency, does not issue as a matter of course. An administrative subpoena may be contested on the ground that it exceeds the bounds set by the Fourth Amendment against unreasonable search and seizure; that the inquiry is outside the scope of the authority delegated to the agency; that the testimony sought to be elicited is irrelevant to the subject matter of the inquiry; that the person to whom it is directed cannot be held responsible for the production of the papers. See Interstate Commerce Commission v. Brimson, supra, 154 U.S. at pages 479 and 489, 14 S.Ct. at pages 1134, 1138, 38 L.Ed. 1047; Harriman v. Interstate Commerce Commission, 211 U.S. 407, 29 S.Ct. 115, 53 L.Ed. 253; Ellis v. Interstate Commerce Commission, 237 U.S. 434, 35 S.Ct. 645, 59 L.Ed. 1036; Smith v. Interstate Commerce Commission, 245 U.S. 33, 38 S.Ct. 30, 62 L.Ed. 135; Federal Trade Commission v. American Tobacco Co., 264 U.S. 298, 44 S.Ct. 336, 68 L.Ed. 696, 32 A.L.R. 786; Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494. And see Lilienthal, The Power to Compel Testimony, 39 Harv.L.Rev. 694. 35 In this case, the Securities and Exchange Commission issued a subpoena to Young, as officer of the Penfield Company, for the production of books and records of the company covering the period May 1, 1939, to April 9, 1943. Upon Young's failure to comply, the Commission applied to the District Court, on April 13, 1943, for an order compelling obedience. From this order an appeal was taken to the Circuit Court of Appeals which affirmed the order on June 30, 1944, 9 Cir., 143 F.2d 746, its mandate being spread on the record of the District Court on December 7, 1944. Young having persisted in his refusal to comply, the Securities and Exchange Commission, on January 24, 1945, applied for a rule to show cause why he should not be cited for contempt. The District Court postponed final hearings on the ord r to show cause, pending, apparently, the completion of a criminal trial of Young and the Penfield Company then before the Court, on an indictment growing out of the inquiry for which the subpoena had been issued. It was not until July 2, 1945, after the petitioners had been acquitted in the criminal proceeding, that the rule to show cause was heard. 36 The District Court found petitioner Young guilty of contempt of court for disobedience of its order of June 1, 1943 requiring the production of records called for by the subpoena issued by the S.E.C. But the Court refused the Government's request to impose a contingent punishment to secure production of the records. Instead, it sentenced Young to the payment of a fine of $50. Without objection Young paid this fine, and consistently thereafter maintained that by such payment judicial power had exhausted itself. See In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500. The Government appealed from this disposition by the District Court on the ground that the District Court, having adjudged Young to be in contempt, erred in ordering Young to pay a fine of $50 and stand committed until the fine was paid, instead of imposing a remedial penalty, calculated to coerce Young to produce or allow inspection of the books and records of the Penfield Co., pursuant to the order of June 1, 1943. On the basis of this appeal, which challenged what the District Court did and what it refused to do, the Circuit Court of Appeals, one judge dissenting, reversed the order of the lower court: 'The order imposing the fine is reversed and the case remanded to the district court for an order requiring Young's imprisonment to compel his obedience to the order to produce the documents in question.' 9 Cir., 157 F.2d 65, 67. This Court then granted certiorari, the petition for which asked this Court to 'reverse the judgment and order of the Circuit Court of Appeals in this case.' There was thus properly before the Circuit Court of Appeals the judgment imposing the fine of $50 and refusing to give coercive remedy, and there is accordingly before us the correctness of the judgment of the Circuit Court of Appeals setting aside the $50 fine and ordering coercive decree. 37 The judgment immediately before us is that of the Circuit Court of Appeals setting aside the fine imposed by the District Court and reversing its refusal to issue a coercive order. The ultimate question is the correctness of what the District Court did not what it refused to do. It is essential therefore to focus attention on the precise circumstances in which the District Court acted as it did. This is what the record tells us: 38 'Mr. Cuthbertson: So far as the punishment which the Court might see fit to impose, that is up to the Court. We are still anxious to get a look at these books and records, so I suggest to the Court, if he be so disposed, whatever punishment the Court might see fit to impose would be in connection with or so long as he refused to produce his books and records for our inspection. 39 'The Court: I don't think that I am going to be disposed to do anything like that. I sat here for six weeks and listened to books and records. The Government produced people from all over the United States in connection with the Penfield matter. 40 'Mr. Cuthbertson: I might say, your Honor, that we have in mind that these books and records may disclose certain acts other than those charged in the indictment. We don't propose to go over the same matter that the Court went over in connection with the criminal case. 41 'The Court: The Court can take judicial notice of its own books and records, and in that trial the evidence was clear and definite and positive from all of the Government's witnesses, that during one period of time this defendant had nothing whatsoever to do with the Penfield Company. Whether that period of time is covered by what the Securities and Exchange Commission seeks or not, I don't know. 42 'The judgment and sentence of the Court is that the efendant pay a fine of $50, and stand committed until paid.' 43 Bearing in mind that the District Court was not an automaton which must unquestioningly compel obedience to a subpoena simply because the Commission had issued it, we must consider whether the District Court had abused the fair limits of judicial discretion. If a District Court believes that howsoever relevant a demand for documents may have been at the time it was made, circumstances had rendered the subpoena obsolete, it is entitled to consider the merits of the subpoena as of the time that its enforcement is sought and not as of the time that it was issued. The above colloquy means nothing unless it means that Judge Hall was of the view that events had apparently rendered needless the call from Young for the documents. He may have been wrong in that belief. At all events it was the view of a judge who had presided for six weeks over a trial in which these matters were canvassed. The Circuit Court of Appeals did not have before it, nor have we, the knowledge or the basis for knowledge that Judge Hall had, and so neither court can say with any confidence that he did not have ground for thinking that the change in circumstances revealed in the course of the trial obviated the need for the demand that was made upon Young. We surely ought not to reverse the action of the district judge on the abstract assumption that papers ordered to be produced as relevant to an inquiry at the time the subpoena issued, continued relevant several months later. We ought not to assume that a subpoena was proper months later when a proceeding lasting more than six weeks before the judge who had approved the subpoena in the first instance persuaded him that the circumstances no longer called for carrying out the terms of the subpoena. When the trial judge stated his understanding that the intervening circumstances had rendered inappropriate the use of his coercive powers, counsel for the Government did not gainsay the judge's view. The failure of Government counsel to contradict the interpretation of facts by the Court does not present any technical ground of not allowing a point to be raised on appeal to which no exception was taken. The significance of counsel's silence is its confirmation of the judge's interpretation of the circumstances. At least in the absence of contradiction, the interpretation of the facts by the trial judge was a proper basis for the exercise of his judicial discretion. 44 On the record before us, Judge Hall exercised allowable discretion in finding that the subpoena had spent its force, and in concluding not to compel obedience to it. At the same time, he was justified in finding that because Young had disobeyed the subpoena while it was still alive, he should be fined and made to feel that one cannot flout a court's authority with impunity. 45 The question, then, is whether the Court could impose what constituted a fine for criminal contempt, that is, to vindicate the law as such, without a formal pleading charging Young with such disobedience. We do not think Judge Hall had to direct the clerk to issue an attachment against Young to inform him of that which he obviously knew and which the proceedings had made abundantly clear to him. The true significance of our opinion in United States v. United Mine Workers, 330 U.S. 258, 67 S.Ct. 677, as we understand it, is that contempt proceedings are sui generis and should be treated as such in their practical incidence. They are not to be circumscribed by procedural formalities or by traditional limitations of what are ordinarily called crimes, except insofar as due process of law and the other standards of decency and fairness in the administration of federal justice may require. On this record we find not the faintest denial of any safeguard or of appropriate procedural protection. 46 We think the judgment of the Circuit Court of Appeals should be reversed and that of the District Court reinstated. 1 Sec. 22(b), 15 U.S.C.A. § 77v(b), provides: 'In case of contumacy or refusal to obey a subpoena issued to any person, any of the said United States courts, within the jurisdiction of which said person guilty of contumacy or refusal to obey is found or resides, upon application by the Commission may issue to such person an order requiring such person to appear before the Commission, or one of its examiners designated by it, there to produce documentary evidence if so ordered, or there to give evidence touching the matter in question; and any failure to obey such order of the court may be punished by said court as a contempt thereof.' 2 That order was affirmed by the Circuit Court of Appeals. 9 Cir., 143 F.2d 746, 154 A.L.R. 1027. 3 The request of the Commission and the ruling of the court are made clear by the following colloquy: 'Mr. Cuthbertson: So far as the punishment which the Court might see fit to impose, that is up to the Court. We are still anxious to get a look at these books and records, so I suggest to the Court, if he be so disposed, whatever punishment the Court might see fit to impose would be in connection with or so long as he refuses to produce his books and records for our inspection. 'The Court: I don't think that I am doing to be disposed to do anything like that. I sat here for six weeks and listened to books and records. The Government produced people from all ver the United States in connection with the Penfield matter. 'Mr. Cuthbertson: I might say, your Honor, that we have in mind that these books and records may disclose certain acts other than those charged in the indictment. We don't propose to go over the same matter that the Court went over in connection with the criminal case. 'The Court: The Court can take judicial notice of its own books and records, and in that trial the evidence was clear and definite and positive from all of the Government's witnesses, that during one period of time this defendant had nothing whatsoever to do with the Penfield Company. Whether that period of time is covered by what the Securities and Exchange Commission seeks or not, I don't know. 'The judgment and sentence of the Court is that the defendant pay a fine of $50, and stand committed until paid.' 4 Section 8(c) of the Act of February 13, 1925, 43 Stat. 936, 940, as amended, 28 U.S.C.A. § 230, 28 U.S.C.A. § 230 provides: 'No * * * appeal intended to bring any judgment or decree before a circuit court of appeals for review shall be allowed unless application therefore be duly made within three months after the entry of such judgment or decree.' See Alaska Packers Ass'n v. Pillsbury, 301 U.S. 174, 57 S.Ct. 682, 81 L.Ed. 988; Georgia Hartford Lumber Co. v. Compania, 323 U.S. 334, 65 S.Ct. 293, 89 L.Ed. 280. 5 Rule 73(a), 28 U.S.C.A. following section 723c, provides in part: 'When an appeal is permitted by law from a district court to a circuit court of Appeals and within the time prescribed, a party may appeal from a judgment by filing with the district court a notice of appeal.' Where a Rule of Civil Procedure conflicts with a prior statute, the Rule prevails. 48 Stat. 1064, 28 U.S.C. § 723b, 28 U.S.C.A. § 723b. 6 See § 22(b), supra, note 1. 7 This thus disposes of the further contention that the appeal was not timely under the Criminal Appeals Act, 18 U.S.C.Supp. II § 682, 18 U.S.C.A. § 682. United States v. Hark, 320 U.S. 531, 64 S.Ct. 359 88 L.Ed. 290. 8 As will be seen from note 3, supra, the court, immediately prior to rendering its sentence, noted that there was one period during which Young was not connected with Penfield Co. But the court added: 'Whether that period of time is covered by what the Securities and Exchange Commission seeks or not, I don't know.' 9 Some rules governing criminal contempts are, of course, different from those governing civil contempts. Gompers v. Bucks Stove & Range Co., supra, 221 U.S. at pages 444, 446—449, 31 S.Ct. at pages 499, 500—501, 55 L.Ed. 797, 34 L.R.A.,N.S., 874. If those differences are satisfied and if, as in In re Swan, 150 U.S. 637, 14 S.Ct. 225, 37 L.Ed. 1207; Matter of Christensen Engineering Co., 194 U.S. 458, 24 S.Ct. 729, 48 L.Ed. 1072; In re Merchants' Stock & Grain Co., 223 U.S. 639, 32 S.Ct. 339, 56 S.Ct. 584; Farmers & Mechanics Nat. Bank v. Wilkinson, 266 U.S. 503, 45 S.Ct. 144, 69 L.Ed. 408, the criminal penalty and the remedial relief are segregated, no problem of the adequacy of the order for purposes of appellate review is presented. No question is raised here as to the propriety of combining civil and criminal contempt in the same proceeding. 1 See In re Fox, § 3 Cir., 96 F.2d 23; Norstrom v. Wahl, 7 Cir., 41 F.2d 910. 2 The application in contempt was made by affidavit setting forth the facts alleged to constitute the violation. The contempt proceeding was entered upon the civil docket, being cause 'No. 2863, Civil, Securities and Exchange Commission v. Penfield Company of California.' Young was first commanded to appear and show cause why a further order should not be made directing him 'to show cause why an order should not be made holding said A.W. Young in contempt of this Court and to be dealt with accordingly.' The order of citation followed in the same terms. At the hearing counsel for the Commission maintained consistently and urgently that the proceeding was exclusively civil, not criminal in character. Not until pronouncement of judgment was any step taken indicat ng the proceeding to be criminal in nature. 3 The validity of the order for production was sustained on appeal. 9 Cir., 143 F.2d 746. 4 See the Court's discussion in Gompers v. Bucks Stove & Range Co., 221 U.S. 418, particularly at pages 444—449, 451 ff., 31 S.Ct. 492, at pages 499—501, 55 L.Ed. 797, 34 L.R.A.,N.S., 874; see also discussion in United States v. United Mine Workers, 330 U.S. 258, 263, 67 S.Ct. 677, dissenting opinion, p. 730, Part III. 5 The Gompers opinion, as I understand it, does not hold that the character of the relief sought is exclusively the criterion of the character of the proceeding. It was said to be a factor to be taken into account. But, in view of the Court's stress upon other factors, including the private or public character of the complainant, whether or not the contempt proceeding arises in and as corollary to civil litigation, and the necessity for observing distinct procedural requirements in the course of trial, the case seems clearly to rule that the character of the proceeding determines the nature of the relief which can be given rather than the reverse. 6 See the references cited in note 4 supra; and see note 5. 7 'A criminal contempt except as provided in subdivision (a) of this rule shall be prosecuted on notices. The notice shall state the time and place of hearing, allowing a reasonable time for the preparation of the defense, and shall state the essential facts constituting the criminal contempt charged and describe it as such. The notice shall be given orally by the judge in open court in the presence of the defendant or, on application of the United States attorney or of an attorney appointed by the court for that purpose, by an order to show cause or an order of arrest. * * *' Rule 42(b), Federal Rules of Criminal Procedure, 18 U.S.C.A. following section 687. See United States v. United Mine Workers, 330 U.S. 258, 372, 67 S.Ct. 677, dissenting opinion, p. 735, and note 45. The rule did not become effective until March 21, 1946, hence was not applicable to the present proceeding which was instituted and concluded in the trial court prior to that date. 8 See text infra. The record does not show that the function of the subpoena had been exhausted at the time of the judgment in contempt, alt ough this was Young's contention accepted, apparently, by the District Court. The contrary, in fact, affirmatively appeals. The subpoena did not purport to be issued exclusively in connection with and for the purposes of the criminal trial which transpired in the District Court between its issuance and the time of the judgment in contempt. Counsel for the Commission expressly stated that the subpoena was not limited to that matter and the court said, after referring to the period of the criminal suit: 'Whether that period of time is covered by what the Securities and Exchange Commission seeks or not, I do not know.' The court made no finding that the subpoena's function had been exhausted. The only reason assigned for refusing civil relief was that the court had sat in the criminal trial for six weeks during which it had 'listened to books and records,' as well as witnesses produced 'from all over the United States in connection with the Penfield matter.' Taking judicial notice of its own proceedings, the court said: '* * * in that trial the evidence was clear and definite * * * that during one period of time this defendant (Young) had nothing whatsoever to do with the Penfield Company.' These grounds, of course, were not the equivalent of finding that the records covered by the subpoena had been produced or that the Commission had no power or valid reason for pursuing its statutory investigation through the subpoena beyond the confines of the closed criminal trial. 9 See note 8. And see text infra preceding note 20. 10 28 U.S.C.A. § 225, 28 U.S.C.A. § 225; see Clarke v. Federal Trade Commission, 9 Cir., 128 F.2d 542; Lamb v. Cramer, 285 U.S. 217, 220, 52 S.Ct. 315, 76 L.Ed. 715. 11 The principal contention in this respect is based on § 268 of the Judicial Code, 28 U.S.C. § 385, 28 U.S.C.A. § 385, and the decision in In re Bradley, 318 U.S. 50, 63 S.Ct. 470, 87 L.Ed. 500. The Bradley case, however, was one in criminal contempt and the decision was that in such a case § 268 forbids imposition as penalty of both fine and imprisonment. The penalties being alternative by the section's terms, it was held that payment of the fine exhausted the court's power. The Bradley case therefore presented no question of the applicability of § 268 in civil contempt proceedings or of its effect if applicable. Compare the majority and concurring opinions in In re Sixth & Wisconsin Tower, Inc., 7 Cir., 108 F.2d 538. It cannot be taken as having ruled that the court's invalid imposition of criminal punishment in civil contempt proceedings or satisfaction of such a void sentence exhausts either the trial court's power or that of an appellate court on review to deal with the civil contempt by affording civil relief or to avoid the invalid criminal judgment. Whether or not § 268, if applicable to a so-called mixed civil-criminal contempt proceeding, would forbid the imposition of relief both by way of fine and imprisonment, one punitive, the other coercive and remedial, need not be considered in view of the holding that this proceeding was exclusively civil in character. 12 See notes 10, 14. 13 See note 11 supra. 14 The opinion of the Circuit Court of Appeals states: 'Young did not appeal from the order holding him in contempt. That decision is final and the only question before us is the extent of the remedy to which the Commission is entitled.' 9 Cir., 157 F.2d 65, 66. Ruling that the cause did not become moot by reason of Young's payment of the fine, the court further held the District Court had abused its 'discretion' in not granting the full relief sought by the Commission. The concluding paragraph of the opinion stated: 'The order imposing the fine is reversed and the case remanded to the district court for an order requiring Young's imprisonment to compel his obedience to the order to produce the documents in question.' The opinion concluded: 'The order of the district court is reversed,' 9 Cir., 157 F.2d at page 67, and the formal order for judgment entitled 'decree' directed 'that the order of the said District Court in this cause be, and hereby is, reversed, and that this cause be, and hereby is remanded to the said District Court for further proceedings in accordance with the opinion of this Court.' The notice of appeal filed in the District Court is not set forth in the printed record here. But the 'Statement of Points on Which the Appellant Intends to Rely,' filed in the Court of Appeals, specifies that 'the District Court erred in ordering Young to pay a fine of $50.00 instead of imposing a remedial penalty calculated to coerce Young to produce or allow inspection of the books and records. * * *' In this state of the record it cannot be taken that the appeal and the judgment of the Court of Appeals did not comprehend the criminal penalty. 15 This Court's action in granting certiorari, 329 U.S. 706, 67 S.Ct. 202, was not limited to any question or phase of the Court of Appeals' action, but brought up the judgment in its entirety. Since that court's judgment comprehended the reversal of the criminal penalty imposed by the District Court, that phase of the Court of Appeals' judgment is necessarily here for review and determination. 16 See text at note 20. 17 See United States v. United Mine Workers, 330 U.S. 258, 363, 67 S.Ct. 677, dissenting opinion, p. 730, Part III. The rule to show cause issued in that case provided: 'It Is Further Ordered, that the accused, and each of them, shall, unless waived by them, be tried upon said charges of contempt by the court with an advisory jury to be empanelled by this court.' (Emphasis added.) The advisory jury was waived. 18 See note 11 supra and text. 19 The court inquired of Commission counsel, in response to argument that the proceeding was exclusively civil, since it arose in the course of civil litigation and sought only remedial relief for one of the parties, and not as an independent proceeding in the public interest to vindicate the court's power: 'The Securities and Exchange Commission does not operate for itself, does it? I mean it operates in the public interest doesn't it?' 20 E. Ingraham Co. v. Germanow, 2 Cir., 4 F.2d 1002, 1003.

01

330 U.S. 695 67 S.Ct. 954 91 L.Ed. 1184 PYRAMID MOTOR FREIGHT CORPORATIONv.ISPASS et al. No. 41. Argued Oct. 22, 1946. Decided March 31, 1947. [Syllabus from pages 695-697 intentionally omitted] Mr. Charles E. Cotterill, of New York City, for petitioners. Mr. Deane Ramey, of New York City, for respondents. Mr. Justice BURTON delivered the opinion of the Court. This case presents two issues: 1 I. Was it reversible error for the Circuit Court of Appeals, 2 Cir., 152 F.2d 619, to deny petitione § motion to dismiss the appeal, made on the ground that the appeal had not been docketed and the transcript of record had not been filed within the time specified in Rule 73(g) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c? We hold that it was not. 2 II. Under the principles we have stated in the companion case of Levinson v. Specitor Motor Service, 330 U.S. 649, 67 S.Ct. 931, was the Circuit Court of Appeals justified in remanding the present case to the District Court for entry of a judgment under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., in favor of all of the respondents except Shapiro? We hold that the case should be remanded, but with directions to proceed in accordance with the opinion of this Court in this case and the Levinson case. This will include a direction to the District Court to determine whether or not the activities of each respondent consisted, wholly or in substantial part, of the class of work which is defined by the Interstate Commerce Commission in Ex parte No. MC—2, 28 M.C.C. 125, 133—134, as that of a 'loader' of freight for an interstate common carrier by motor vehicle, and as affecting the safety of operation of motor vehicles in interstate or foreign commerce.1 3 This action was begun in 1942 in the City Court of the City of New York, pursuant to § 16(b) of the Fair Labor Standards Act.2 It sought to recover unpaid overtime compensation for services rendered to the petitioner by each of six of the eight respondents as 'a delivery clerk and 'push-boy", during various periods between October 24, 1938, and September 20, 1941, computed in accordance with § 7 of the Fair Labor Standards Act,3 together with interest, liquidated damages and an attorney's fee. The case was removed by the petitioner to the United States District Court for the Southern District of New York, 59 F.Supp. 341. The other two respondents there joined in the complaint on like grounds. The petitioner answered that it was an interstate common carrier of freight by motor vehicle; that the labor performed by each of the respondents 'consisted primarily of that of (a) driver's helper and of (a) loader;' that, with respect to them, the Interstate Commerce Commission had power to establish qualifications and maximum hours of service pursuant to § 204 of the Motor Carrier Act, 1935, 49 U.S.C.A. § 304, and that, by virtue of s 13(b)(1) of the Fair Labor Standards Act,4 § 7 of that Act did not apply to the services of the respondents. The case was submitted to the court upon an agreed statement of facts.5 4 On November 29, 1943, the District Court rendered an opinion in which it declined to determine the status of the respondents but held the case 'open for further action' in order to give the respondents an opportunity to present that question to the Interstate Commerce Commission. D.C., 54 F.Supp. 565, 569. Pursuant to respondents' statement that they would not so apply to the Commission and pursuant to their motion requesting a final disposition of the case, the court, on February 14, 1945, dismissed the complaint 'without prejudice.'6 D.C., 59 F.Supp. 341. After considerable delay in the filing of the record on appeal, the Circuit Court of Appeals for the Second Circuit affirmed the judgment of dismissal as to the respondent Shapiro on the ground that 'he is a 'helper' within the Commission's ruling in 28 M.C.C. at pp. 135, 136.' 2 Cir., 152 F.2d 619, 622. As to the other respondents, it reversed the judgment with costs and remanded the cause 'for entry of judgment in their favor and for allowance of an attorney's fee.' 152 F.2d at 622. The judgment as to Shapiro has not been questioned and is not before us. 5 Because of its importance in the interpretation of the Motor Carrier Act and the Fair Labor Standards Act, we granted certiorari, 327 U.S. 774, 66 S.Ct. 818, and the case was argued immediately following the Levinson case. A brief on behalf of the Administrator of the Wage and Hour Division, United States Department of Labor, as amicus curiae, was filed jointly in this case and in the Levinson case, supporting the position of the respondents.7 I. 6 Notice of appeal, dated March 29, 1945, was filed by the respondents in the District Court April 2, 1945. In spite of the applicable provisions of Rule 73(g) of the Federal Rules of Civil Procedure,8 respondents sought from the District Court no extension of time within which to docket their appeal or file a transcript of the record. On July 20, 1945, more than 90 days from the date of the first notice of appeal, respondents, pursuant to motion supported by affidavit, secured from Circuit Judge Augustus N. Hand an order extending to September 1, 1945, the time within which to serve and file their record on appeal. On that date, the transcript of record was filed. The petitioner promptly moved to dismiss the appeal under Rule 73(a) of the Federal Rules of Civil Procedure,9 questioning especially the right of a single member of that court to make the order of July 20. This motion was denied October 10, 1945, Circuit Judges Learned Hand, Swan and Clark speaking for the court. The motion was renewed at the hearing on the merits of the appeal and, on December 28, 1945, was denied again, Circuit Judges Learned Hand, Swan and Frank speaking for the court. 2 Cir., 152 F.2d 619. The issue was raised properly and fully presented here. 7 The authority of a Judge of the Circuit Court of Appeals for the Second Circuit to extend the time for filing the record on appeal appears to be supported by Rule 15 of that court.10 That Rule, however, was not discussed by counsel and we sustain the action taken by the Circuit Court of Appeals under authority of Rule 73(a), even without reference to its own Rule 15. 8 The principal argument against the final action of the Circuit Court of Appeals on this motion is based upon the following statement in that court's opinion: 'In the case at bar there was no abuse of discretion in extending the time, despite the somewhat feeble excuses for delay, since the appeal presents a substantial question as to the correctness of the judgment.' (Italics supplied.) 2 Cir., 152 F.2d 619, 621. It is urged that this shows that the court based its refusal to dismiss the appeal on the substantiality of the question to be presented on the merits of the appeal, rather than on the substantiality of the excuses for the delay in filing the record. 9 We interpret the sta ement as no more than a recognition by the court that the substantiality of the question to be at issue on the merits of the appeal was a matter appropriate for its consideration under Rule 73(a), in connection with all the other circumstances before It. Rule 73(a) is intended to place reliance upon the sound discretion of the Circuit Court of Appeals. We see no reason to question the discretion exercised in this case as evidenced by the agreement of all of the five Circuit Judges to whom the issue was rpesented. Ainsworth v. Gill Glass & Fixture Co., 3 Cir., 104 F.2d 83; Mutual Benefit Health & Accident Ass'n v. Snyder, 6 Cir., 109 F.2d 469; Burke v. Canfield, 72 App.D.C. 127, 111 F.2d 526; United States v. Gallagher, 9 Cir., 151 F.2d 556. 10 Accordingly, we sustain the denial of the motion to dismiss the appeal under Rule 73(a). II. 11 On the merits, the question is whether or not the Circuit Court of Appeals was justified in remanding this case with instructions to enter a judgment under the Fair Labor Standards Act in favor of all of the respondents except Shapiro. We hold that the cause should be remanded but that the order of remand should be modified. This case was tried, without a jury, entirely upon an agreed statement of facts and a pre-trial agreement between the parties, approved by the District Court, settling the issues to be determined. For the sake of clarity, we have proceeded on the same basis and have treated the case as though, upon remand of it to the District Court, that court will proceed upon the same record. This, however, should not be interpreted as necessarily restricting that court to that record if, for good cause, that court should find it advisable to retry the case de novo.11 12 Under the agreed statement there was no question but that the Fair Labor Standards Act applied to each respondent provided only that he was not found to have been excluded from the overtime pay requirements of that Act by § 13(b)(1) because of being an 'employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act, 1935; * * *.' 52 Stat. 1068, 29 U.S.C. § 213(b)(1), 29 U.S.C.A. § 213(b)(1). There thus will remain to be determined by the District Court the question whether the activities of the respective respondents consisted, either wholly or in substantial part, of the class of work which is defined by the Interstate Commerce Commission in Ex Parte No. MC—2, 28 M.C.C. 125, 133—134, as that of a 'loader,' and as affecting the safety of operation of motor vehicles in interstate or foreign commerce.12 13 It will remain for the District Court to apply the facts found by it as to the activities of the respective respondents to the classifications of work that have been made by the Interstate Commerce Commission, defining what comes within the jurisdiction of the Commission under § 204 of the Motor Carrier Act. The Commission has defined its jurisdict on, both affirmatively and negatively, as follows: 14 '* * * we have power, under section 204(a) of said part II, to establish qualifications and maximum hours of service for the classes of employees covered by findings of fact numbered 1, 2, and 3 above (mechanics, loaders and helpers), and * * * we have no such power over any other classes of employees, except drivers.' Ex parte No. MC—2, 28 M.C.C. 125, 139.13 15 Under these circumstances, there is no occasion for us to refer to the Commission any question presented in this case nor to suspend the long delayed final judgment pending further findings by theCommission. The Commission has done its work. The District Court must determine simply whether or not the respective employees who seek to recover overtime compensation under § 7 are excluded from the benefits of that Section because they are within the above classification. The special knowledge and experience required to determine what classifications of work affect safety of operation of interstate motor carriers have been applied by the Commission. The determination whether or not an individual employee is within any such classfication is to be determined by judicial process. 16 The District Court, in applying § 204 of the Motor Carrier Act to respondents, will determine whether or not the activities of each respondent, either as a whole or in substantial part, come within the Commission's definition ofthe work of a 'Loader'. In determining whether the activities, or any substantial part of the activities, of an individual come within those of such a 'loader,' the District Court shall not be concluded by the name which may have been given to his position or to the work that he does, nor shall the District Court be required to find that any specific part of his time in any given week must have been spent in those activities. The District Court shall give particular attention to whether or not the activities of the respective respondents included that kind of 'loading' which is held by the Commission to affect safety of operation. In contrast to the loading activities in the Levinson case, the mere handling of freight at a terminal, before or after loading, or even the placing of certain articles of freight on a motor carrier truck may form so trivial, casual or occasional a part of an employee's activities, or his activities may relate only to such articles or to such limited handling of them, that his activities will not come within the kind of 'loading' which is described by the Commission and which, in its opinion, affects safety of operation. See also, McKeown v. Southern California Freight Forwarders, D.C., 49 F.Supp. 543. Except insofar as the Commission has found that the activities of drivers, mechanics, loaders and helpers, as defined by it, affect safety of operation, it has disclaimed its power to establish qualifications or maximum hours of service under § 204 of the Motor Carrier Act. 17 If none of the alleged 'loading' activities of the respective respondents, during the periods at issue, come within the kind of activities which, according to the Commission, affect the safety of operation of motor vehicles in interstate or foreign commerce within the meaning of the Motor Carrier Act, then those respondents of which that is true are entitled to the benefits of § 7 of the Fair Labor Standards Act. On the other hand, if the whole or a substantial part of such alleged 'loading' activities of the respective respondents, during the periods at issue, do come within the kind of activities which, according to the Commission, affect such safety of operation, then those respondents who are engaged in such activities are excluded from the benefits of such § 7. If some, but less than a substantial part, of such activities of the respective respondents, during some or all of the periods at issue, come within the kind of activities which, according to the Commission, affect such safety of operation, then the right of those respondents who were engaged in such activities to receive the benefits of § 7 of the Fair Labor Standards Act does not come within the precise issue determined in the Levinson case and this Court reserves its decision as to the power of the Commission to establish qualifications and maximum hours of service with respect to them and, consequently, reserves its decision as to their right to receive the benefits of § 7 of the Fair Labor Standards Act. 18 For these reasons, the judgment of the Circuit Court of Appeals is vacated insofar as it relates to the respondents other than Shapiro, and the cause is remanded to the District Court for further proceedings consistent with this opinion. 19 It is so ordered. Vacated and remanded. 1 See Levinson v. Spector Motor Service, 330 U.S. 652, 67 S.Ct. 933, note 2. 2 See Levinson v. Spector Motor Service, note 6. 3 See Levinson v. Spector Motor Service, note 5. 4 See Levinson v. Spector Motor Service, note 4. 5 This included the following description of the work of the respondents as employees of the petitioner: 'Item 3. As to northbound freight the loaded vehicles would come into New York in the very early morning hours to the West 11th Street Terminal where new drivers took charge of the vehicles, and what were called downtown helpers rode on the vehicles with the drivers to the 38th Street Terminal. At such terminal the doors of the trucks were opened in the mornings, both the driver and downtown helper remaining on the vehicles. As the downtown helper pushed the freight packages over the tailboards they were received by the plaintiffs (respondents) who then placed the freight packages in the subterminal building. Still later in the mornings the plaintiffs (respondents) then delivered the packages to various consignees in the Garment Center, generally using for that purpose what are called hand-trucks or flat trucks, using their own manpower for porpulsion. 'During those same days other northbound trucks after first stopping at the West 11th Street main terminal to change a driver and receive a downtown helper, by-passed the West 38th Street subterminal and pa ked first at one place and then another alongside the curbs in the Garment Center. At those places the unloading operation was performed in the same way as at the sub-terminal hereinabove described, and the plaintiffs (respondents) then made the deliveries by hand or by hand trucks into the insides of the Garment Center buildings. 'Item 4. In the late afternoons and early evenings freight originating with various consignors at various locations in the Garment Center was 'picked up' for intended delivery the next morning in Philadelphia or elsewhere south of New York. As to these southbound operations the facts were these: Some of the freight packages would be picked up by the plaintiffs (respondents) at the consignor's places of business in the Garment Center and hand-trucked by them to the West 38th Street sub-terminal. At that place the plaintiffs (respondents) themselves did, in due course, physically load the freight packages into a waiting truck which, when loaded, took up this journey first to the West 11th Street main terminal, and then with a new driver went on to the destinations south of New York. A downtown employee other than the plaintiffs (respondents) would also at the same time so load the vehicles. 'Other trucks for southbound loadings took their stations on the public streets in the Garment Center where the plaintiff's (respondents) brought the packages by hand or by hand truck. The part which the plaintiffs (respondents) took in such loading consisted of the lifting of the packages on to the tailboards of the trucks, and very often when the weights or size of the packages so required they would stand inside the truck bodies and, together with the downtown employee, stack and pile the freight in the vehicle. 'Item 5. As to all the plaintiffs (respondents) other than Shapiro they generally walked between stopping points but occasionally rode upon the trucks when the trucks moved from one place to another in the Garment Center, thereby avoiding loss of time by walking. As to the plaintiff Shapiro, he regularly and as a matter of fixed duty, between August 1939 and September 1, 1941, rode on the truck between four and five hours daily. On the truck at the same time was the driver and a helper from the downtown terminal. In addition thereto the plaintiff Shapiro devoted three and a half hours each day to inside office work at the 38th Street sub-terminal.' (Italics supplied.) 6 The order of dismissal appearing in the record was as follows: 'Ordered that the complaint be and the same hereby is dismissed and that judgment be entered abating and dismissing said action, without prejudice to the rights of plaintiffs (respondents), or any one of them, to bring other actions or proceedings for the establishment of their respective claims, either administratively or at an appropriate time, by action in this court or other proper tribunal.' 7 See also, Walling v. Comet Carriers, D.C., 57 F.Supp. 1018; 2 Cir., 151 F.2d 107, 109, certiorari granted, 326 U.S. 716, 66 S.Ct. 338, writ of certiorari dismissed on motion of counsel for petitioner Comet Carriers, 328 U.S. 819, 66 S.Ct. 1007. That case, also in the Second Circuit, related to 'four motor truck drivers, four drivers' helpers and two hand truckers or pushers' employed by Comet Carriers in the transportation of goods between manufacturers and contractors mostly on intrastate trips within or near the New York City Garment Center. As to the hand truckers or pushers, the District Court said: 'they are not employed on motor vehicles nor do their functions as employees affect or relate to the safety of operation of the motor vehicles in interstate commerce.' D.C., 57 F.Supp. 1018, 1023. The Circuit Court of Appeals discussed only the drivers and drivers' helpers. As to them it said: 'Proof that two employees worked only three hours a week in interstate transportation and that two employees made 'some' and 'occasional' deliveries to the warehouses of chain stores and worked the remaining time in the production of goods for commerce does not satisfy the requirement that the amount of time during which they are engaged in interstate commerce be substantial.' 2 Cir., 151 F.2d 107, 111. 8 'Rule 73. Appeal to a Circuit Court of Appeals '(g) Docketing and Record on Appeal. The record on appeal as provided for in Rules 75 and 76 shall be filed with the appellate court and the action there docketed within 40 days from the date of the notice of appeal; except that, when more than one appeal is taken from the same judgment to the same appellate court, the district court may prescribe the time for filing and docketing, which in no event shall be less than 40 days from the date of the first notice of appeal. In all cases the district court in its discretion and with or without motion or notice may extend the time for filing the record on appeal and docketing the action, if its order for extension is made before the expiration of the period for filing and docketing as originally prescribed or as extended by a previous order; but the district court shall not extend the time to a day more than 90 days from the date of the first notice of a peal.' 308 U.S. 752, 28 U.S.C. following § 723(c), 28 U.S.C.A. following section 723c. 9 'Rule 73. Appeal to a Circuit Court of Appeals '(a) How Taken. When an appeal is permitted by law from a district court to a circuit court of appeals and within the time prescribed, a party may appeal from a judgment by filing with the district court a notice of appeal. Failure of the appellant to take any of the further steps to secure the review of the judgment appealed from does not affect the validity of the appeal, but is ground only for such remedies as are specified in this rule or, when no remedy is specified, for such action as the appellate court deems appropriate, which may include dismissal of the appeal.' 308 U.S. 749, 28 U.S.C. following § 723(c), 28 U.S.C.A. following section 723c. 10 Rule 15, U.S.C.C.A., Second Circuit. 'Docketing Cases. '1. In an appeal in a civil action the appellant shall docket the action and file the record in this court within forty days after filing the notice of appeal with the District Court, or within any added time granted by the district judge within forty days after the filing of the notice of appeal, but in no case later than ninety days after such filing (Rule 73(g)). * * * If the record is not presented to the clerk for filing within the periods above provided, he shall refuse to accept it unless this court so orders, or a judge thereof if the court is not sitting. '2. This Court will not hear and grant motions for filing and docketing appeals, otherwise properly taken, at times other than as stated in subdivision 1 hereof, except upon a showing by affidavits, or otherwise as the Court may order, (a) that the delay has been due to cause beyond the control of the moving party or (b) that the delay has been due to circumstances which shall be deemed to be merely excusable neglect on the part of the moving party and there is a substantial question to be presented on appeal and (c) in all cases where the district court has power to act, that an extension of time has been denied by that court, together with the grounds for such denial, if any are stated. '3. If the appellant shall have failed to comply with this rule, any appellee may either docket the action and file the record in this Court, in which event it shall stand for argument, or may have the action docketed and dismissed by the Clerk of this Court upon producing a certificate from the Clerk of the Court wherein the judgment or decree was rendered, certifying that such appeal has been duly taken or allowed, and proof that four days' notice in writing has been served on the appellant or his attorney that application will be made to the Clerk of this Court for such dismissal. No action dismissed under this rule shall be reinstated except in the discretion of the Court and upon a showing similar to that required under subdivision 2 hereof.' (Italics supplied.) 11 U.S.Sup.Ct.Rep.Digest, L.Ed., Supp. No. 4, p. 55. 11 The District Court, in its order of February 14, 1945, described the basis on which the case had been tried as follows: '* * * on the 3rd day of May, 1943, and the parties hereto having duly appeared by their respective attorneys, and submitted to the Court, in lieu of the offering of proof, an agreed statement of facts setting forth the issues framed by the complaint, and the Court, upon the consent of the attorneys for the respective parties, having thereupon made and entered an order herein on the said 3rd day of May, 1943, wherein and whereby the said agreed statement of facts which were submitted by the attorneys for the respective parties, as aforesaid, was set forth as the issues framed by the complaint and answer, and the said action having been submitted to the Court for its determination upon the said agreed statement of facts and order hereinbefore mentioned and referred to, * * *.' 12 See Levinson v. Spector Motor Service, note 2. 13 The findings of fact referred to by the Commission, insofar as they relate to loaders, are those quoted in the text of Levinson v. Spector Motor Service, at note 17.

67

330 U.S. 545 67 S.Ct. 883 91 L.Ed. 1088 T. WALLING, Administrator of Wage and Hour Division, U.S. Dept. of Labor,v.GENERAL INDUSTRIES CO. No. 564. Argued Feb. 10, 11, 1947. Decided March 31, 1947. Mr. George M. Szabad, of Washington, D.C., for petitioner. Mr. Glen O. Smith, of Cleveland, Ohio, for respondent. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 In a complaint filed in the District Court, petitioner charged that respondent was violating the Fair Labor Standards Act1 by failing to pay some of its employees time and one-half for statutory overtime, as required by § 7(a) of the Act, and asked an injunction against continued violation. Respondent denied the charge, and separately alleged that any of its employees not compensated in accordance with the requirements of § 7(a) were exempt from the Act by § 13(a). 2 The Court, without a jury, heard witnesses for both parties with respect to the compensation and status of three engineers in respondent's power plant. It made special findings of fact, concluded that these men were exempt employees, and entered judgment for respondent.2 The Circuit Court of Appeals thought the evidence did not sustain the District Court's findings relative to the engineers' exempt status. But it thought that the District Court had also found the engineers' compensation to be in accordance with the Act. It decided that the evidence was adequate to this end, and affirmed the District Court's judgment.3 We granted certiorari4 to determine whether the ruling of the Circuit Court of Appeals was not inconsistent with this Court's decision on computation of overtime in Overnight Motor Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682. On argument here, however, respondent continued to urge that the District Court was warranted in its findings as to the engineers' exempt status.5 Having heard the argument and examined the record, we agree that it was. Therefore, we need not consider further the question of computation of overtime, and proceed only to state the considerations relevant to the particular ground of our decision. 3 There is no dispute as to the applicable law. Section 13(a) exempts from the overtime provisions of the Act any person employed in an 'executive capacity' as defined in regulations issued by the Administrator. The Regulations prescribe six conjunctive conditions to an executive capacity, which are set forth in the margin.6 Respondent had the burden of proving the existence of these conditions, if it would rely on its defense that the engineers were exempt employees.7 4 There was evidence to the following effect. Respondent operates at Elyria, Ohio, a plant engaged in the production of small motors and plastic products. Part of this plant consists of a power-house containing a boiler room and engine room. In the former are four boilers. These supply the steam required to drive three large electrical generators which are the source of power for the entire plant, and to create the high steam-pressures and air-pressures employed in molding plastics. In the engine room, besides the generators, are compressors, engines, and other equipment. All this machinery, in both rooms, constitutes an interrelated and interdependent system. It must be carefully and skillfully tended at all times in order to maintain the power and pressure required for continuous 24-hour operation of the plant, to avoid damage to the tremendous investment in the machinery itself, and to guard against the fearful consequences of an explosion. 5 During the period covered by the evidence, the powerhouse was manned by the following personnel. At the top was the chief engineer, who apparently adhered to no precise duty-hours, but was customarily present most of the morning and afternoon and subject to call, in the event of an emergency, twenty-fours a day. Directly under and responsible to him were the three 'operating engineers' whose status is in issue. They worked consecutive eight or eight and one-half hour shifts, one of them being present in the powerhouse at all times. Finally, there were an unspecified number of firemen and coal-passers, who, collectively, were also on twenty-four hour duty. 6 The engineers in question were paid regular monthly salaries of more than $200 per month, for which they regularly worked six-shift weeks. They received sick leave, vacations with pay, bonuses, insurance, and pension rights usually reserved for supervisory employees. 7 The engineers were in charge of the powerhouse and performed the duties generally incident to direct supervision of a highly mechanized operation. Respondent's vice president and factory manager testified that they acted as foremen of the firemen and coal-passers. This testimony was corroborated by other facts. In July, 1944, two months before the complaint in this case was filed, the engineers signed agreements with respondent stating their desire 'to be regarded as foremen, as in the past, with foremen privileges and continue on a salary basis.' Three weeks later the International Brotherhood of Firemen, Oilers and Helpers abandoned a long-contested claim of right to represent the engineers, thereby formally recognizing their supervisory status. Indeed, the nature of the operations in the powerhouse was such that the immediate and continuous supervision of trained persons was indispensable, and there were concededly no other employees to give such supervision. The engineers were required to maintain constant observation of all machinery in the powerhouse, and to make regular inspections and necessary repairs. In addition they were required to spend a small part of their time in oiling and cleaning the engines. 8 The District Court, having made findings substantially as stated above, proceeded to make additional findings of the existence of each of the facts on which an executive status, as defined by the Regulations, is made to depend. 9 We believe that the evidentiary facts afford an adequate basis for the inferences drawn by the Court in making such additional findings. At the least, we think that in drawing such inferences the Court was not clearly wrong, and conclude that the findings should therefore have been left undisturbed.8 The Circuit Court of Appeals' rejection of those findings cannot rest on the conflicting testimony of petitioner's witnesses. The District Court heard the witnesses, and was the proper judge of their credibility.9 10 Affirmed. 11 Mr. Justice RUTLEDGE, dissenting. 12 In my opinion the Circuit Court of Appeals correctly found that the evidence is not sufficient to sustain the findings upon which the District Court concluded that the operating engineers are exempt under § 13(a)(1) of the Fair Labor Standards Act. It said, unanimously: 13 'The District Court found as a fact that Stegman, Page and Spooner were employed as foremen or supervisors of the department, with power to supervise the work of firemen and coal-passers in the boiler-room; that they customarily and regularly directed the work of other employees in the department, and customarily exercised discretionary powers. We think these findings are not sustained by the evidence. The work done by the engineers was highly skilled mechanical work. While the machinery was vital to the plant, dangerous and complicated, its operation involved no exercise of discretion, but merely the proper application of the skilled engineering training which these men had received. Although the three engineers were responsible for the proper operation of the machinery during their shifts, and, as the factory manager testifies, 'in charge of management of the property,' none of them could fire or hire or give orders to any man in the boiler-room. Latteman, the chief engineer, who was present at the plant during one shift and on call 24 hours a day and seven days a week, was in full charge of the department. While Latteman might act on information from Stegman, Page, or Spooner, during the period involved, orders emanated only from him. It is not shown that Stegman, Page or Spooner ever made any recommendation concerning the change in status of the boiler-men. It was essential to have proper steam pressure in the boiler-room, but if the three engineers desired in this connection to secure action from the firemen and coal-passers, they had to secure an order from Latteman. This evidence is not contradicted.' 6 Cir., 155 F.2d 711, 714. 14 An independent examination of the record confirms the Court of Appeals' conclusions. It discloses that on one or two occasions an operating engineer tried to give orders to firemen or coal passers in the boiler room, but in each instance those men refused to follow them and took their orders solely from Latteman. This falls far short at least of the regular and customary supervision required by §§ 541.1(A) and (B) of the controlling regulations to make the exemption operative. 15 Since the Court does not reach other questions presented on the record, I express no opinion concerning them. 16 Mr. Justice BLACK, and Mr. Justice MURPHY, join in this dissent. 1 52 Stat. 1060, 29 U.S.C. § 201 et seq., 29 U.S.C.A. § 201 et seq. 2 Walling v. General Industries Co., D.C., 60 F.Supp. 549. 3 Walling v. General Industries Co., 6 Cir., 155 F.2d 711. 4 329 U.S. 704, 67 S.Ct. 192. 5 Respondent was entitled to make this contention here without filing a cross-petition for certiorari. Langnes v. Green, 282 U.S. 531, 538, 51 S.Ct. 243, 246, 75 L.Ed. 520; Public Service Commission of Puerto Rico v. Havemeyer, 296 U.S. 506, 509, 56 S.Ct. 360, 361, 80 L.Ed. 357. 6 29 Code Fed.Regs. § 541.1, 5 F.R. 4077 (Regulations of the Administrator, Wage and Hour Division, U.S. Dep't of Labor, Oct. 24, 1940, amended Jan. 17, 1942) provides as follows: 'Section 541.1—Executive. 'The term 'employee employed in a bona fide executive . . . capacity' in section 13(a)(1) of the act shall mean any employee— '(A) whose primary duty consists of the management of the establishment in which he is employed or of a customarily recognized department or subdivision thereof, and '(B) who customarily and regularly directs the work of other employees therein, and '(C) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight, and '(D) who c stomarily and regularly exercises discretionary powers, and '(E) who is compensated for his services on a salary basis at not less than $30 per week (exclusive of board, lodging, or other facilities), and '(F) whose hours of work of the same nature as that performed by nonexempt employees do not exceed 20 percent of the number of hours worked in the work-week by the nonexempt employees under his direction; provided that this subsection (F) shall not apply in the case of an employee who is in sole charge of an independent establishment or a physically separated branch establishment.' 7 See Helliwell v. Haberman, 2 Cir., 140 F.2d 833, 834; Fletcher v. Grinnell Brothers, 6 Cir., 150 F.2d 337, 340, 341; Smith v. Porter, 8 Cir., 143 F.2d 292, 294. 8 Rule 52(a), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c; Lawson v. United States Mining Co., 207 U.S. 1, 12, 28 S.Ct. 15, 18, 52 L.Ed. 65; Butte & Superior Copper Co. v. Clark-Montana Realty Co., 249 U.S. 12, 30, 39 S.Ct. 231, 235, 63 L.Ed. 447. See District of Columbia v. Pace, 320 U.S. 698, 701, 64 S.Ct. 406, 407, 88 L.Ed. 408. 9 Rule 52(a), Federal Rules of Civil Procedure; Adamson v. Gilliland, 242 U.S. 350, 37 S.Ct. 169, 61 L.Ed. 356; United States v. United Shoe Machinery Co., 247 U.S. 32, 37, 38, 41, 38 S.Ct. 473, 475, 476, 62 L.Ed. 968.

67

330 U.S. 731 67 S.Ct. 1009 91 L.Ed. 1209 LAND, Chairman, U.S. Maritime Commission, et al.v.DOLLAR et al. No. 207. Argued Feb. 11, 12, 1947. Decided April 7, 1947. [Syllabus from pages 731-733 intentionally omitted] Mr. Paul A. Sweeney, of Washington, D.C., for petitioners. Mr. Gregory A. Harrison, of San Francisco, Cal., for respondents. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Petitioners are present and former members of the United States Maritime Commission. Respondents are stockholders of Dollar Steamship Lines, Inc., Ltd. (Dollar of Delaware), whose corporate name was changed to American President Lines, Ltd., subsequent to the execution in 1938 of a contract out of which the present litigation arises. By 1937 Dollar of Delaware was in difficult financial straits. The problems confronting it and the various steps taken to remedy the situation need not be recapitulated here.1 It is sufficient for purposes of the various questions presented by this case to say that the Commission and respondents entered into a contract in 1938 by which respondents delivered their common stock in Dollar of Delaware, endorsed in blank, to the Commission; and the Commission released some of respondents from certain obligations and agreed to grant Dollar of Delaware an operating subsidy and to make a loan to it and to obtain for it another loan from the Reconstruction Finance Corporation. 2 The subsidy was granted and the loans were made. By 1943 American President Lines, Ltd., had fully paid all indebtedness due the United States. Respondents thereupon demanded return of their shares of stock from the then members of the Commission, claiming that the shares had only been pledged as collateral for a debt which had been paid. The members of the Commission refused to surrender the shares, claiming that they had not been pledged under the 1938 contract but transferred outright. Acting on that theory the Commission had indeed offered the shares for sale and had under consideration substantial offers to purchase them. 3 Thereupon respondents instituted the present suit in the District Court for the District of Columbia, see 11 D.C.Code, §§ 301, 305, 306, claiming that petitioners were unlawfully in possession of respondents' stock and illegally withholding it. The prayer was that petitioners be restrained from selling the shares and be directed to return them to respondents. Respondents moved for a preliminary injunction. Petitioners submitted affidavits opposing the motion. After a hearing, the District Court on its own motion dismissed the complaint with prejudice, holding that the suit was against the United States. The Court of Appeals reversed. 154 F.2d 307. The case is here on a petition for a writ of certiorari which we granted because of the importance of the question presented.2 4 First. The facts asserted in the affidavits support the view that the 1938 contract called for the outright transfer of the shares, not for their pledge. But we put the affidavits to one side for two reasons. In the first place the function of the affidavits was to oppose the motion for a preliminary injunction. The case had not been submitted for decision on the merits. Issue, indeed had not yet been joined. And the ruling of the District Court, as we read it, was based on the premise that since the Commission had the right to make the contract, the suit was against the United States.3 Hence we do not think the District Court in fact relied on the affidavits in dismissing the complaint. In the second place, although as a general rule the District Court would have authority to consider questions of jurisdiction on the basis of affidavits as well as the pleadings,4 this is the type of case where the question of jurisdiction is dependent on decision of the merits. 5 The allegations of the complaint, if proved, would establish that petitioners are unlawfully withholding respondents' property under the claim that it belongs to the United States. That conclusion would follow if either of respondents' contentions was established: (1) that the Commission had no authority to purchase the shares or acquire them outright; or (2) that even though such authority existed, the 1938 contract resulted not in an outright transfer but in a pledge of the shares. 6 If respondents are right in these contentions, their claim rests on their right under general law to recover possession of specific property wrongfully withheld. At common law their suit as pledgors to recover the pledged property on payment of the debt would sound in tort.5 7 If viewed in that posture, the case is very close to United States v. Lee, 106 U.S. 196, 1 S.Ct. 240, 27 L.Ed. 171. That was an action in ejectment to recover possession of a tract of land. The defendants were military officers who, acting under orders of the President, took possession of the land and converted one part into a fort and another into a cemetery. For the lawfulness of their possession they relied on a tax sale of the property to the United States. On the trial it was held that the claim of the plaintiffs to the land was valid and that the defendants were wrongfully in possession. The Court affirmed the judgment over the objection that the suit was one against the United States. It held that the assertion by officers of the Government of their authority to act did not foreclose judicial inquiry into the lawfulness of their action; that a determination of whether their 'authority is rightfully assumed is the exercise of jurisdiction, and must lead to the decision of the merits of the question.' 106 U.S. at page 219, 1 S.Ct. at page 259, 27 L.Ed. 171. It further held that while such an adjudication is not res judicata against the United States because it cannot be made a party to the suit, the courts have jurisdiction to resolve the controversy between those who claim possession. And it concluded that an agent or officer of the United States who acts beyond his authority is answerable for his actions. And see Philadelphia Co. v. Stimson, 223 U.S. 605, 619, 620, 32 S.Ct. 340, 343, 344, 56 L.Ed. 570; Sloan Shipyards Corp. v. United States Shipping Board Emergency Fleet Corp., 258 U.S. 549, 567, 42 S.Ct. 386, 388, 66 L.Ed. 762. 8 Where the right to possession or enjoyment of property under general law is in issue, and the defendants claim as officers or agents of the sovereign, the rule of United States v. Lee, supra, has been repeatedly approved. Cunningham v. Macon & Brunswick R. Co., 109 U.S. 446, 452, 3 S.Ct. 292, 296, 27 L.Ed. 992; Tindal v. Wesley, 167 U.S. 204, 17 S.Ct. 770, 42 L.Ed. 137; Smith v. Reeves, 178 U.S. 436, 439, 20 S.Ct. 919, 920, 44 L.Ed. 1140; Scranton v. Wheeler, 179 U.S. 141, 152, 153, 21 S.Ct. 48, 53, 45 L.Ed. 126; Philadelphia Co. v. Stimson, supra, 223 U.S. at pages 619, 620, 32 S.Ct. at pages 343, 344, 56 L.Ed. 570; Goltra v. Weeks, 271 U.S. 536, 545, 46 S.Ct. 613, 616, 70 L.Ed. 1074; Ickes v. Fox, 300 U.S. 82, 96, 57 S.Ct. 412, 417, 81 L.Ed. 525; Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 50, 51, 64 S.Ct. 873, 874, 875, 88 L.Ed. 1121. That rule is applicable here although we assume that record title to the shares is in the Commission. In United States v. Lee, supra, record title of the land was in the United States and its officers were n possession. The force of the decree in that case was to grant possession to the private claimant. Though the judgment was not res judicata against the United States, 106 U.S. at page 222, 1 S.Ct. at page 262, 27 L.Ed. 171, it settled as between the parties the controversy over possession. Precisely the same will be true here, if we assume the allegations of the complaint are proved. For if we view the case in its posture before the District Court, petitioners, being members of the Commission, were in position to restore possession of the shares which they unlawfully held. 9 We do not trace the principle of United States v. Lee, supra, in its various ramifications. Cases on which petitioners rely are distinguishable. This is not an indirect attempt to collect a debt from the United States by preventing action of government officials which would alter or terminate the contractual obligation of the United States to pay money. See Wells v. Roper, 246 U.S. 335, 38 S.Ct. 317, 62 L.Ed. 755; Mine Safety Co. v. Forrestal, 326 U.S. 371, 66 S.Ct. 219. It is not an attempt to get specific performance of a contract to deliver property of the United States. Goldberg v. Daniels, 231 U.S. 218, 34 S.Ct. 84, 58 L.Ed. 191. It is not a case where the sovereign admittedly has title to property and is sued by those who seek to compel a conveyance or to enjoin disposition of the property, the adverse claims being based on an allegedly superior equity or on rights arising under Acts of Congress. Cunningham v. Macon & Brunswick R. Co., supra; State of Minnesota v. Hitchcock, 185 U.S. 373, 22 S.Ct. 650, 46 L.Ed. 954; State of Oregon v. Hitchcock, 202 U.S. 60, 26 S.Ct. 568, 50 L.Ed. 935; Naganab v. Hitchcock, 202 U.S. 473, 26 S.Ct. 667, 50 L.Ed. 1113; State of Louisiana v. Garfield, 211 U.S. 70, 29 S.Ct. 31, 53 L.Ed. 92; Morrison v. Work, 266 U.S. 481, 45 S.Ct. 149, 69 L.Ed. 394. And see Stanley v. Schwalby, 162 U.S. 255, 271, 272, 16 S.Ct. 754, 761, 40 L.Ed. 960. 10 We say the foregoing cases are distinguishable from the present one, though as a matter of logic it is not easy to reconcile all of them. But the rule is based on practical considerations reflected in the policy which forbids suits against the sovereign without its consent. The 'essential nature and effect of the proceeding' may be such as to make plain that the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration. Ex parte State of New York, 256 U.S. 490, 500, 502, 41 S.Ct. 588, 590, 591, 65 L.Ed. 1057. If so, the suit is one against the sovereign. Mine Safety Co. v. Forrestal, supra, 326 U.S. at page 374, 66 S.Ct. at page 221. But public officials may become tort-feasors by exceeding the limits of their authority. And where they unlawfully seize or hold a citizen's realty or chattels, recoverable by appropriate action at law or in equity, he is not relegated to the Court of Claims to recover a money judgment. The dominant interest of the sovereign is then on the side of the victim who may bring his possessory action to reclaim that which is wrongfully withheld. 11 It is in the latter category that the pleadings have cast this case. That is to say, if the allegations of the petition are true, the shares of stock never were property of the United States and are being wrongfully withheld by petitioners who acted in excess of their authority as public officers. If ownership of the shares is in the United States, suit to recover them would of course be a suit against the United States. But if it is decided on the merits either that the contract was illegal or that respondents are pledgors, they are entitled to possession of the shares as against petitioners, though, as we have said, the judgment would not be res judicata as against the United States. See United States v. Lee, supra, 106 U.S. at page 222, 1 S.Ct. at page 262, 27 L.Ed. 171. 12 We intimate no opinion on the merits of the controversy. We only hold that the District Court has jurisdicti n to determine its jurisdiction by proceeding to a decision on the merits. 13 Second. Motions were made by the Solicitor General to substitute as defendants the new members of the Commission for those who are no longer members.6 We added the new members as petitioners-defendants, and dismissed as to a deceased member, but reserved decision as to the other former members. 329 U.S. 700, 67 S.Ct. 62. A majority of those joining in this opinion are of the view that it is more appropriate that both motions be considered by the District Court. The questions have not been briefed or argued here. Moreover, the present record may not present all the facts necessary for disposition of the motions. Accordingly, we vacate the order of substitution which we entered, so that the District Court may, on remand of the cause, pass on the motions unembarrassed by any action here. 14 The judgment of the Court of Appeals is affirmed. 15 Affirmed. 16 Mr. Justice BLACK took no part in the consideration or decision of this case. 17 Mr. Justice REED, concurring. 18 As I think this proceeding states a cause of action against the United States Maritime Commission, I do not agree with the manner of disposition. No damages are sought against the petitioners. Relief is sought that can only be obtained by an order directed against the Commission. 19 A contract between plaintiffs, Dollar et al., and the United States Maritime Commission, was attached to the complaint as an exhibit. The contract was not signed by any individual member of the Commission but by the Commission through its duly authorized special counsel. In the complaint, respondents alleged that they and their predecessors in interest 'caused said shares of stock of the company to be transferred to the United States Maritime Commission.' They further alleged that they made demand upon the 'Maritime Commission for the return of said stock in July, 1945. This request was denied by the Maritime Commission in July, 1945.' The ultimate result sought by the complaint was that the respondents 'be directed and ordered by this court to return the plaintiffs' stock, now in the unlawful possession and custody of the defendants, to the plaintiffs, the lawful owners.' Taken as a whole, I cannot read the complaint otherwise than as alleging that title and possession of this stock is now in the United States Maritime Commission. Although plaintiffs assert possession in the defendants, the other allegations and the attached contract show that defendants hold the stock by virtue of their official positions as members of the Commission. If the basic allegations were proven, the Commission would be shown to be in possession of the stock under a claim of right. 20 If that is the correct interpretation of the complaint, it follows of course that the Maritime Commission is an indispensable party to this proceeding. See Commonwealth Trust Co. v. Smith, 266 U.S. 152, 159, 45 S.Ct. 26, 28, 69 L.Ed. 219. No matter how far beyond their statutory powers the members of the Commission may have acted in contracting with the respondents or how illegal may be the retention of the certificates by the Commission under its claim of ownership through the contract, the transfer to the Commission, as alleged in the petition, put the title and possession of this property in the Maritime Commission and not in the petitioners as individuals. It may be that the Commission holds the stock wrongfully but if so, it can only be restored to the respondents by an act of the Commission. Under such circumstances, cases like United States v. Lee, 106 U.S. 196, 1 S.Ct. 240, 27 L.Ed. 171, are inapplicable. In the Lee case, an action in ejectment was brought to recover possession of land from officers of the United States who were wrongfully in possession of the land. That suit was not brought against the United St tes to compel the United States to retransfer title to the complainants or to quiet title in those who claimed against the United States. In United States v. Lee, the officer of the United States could be ejected from the real property involved without loss of title or right of possession to the United States. That is not the result in this case. A piece of paper, the stock certificate, will be taken from the hands of the Maritime Commission and placed in the hands of plaintiffs by a court decree, if plaintiffs are successful. If the decree is to be effective, it will require the individual defendants to transfer the certificates by endorsement of the name of the Maritime Commission or delivery, if the certificate is still in the name of the plaintiffs. The situation is as if the United States had been ordered by the decree in the Lee case to convey title to and possession of the property to Lee. Plaintiffs do not here seek damages for past acts of petitioners. Plaintiffs want property now in the possession of the Maritime Commission and to secure this relief, plaintiffs, I should think, must implead the Commission. Whether the Maritime Commission holds the property by title unchallenged by the plaintiffs or challenged by the plaintiffs cannot, it seems to me, be determinative as to the necessity of making the Commission a party. See Goldberg v. Daniels, 231 U.S. 218, 34 S.Ct. 84, 58 L.Ed. 191. 21 Cases cited in the opinion of the Court as following the rule of United States v. Lee are not significant here. Two are similar cases of ejectment.1 Other cases cited turn on liability of a sovereign to suits.2 Still others are those which enjoin an officer from proceeding illegally.3 In Goltra v. Weeks, 271 U.S. 536, 539, 549, 46 S.Ct. 613, 614, 617, 70 L.Ed. 1074, there was a suit by a lessee to enjoin officers of the United States from taking possession of boats leased to the plaintiff by the Government and also to return the boats already taken. The prayer for a return of the property contained the possibility of the issue here raised but this Court treated the proceeding as one to enjoin a threatened trespass. 22 The present suit is for the return to the plaintiffs of property held by the Maritime Commission under a contract which the Dollar interests allege called for a return of the certificates to them on payment of a debt. Such a suit, it seems to me, is an effort to get possession of property actually in the possession of the Maritime Commission. This cannot be done without joining the Maritime Commission as a party defendant. See Goldberg v. Daniels, 231 U.S. 218, 34 S.Ct. 84, 58 L.Ed. 191; Wells v. Roper, 246 U.S. 335, 38 S.Ct. 317, 62 L.Ed. 755; Morrison v. Work, 266 U.S. 481, 487, 45 S.Ct. 149, 152, 69 L.Ed. 394; Mine Safety Co. v. Forrestal, 326 U.S. 371, 66 S.Ct. 219. 23 As this appears to me as a suit against the Commission, I would affirm the judgment of the Court of Appeals, remanding this case to the District Court. There the questions of the suability of the Commission4 and the effect of the Administrative Procedure Act of June 11, 1946, 5 U.S.C.A. § 1001 et seq., could be considered. There the merits of the controversy could be decided. 1 The details of the difficulties, and the teps taken to remedy them are contained in two reports to Congress by the Commission: (1) Financial Readjustments in Dollar Steamship Lines, Inc., Ltd., dated February 17, 1938; (2) Reorganization of American President Lines, Ltd., dated April 10, 1939. 2 Although the judgment below was not a final one, we considered it appropriate for review because it involved an issue 'fundamental to the further conduct of the case.' United States v. General Motors Corp., 323 U.S. 373, 377, 65 S.Ct. 357, 359, 89 L.Ed. 311, 156 A.L.R. 390. 3 The District Court said: '* * * I think * * * that the Commission had the legal right; and therefore I think it is inescapable that this is a suit against the United States and therefore that the complaint must be dismissed * * *.' (154 F.2d 307, 308) 4 In passing on a motion to dismiss because the complaint fails to state a cause of action, the facts set forth in the complaint are assumed to be true and affidavits and other evidence produced on application for a preliminary injunction may not be considered. Polk Co. v. Glover, 305 U.S. 5, 9, 59 S.Ct. 15, 16, 83 L.Ed. 6; Gibbs v. Buck, 307 U.S. 66, 76, 59 S.Ct. 725, 731, 83 L.Ed. 1111. But when a question of the District Court's jurisdiction is raised, either by a party or by the court on its own motion, Judicial Code § 37, 28 U.S.C. § 80, 28 U.S.C.A. § 80; Federal Rules Civil Procedure, rule 12(b), 28 U.S.C.A. following section 723c, the court may inquire by affidavits or otherwise, into the facts as they exist. Wetmore v. Bymer, 169 U.S. 115, 120, 121, 18 S.Ct. 293, 295, 42 L.Ed. 682; McNutt v. G neral Motors Corp., 298 U.S. 178, 184 et seq., 56 S.Ct. 780, 783, 80 L.Ed. 1135; KVOS, Inc., v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 201, 81 L.Ed. 183. As stated in Gibbs v. Buck, supra, 307 U.S. at pages 71, 72, 59 S.Ct. at page 729, 83 L.Ed. 1111, 'As there is no statutory direction for procedure upon an issue of jurisdiction, the mode of its determination is left to the trial court.' 5 Restatement of the Law of Torts, §§ 223, 237; 3 Street, Foundations of Legal Liability (1906), p. 160. 6 See Federal Rule Civil Procedure, 25(d); Allen v. Regents of University System of Georgia, 304 U.S. 439, 444, 445, 58 S.Ct. 980, 982, 82 L.Ed. 1448. 1 Tindal v. Wesley, 167 U.S. 204, 17 S.Ct. 770, 42 L.Ed. 137; Scranton v. Wheeler, 179 U.S. 141, 21 S.Ct. 48, 45 L.Ed. 126. 2 Cunningham v. Macon & Brunswick R. Co., 109 U.S. 446, 3 S.Ct. 292, 27 L.Ed. 992; Smith v. Reeves, 178 U.S. 436, 20 S.Ct. 919, 44 L.Ed. 1140; Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121. 3 Ickes v. Fox, 300 U.S. 82, 57 S.Ct. 412, 81 L.Ed. 525; Philadelphia Co. v. Stimson, 223 U.S. 605, 32 S.Ct. 340, 56 L.Ed. 570. 4 Merchant Marine Act, 49 Stat. 1988, § 207, as amended, 52 Stat. 954, § 2, 46 U.S.C.A. § 1117: 'The Commission may enter into such contracts, upon behalf of the United States, and may make such disbursements, as may, in its discretion, be necessary to carry on the activities authorized by this Act, or to p otect, preserve, or improve the collateral held by the Commission to secure indebtedness, in the same manner that a private corporation may contract within the scope of the authority conferred by its charter.' Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784.

89

330 U.S. 709 67 S.Ct. 997 91 L.Ed. 1192 UNITED STATESv.OGILVIE HARDWARE CO., Inc. No. 430. Argued March 5, 1947. Decided April 7, 1947. Mr. Lee A. Jackson, of Washington, D.C., for petitioner. Mr. Elias Goldstein, of Shreveport, La., for respondent. [Argument of Counsel from page 710 intentionally omitted] Mr. Justice BLACK delivered the opinion of the Court. 1 This is a suit for tax refund which the District Court allowed. 62 F.Supp. 338. The Circuit Court of Appeals affirmed. 5 Cir., 155 F.2d 577. We granted certiorari because of an apparent conflict with Century Electric Co. v. Commissioner, 8 Cir., 144 F.2d 983. 2 The respondent, Ogilvie Hardware Co. Inc., was incorporated in Louisiana in 1907 with a paid in capital of $100,000. In 1924 it increased its capitalization to $200,000 by declaration of a $100,000 stock dividend out of past earnings. Depressed business conditions during the 1930's brought heavy operating losses so that by 1937 the company's assets were about $71,000 less than the $200,000 capitalization. The company books accordingly showed a deficit in this amount. By 1938 this deficit was reduced to about $61,000. In this financial posture the corporation could not declare dividends without impairing its then capital structure (which included capitalization of the $100,000 stock dividend) and Louisiana law prohibited payment of a dividend under such circumstances.1 Section 14 of the governing Revenue Act of 1936 imposed a surtax on certain corporate net income earned during the tax year but not distributed as dividends.2 It provided no exemption from that surtax because a corporation had an accumulated deficit at the beginning of the tax year, or because state law prohibited payments of dividends. 3 Acting under this 1936 law, the Commissioner, on examination of respondent's 1937 and 1938 tax returns, determined that respondent was subject to the undistributed profits tax, despite the deficit and the state prohibition against payment of dividends. The Commissioner's interpretation and application of the 1936 Act was in accord with our holding in Helvering v. Northwest Steel Rolling Mills, 311 U.S. 46, 61 S.Ct. 109, 85 L.Ed. 29, and Crane-Johnson Co. v. Helvering, 311 U.S. 54, 61 S.Ct. 114, 85 L.Ed. 35. The taxpayers in those cases claimed exemption from the surtax, on the ground that they could not distribute dividends 'without violating a provision of a written contract executed by the corporation prior to May 1, 1936, which provision expressly deals with the payment of dividends.' (311 U.S. 48, 61 S.Ct. 111) Section 26(c)(1) of the 1936 Act relieved corporations from the tax if such contracts existed. 49 Stat. 1648, 1664, 26 U.S.C.A. Int.Rev.Acts, page 836. The question we had to decide in those cases was whether a state constitution, corporate charter, or state statute, which prohibited payment of dividends, was a 'written contract' within the meaning of the § 26(c)(1) exemption provision. We held that we could not so expand the provision's language, relying in part upon previous statements of this Court 'that provisions granting special tax exemptions are to be strictly construed.' Helvering v. Northwest Steel Rolling Mills, supra, 311 U.S. at page 49, 61 S.Ct. at page 111, 85 L.Ed. 29. Since the respondent here had no 'written contract' against payment of dividends, it had no exemption from the surtax imposed by the original 1936 Act. 4 But this suit is not brought to determine the company's tax liability under the 1936 Act as it stood in the taxable years 1937 and 1938. It is an action for a refund under a 1942 relief amendment to the 1936 Act specifically designed to authorize corporations to obtain repayments of taxes they had been forced to pay under the 1936 Act as we had interpreted it. That amendment, as enacted, provided for complete or partial retroactive immunity from the 1936 undistributed profits tax under the following circumstances: 5 'Deficit corporations. In the case of a corporation having a deficit in accumulated earnings and profits as of the close of the preceding taxable year, the amount of such deficit, if the corporation is prohibited by a provision of a law or of an order of a public regulatory body from paying dividends during the existence of a deficit in accumulated earnings and profits, and if such provision was in effect prior to May 1, 1936.' § 501(a)(2), Revenue Act of 1942, 56 Stat. 798, 954, 26 U.S.C.A. Int.Rev.Acts, page 344. 6 This amendment was designed to grant corporations a refund on account of payments of undistributed profits taxes for tax years in which they had an accumulated deficit, and where, for that reason, state law, federal law, or public regulatory orders of either prohibited distribution of dividends. It therefore authorized refunds to the very taxpayers who had been lawfully required to pay taxes by the 1936 Act as we had interpreted it in the two cases cited above. Furthermore, in order to make sure that taxpayers who had paid under our interpretation might recover refunds, § 501(c) of the same amendment specifically authorized claims for repayment to be filed within one year after its passage, without regard to any statute of limitations or other designated statutory bars. 56 Stat. 798, 955, 26 U.S.C.A. Int.Rev.Acts, page 345. 7 The Government's contention is that we should construe the word 'deficit' and the phrase 'accumulated earnings and profits' according to their established meaning under federal tax law; that so construed the $100,000 allotted for stock dividends remained a part of earnings and profits for tax purposes; therefore, there was no deficit in the federal tax sense, and consequently the tax payments should not have been refunded here despite the state prohibition against distribution. We may assume that the Government is correct in contending that if Congress intended in the 1942 amendment to use the words 'deficit' and 'earnings and profits' in this federal tax sense, the stock dividend did not reduce 'earnings,' there was no 'deficit', and the refund should be denied. See § 115, Revenue Act of 1936, 49 Stat. 1648, 1687 1689, 26 U.S.C.A. Int.Rev.Acts, page 868; Commissioner v. Bedford, 325 U.S. 283, 292, 65 S.Ct. 1157, 1161, 89 L.Ed. 1611. This construction would greatly limit the scope of the relief granted by the 1942 amendment. To determine whether Cong ess intended so to limit the relief it granted, we must look to the whole 1942 amendment in its relationship to the 1936 Act and the legislative and judicial history intervening between the two. 8 The 1936 undistributed profits tax law was a novelty in the field of federal taxation. Its chief novel feature was that it was designed to compel corporations to distribute current earnings to shareholders by imposing a surtax on corporations which failed to make such distributions. It had detailed provisions for defining the net income which would be reached by this tax. Its application, therefore, raised new and sometimes wholly unexpected problems. Widespread opposition developed to the pointed out that under governing survived. See Revenue Act of 1938, 52 Stat. 447. But even after the 1936 undistributed profits tax was no longer in effect, complaints about its prior application from corporations which had been required to pay an undistributed profits tax continued to reach and to concern Congress. Representatives of these corporations appeared before the House and Senate Committees in 1942 and Congress responded to their complaints by enacting the several provisions of § 501—the retroactive relief legislation now under consideration. 9 One subject of complaint was that under the income tax definitions only a fraction of capital losses were deductible from taxable net income. Corporations which had suffered large capital losses in a given year were required to pay undistributed profits taxes in that year as though they had made a profit. The 1942 amendment, as reported by the House Committee, met this complaint by recommending that refunds be authorized for corporations who had paid under this 1936 definition of net income.3 This authorization, subsequently, approved by the Senate Committee,4 clearly shows that Congress intended to provide for this phase of the refund without regard to tax definitions, and did not intend its authorized refund to be restricted by the application of established tax terminology. 10 When the bill reached the Senate Committee, insistent complaints related to the fact that corporations with deficits in accumulated earnings and profits had been compelled to pay taxes for non-distribution of dividends although state or federal law prohibited dividend payments. A deficit railroad corporation had been taxed over its objection that payment of dividends would have rendered its officers subject to punishment for a misdemeanor under federal law and a money penalty under state law. The Board of Tax Appeals had overruled objections on these grounds, relying on our decisions in the Crane-Johnson and Northwest Steel cases, supra, Paris & Mt. Pleasant R. Co. v. Comm'r, 47 B.T.A. 439.5 The counsel who had represented Crane-Johnson before this Court also appeared on their behalf before the Senate Committee and made a plea for relief for deficit corporations which had been compelled to pay the undistributed profits tax.6 He urged that such corporations had been 'caught in a trap,' and that they were justly entitled to have a refund for that reason. It was apparently in response to the foregoing complaints that the relief provision befo e us, not part of the House bill as it came to the Senate,7 was introduced by the Senate Committee.8 We think Congress was moved to relieve those corporations which it considered to be 'caught in a trap' whereby they were taxed by the Federal Government if they did not pay dividends and subject to prosecution and penalties by the Federal Government or the states if they did. 11 Some of the language Congress used, considered taxwise only, provides plausible support for the interpretation urged by the Government which would give the relief amendment more limited scope. But the provision before us is not a general tax exemption to be interpreted in the framework of a currently operating general revenue law. It is a special retroactive relief measure to authorize repayment of taxes collected in previous years under a revenue law which had already been substantially abandoned. The language of this extraordinary relief measure and the circumstances which prompted its passage convince us that Congress intended to provide refunds to corporate taxpayers, with possible minor exception, who had paid undistributed profits taxes as a choice between conflicting state and federal compulsions. 12 Furthermore, the very mechanics of the 1942 amendment require that determination of rights to refund under it be based on consideration of something other than the tax meaning of the 1936 Act or other tax terminology. The right to recovery in every case depends ultimately upon whether federal law or federal regulatory bodies, or state law or state regulatory bodies, prohibit payments of dividends. In this case the ultimate right to refund depends upon state law. Cf. Lyeth v. Hoey, 305 U.S. 188, 193, 59 S.Ct. 155, 158, 83 L.Ed. 119, 119 A.L.R. 410. Before that right can be finally established, courts must examine state law at least to the extent of determining (1) what is a 'deficit'; (2) what are 'accumulated earnings and profits'; (3) what was the state law on these questions prior to May 1, 1936; (4) whether payments of dividends under these circumstances were prohibited by state law. Acceptance of the Government's contention would mean that courts administering the 1942 Act must first determine whether a deficit exists unde federal law; if such a federal deficit exists, they must then turn to state law to decide whether under it a deficit exists such as prohibits the payment of dividends. We do not think that Congress intended the courts so to administer the 1942 amendment. The Government's argument that it does relies heavily upon the Senate Committee Report. 13 We think the Senate Committee Report, as a whole, leans toward the view we have taken of the purpose of the law.9 But in one of the six illustrative examples of application of the new tax relief provisions of the amendment, and in the subsequent Treasury Regulations, it was indicated that no tax credit should be allowed where a tax deficit resulted from 'prior capitalization of surplus in the course of a non-taxable reorganization.'10 Aside from the fact that corporate reorganizations and simple stock dividends are quite different things, we find this one illustrative example insufficient to outweigh the considerations which have governed our interpretation of the 1942 amendment. 14 We are persuaded that Congress at least intended by the amendment to refund taxes imposed on corporations which had failed to distribute dividends when distribution, in violation of state law, would have impaired long-existing state approved corporate capitalizations. See United States v. Byron Sash & Door Co., 6 Cir., 150 F.2d 44, 46. In order that this purpose may be effected, the judgment of the Circuit Court of Appeals is 15 Affirmed. 16 Mr. Justice FRANKFURTER, with whom Mr. Justice REED joins, dissenting. 17 The Revenue Act of 1936 imposed a surtax on undistributed corporate profits. Section 26(c)(1) gave relief from this surtax under defined circumstances.1 In Helvering v. Northwest Steel Mills, 311 U.S. 46, 61 S.Ct. 109, 85 L.Ed. 29, it was held that although a restriction on the distribution of corporate profits was imposed by State law, a credit for such withheld profits was not authorized by § 26(c)(1). In reaching this conclusion, the Court took into account that it 'has been said many times that provisions granting special tax exemptions are to be strictly construed.' Helvering v. Northwest Steel Mills, supra, 311 U.S. at page 49, 61 S.Ct. at page 111, 85 L.Ed. 29. By way of relaxing the restricted scope which this Court gave to exemption from the undistributed profits tax, Congress, by the Revenue Act of 1942, substituted a new subdivision (3) to § 26(c) of the Revenue Act of 1936. This section did nto undo the Northwest Steel Mills doctrine. It did not allow a deduction for profits forbidden to be distributed by State law, as it had in § 26(c)(1), allowed credit for profits undistributed because of a 'written contract.' Congress gave relief for earnings forbidden to be distributed by State law only 'In the case of a corporation having a deficit in accumulated earnings and profits as of the close of the preceding taxable year * * *.'2 18 This is tax language and should be read in its tax sense. We must not disregard the illumination of an authoritative tax lexicon in reading tax legislation. The language of the 1942 amendment carries with it tax usage, tax practice, and the gloss of authoritative legislative history. All combine to make the condition under which State law prohibiting distribution of profits comes into play, that which Congress in words of art said was the condition, namely, the existence of 'a deficit in accumlated earnings and profits.' Here there was no deficit in the controlling sense of the term. And nothing warrants the attribution of a non-technical meaning to so settled a technical term. Nothing, that is, except the suggestion that to give the 1942 amendment this established meaning might not afford the relief that, as a matter of abstract justice, should be afforded. But this is merely an attempt to invoke what has been called the 'equity' of a statute. I am no friend of artificial canons of construction, and I would not strain language in order to construe tax exemptions strictly. On the other hand, Revenue Acts are not the kind of legislation which should be loosely construed in order to grant exemptions. 19 The legislative history of this enactment and the administrative practice only reenforce what seems to me to be the compelling requirement, to render technical terms used by Congress with their technical meaning. If it be suggested that counsel for taxpayers at a Congressional hearing urged the fairness of the construction which the Court now places upon what Congress has expressed, it would not be the first time that the final legislation of Congress did not satisfy the desire of some of its proponents. In any event, I do not think the argument of counsel for a taxpayer urging relief should carry more we ght than the use by Congress of settled tax language, carrying a meaning which excludes that result, a meaning which is reenforced by the legislative, judicial and administrative history that led up to and followed the enactment. See Century Electric Co. v. Commissioner, 8 Cir., 144 F.2d 983, affirming the Tax Court, 3 T.C. 297; S.Rep.No. 1631, 77th Cong.2nd Sess., pp. 244—46; Treasury Regulations, 94 and 101, Art. 115—11; Treasury Regulations 103, § 19.115—11; Treasury Regulations 111, § 29.115—11. The short of the matter is, that even though corporate profits here were withheld because Louisiana forbade their distribution, there can be no credit allowed for a deficit because in a federal tax sense there was no deficit. 20 No doubt Congress, to some extent, desired to relieve from the undistributed profits tax corporations forbidden by State law from declaring dividends. But neither what Congress enacted nor its legislative history indicates a purpose to disregard the limiting provisions of § 115(h) of the Revenue Act of 1936.3 This section, which embodies the analysis of Commissioner v. Sansome, 2 Cir., 60 F.2d 931, see S.Rep. 2156, 74th Cong., 2d Sess., p. 19, requires that, in respect to federal taxes, assets be treated as available for distribution as earnings regardless of stock dividends which capitalize earnings and profits. H.Rep.No.2894, 76th Cong., 3rd Sess., p. 41 cited in Commissioner v. Wheeler, 324 U.S. 542, 546, 65 S.Ct. 799, 802, 89 L.Ed. 1166. The specific example cited by the Senate Committee Report on § 501 of the Revenue Act of 1942 shows that Congress intended to limit the relief afforded by the amendment to cases where the deficit in question had not resulted from the capitalization of accumulated earnings and profits.4 The majority finds a difference between capitalization of earnings in a non-taxable reorganization and capitalization of earnings by a simple stock dividend. The circumstances are different but the difference is not significant for the legal effect of the stock dividend on earnings and profits. The example given is concerned with the effect of capitalizing earnings and profits, not with the method. If Congress meant to relieve undistributed earnings and profits even though those earnings and profits were considered available under § 115(h), it should have said so. 21 We think the judgment of the Circuit Court of Appeals should be reversed. 1 'I. No corporation shall pay dividends in cash or property, (a) except from the surplus of the aggregate of its assets over the aggregate of its liabilities, plus the amount of its capital stock; or (b) out of any surplus due or arising from (1) any profit on treasury shares before resale; or (2) any unrealized appreciation in value or revaluation of fixed assets; or (3) any unrealized appreciation in value or revaluation of inventories before sale; or (4) the unaccrued portion of unrealized profit on notes, bonds or obligations for the payment of money, purchased or otherwise acquired, unless such notes, bonds or obligations are readily marketable, in which case they may be taken at their actual market value; or (5) the unaccrued or unearned portion of any unrealized profit in any form whatever, whether in the form of notes, bonds, obligations for the payment of money, installment sales, credits or otherwise, except as provided in the preceding sub-paragraph (4). 'III. No corporation shall pay dividends in shares of the corporation, except from the surplus of the aggregate of its assets * * * over the aggregate of its liabilities, plus the amount of its capital stock.' La.Acts 1928, No. 250, § 26, I, III, 1 La.Gen.Stat. § 1106. 2 49 Stat. 1648, 1655—1657, 26 U.S.C.A. Int.Rev.Acts, page 823. 3 The House Ways and Means Committee reported that § 501 of the 1942 Act allowed corporations to deduct capital losses from their capital assets for purposes of the undistributed profits tax even though only $2,000 of such capital loss was deductible from gross income for other purposes. Another amendment provided a stock redemption credit deductible from gross income taxable for undistributed profits tax purposes. And the breadth of the refund provision is illustrated by the provisions making the amendment effective as of the date the 1936 Act was enacted, and extending the Statute of Limitations to permit refunds for all overpayments since that date. H.R.Rep. 2333, 77th Cong., 2d Sess., 170 (1942). 4 Sen.Rep.No.1631, 77th Cong., 2d Sess., 244, 245 (1942). 5 Hearings before Senate Committee on Finance on Revenue Act of 1942, 77th Cong., 2d Sess., 2343—2345 (1942). Counsel for another deficit railroad corporation pointed out that under govering state law that railroad's officers would have been liable for a penalty of double the damages to anyone harmed. Id. at 1422. 6 Statement of Mr. John E. Hughes: 'Next I have a statement on behalf of Crane Johnson Co. that section 501 of the House bill should be simplified. That point is this: If a corporation was forbidden by State law to declare a dividend because its capital stock was impaired, it could not avoid the undistributed profits tax enacted in 1936 and was caught in a trap. A rich corporation could. It could declare a dividend and avoid it. Surely you would not discriminate against a poor one. 'Furthermore, if it had an impairment of capital stock and was organized under the laws of about one-third of the States where corporations in such condition are allowed to declare dividends, a dividend would be a return of capital to the shareholder and no credit for the undistributed profits tax would be given. 'There is no reason for granting relief retroactively in the limited cases which may be held to be covered by the vague and ambiguous language of section 501 of the House bill without granting relief in these cases also. 'The language of section 501 is vague and ambiguous and ought to be simplified. In 1938 relief was granted as soon as this situation was brought to the attention of Congress, but unfortunately was not made retroactive to 1936. The House bill in section 501 properly makes it retroactive to 1936, but is not phrased in simple enough language.' Hearings, supra 1022. See also id. at 1306—1308. 7 See H.R.Rep., note 3, supra. 8 See Sen.Rep. note 4, supra. 9 Sen.Rep. 1631, note 4, supra, outlining § 501 of the proposed Revenue Act of 1942 stated: '* * * (A) new paragraph * * * has been added, providing for an additional credit in cases of corporations having a deficit in accumulated earnings and profits and prohibited by law from paying dividends and * * * a new subsection has been added providing for a stock redemption credit. 'Section 501 * * * grants relief from the undistributed-profits tax for taxable years beginning after December 31, 1935, and prior to January 1, 1938, by allowing as an additional credit in computing undistributed net income the portion of the adjusted net income which, in certain instances, could not be distributed as taxable dividends. * * * 'Under § 14 of the Revenue Act of 1936 corporations in general were subject to surtax at various rates from 7 to 27 per cent of their undistributed net income. In some instances State law or an order of a public regulatory body prohibited payment of dividends during the existence of a deficit even though the corporation had current earnings and profits which would constitute undistributed net income under the definition thereof in § 14(a)(2). Such corporations were, therefore, subject to undistributed profits surtax even though they were prohibited by law from paying dividends. The addition of the new paragraph 3 to subsection (c) of section 26 to provide an additional credit in the amount of the deficit in accumulated earnings and profits as of the close of the preceding taxable year is intended to give relief in certain of these cases. 'Also under § 14 of the Revenue Act of 1936, it was possible that the undistributed net income of a corporation might exceed accumulated and current earnings and profits. In such case the tax could not be avoided even if distributions were made to shareholders.' The amendment was to provide relief in this situation also. 10 Id. at 246. 1 49 Stat. 1648, 1664. 'In the case of a corporation the following credits shall be allowed to the extent provided in the various sections imposing tax— '(1) Prohibition on payment of dividends. An amount equal to the excess of the adjusted net income over the aggregate of the amounts which can be distributed within the taxable year as dividends without violating a provision of a written contract executed by the corporation prior to May 1, 1936, which provision expressly deals with the payment of dividends. If a corporation would be entitled to a credit under this paragraph because of a contract provision and also to one or more credits because of other contract provisions, only the largest of such credits shall be allowed, and for such purpose if two or more credits are equal in amount only one shall be taken into account.' 2 Section 501(a)(2), Revenue Act of 1942, 56 Stat. 798, 954. '(3) Deficit corporations. In the case of a corporation having a deficit in accumulated earnings and profits as of the close of the preceding taxable year, the amount of such deficit, if the corporation is prohibited by a provision of a law or of an order of a public regulatory body from paying dividends during the existence of a deficit in accumulated earnings and profits, and if such provision was in effect prior to May 1, 1936.' 3 49 Stat. 1648, 1688, 1689. § 115(h): 'Effect on Earnings and Profits of Distributions of Stock. The distribution (whether before January 1, 1936, or on or after such date) to a distributee by or on behalf of a corporation of its stock or securities or stock or securities in another corporation shall not be considered a distribution of earnings or profits of any corporation— '(1) if no gain to such distributee from the receipt of such stock or securities was recognized by law, or '(2) if the distribution was not subject to tax in the hands of such distributee because it did not constitute income to him within the meaning of the Sixteenth Amendment to the Constitution or because exempt to him under section 115(f) of the Revenue Act of 1934 or a corresponding provision of a prior Revenue Act. As used in this subsection the term 'stock or securities' includes rights to acquire stock or securities.' 4 S.Rep.No.1631, 77th Cong., 2d Sess., pp. 245, 246: '(1) The X corporation for the calendar year 1936 had an adjusted net income of $200,000 * * * '(2) Assume in the above example that the deficit in accumulated earnings and profits is $20,000 for income tax purposes, but the deficit in accumulated earnings and profits on the corporation's books by reason of a prior capitalization of surplus in the course of a nontaxable reorganization amounts to $250,000. In this case, although the State law would probably prohibit payment of any dividends, the credit allowed under the amendment to section 26(c) is limited to $20,000, which is the deficit in accumulated earnings and profits for income tax purposes. X corporation, therefore, will be liable for undistribut d profits surtax on $180,000 of its adjusted net income.'

1112

330 U.S. 767 67 S.Ct. 1026 91 L.Ed. 1234 BETHLEHEM STEEL CO. et al.v.NEW YORK STATE LABOR RELATIONS BOARD. ALLEGHENY LUDLUM STEEL CORPORATION v. KELLEY et al. Nos. 55, 76. Argued Dec. 16, 17, 1946. Decided April 7, 1947. Appeal from the Court of Appeals of the State of New York. Appeal from the Supreme Court of the State of New York the Court of Chautauqua. Mr. Bruce Bromely, of New York City, for appellants Bethlehem Steel Co. and others. Mr. John G. Buchanan, of Pittsburgh, Pa., for appellant Allegheny Ludlum Steel Corp. Mr. William E. Grady, of New York City, for appellees. Robert L. Stern, of Washington, D.C., for United States, as amicus curiae, by special leave of Court. Mr. Justice JACKSON delivered the opinion of the Court. 1 These appeals challenge the validity of the Labor Relations Act of the State of New York as applied to appellants to permit unionization of their foremen. Conflict is asserted between it and the National Labor Relations Act and hence with the Commerce Clause of the Constitution. 2 After enactment by Congress of the National Labor Relations Act, July 5, 1935, 49 Stat. 449, 29 U.S.C. § 151 et seq., 29 U.S.C.A. § 151 et seq., New York adopted a State Labor Relations Act following the federal pattern. Laws of New York 1937, Chap. 443, 30 McKinney's Consolidated Laws of New York, Labor Law, §§ 700 716. In the administrative boards they create, the procedures they establish, the unfair labor practices prohibited, the two statutes may be taken for present purposes to be the same. But in provision for determination of units of representation for bargaining purposes, the two Acts are not identical. Their differences may be made plain by setting forth § 9(b) of the Federal Act, with that part which is omitted from the State Act in brackets and additions made by the State Act as amended, Laws of New York, 1942, Chap. 518, Labor Law, § 705, subd. 2, in italics: 'The board shall decide in each case whether, in order to insure to employees the full benefit of their right to self-organization, (and) to collective bargaining and otherwise to effectuate the policies of this act, the unit appropriate for the purposes of collective bargaining shall be the employer unit, multiple employer unit, craft unit, plant unit, or (subdivision thereof) any other unit; provided, however, that in any case where the majority of employees of a particular craft shall so decide the board shall designate such craft as a unit appropriate for the purpose of collective bargaining.' 3 The procedures prescribed for the two boards for investigation, certification, and hearing on representation units and for their election are substantially the same except that the State law adds the following limitation not found in the Federal Act: '* * * provided, however, that the board shall not have authority to investigate any question or controversy between individuals or groups within the same labor organization or between labor organizations affiliated with the same parent labor organization.' Laws of New York, 1937, Chap. 443, as amended, Laws 1942, Chap. 518, 30 McKinney's Consolida ed Laws of New York, Labor Law, § 705, subd. 3. 4 The two boards have at times pursued inconsistent policies in applying their respective Acts to petitions of foremen as a class to organize bargaining units thereunder. The State Board has in these cases recognized that right; the National Board for a time recognized it. Union Collieries Coal Co., 41 N.L.R.B. 961; Godchaux Sugars, Inc., 44 N.L.R.B. 874. Later, there was a period when, for policy reasons but without renouncing jurisdiction, it refused to approve foremen organization units. Maryland Drydock Co., 49 N.L.R.B. 733; Boeing Aircraft Co., 51 N.L.R.B. 67; General Motors Corp., 51 N.L.R.B. 457. Now, again, it supports their right to unionize. Packard Motor Car Co., 61 N.L.R.B. 4, 64 N.L.R.B. 1212; L. A. Young Spring & Wire Corp., 65 N.L.R.B. 298. The foremen of these appellants, at a time when their desire to organize was frustrated by the policy of the National Board, filed applications with the State Board. It entertained their petitions and its policy permitted them as a class to become a bargaining unit. Both employers, by different methods adequate under State law to raise the question, challenged the constitutionality of the State Act as so applied to them. Their contentions ultimately were considered and rejected by the New York Court of Appeals and its decisions sustaining state power over the matter were brought here by appeals. 5 Both of these labor controversies arose in manufacturing plants located in New York where the companies employ large staffs of foremen to supervise a much larger force of labor. But both concerns have such a relation to interstate commerce that, for the reasons stated in National Labor Relations Board v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352, federal power reaches their labor relations. On this basis the National Board has exercised power to certify bargaining agents for units of employees other than foremen of both companies. Matter of Allegheny Ludlum Steel Corporation and Steel Workers Organizing Committee, Case No. III—R—411, N.L.R.B., June 29, 1942; Matter of Bethlehem Steel Corp. and C.I.O., 30 N.L.R.B. 1006, 32 N.L.R.B. 264, 1941 (production and maintenance employees); Matter of Bethlehem Steel Corp. and A.F. of L., 47 N.L.R.B. 1330, 1943 (plant protection employees); Matter of Bethlehem Steel Corporation and C.I.O., 52 N.L.R.B. 1217, 1943 (employees in order department); Matter of Bethlehem Steel Co. and A.F. of L., 55 N.L.R.B. 658, 1944 (fire department employees). The companies contend that the National Board's jurisdiction over their labor relations is exclusive of state power; the State contends on the contrary that while federal power over the subject is paramount, it is not exclusive and in such a case as we have here, until the federal power is actually exercised as to the particular employees, State power may be exercised. 6 At the time the courts of the State of New York were considering this issue, the question whether the Federal Act would authorize or permit unionization of foremen was in controversy and was unsettled until our decision in Packard Motor Car Co. v. N.L.R.B., 330 U.S. 485, 67 S.Ct. 789. Whatever constitutional issue may have been presented by earlier phases of the evolution of the federal policy in relation to that of the State, the question now is whether, Congress having undertaken to deal with the relationship between these companies and their foremen, the State is prevented from doing so. Congress has not seen fit to lay down even the most general of guides to construction of the Act, as it sometimes does, by saying that its regulation either shall or shall not exclude state action. Cf. Securities Act of 1933, § 18, 48 Stat. 85, 15 U.S.C. § 77r, 15 U.S.C.A. § 77r; Securities Exchange Act of 1934, § 28, 48 Stat. 903, 15 U.S.C. § 78bb, 15 U.S.C.A. § 78bb; United States Warehouse Act, § 29, before and after 1931 amendment, 39 Stat. 490, 46 Sta . 1465, 7 U.S.C. § 269, 7 U.S.C.A. § 269. Our question is primarily one of the construction to be put on the Federal Act. It long has been the rule that exclusion of state action may be implied from the nature of the legislation and the subject matter although express declaration of such result is wanting. Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 47 S.Ct. 207, 71 L.Ed. 432. 7 In determining whether exclusion of state power will or will not be implied, we well may consider the respective relation of federal and state power to the general subject matter as illustrated by the case in hand. These companies are authorized to do business in New York State, they operate large manufacturing plants in that state, they draw their labor supply from its residents, and the impact of industrial strife in their plants is immediately felt by state police, welfare and other departments. Their labor relations are primarily of interest to the state, are within its competence legally and practically to regulate, and until recently were left entirely to state control. Thus, the subject matter is not so 'intimately blended and intertwined with responsibilities of the national government' that its nature alone raises an inference of exclusion. Cf. Hines v. Davidowitz, 312 U.S. 52, 66, 61 S.Ct. 399, 403, 85 L.Ed. 581. 8 Indeed, the subject matter is one reachable, and one which Congress has reached, under the federal commerce power, not because it is interstate commerce but because under the doctrine given classic expression in the Shreveport case, Congress can reach admittedly local and intrastate activities 'having such a close and substantial relation to interstate traffic that the control is essential or appropriate to the security of the traffic, to the efficiency of the interstate service, and to the maintenance of conditions under which interstate commerce may be conducted upon fair terms and without molestation or hindrance.' Houston, East & West Texas Ry. v. United States, 234 U.S. 342, 351, 34 S.Ct. 833, 836, 58 L.Ed. 1341. See also National Labor Relations Board v. Fainblatt, 306 U.S. 601, 59 S.Ct. 668, 83 L.Ed. 1014. 9 In the National Labor Relations Act, Congress has sought to reach some aspects of the employer-employee relation out of which such interferences arise. It has dealt with the subject or relationship but partially, and has left outside of the scope of its delegation other closely related matters. Where it leaves the employer-employee relation free of regulation in some aspects, it implies that in such matters federal policy is indifferent, and since it is indifferent to what the individual of his own volition may do we can only assume it to be equally indifferent to what he may do under the complusion of the state. Such was the situation in Allen-Bradley Local No. 1111, United Electrical Radio and Machine Workers of America v. Wisconsin Employment Relations Board, 315 U.S. 740, 62 S.Ct. 820, 86 L.Ed. 1154, where we held that employee and union conduct over which no direct or delegated federal power was exerted by the National Labor Relations Act is left open to regulation by the state. However, the power of the state may not so deal with matters left to its control as to stand 'as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' Hill v. Florida ex rel Watson, 325 U.S. 538, 542, 65 S.Ct. 1373, 1375, 89 L.Ed. 1782. Cf. Maurer v. Hamilton, 309 U.S. 598, 60 S.Ct. 726, 84 L.Ed. 969, 135 A.L.R. 1347. When Congress has outlined its policy in rather general and inclusive terms and delegated determination of their specific application to an administrative tribunal, the mere fact of delegation of power to deal with the general matter, without agency action, might preclude any state action if it is clear that Congress has intended no regulation except its own. Oregon-Washington R. & Nav. Co. v. Washington, 270 U.S. 87, 46 S.Ct. 279, 70 L.Ed. 482. In other cases, Congress has passed statutes which initiate regulation f certain activities, but where effective regulation must wait upon the issuance of rules by an administrative body. In the interval before those rules are established, this Court has usually held that the police power of the state may be exercised. Northwestern Bell Telephone Co. v. Nebraska State Ry. Commission, 297 U.S. 471, 56 S.Ct. 536, 80 L.Ed. 810. Welch Co. v. New Hampshire, 306 U.S. 79, 59 S.Ct. 438, 83 L.Ed. 500. But when federal administration has made comprehensive regulations effectively governing the subject matter of the statute, the Court has said that a state regulation in the field of the statute is invalid even though that particular phase of the subject has not been taken up by the federal agency. Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 47 S.Ct. 207, 71 L.Ed. 432. However, when federal administrative regulation has been slight under a statute which potentially allows minute and multitudinous regulation of its subject, cf. Atlantic Coast Line R. Co. v. Georgia, 234 U.S. 280, 34 S.Ct. 829, 58 L.Ed. 1312, or even where extensive regulations have been made, if the measure in question relates to what may be considered a separable or distinct segment of the matter covered by the federal statute and the federal agency has not acted on that segment, the case will be treated in a manner similar to cases in which the effectiveness of federal supervision awaits federal administrative regulation. Northwestern Bell Telephone Co. v. Nebraska State Ry. Commission, supra; Welch Co. v. New Hampshire, supra. The states are in those cases permitted to use their police power in the interval. Terminal Railroad Ass'n v. Brotherhood of Railroad Trainmen, 318 U.S. 1, 63 S.Ct. 420, 87 L.Ed. 571. However, the conclusion must be otherwise where failure of the federal officials affirmatively to exercise their full authority takes on the character of a ruling that no such regulation is appropriate or approved pursuant to the policy of the statute. Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 47 S.Ct. 207, 71 L.Ed. 432; compare Oregon-Washington R. & Nav. Co. v. Washington, 270 U.S. 87, 46 S.Ct. 279, 70 L.Ed. 482, with Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315; cf. Mintz v. Baldwin, 289 U.S. 346, 53 S.Ct. 611, 77 L.Ed. 1245. 10 It is clear that the failure of the National Labor Relations Board to entertain foremen's petitions was of the latter class. There was no administrative concession that the nature of these appellants' business put their employees beyond reach of federal authority. The Board several times entertained similar proceedings by other employees whose right rested on the same words of Congress. Neither did the National Board ever deny its own jurisdiction over petitions because they were by foremen. Soss Manufacturing Co., 56 N.L.R.B. 348. It made clear that its refusal to designate foremen's bargaining units was a determination and an exercise of its discretion to determine that such units were not appropriate for bargaining purposes. Maryland Drydock Co., 49 N.L.R.B. 733. We cannot, therefore, deal with this as a case where federal power has been delegated but lies dormant and unexercised. 11 Comparison of the State and Federal statutes will show that both governments have laid hold of the same relationship for regulation, and it involves the same employers and the same employees. Each has delegated to an administrative authority a wide discretion in applying this plan of regulation to specific cases, and they are governed by somewhat different standards. Thus, if both laws are upheld, two administrative bodies are asserting a discretionary control over the same subject matter, conducting hearings, supervising elections and determining appropriate units for bargaining in the same plant. They might come out with the same determination, or they might come out with conflicting oncs as they have in the past. Cf. Matter of Creamery Package Mfg. Co., 34 N.L.R.B. 108; Wisc. Emp. Rel. Bd. Case III, No. 348 E.—117. But the power to decide a matter can hardly be made dependent on the way it is decided. As said by Mr. Justice Holmes for the Court, 'When Congress has taken the particular subject-matter in hand, coincidence is as ineffective as opposition * * *.' Charleston & W.C.R. Co. v. Varnville Furniture Co., 237 U.S. 597, 604, 35 S.Ct. 715, 716, 717, 59 L.Ed. 1137, Ann.Cas.1916D, 333. See also Southern Railway Co. v. Railroad Commission of Indiana, 236 U.S. 439, 448, 35 S.Ct. 304, 308, 309, 59 L.Ed. 661; Missouri Pacific R. Co. v. Porter, 273 U.S. 341, 345, 346, 47 S.Ct. 383, 384, 385, 71 L.Ed. 672. If the two boards attempt to exercise a concurrent jurisdiction to decide the appropriate unit of representation, action by one necessarily denies the discretion of the other. The second to act either must follow the first, which would make its action useless and vain, or depart from it, which would produce a mischievous conflict. The State argues for a rule that would enable it to act until the federal board had acted in the same case. But we do not think that a case by case test of federal supremacy is permissible here. The federal board has jurisdiction of the industry in which these particular employers are engaged and has asserted control of their labor relations in general. It asserts, and rightfully so, under our decision in the Packard case, supra, its power to decide whether these foremen may constitute themselves a bargaining unit. We do not believe this leaves room for the operation of the state authority asserted. 12 The National and State Boards have made a commendable effort to avoid conflict in this overlapping state of the statutes. We find nothing in their negotiations, however, which affects either the construction of the federal statute or the question of constitutional power insofar as they are involved in this case, since the National Board made no concession or delegation of power to deal with this subject. The election of the National Board to decline jurisdiction in certain types of cases, for budgetary or other reasons presents a different problem which we do not now decide. 13 We therefore conclude that it is beyond the power of New York State to apply its policy to these appellants as attempted herein. The judgments appealed from are reversed and the causes remanded for further proceedings not inconsistent herewith. 14 Reversed. 15 Separate opinion of Mr. Justice FRANKFURTER in which Mr. Justice MURPHY and Mr. Justice RUTLEDGE join. 16 The legal issue in these cases derives from our decision in Packard Motor Car Co. v. National Labor Relations Board, 330 U.S. 485, 67 S.Ct. 789. The Court there held that foremen are 'employees' within § 2(3) of the National Labor Relations Act, 49 Stat. 449, 450, 29 U.S.C.A. § 152(3), and as such are entitled to the rights of self-organization under the Act. As the Packard case points out, the exercise of this authority over foremen has had a chequered history before the National Labor Relations Board. There was a period when the Board in the exercise of its discretion denied resort to its authority by foremen seeking collective bargaining representation. During that period, foremen of the two petitioning steel companies invoked the jurisdiction of the New York State Labor Board to certify them as a bargaining unit under the New York law descriptively characterized as a 'Little Wagner Act' because it enforces the same policies by the same means as does the Wagner Act. The State Board assumed jurisdiction and the New York Court of Appeals sustained that assumption. Our problem is whether the National Labor Relations Act in its entirety—the law as Congress gave it to the National Board for administration precluded this exercise of State authority. 17 If the Court merely held that, having given the National Board jurisdiction over foremen Congress also gave it discretion to determine that it may be undesirable, as a matter of industrial relations, to compel recognition of foremen's unions; that the Board had so exercised its discretion and, by refusing to sanction foremen's unions, had determined that foremen in enterprises like those before us could not exact union recognition; that therefore New York could not oppose such federal action by a contrary policy of its own, I should concur in the Court's decision, whatever the differences of interpretation to which the course of events before the National Board may lend itself. But the Court's opinion does not, as I read it, have that restricted scope, based on the individual circumstances before us. Apart from the suggestion that the National Board's declination of jurisdiction 'in certain types of cases, for budgetary reasons' might leave room for the State in those situations, the Court's opinion carries at least overtones of meaning that, regardless of the consent of the National Board, New York is excluded from enforcing rights of collective bargaining in all industries within its borders as to which Congress has granted opportunity to invoke the authority of the National Board. 18 The inability of the National Board to exercise its dormant powers because of lack of funds ought not to furnish a more persuasive reason for finding that concurrent State power may function that a deliberate exercise of judgment by the National Board that industrial relations having both national and state concern can most effectively be promoted by an appropriate division of administrative resources between the National and the State Boards. This states abstractly a very practical situation. Based on the realization that as a practical matter the National Board could not effectuate the policies of the Act committed to it over the whole range of its authority, an arrangement was worked out whereby the National Board leaves to the State Board jurisdiction over so-called local industries covered by the federal Act, while the State Board does not entertain matters over which the National Board has consistently taken jurisdiction. This practical Federal-State working arrangement, arrived at by those carrying the responsibility for breating life into the bare bones of legislation, is so relevant to the solution of the legal issues arising out of State-Nation industrial interaction, that I have set forth the agreement in full into Appendix. Particularly when dealing with legal aspects of industrial relations is it important for courts not to isolate legal issues from their workaday context. I cannot join the Court's opinion because I read it to mean that it is beyond the power of the National Board to agree with State agencies enforcing laws like the Wagner Act to divide, with due regard to local interests, the domain over which Congress had given the National Board abstract discretion but which, practically, cannot be covered by it alone. If such cooperative agreements between State and National Boards are barred because the power which Congress has granted to the National Board ousted or superseded State authority, I am unable to see how State authority can revive because Congress has seen fit to put the Board on short rations. 19 Since we are dealing with aspects of commerce between the States that are not legally outside State action by virtue of the Commerce Clause itself, New York has authority to act so long as Congress has not interdicted her action. While what the State does she does on sufferance, in ascertaining whether Congress has allowed State action we are not to consider the matter as though Congress were conferring a mere bounty, the extent of which must be viewed with a thrify eye. When construing federal legislation that deals with matters that also lie within the authority, because within the proper interests, of the States, we must be mindful that we are part of the delicate process of adjusting the interacting areas of National and State authority over commerce. The inevitable extension of federal authority over economic enterprise has absorbed the authority that was previously left to the States. But in leg slating, Congress is not indulging in doctrinaire, hard-and-fast curtailment of the State powers reflecting special State interests. Federal legislation of this character must be construed with due regard to accommodation between the assertions of new federal authority and the functions of the individual States, as reflecting the historic and persistent concerns of our dual system of government. Since Congress can, if it chooses, entirely displace the States to the full extent of the far-reaching Commerce Clause, Congress needs no help from generous judicial implications to achieve the supersession of State authority. To construe federal legislation so as not needlessly to forbid preexisting State authority is to respect our federal system. Any indulgence in construction should be in favor of the States, because Congress can speak with drastic clarity whenever it chooses to assure full federal authority, completely displacing the States. 20 This is an old problem and the considerations involved in its solution are commonplace. But results not always harmonious have from time to time been drawn from the same precepts. In law also the emphasis makes the song. It may make a decisive difference what view judges have of the place of the States in our national life when they come to apply the governing principle that for an Act of Congress completely to displace a State law 'the repugnance or conflict should be direct and positive, so that the two acts could not be reconciled or consistently stand together.' Sinnot v. Davenport, 22 How. 227, 243, 16 L.Ed. 243. Congress can speak so unequivocally as to leave no doubt. But real controversies arise only when Congress has left the matter in doubt, and then the result depends on whether we require that actual conflict between State and federal action be shown, or whether argumentative conflict suffices. 21 Our general problem was only recently canvassed in the three opinions in Hill v. Florida ex rel. Watson, 325 U.S. 538, 65 S.Ct. 1373, 89 L.Ed. 1782. But the frequent recurrence of the problem and the respective legislative and judicial share in its proper solution justify some repetition. It may be helpful to recall the circumspection with which federal absorption of authority previously belonging to the States was observed in the control of railroad rates. 22 In Shepard (Simpson v. Minnesota Rate Cases), 230 U.S. 352, 33 S.Ct. 729, 57 L.Ed. 1511, 48 L.R.A.,N.S., 1151, Ann.Cas.1916A 18, this Court after elaborate argument and extended consideration, held that State rates covering intrastate transportation could not be stricken down judicially even though it may be shown that such rates adversely affect carriers in their interstate aspects. This decision was based largely on the respect to be accorded to the respective functions of State and national authority, as evinced by Congressional and judicial history. But a year later, the Court held that when the Interstate Commerce Commission found that State regulation of local rates was designed to operate discriminatorily against related interstate commerce, the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., authorized removal of the discrimination against the interstate rates. Houston, East & West Texas Ry. Co. v. United States, 234 U.S. 342, 34 S.Ct. 833, 58 L.Ed. 1341. Nevertheless, so important did this Court deem respect for State power that it would not allow the Shreveport doctrine to be loosely used as a curtailment of State authority. Accordingly it insisted on precision and definiteness in the orders of the Interstate Commerce Commission in this interacting area. Illinois Central R. Co. v. State Public Utilities Commission, 245 U.S. 493, 38 S.Ct. 170, 62 L.Ed. 425. Subsequently, by the Transportation Act of 1920, Congress formalized the Shreveport doctrine and extended its scope. The Commission was expressly authorized to correct State rates that were unreasonable with reference to related interstate rates, and was also given control over State rates which adversely affected interstate commerce as such. See § 13, par. 4 of the Interstate Commerce Act, as amended by ss 416 and 422 of the Transportation Act of 1920, 41 Stat. 456, 484, 488, 49 U.S.C.A. § 13, par. 4 and § 15a; Railroad Commission of Wisconsin v. Chicago B. & Q.R.R. Co., 257 U.S. 563, 42 S.Ct. 232, 66 L.Ed. 371, 22 A.L.R. 1086; New York v. United States, 257 U.S. 591, 42 S.Ct. 239, 66 L.Ed. 385. It is not without significance that in exercising this new power Congress associated with the Interstate Commerce Commission the appropriate State agencies in an advisory capacity. Even where foreign commerce is involved, as to which State control is naturally viewed with less favor, this Court has not ruled out State authority derived from a State interest where State regulation was found to be complementary to federal regulation. Union Brokerage Co. v. Jensen, 322 U.S. 202, 208, 209, 64 S.Ct. 967, 971, 972, 88 L.Ed. 1227, 152 A.L.R. 1072. 23 No doubt, as indicated, case have not always dealt with such scrupulous regard for State action where Congress has not patently terminated it. Metaphor—' occupied the field'—has at times done service for close analysis. But the rules of accommodation that have been most consistently professed as well as the dominant current of decisions make for and not against the modus vivendi achieved by the two agencies in the labor relations field, which the Government as amicus curiae, here sponsored. Such an arrangement assures the effectuation of the policies which underlie both the National Labor Relations Act and the 'Little Wagner Act' of New York in a manner agreed upon by the two Boards for dealing with matters affecting interests of common concern. 'Where the Government has provided for collaboration the courts should not find conflict.' Union Brokerage Co. v. Jensen, 322 U.S. 202, 209, 64 S.Ct. 967, 972, 88 L.Ed. 1227, 152 A.L.R. 1072. 24 What is before us is a very real and practical situation. The vast range of jurisdiction which the National Labor Relations Act has conferred upon the Board raises problems of administration wholly apart from available funds. As a result of this Court's decision in National Labor Relations Board v. Fainblatt, 306 U.S. 601, 59 S.Ct. 668, 83 L.Ed. 1014, untold small enterprises are subject to the power of the Board. While labor difficulties in these units in the aggregate may unquestionably have serious repercussions upon interstate commerce, in their individualized aspects they are equally the concern of their respective localities. Accordingly, the National Labor Relations Board, instead of viewing the attempt of State agencies to enforce the principles of collective bargaining as an encroachment upon national authority, regards the aid of the State agencies as an effective means of accomplishing a common end. Of course, as Mr. Justice Holmes said, 'When Congress has taken a particular subject-matter in hand, coincidence is as ineffective as opposition' to save the State law. But surely this is so only when the State seeks 'to enforce a state policy differently conceived * * *.' Charleston & Western Carolina R.R. Co. v. Varnville Furniture Company, 237 U.S. 597, 604, 35 S.Ct. 715, 716, 717, 59 L.Ed. 1137, Ann.Cas.1916D, 333. 25 The National Board's business explains the reason and supports the reasonableness behind its desire to share burdens that may be the State's concern no less than the Nation's. The Board's Annual Reports show increasing arrears. At the end of the fiscal year 1944, 2602 cases were pending; at the end of 1945, 3244; at the end of 1946, there were 4605 unfinished cases. A shrewd critic has thus expressed the considerations that in the past have often lain below the surface of merely doctrinal applications: 'Formally, the enterprise is one of interpretation of the Act of Congress to discover its scope. Actually it is often the enterprise of reaching a judgment whether the situation is so adequately handled by national prescription that the impediment of further state requirements is to be deemed a bane rather than a blessing.' T. R. Powell, Commerce Clause and State Police Power, 12 Minn.L.Rev. 607. In the submission by the Board before us, we have the most authoritative manifestation by national authority that State collaboration would be a blessing rather than a bane, and yet judicial construction would forbid the aid which the agency of Congress seeks in carrying out its duty. It is surely a responsible inference that the result will be to leave uncontrolled large areas of industrial conflict. Neither what Congress has said in the National Labor Relations Act, nor the structure of the Act, nor its policy, nor its actual operation, should be found to prohibit the Board from exercising its discretion so as to enlist the aid of agencies charged with like duties within the States in enforcing a common policy by a distribution of cases appropriate to respective State and National interests. 26 APPENDIX. 27 Documents Indicating Understanding Between the New York and the National Labor Relations Boards. NEW YORK STATE LABOR RELATIONS BOARD 250 West 57th Street NEW YORK 19 28 WILLIAM E. GRADY, Jr. General Counsel 29 JULY 10, 1945. ALVIN J. ROCKWELL, Esquire 30 General Counsel, 31 National Labor Relations Board, 32 Washington, D.C. 33 DEAR MR. ROCKWELL: The Board has examined your memorandum of our conference of April 20, 1945 and considers that it represents a fair statement of the proceedings. 34 As to insurance companies (page 6 of your memo), you will recall that we mentioned our prior experience with such companies and the fact that units of less than statewide scope have been established and upheld by the courts. In such cases, therefore, we think it would be to the benefit of both Boards that you clear with us. A situation may very easily arise in which you would prefer to have us entertain a petition which had been filed with us. 35 Best regards. 36 Sincerely, 37 /s/ WILLIAM E. GRADY, Jr. 38 NATIONAL LABOR RELATIONS BOARD, 39 Washington 25, D.C., July 26, 1945. 40 WILLIAM E. GRADY, Jr., 41 General Counsel, 42 New York State Labor Relations Board, 43 250 West 57th Street, 44 New York City 19, N.Y. 45 DEAR MR. GRADY: In Mr. Rockwell's absence on vacation this week, I am replying to your letter of July 10. 46 Mr. Rockwell's memorandum of our conference of April 20 and your letter were discussed with and approved by the Members of the Board. 47 We are, accordingly, circulating copies of this memorandum to the members of our staffs in the Buffalo and New York City offices. This memorandum and your letter will hereafter be followed as a guide in relations between the two Boards as regards cases arising in New York State. 48 Sincerely yours, 49 /s/ Oscar S. Smith 50 OSCAR S. SMITH, 51 Director of Field Division. 52 MEMORANDUM RE CONFERENCE BETWEEN REPRESENTATIVES OF NEW YORK STATE LABOR RELATIONS BOARD AND NATIONAL LABOR RELATIONS BOARD, HELD FRIDAY, APRIL 20, 1945. 53 A conference was held at the offices of the New York State Labor Relations Board on Friday, April 20, 1945, attended by Father Kelley, Chairman, and Board Members Goldberg and Lorenz, Executive Secretary Goldberg, General Counsel Grady, and Associate General Counsel Feldblum, of the New York State Labor Relations Board, and by Field Director Smith, New York Regional Director Howard LeBaron, General Counsel Rockwell, and New York Regional Attorney Perl, of the National Labor Relations Board. The subject of the conference was the proper division of jurisdiction between the National and State Boards. 54 This conference followed an earlier conference held on January 9, 1945, in Washington, between Messrs. Smith and Rockwell and Buffalo Regional Director Ryder, representing the NLRB, and Messrs. Goldberg and Feldblum, representing the New York Board. At the conference in Washington, the principal subject discussed was the action of the State Board in entertaining election petitions involving the employees of large nterstate manufacturing establishments over which the National Board has customarily asserted jurisdiction. The cases in question related to petitions filed by labor organizations which sought to be certified as representatives of units of supervisory employees or in one case, a labor organization which sought to represent non-supervisory employees but whose membership was composed of a substantial number of supervisors. At the time of the January conference, the Board's decision in the Packard case, 61 N.L.R.B., No. 3, had not been issued; it appeared that in certifying a labor organization for supervisory employees the State Board was taking action contrary to that which would have been taken by the National Board had the petition been filed with it. It was also believed that the action of the State Board in proceeding to a certification of a labor organization for non-supervisory employees whose membership included supervisors in substantial number might be contrary to the National Board's disposition of the case under its decision in Matter of Rochester & Pittsburgh Coal Co., 56 N.L.R.B. 1760. No understanding was reached with regard to these types of cases at the January conference. In the meantime, on March 26, 1945, the Board issued its decision in the Packard case, holding that it would proceed to certify unaffiliated unions as representative of supervisory employees and leaving open the question of whether it would proceed to certify affiliated unions as such representatives. The New York conference was arranged in order to discuss the types of cases which were the subject of the January conference and also to canvass in general the question of the respective jurisdictions of the two Boards. 55 The New York conference began with consideration of Father Boland's letter to Mr. Madden dated July 12, 1937, which has constituted the principal basis of understanding between the two Boards during the ensuing years. The Boland letter states: 56 Unless there are unusual circumstances, the New York State Labor Relations Board will assume jurisdiction over all cases arising in the following trades and industries, without clearing, except as a matter of record, with the National Board's officials: 57 1. Retail stores, 58 2. Small industries which receive all or practically all raw materials from within the State of New York, and do not ship any material proportion of their product outside the State, 59 3. Service trades (such as laundries), 4. Office and residential buildings, 60 5. Small and clearly local public utilities (this includes local traction companies, as well as gas and electric light corporations), 61 6. Storage warehouses, 62 7. Construction operations, 63 8. Other obviously local businesses. 64 A copy of the letter of July 12, 1937, is attached to this memorandum. 65 At the time of the preparation of the letter of July 12 and the conference which preceded it and upon which it is based, their was relatively little case law as to the jurisdiction under the commerce clause of the National Board under the National Act. Since that time there has been a large number of decisions in the federal circuit courts of appeals and several in the Supreme Court which have substantially extended the Board's jurisdiction beyond that which was understood to exist in July 1937. To take only one pertinent example: In July 1937 the Board had not asserted jurisdiction over retail establishments. Since 1937 the Board has accepted a considerable number of cases involving retail establishments such as department stores and the Board's power in this respect has been sustained by the courts. Notwithstanding this extension of jurisdiction under the National Act, the National and State Boards, respectively, have, in general, followed the understanding reflected by the letter of July 12, 1937. Thus, in New York State the National Board has not asserted jurisdiction over retail establishments. The representatives at the conference of April 20 expressed the view that, by and large, the understanding had worked out well as applied to the types of businesses there dealt with. The position was repeatedly expressed by the representatives of both National and State Boards that as a working matter the jurisdiction between the two Boards must be allotted on the basis of the type of industry or business involved (rather, for example, than on the basis of which Board a petition or charge is initially filed with), and that when one Board, pursuant to common understanding, has asserted jurisdiction in the past over a particular employer, the other Board should thereafter refer any matters coming to it to the Board which had entertained the earlier case or cases.1 66 Following reference to the letter of July 12, there was detailed discussion of the eight categories there listed, which are quoted above. The gist of this discussion was as follows: Retail stores. Where the same company operates retail stores and also does a substantial interstate mail order business from within New York State, representatives of the National Board pointed out that probably the National Act should be applied to the company. The understanding was reached that before the State Board asserted jurisdiction in the future over any such companies, the case would be cleared with the National Board through the New York City or Buffalo offices, depending upon the region in which the case arose. Service trades. Where a New York concern is in the business of furnishing guards, window washers, laundry, or some other type of service within the State, it was felt that the business is essentially local in character and should be subject to the State Act even though the services are furnished to a number of large interstate enterprises, which in themselves are subject to the jurisdiction of the National Act. (An exception is the case of detective agencies doing business on a national scale, concerning which, it is understood, the State Board will clear with the National Board before asserting jurisdiction.) On the other hand, where the interstate enterprise, over which the National Board would customarily assert jurisdiction, supplies its own guard, window washing, laundry, or other service for itself, it was believed that the employees involved would rightly come within the jurisdiction of the National Act. The test here is whether the service is performed by a separate business establishment which can properly be considered a local enterprise even though services are rendered to interstate businesses, or whether the service is rendered by the interstate enterprise itself as an incident of its own business. Office buildings. The same test applicable to the service trades was also thought to be applicable to office buildings. Thus, if the employer involved is in the business of operating office buildings he is subject to the State Act even though tenants consist of interstate enterprises. On the other hand, where the office building is owned or operated, or both, by an interstate enterprise, over which the National Board would customarily assert jurisdiction, and is used by the interstate enterprise in conducting its interstate business, the National Board would expect to assert jur sdiction. Public utilities. It was agreed that the New York Board could properly assert jurisdiction over such utilities, including electric, gas, traction, bus companies, and the like which are not themselves engaged in supplying service across the State line. In short, where the National Board could only base its jurisdiction on the 'affecting commerce' principle (plus the shipment into the State of fuel and capital equipment, not for resale), it was believed in general that the National Board could properly leave jurisdiction to the State Board. An exception to this working rule is provided by a few very large utilities, such as the Consolidated Edison Company, over which the National Board originally asserted jurisdiction. Warehouses. The test applied in the case of service trades and office buildings seems applicable to warehouses, the question being whether they are operated as separate local enterprises or as incidents of the operation of interstate business over which the National Board would customarily take jurisdiction. Construction business. The New York Board is expected to assert jurisdiction over the construction industry except, for example, in the case of the construction of ships, which is thought of as falling within the field of manufacturing, over which, in general, the National Board asserts jurisdiction. 67 In addition to the foregoing lines of activity, referred to in the letter of July 12, 1937, two other businesses not dealt with in that letter were also discussed. Insurance companies. In the past both the State and the National Boards have intermittently asserted jurisdiction over insurance companies. So far as small insurance, bonding, casualty companies, etc., doing business primarily within the State are concerned, it was felt that the State Board should occupy this filed. So far as the large national companies are concerned, however, the representatives of the National Board expressed the view that hereafter cases involving such companies should be handled by the latter Board. In this connection it was pointed out that as organization has matured among the large companies, Statewide and even larger units are being established and that this type of activity had therefore advanced to the stage where it was peculiarly the interest of the National Board. It was agreed that the State Board would not entertain any cases involving the large national companies without prior clearance with the National Board. Newspapers. The National Board has taken jurisdiction over large daily newspapers in New York and other States and, where challenged, has been uniformly sustained in this by the courts. At the same time, the circulation departments of such newspapers, to the extent that the distributing activity is confined within a single State, are in many aspects local in character. In New York State, and particularly in New York City, where news vendors are subject to local licensing requirements, the National Board feels that cases involving the distribution of newspapers should properly be handled by the State Board. Consistent with this approach, the New York Regional Office of the National Board has recently referred to the State Board news vendor cases involving four of the largest afternoon newspapers in New York City. The representatives of the State Board expressed agreement with this approach and indicated that the proper line of division might come at the level of the circulation managers. It was agreed that hereafter neither Board will accept cases at the circulation manager level without prior clearance with the other Board; that cases above this level will be handled by the National Board; and that cases below this level will be handled by the State Board. Of course, small newspapers of limited circulation will properly be handled by the State Board. 68 Concurrent jurisdiction.2 The letter of July 12, 1937, left open the question of 'concurrent jurisdiction'—by which, it is understood, was meant the procedure to be foll wed in the case of employers who might simultaneously be subject to the requirements of both the State and National Acts. The letter stated: 'So far as concurrent jurisdiction is concerned, we assume that even a tentative understanding must await mutual study of the memorandum which Mr. Fahy is now preparing.' It appears that the memorandum referred to was never repared and that no subsequent understanding was reached as to such concurrent jurisdiction. In practice, this does not seem to have been a problem, except in the situation discussed below, since the State Board has by and large confined its activities to the businesses detailed in the letter of July 12 and the National Board in turn has left this field open to the State Board. The problem of so-called 'concurrent jurisdiction' has arisen in recent months because, following the National Board's decision in Matter of Maryland Drydock Company, 49 N.L.R.B. 733, a number of labor organizations have filed election petitions with the State Board which they knew would not be entertained by the National Board. (See the second paragraph of this memorandum above, concerning the conference of January 9, 1945, in Washington.) Prior to the Maryland Drydock case, the State Board, it is understood, had refrained from entertaining cases involving large intestate manufacturers and the National Board had asserted exclusive jurisdiction over such employers. 69 At the conference of April 20 the representatives of the National Board pointed to the recent decision in the Packard case and suggested that the State Board should adhere to its general policy of leaving all cases involving large manufacturing establishments doing interstate business to the National Board. The impracticability of both Boards intermittently asserting jurisdiction over the same employer was emphasized, and in addition the question was raised whether under the Federal Constitution the State Board could lawfully enforce any requirement against such employers which was inconsistent with or which imposed restraints in addition to those enforced by the National Board. The representatives of the New York Board agreed that cases of this type presented a legal problem but were of the view that it was advisable for the State Board to entertain election petitions for units of supervisory employees where it was doubtful whether the National Board would proceed with the case were it filed with the latter Board. The representatives of the New York Board pointed to their obligation to contribute to the maintenance of industrial peace within the borders of New York State and recalled a provision of the New York Constitution which guarantees organizational rights to all employees. The representatives of the latter Board agreed however, that their officials should not reach out for cases of this character, involving large interstate manufacturers, and that they would keep the National Board advised as to all such cases they decided to entertain. Thus, no broad understanding was reached on this score, both Boards reserving their respective positions with regard to petitions for units of supervisory employees and other petitions involving large interstate manufacturers. 70 It was believed that it would be helpful to the work of both Boards if lists of cases entertained within the State were periodically exchanged. The details of this were left to be worked out. NEW YORK STATE LABOR RELATIONS BOARD, 71 July 12, 1937. 72 Honorable J. WARREN MADDEN, 73 National Labor Relations Board, 74 Washington, D.C. 75 DEAR MR. MADDEN: We wish, in the first place, to thank you and your colleagues for your warm reception of last Wednesday. It is gratifying to know that we can look forward to such wholehearted cooperation from your Board and its staff. We will gladly reciprocate. 76 As requested, we outline our recollection of the understanding reached. So far as concurrent jurisdiction is concerned, we assume that even a tentative understanding must await mutual study of the memorandum which Mr. Fahy is now preparing. 77 Unless there are unusual circumstances, the New York State Labor Relations Board will assume jurisdiction over all cases arising in the following trades and industries, without clearing, except as a matter of record, with the National Board's officials: 78 1. Retail stores, 79 2. Small industries which receive all or practically all raw materials from within the State of New York, and do not ship any material proportion of their product outside the State, 80 3. Service trades (such as laundries), 81 4. Office and residential buildings, 82 5. Small and clearly local public utilities (this includes local traction companies, as well as gas and electric light corporations), 83 6. Storage warehouses, 84 7. Construction operations, 85 8. Other obviously local businesses. 86 Clearance is certainly going to be required in the case of industries where the raw materials or most of them come from without the State, but the product is not shipped beyond the borders of New York. (The question here is as to the breadth of application of the 'come to rest' doctrine of the Schechter case (Schechter Poultry Corporation v. United States), 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947.) 87 You are familiar, of course, with Section 715 of our statute, part of which reads as follows: 'Application of article. The provisions of this article shall not apply to the employees of any employer who concedes to and agrees with the board that such employees are subject to and protected by the provisions of the national labor relations act or the federal railway labor act * * *'. The New York State Board will undoubtedly take the position that the words 'agrees with' contemplate the necessity of our Board's agreeing with the employer that his employees are subject to the national statute and that no employer can by unilateral action select his jurisdiction. 88 This however, does not solve all of the problems created by the Section, since it is clear that even the agreement of this Board with the employer will not necessarily bestow federal jurisdiction under the Constitution. Presumable every time such a concession is proffered by an employer, our Board will have to clear with the National Board officials in the same way it would clear with them if no such concession were made. 89 It is our understanding that we should clear on all questions of jurisdiction with the Regional Directors in New York City and Buffalo in the first instance, and that you will instruct your Directors to reciprocate by clearing with us all doubtful cases which first come to their attention. 90 Whenever this Board and either of your Regional Directors find themselves unable to agree, the matter will be taken up with you at once. 91 We would appreciate knowing that your recollection and understanding of the above are in accord with our own. 92 Very sincerely your, 93 /s/ John P. Boland 94 (Dr.) JOHN P. BOLAND, Chairman. 95 NATIONAL LABOR RELATIONS BOARD. MINUTES OF AUGUST 16, 1946. 96 An informal inquiry was made to the Board by United Financial Employees Association asking whether the Board would entertain a Section 9 representation petition on behalf of the employees of Harris Upham and Company, a New York brokerage house. The Board was also advised that similar petitions were contemplated for the employees of a number of similar New York brokerage houses. The Board concluded that it would not, at this time, entertain a petition filed on behalf of the employees of Harris Upham and Company or other such brokerage houses because of budgetary and other administrative considerations. The Board further concluded that, in view of this disposition, it had no objection to having the State Labor Relations Board of the State of New York entertain such petitions filed under the State Act. 97 Dated at Washi gton, D.C. 98 August 16, 1946. Donn N. Bent 99 DONN N. BENT, 100 Executive Secretary. Approved: 101 s/ P.M.H. 102 s/ J.M.H. 103 Certified to be a true and correct copy. 104 s/ Donn N. Bent 105 DONN N. BENT, 106 Executive Secretary. 1 In Consolidated Edison Co. v. N.L.R.B., 305 U.S. 197, 223, 59 S.Ct. 206, 214, 83 L.Ed. 126, the Supreme Court indicated that in deciding whether or not to assert jurisdiction the National Board could properly take into account the existence of State protective legislation, such as the New York State Labor Relations Act. The National Act contains no provision authorizing the National Board to enter into compacts or agreements with State Boards, but would seem to require the National Board in each case to exercise its discretion whether or not to proceed. It is believed, nevertheless, that understanding such as that embodied in the letter of July 12, 1937, although of no legal effect, assist both Boards in determining the proper disposition of particular cases as they arise. 2 See Davega City Radio, Inc. v. New York Labor Relations Board, 281 N.Y. 13, 22 N.E.2d 145; 4 L.R.R.Man. 899. (July 11, 1939.)

910

330 U.S. 724 67 S.Ct. 1004 91 L.Ed. 1204 UNITED STATESv.HOY. No. 585. Argued and Submitted March 14, 1947. Decided April 7, 1947. Appeal from the District Court of the United States for the Southern District of California. Mr. Peyton Ford, of Washington, D.C., for appellant. Mr. Henry G. Bodkin, of Los Angeles, Cal., for appellee. Mr. Justice BLACK delivered the opinion of the Court. 1 A United States Attorney filed an information in a Federal District Court charging that the appellee, Lem Hoy, 'did attempt to induce, assist, encourage, and solicit, certain alien persons to migrate to the United States as contract laborers * * * who were not alien contract laborers duly entitled to migrate to the United States under the Act of February 5, 1917, or to enter or migrate to the United States under any other law of the United States, as the defendant then and there well knew.' The conduct charged was made an offense by § 5 of the 1917 Immigration Act referred to in the information. 39 Stat. 874, 879, 8 U.S.C. § 139, 8 U.S.C.A. § 139. Hoy appeared, waived indictment, asked for a bill of particulars, and moved to dismiss the information on the ground that § 5 of the 1917 Act had been repealed by § 5(g) of the Farm Labor Supply Appropriation Act of 1944. 58 Stat. 11, 15, 16, 50 U.S.C.App., Supp. V, § 1355(g), 50 U.S.C.A.Appendix, § 1355(g). The bill of particulars showed that Hoy had written a letter to certain persons living in Mexico to induce them to come to the United States to work for him. In the letter Hoy told them that 'it makes no difference if you pass as contraband (smuggle in), as whenever the Immigration catches you I will get you out with a bond.' The letter also directed the aliens to see a man near the border who would 'bring' them to Hoy for $25, and stated that Hoy would 'arrange everything.' It was stipulated that Hoy wanted the men to work for him as agricultural laborers. 2 Holding that the 1944 Farm Labor Act had made the 1917 Act inapplicable to such farm laborers, and therefore to those who induced their entry, the District Court dismissed the information. Since this dismissal was based on the construction of the 1917 Act as the Government sought to apply it in the information, the case is properly here on direct appeal from the District Court. 18 U.S.C. Supp. V § 682, 18 U.S.C.A. § 682; 28 U.S.C. § 345, 28 U.S.C.A. § 345. 3 The 1944 Farm Labor Act, by its terms, was designed to facilitate the war-time employment, and therefore the immigration into the United States for a limited stay, of agricultural laborers from North, South, and Central America, and islands adjacent thereto. In determining whether this information was properly dismissed, it is appropriate for us to consider whether Congress intended in the 1944 Act to remove all restrictions, enforceable by sanctions, against immigration into the United States of such agricultural laborers from the western hemisphere; and at the same time whether it intended to repeal, not only the provision which prohibited contract laborers from entering the country, but also, the longstanding law which made it a criminal offense to induce such persons, barred by law, to enter.1 If the 1944 Act has these effects, it marks a complete reversal of the congressional policy which has been followed for more than half a century.2 4 In line with this policy, the purpose of the 1917 Act, according to its title, was 'To regulate the immigration of aliens to, and the residence of aliens in, the United States.' It provided detailed qualifications for persons to be admitted to the country. Certain persons were to be completely barred, such as idiots, epileptics, chronic alcoholics, vagrants, criminals, polygamists, prostitutes, persons afflicted with loathsome or dangerous contagious diseases, persons who advise, advocate, or teach opposition to organized government or its overthrow by force, illiterates, and contract laborers, defined as persons induced or encouraged to come to this country by offers or promises of employment. The 1917 Act further provided for deportation of improperly admitted aliens, and authorized the promulgation of regulations to enforce the various provisions looking to exclusion of all persons except those qualified to enter the United States under the prescribed statutory standards. Pursuant to the broad terms of the 1917 and other supplementary Acts, a bureau of immigration and naturalization, now a part of the Department of Justice, has been established to examine the qualifications of those seeking admission and otherwise to enforce and administer the immigration laws in the interior and at the borders.3 5 The 1944 Farm Labor Act does not on its face purport to relax the standards of the 1917 and other Acts, except in a very limited way. It does not abolish the screening, administrative and enforcement function of the immigration authorities. Indeed the sponsor of the bill on the Senate floor explained that the measure proposed made certain, by provision for strict control of immigration and immigrants, that the stay of workers admitted pursuant to its provisions would be wholly temporary, and that 'we' who sponsored the bill 'are not in any way interfering with the firmly established national immigration policy.'4 6 Section 5(g) of the 1944 Act, relied on as wholly excepting agricultural laborers from the restrictions of the 1917 Act, is set out below.5 It will be noted that this section does permit entrance of agricultural workers who, but for this Act, would not be admitted under the former law. The only exceptions from the long list of nonadmissibles under the 1917 and other Acts are these: illiterates and those who have been induced to come into the country by promises of employment, or whose passage has been paid by corporations or other persons. By specifically lifting the immigration barriers in these respects, Congress left the barriers in effect which barred physical and mental defectives, those with certain diseases, etc. And even the exceptions granted were not unconditional, for under the 1944 Act agricultural laborers could still be admitted only 'for such time and under such conditions * * * as may be required by regulations prescribed by the Commissioner of Immigration and Naturalization with the approval of the Attorney General * * *'. 7 In pursuance of their authority under this Act the immigration authorities have promulgated regulations which provide in detail for the admission of agricultural laborers who are 'in all respects admissible under the immigration laws, except,' as to the particular limited provisions of the 1917 Act designated in the 1944 Act. Code Fed.Regs. § 115 (Cum.Supp.1943). And as shown by the Senate and House reports and hearings on the 1944 Act, a vast program was to be carried out to permit agricultural laborers to enter and to remain in the United States, but only for a limited time and under such conditions as conform with the immigration laws and regulations, and in accordance, so far as this case is concerned, with agreements made with the Government of Mexico.6 Far from abolishing the responsibilities of the immigration authorities in examining and approving these persons at the border and supervising their stay, the 1944 Act, the treaty and the regulations, although changing those responsibilities in some respects, have actually increased them. Aliens must still make a lawful entry at the places designated for their examination, screening, and registration. Those who do not meet the statutory standards of the 1917 Act, with the minor exceptions made in the 1944 Act, must be turned back. And those who are permitted to enter remain subject to supervision, control, and early deportation by immigration authorities.7 8 This brings us to the contention that Hoy cannot be prosecuted under § 5 of the 1917 Act because the 1944 Act provides that § 5 'shall not apply to the importation of aliens under this title.' But Hoy was not charged with inducing or encouraging the Mexican aliens whom he wrote to come in 'under this title.'8 He was allegedly inviting them to enter the country in disregard and definance of 'this title' and all other law. Thus he was specifically charged with inducing aliens to come into this country who were not entitled to enter under the 1917 Act or 'under any other law of the United States as (he) then and there well knew.' If this charge, as clarified by the bill of particulars, is true, he was urging aliens to come into this country without passing through the immigration stations, without regard to the length of their stay, or whether they were barred by reason of disease, physical weakness, or any of the other disqualifications set out in the 1917 and other laws or regulations. 9 The 1944 Act was intended to permit alien agricultural workers to enter the country for a limited time under Government rules and regulations after proper proofs to Government officials that the aliens were so qualified. It is true that the law was intended to fill the need for agricultural workers by removing the 1917 prohibition against would-be employers' inviting and inducing foreign workers to come to the United States. But we are not persuaded that the law, which provided specific limitations and requisites to entry under it, can properly be interpreted to authorize would-be employers to invite, induce and offer rewards to aliens to circumvent immigration processing and to enter the United States in disregard and defiance of law. The 1917 prohibition against employers inducing laborers to enter the country, enforceable by sanctions, removed obstacles which might hinder immigration authorities in the performance of their duties; we do not think the 1944 Act was intended to license employers to obstruct their performance. The information charged an offense and it should not have been dismissed. 10 Reversed. 1 Compare 39 Stat. 894, 8 U.S.C. § 163, 8 U.S.C.A. § 163 (crime to aid or assist any person to enter who believes in violent overthrow of government); 39 Stat. 880, 43 Stat. 166, 8 U.S.C. § 145, 8 U.S.C.A. § 145 (crime to bring to United States an alien with certain diseases); 45 Stat. 1551, 8 U.S.C. § 180a, 8 U.S.C.A. § 180a (crime for alien to enter at any place other than at an immigration point, or to elude examination). See also 35 Stat 1152, 18 U.S.C. § 550, 18 U.S.C.A. § 550, which provides that 'Whoever directly commits any act constituting an offense defined in any law of the United States, or aids, abets, counsels, commands, induces, or procures its commission, is a principal.' 2 See 23 Stat. 332; 32 Stat. 1213; 34 Stat. 898; 41 Stat. 1008; Holy Trinity Church v. United States, 143 U.S. 457, 463—465, 12 S.Ct. 511, 513, 514, 36 L.Ed. 226. 3 22 Stat. 214, 24 Stat. 415, 26 Stat. 1085, 28 Stat. 780, 32 Stat. 825, 828, 37 Stat. 736, 737, 54 Stat. 1238, 8 U.S.C. §§ 100 103, 8 U.S.C.A. §§ 100—103. 4 90 Cong.Rec. 864 (1944). 5 'In order to facilitate the employment by agricultural employers in the United States of native-born residents of North America, South America, and Central America, and the islands adjacent thereto, desiring to perform agricultural labor in the United States, during continuation of hostilities in the present war, any such resident desiring to enter the United States for that purpose shall be exempt from the payment of head tax required by section 2 of the Immigration Act of February 5, 1917, and from other admission charges, and shall be exempt from those excluding provisions of section 3 of such Act which relates to contract laborers, the requirements of literacy, and the payment of passage by corporations, foreign government, or others; and any such resident shall be admitted to perform agricultural labor in the United States for such time and under such conditions (but not including the exaction of bond to insure ultimate departure from the United States) as may be required by regulations prescribed by the Commissioner of Immigration and Naturalization with the approval of the Attorney General; and in the event such regulations require documentary evidence of the country of brith of any such resident which he is unable to furnish, such requirement may be waived by the admitting officer of the United States at the point where such resident seeks entry into the United States if such official has other proof satisfactory to him that such resident is a native of the country claimed as his birthplace. Each such resident shall be provided with an identification card (with his photograph and fingerprints) to be prescribed under such regulations which shall be in lieu of all other documentary requirements, including the registration at time of entry or after entry required by the Alien Registration Act of 1940. Any such resident admitted under the foregoing provisions who fails to maintain the status for which he was admitted or to depart from the United States in accordance with the terms of his admission shall be taken into custody under a warrant issued by the Attorney General at any time after entry and deported in accordance with section 20 of the Immigration Act of February 5, 1917. Sections 5 and 6 of such Act shall not apply to the importation of aliens under this title. No provision of this title shall authorize the admission into the United States of any enemy alien.' § 5(g), Farm Labor Supply Appropriation Act, 1944, 58 Stat. 11, 15—16, 50 U.S.C.App.Supp.V. 1355(g), 50 U.S.C.A.Appendix, § 1355(g). 6 See H.Rep.No.246, 78th Cong., 1st Sess., 3, 4, 6 (1943); H.Rep.No.358, 78th Cong., 1st Sess., 8 (1943); Sen.Rep.No.157, 78th Cong., 1st Sess., 3, 4 (1943). 7 For example, under the treaty with Mexico governing wartime immigration of these farm laborers our Government has the right to determine where in the United States workers are needed most and to send them there. Other provisions of the treaty require that 10% of each worker's wages be earmarked and returned for deposit in Mexico, and that their living and working conditions meet specified standards. These provisions require close supervision of the admitted aliens by immigration authorities. 56 Stat. 1759 1768; 57 Stat. 1152—1163. 8 The phrase 'this title' refers only to the 'Farm Labor Supply Appropriation Act, 1944,' § 5(l), 58 Stat. 11, 17, 50 U.S.C.A.Appendix, § 1355(l).

01

330 U.S. 743 67 S.Ct. 1015 91 L.Ed. 1219 BRUCE'S JUICES, Inc.,v.AMERICAN CAN CO. No. 27. Reargued Nov. 14, 1946. Decided April 7, 1947. Messrs. Thurman Arnold, of Washington, D.C., and Cody Fowler, of Tampa, Fla., for petitioner. Mr. John Lord O'Brian, of Washington, D.C., for respondent. Mr. Justice JACKSON delivered the opinion of the Court. 1 The federal question which survives proceedings in the Florida state courts is whether renewal notes representing the purchase price of goods sold and delivered are uncollectible if it is found that the vendor violated the Robinson-Patman Act, 49 Stat. 1526, 1528, 15 U.S.C. §§ 13, 13a, 15 U.S.C.A. §§ 13, 13a. 2 Bruce is a canner and, over a period of years, bought its cans chiefly from The American Can Company. A debt accumulated which was put into promissory notes and on one or more occasions they were renewed, reduced by amounts which had been paid. Upon eventual default, two suits, later consolidated, were brought on renewal notes aggregating about $114,000. As to each note, Bruce pleaded in defense that 'the consideration for said notes is illegal and said notes void and of no force and effect.' This was said to be for the reason that the Can Company had sold to others at prices which discriminated against Bruce and thereby violated the Robinson-Patman Act. 3 The alleged discrimination chiefly relied upon consisted of quantity discounts. Annual purchases by Bruce were about $350,000. Some other canners bought much larger quantities. The Can Company's contract with all its customers allowed a discount of 1% On annual purchases of $500,000, and nothing to those whose purchases were less than that. It was so graduated as to give a maximum discount of 5% To a customer whose purchases were $7,000,000 a year. The consequence is that relatively small packers pay 5% More for their cans than their largest competitors. 4 It is claimed that this advantage to quantity buyers renders the quantity discount per se a violation of the Robinson-Patman Act. To sustain the defense in this case it would be necessary to so hold. It is not denied that Bruce got the same discounts as other purchasers of like quantities when it qualified, and in one year Bruce was in the $500,000 bracket and received the 1% Discount. It is not claimed that the Can Company failed to give discounts where earned under this uniform contract, or that discounts were given where not so earned. Bruce received the same discounts as others within its classification and it is not questioned that had it been a purchaser of larger quantities it would have been allowed the same discount as other purchasers of that class. 5 Before a court could sustain the defense in this particular case, it would also have to overcome other difficulties of law and fact. The Act does not prohibit all quantity discounts but expressly permits them under certain conditions. It indicates, too, that the Federal Trade Commission is the appropriate tribunal to hear in the first instance the complicated issues growing out of grievances against a quantity discount practice of a seller. 49 Stat. 1526, 15 U.S.C. § 13(a), 15 U.S.C.A. § 13(a). Quantity discounts are among the oldest, most widely employed and best known of discount practices. They are common in retail trade, wholesale trade, and manufacturer-jobber relations. They are common in regulated as well as unregulated price structures. Congress refused to declare flatly that they are illegal. They become illegal only under certain conditions and when they are illegal it is as much a violation to accept or receive as to allow them. Bruce, in one of t e years included in its balance of account, purchased more than a half million dollars of cans on which it received precisely the kind and amount of discount it now asserts to be illegal. 6 The argument is made that such a remedy as Bruce seeks here would support the antimonopoly policy of Congress. But Bruce is not complaining of the high price of cans. Bruce complains of a lower price for cans to others—which would enable competitors to put their products on the market cheaper. This may well put Bruce to some disadvantage, but it does not follow that Congress would forbid the savings of large-scale mass production to be passed along to consumers. The economic effects on competition of such discounts are for the Trade Commission to judge. Until the Commission has determined the question, courts are not given guidance as to what the public interest does require concerning the harm or benefit of these quantity discounts on the ultimate public interests sought to be protected in the Act. It would be a far-reaching decision to outlaw all quantity discounts. Courts should not rush in where Congress feared to tread. 7 Because of a more fundamental defect in petitioner's case, however, the Court does not find it necessary to consider the effect of these features of the Act on this case, as would be necessary before a conclusion could be reached that petitioner should win on the merits. On the questions of fact, considerable evidence was taken at pretrial hearings and the parties are in dispute as to whether the decision thereon was a final judgment and, if so, as to whether the defense was not also adjudicated to be insufficient on the facts. Although the record is unsatisfactory, we take it that all of the sales evidenced by the notes were made after the passing of the Robinson-Patman Act. It appears, however, that the notes are not identified with any particular sale but represent a balance remaining on a running account of sales and credits in many of which a claim of discrimination might not be supportable. The indebtedness they supplant is conceded to have been incurred before February, 1940. The purchases covered at least a four-year period and involved two types of cans. The purchase price which Bruce asks us to excuse it from paying is not identified either as to type of can or date of transaction. But petitioner contends that it is not necessary in proving a discrimination to show that others received a different discount on the same type of can at approximately the same time 'because the scheme of discount by aggregate dollar volume of annual sales comprehends all cans bought whatever their size or price.' To sustain this position would mean that a sale to a competitor of large cans in 1940 at a higher discount invalidated a sale of small cans to petitioner in 1936 so that petitioner need not pay the contract price for cans delivered that year. The contention is simply that if some purchasers got larger discounts on any bill for cans than petitioner got, the bill against petitioner and notes in settlement and extension of it are uncollectible. 8 However, for the purposes of this decision, in view of the uncertain nature of the proceedings below, we assume, but do not decide, that the defense on the facts has been or could be established as pleaded. We do not decide whether the quantity discount plan, whatever the facts were, violated the Robinson-Patman Act. The sole question we decide is whether notes given for purchases are unenforceable if the quantity discount plan violates the Act. Petitioner suggests that the Court may take two paths to the answer, but that the answer will be yes. The broad ground petitioner offers is 'that a transaction unlawful under the Robinson-Patman Act constitutes criminal conduct upon which no money judgment can be based.' Petitioner also offers a narrow ground on which we can yet decide in its favor. 'But, if it be admitted that the buyer (sic) is entitled to the fair value of the goods,' petitioner says, respon ent probably already has been paid the fair value of all the cans bought in 1936—40. When that value has been determined by the trial court, it urges, it will be found that the amount in notes is substantially equivalent to the amount of discrimination in discount.1 9 In effect, petitioner is treating the $114,000 in notes as representing the discount it claims it should have gotten on its 1937—42 purchases of $2,000,000. This alternative argument is that petitioner is liable only for the fair value of all the cans it bought, and in this suit it asks the courts to determine what that fair value was. But the fact is that as to the transactions for which petitioner paid $2,000,000 it has already paid the agreed price. Those transactions cannot be identified with particularity, but they were paid for at respondent's prices. Petitioner did not allege and does not contend that the notes represent specific transactions or that the sales for which they were given could be identified. Mr. Bruce conceded in his testimony that the notes simply represent a balance of an account which mingled the prices of individual transactions.2 In its brief here, petitioner's only response to respondent's statement that 'None of the original notes * * * had been tied to a particular transaction' is that 'The record shows that all of the notes are tied to the entire series of transactions.' There may be substantial equivalence numerically in the amount of the notes and the amount of alleged discrimination, but it cannot be said that the notes represent the separate item of price discrimination.3 10 The Act prescribes sanctions, and it does not make uncollectibility of the purchase price one of them. Violation of the Act is made criminal and upon conviction a violator may be fined or imprisoned. 49 Stat. 1528, 15 U.S.C. § 13a, 15 U.S.C.A. § 13a. Any person who is injured in his business or property by reason of anything forbidden therein may sue and recover three fold the damages by him sustained and the costs of suit, including a reasonable attorney's fee. 38 Stat. 731, 15 U.S.C. § 15, 15 U.S.C.A. § 15. This triple damage provision to redress private injury and the criminal proceedings to vindicate the public interest are the only sanctions provided by Congress. 11 It is contended that we should act judicially to add a sanction not provided by Congress by declaring the purchase price of goods uncollectible where the vendor has violated the Act. It may be admitted as argued that such a sanction would be an effective enforcement provision. Addressed to Congress, this argument might be persuasive, but the very fact that it would obviously be an effective sanction makes it even more significant that the Act made no provision for it; that no committee dealing with the Robinson-Patman Act proposed it; that not one word suggesting its consideration appears in the debates of Congress; no proponent of the Act pointed out in its favor that it would be self-enforcing because of this sanction; and no opponent pointed with alarm to the consequences of such a drastic sanction on the commerce of the nation. On the contrary, a proposed provision of the Act, passed only by the Senate which later receded, shows that Congress gave consideration to no sanction more extreme than to compel the remission of the excess charged. See S. 3154, § 2(d), 74th Cong., 1st Sess., S. Rep. No. 1502, 74th Cong., 2d Sess., p. 8: Conference Rep., H. Rep. No. 2951, 74th Cong., 2d Sess., p. 8. Congress declined to adopt this relatively moderate provision and at no time does it appear that either house of Congress wanted to go so far as to permit a buyer to get goods for nothing. 12 Where the interests of individuals or private groups or those who bear a special relation to the prohibition of a statute are identical with the public interest in having a statute enforced, it is not uncommon to permit them to invoke sanctions. This stimulates one set of private interest to combat transgressions by another without resort to governmental enforcement agencies. Such remedies have the advantage of putting back of such statutes a strong and reliable motive for enforcement, which relieves the Government of cost of enforcement. Such private remedies lose, of course, whatever advantage there may be in the presumed disinterested, public interest standards and expertness of a governmental agency which has the initiative control of retributory measures. It is clear Congress intended to use private self-interest as a means of enforcement and to arm injured persons with private means to retribution when it gave to any injured party a private cause of action in which his damages are to be made good threefold, with costs of suit and reasonable attorney's fee. 13 Bruce, it appears, already has undertaken the triple damage suit remedy against the Can Company. Br ce's Juices, Inc., v. American Can Co.,* No. 569, Civ. T., S.D. Fla., 1942. To indicate its need that the Court establish this additional remedy unauthorized by Congress, it seeks to discredit and belittle both of the remedies Congress has expressly authorized. It says, 'The triple damage suit is likely to prove protracted and expensive; damages caused by a disadvantageous competitive position are so speculative as to be usually unprovable. Nor can the buyer rely for protection upon the action of the government. The Department of Justice or the Federal Trade Commission may never get around to the matter.' It is a little dubious whether the sort of remedy which has been in litigation over four years in this case which Bruce asks us to reverse and send back again, is an antidote for 'protracted and expensive' triple damage suits. Moreover, if Bruce can in this suit prove that the prices respondent charged were illegal, as it must in order to win, it can do the same in a triple damage suit. The damages sustained because of discrimination are no more 'speculative' nor 'unprovable' in one suit than in the other, and their establishment in the statutory form of action carries a bonus. 14 Annexation of the proposed defense to the statute by implication either as an inference of unexpressed intention of Congress or as the result of some doctrine of common law, would be justified only if it would be at least a rational, nondiscriminatory and appropriate means of making the policy of the statute effective. To allow a buyer to get his goods for nothing because the seller violated the Act by giving someone else a greater discount, does not meet this test. 15 It would seem that one test of the rationality and appropriateness of such a defense because of a violation of the Act would be that the reparation it permits should be measured at least roughly by the extent of the injury caused by the violation. This, of course, is the principle of the suit for triple damages. But that is not the principle of the defense here urged. The extent of its indemnity is not measured by injury, and not measured by the dealings affected with the alleged violation. It is measured solely by the amount of credit the buyer obtained from the seller. The seller would lose the amount carried in notes or in open account. Had Bruce's delinquency been greater, so would its gain; had there been no credit asked or given the buyer could have had no remedy by way of defense. The obvious consequence would be to discourage vendors from extending credit where the operation of this rather difficult statute is in doubt. Since the danger of loss under the proposed remedy is greatest in the case of small buyers who get small discounts, the consequence would be to deny the small buyers credit and trust only those who, having the largest discounts, would be least likely to defend on a claim of violation. This result would hardly comport with the argument, so much dwelt upon by petitioner, that its status is that of a small business concern trying to battle a business giant. But we cannot suppose that 'little fellows' are always buyers and only giants sell goods. Bruce itself is a seller of canned goods and if its trade practices include quantity discounts, this 'little' canner might be on the other side of the same issue trying to collect against a small wholesaler who had less discount than a larger one. To decide issues of law on the size of the person who gets advantage or claims disadvantage is treacherous. 16 This construction which would make a grant of credit a point of vulnerability could be avoided only by holding that the whole purchase price, not merely that involved in the credit, is uncollectible and recoverable even if voluntarily paid. In that case, the volume of the transaction, rather than the volume of the credit extended, would measure the loss a seller might suffer from violating the Act. 17 But, of course, if the discount system of the Can Company makes all o the Bruce purchases illegal and the price thereof recoverable, all sales to others under the discount system must be similarly tainted. It is hard to see how any of the Can Company's sales are valid if these to Bruce are void on the theory advanced. If this view is taken, certainly the remedy would soon end illegal quantity business discounts—by ending the business. We do not believe Congress has contemplated so deadly a remedy or has left the way open to us by judicial edict to dislocate business as such a holding would do. It must not be forgotten that such a decision would have retroactive effect for several years and unsettle many accounts. We cannot justify a judicial declaration to this effect. 18 But if only a few cases are to be unsettled—those, say, in positions similar to Bruce's—what becomes of the policy of nondiscrimination? Other canners who have paid cash find themselves competing with Bruce who is absolved from paying for a very large part of its cans—something like one-third of its annual dollar volume being involved in this case. In other words, as penalty for establishing a uniform one to five percent discount, the Can Company would be obliged to give Bruce something over a 30% Discount on one year, or about 5% On all purchases shown by the evidence ever to have been made. 19 It is urged that holdings under the Sherman Anti-Trust Act supply an analogy for allowing this defense under the Robinson-Patman Act. The former provides, among other things, that every contract in restraint of trade or commerce 'is hereby declared to be illegal.' 26 Stat. 209, 50 Stat. 693, 15 U.S.C. § 1, 15 U.S.C.A. § 1. This Court has held that where a suit is based upon an agreement to which both defendant and plaintiff are parties, and which has as its object and effect accomplishment of illegal ends which would be consummated by the judgment sought, the Court will entertain the defense that the contract in suit is illegal under the express provision of that statute. Continental Wall Paper Co. v. Louis Voight & Sons Co., 212 U.S. 227, 29 S.Ct. 280, 53 L.Ed. 486. Cf. Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165. But when the contract sued upon is not intrinsically illegal, the Court has refused to allow property to be obtained under a contract of sale without enforcing the duty to pay for it because of violations of the Sherman Act not inhering in the particular contract in suit and has reaffirmed the 'doctrine that 'where a statute creates a new offense and denounces the penalty, or gives a new right and declares the remedy, the punishment or the remedy can be only that which the statute prescribes." D. R. Wilder Mfg. Co. v. Corn Products Refining Co., 236 U.S. 165, 174, 175, 35 S.Ct. 398, 401, 59 L.Ed. 520, Ann.Cas.1916A, 118; Connolly v. Union Sewer Pipe Co., 184 U.S. 540, 22 S.Ct. 431, 46 L.Ed. 679. 20 Moreover, no single sale can violate the Robinson-Patman Act. At least two transactions must take place in order to constitute a discrimination. Thus, a contract may be made today which has no legal defect under the Robinson-Patman Act. A week later, another sale may be made at a different price or at a different discount, and the latter taken into consideration with the former may establish a discrimination. Whether a sale would be rendered void only because of simultaneous discrimination or preexisting ones, or whether a contract valid when made becomes void by reason of later transactions, and if so, how much later, are questions we need not decide now. It is plain that the violation, if there was one, is not inherent in the contract sued upon, whether it be the notes or the sale of the goods, but can only be found in different transactions which a party to the litigation had with third persons who are not parties. No such defense has been approved under the Sherman Act, and, furthermore, these characteristics show that the entire basis for judging under the two Acts is different and that the case law as to t e Sherman Act does not fit the Robinson-Patman Act. 21 None the less, we are urged to supply judicially the sanction of invalidating obligations to pay for goods sold and delivered because it is said otherwise the courts become parties to the enforcement of a discrimination. If, in order to prove his own case, a plaintiff proves his violation of law, then no court will aid the plaintiff to recover.4 Here, however, what the plaintiff must show is the notes which import consideration. If consideration is denied, he can prove that cans were sold and delivered at a stated price. That is no violation of law. It is only when the Court goes outside of the dealings between plaintiff and defendant and it is proved that the same kind of cans were sold to others at different prices within a relevant period of time, amounting to a discrimination—a fact unnecessary to sustain the plaintiff's cause of action—that the basis of the defense asserted here appears. The Court does not give its approval to transactions between one of the litigants and a third party just because it holds them irrelevant in this litigation. 22 The defendant's claim to be freed of the obligation to pay his promissory note because the payee, as vendor of cans, made sales to others that when compared with sales to itself may be held unlawfully discriminatory, cannot be supported as resting on any congressional word or policy. Not only was this remedy not named by Congress, but it would be surprising if it had been, in view of the remedies Congress did give. We have assumed for the purposes of this case that petitioner could establish that the prices respondent charged were discriminatory so that they violated the Act. But if petitioner can show that, clearly it would be entitled to recover in a triple damage suit supported by the same evidence. For despite petitioner's complaint on the difficulty of proving damages, it would establish its right to recover three times the discriminatory difference without proving more than the illegality of the prices. If the prices are illegally discriminatory, petitioner has been damaged, in the absence of extraordinary circumstances, at least in the amount of that discrimination. No reason suggests itself why Congress should have intended a remedy by which the victim of discrimination could recover by defense only one-third of what he could recover, on the same proof, by offense. The inducement of thrice the damages suffered may bring the sufferer to aid in enforcement of the statute. To assure his help, however, it would hardly be thought appropriate to offer him the choice of taking only one-third that amount. Since the remedy embodied in petitioner's second theory would be but a weak one-third shadow of the one Congress expressly gave, we cannot see the need for judicial reduplication in miniature. We hold that federal law does not support the defense alleged and the judgment of the Florida Supreme Court is affirmed. 23 Affirmed. 24 Mr. Justice MURPHY, dissenting. 25 The issue in this case is whether sellers of goods should be allowed to use the courts to collect price differentials which have been made illegal by Congress in the RobinsonPatman Act. The Court approaches but never quite meets that issue. But the unmistakable effect of the Court's decision is to permit the recovery of discriminatory prices despite the plain language and policy of he Act and despite the lessening of competition that might thereby result. I remain unconvinced, however, that such a result is consistent with the high ideals of our judicial system or that it is made necessary by any rule of law or policy. 26 Section 3 of the Act makes it unlawful for any person to be a party to any sale which discriminates, to his knowledge, against competitors of a purchaser by granting to that purchaser 'any discount, rebate, allowance, or advertising service charge' not available to the competitors in respect of a sale of goods of like grade, quality and quantity. 15 U.S.C. § 13a, 15 U.S.C.A. § 13a. Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, makes it unlawful for any person 'to discriminate in price between different purchasers of commodities of like grade and quality' where the result is to lessen competition or to tend to create a monopoly. 15 U.S.C. § 13(a), 15 U.S.C.A. § 13(a). It is in light of these statutory provisions that we must examine the opinion of the Court. 27 1. The Court proceeds on the basic assumption, unsupported by the record or by petitioner's contentions, that the petitioner is seeking to avoid all liability for the cans sold to it by the respondent. No such assumption is justified. Petitioner's brief, it is true, suggests two alternative theories in support of its position: (1) a transaction unlawful under the Robinson-Patman Act constitutes criminal action upon which no money judgment can be based; (2) discriminatory prices over and above the fair value of the goods cannot be collected by the seller. But petitioner does not pursue the first alternative, pointing out that only the second and narrower alternative is presented by the record. Thus the only contention really before us is that promissory notes cannot be collected by legal action to the extent that they represent a price differential outlawed by Congress. As petitioner notes, this contention 'does not require the Court to decide that the entire transaction is so tainted with illegality that the seller cannot collect even the fair value of the goods, thus giving the buyer a windfall.' If the petitioner were to prevail in this case and the promissory notes were to be declared unenforceable, respondent would still be free to recover on a quantum meruit basis if it has not already so recovered. See Penn-Allen Cement Co. v. Phillips & Sutherland, 182 N.C. 437, 109 S.E. 257. 28 Moreover, there is a strong indication that petitioner already may have paid the respondent the fair value of the cans. Since the passage of the Robinson-Patman Act, petitioner has had a continuing account with the respondent; under that account petitioner paid respondent more than $2,000,000 for cans during the period from 1937 to 1942. When this suit was instituted, petitioner owed a balance of $114,000 on this account, represented by the promissory notes in issue here. To deny enforceability to those notes might thus affect only the discriminatory price differential, which the Court assumes violated the Robinson-Patman Act. 29 It also appears that the quantity discounts in issue were based upon the aggregate dollar value of annual sales rather than upon individual transactions. The discriminatory differentials had a like basis. Hence it is enough if petitioner can prove that the $114,000 in notes represents an illegal differential from this over-all standpoint. 30 The Court states, however, that the transactions represented by the $114,000 cannot be identified and that this figure cannot be said to reflect the separate item of price discrimination. But such sentiments are necessarily premature in the present posture of the case; petitioner has not yet had a full opportunity to present all its evidence or to try to connect the notes with a discriminatory differential. Petitioner concededly has the burden of proving that the $114,000 in notes does represent the discriminatory part of the purchase price, whether in relation to specific transaction or to the aggregate dollar volume of annual sales. If it cannot so prove, its case collapses. The important and the only point now is that petitioner should be given the chance to prove this defense. We should not shut the court's door in petitioner's face before it has had that chance. Nor should we prejudice that defense by holding or intimating that proof is impossible. Certainly the right to offer and prove a defense is not to be denied because a court thinks that the purported defense has not yet been proved. It is one thing to raise a defense; it is quite another to prove it. Since we are concerned here only with the first proposition, it is beside the point whether the defense has been or can be proved. 31 We may thus dismiss as unwarranted the Court's fear that petitioner is going to get something for nothing if its contention is sustained. It is pleading only for the right to defend against the collection of that which Congress has declared illegal. 32 2. Equally irrelevant is the Court's inquiry into whether Congress 'wanted to go so far as to permit a buyer to get goods for nothing' where the Robinson-Patman Act has been violated. In the case before us, the only relevant inquiry is whether the Robinson-Patman Act was designed to allow sellers to recover illegal price differentials through court action. A determination that the Act precludes such a recovery does not involve a finding that the framers of the Act desired these sellers to forfeit all the value of the products on which they placed an illegal price differential. It involves simply a finding that the language and policy of the Act frown upon the use of the courts to effectuate what Congress clearly made illegal. 33 3. The Court thinks it significant that the Robinson-Patman Act makes no provision for a buyer interposing the vendor's violation of the Act as a defense to a suit by the vendor. It is said that the triple damage actions and the criminal proceedings are the exclusive sanctions provided by Congress for the enforcement of the Act. 34 This overlooks the fact, however, that a specific statutory provision is unnecessary to make an illegal contract unenforceable in the courts. Where a contract is outlawed by statute or is otherwise contrary to public policy, the illegality may be set up as a defense to a suit for enforcement despite the absence of a legislative recognition of that defense. Otherwise the courts would become parties to the illegality by sanctioning the enforcement of the unlawful agreements. McMullen v. Hoffman, 174 U.S. 639, 669, 670, 19 S.Ct. 839, 850, 851, 43 L.Ed. 1117. This principle has been applied many times by this Court. At an early date it was recognized that, despite the absence of a provision in the Sherman Act authorizing a defense of illegality in a private suit on a contract, such a defense might be used, that 'anyone sued upon a contract may set up as a defense that it is a violation of the act of Congress, and, if found to be so, that fact will constitute a good defense to the action.' Bement & Sons v. National Harrow Co., 186 U.S. 70, 88, 22 S.Ct. 747, 754, 46 L.Ed. 1058; Continental Wall Paper Co. v. Louis Voight & Sons Co., 212 U.S. 227, 29 S.Ct. 280, 53 L.Ed. 486. Similarly, without specific statutory permission, private litigants have been allowed to invoke the policy of the antitrust laws so as to limit the scope of patent rights. Mercoid Corp. v. Mid-Continent Co., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376; Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165; B.B. Chemical Co. v. Ellis, 314 U.S. 495, 62 S.Ct. 406, 86 L.Ed. 367; Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488, 788, 62 S.Ct. 402, 86 L.Ed. 363; Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394, 67 S.Ct. 416, 424, MacGregor v. Westinghouse Electric & Mfg. Co., 329 U.S. 402, 67 S.Ct. 421, 424. 35 And so when a contract or promissory note is tainted with a violation of the Robinson-Patman Act its enforcement should be refuse by a court, at least to the extent of the illegality involved. The failure of Congress to mention such a sanction slips into insignificance in the light of precedents in analogous situations. 36 4. The Court holds, however, that the Robinson-Patman Act invalidates discrimination rather than contracts of sale at discount and that the analogy of denying the enforcement of contracts violative of other antitrust laws is imperfect. 37 But such a holding misconceives the very nature of the Robinson-Patman Act and the evils at which it was directed. No one contends that the Act makes illegal all contracts of sale at a discount. Nor does any one deny that an illegal discrimination becomes apparent only after there have been two or more sales. As the Court states, a contract may be made today which has no legal defect under the Robinson-Patman Act. But once there are two or more sales and once there has been illegal discrimination, the illegality may reach back to the first transaction, which was free of all defects when made. That is inherent in the very nature of discrimination and it should not surprise us to discover that fact. Discrimination may thus become evident in contracts, promissory notes, open accounts and other forms of indebtedness. And it may put in a tangible appearance when a subsequent suit is brought to recover, among other things, what has proved to be an illegal price differential. To deny effect to that discrimination in a suit by the vendor does not require that a court hold void the entire transaction and permit the buyer to retain the goods free of any charge. It requires only that the court refuse to permit the recovery of that part of the purchase price which discriminates against the buyer who purchased the same kind and quality of goods as his competitors. 38 Thus that part of a contract of sale permitting a certain discount may be or become illegal if the purchaser's competitors are given larger discounts. Such is the whole tenor and policy of the Robinson-Patman Act. And collection of the discriminatory differential falls squarely within the area of illegality defined by the statute. Indeed, the Act is shorn of much of its meaning if the vendor is permitted to recover the fruits of his unlawful conduct. Courts should not be used for that purpose any more than they should be used to sanction recovery on contracts made wholly void by the Sherman Act. In the one case courts are asked to give judgment for an unlawful price differential; in the other, they are asked to enforce a monopolistic agreement. In both cases, the answer should be a strong negative. The Acts are part and parcel of the same legislative policy, the Robinson-Patman Act merely elaborating some of the more subtle and refined monopolistic practices which Congress desired to eliminate. Courts should treat them accordingly. 39 It is no answer to say, as the Court does, that we must go outside the transaction in issue in order to give effect to a defense of unlawful discrimination. Of course that must be done, for discrimination is a relative matter depending upon the vendor's transactions with third parties. But such an inquiry must be made by a court in suits for triple damages under the Robinson-Patman Act. American Can Co. v. Ladoga Conning Co., 7 Cir., 44 F.2d 763. And an inquiry of that type must frequently be made in private suits where defenses are made under the Sherman Act. Discriminations and monopolies rarely if ever appear on the face of documents which are introduced for purposes of securing a recovery in a court of law. Judges constantly must look beyond the particular documents in issue. Surely, if it be assumed that a particular discount is unlawful, no factor of inconvenience or burden in looking at other transactions can justify ignoring the illegality and permitting an unwarranted recovery. And to insist that recovery must be allowed if the plaintiff shows no violation of law in proving the amount due on a promissory note is to hark back to mediev l concepts of pleading and practice. The Robinson-Patman Act deals with complex economic realities. Litigants and judges must act accordingly when the Act is properly brought into issue by a defendant. If the policy of the Act is to be respected, the transaction before the court must be judged on the basis of other dealings by the vendor despite the superficial perfection of the vendor's pleadings and proof. 40 Nor is recovery to be denied because only part of the illegality may be in issue. Courts must strike down illegality wherever it appears. Statutory violations are not to be countenanced merely because the violator seeks to reap only part of his illegal harvest at a time. 41 5. The Court intimates, without actually deciding, that courts should not allow this type of defense to be raised until the Federal Trade Commission has determined the economic effects of quantity discounts on competition. The fear is expressed that without the Commission's guidance, courts might strike down all quantity discounts and create untold retroactive liabilities. 42 The short answer is that we should be reluctant to assume that judges are unable to comprehend the Robinson-Patment Act and the standards it sets up in regard to quantity discounts. It may be granted that the Federal Trade Commission has more technical knowledge and experience in dealing with the complexities of this problem than most courts; and the Commission's judgment would be of inestimable value to any judge called upon to deal with quantity discounts. But in the absence of some action by the Commission, courts must act as best they can within the framework provided by Congress. The Act, 15 U.S.C. § 13(a), 15 U.S.C.A. § 13(a), specifically recognizes that quantity discounts are illegal only where they lessen or injure competition or tend to create a monopoly; and where price differentials are justified by differences in costs of manufacture, sale or delivery, the discounts are permissible. This matter is a complex one, but it is no more complex than many other problems which face the courts. 43 The only alternative to the Court's apparent position in this respect is for judges to sit idly by and allow sellers to collect illegal price differentials—a function that hardly qualifies as an ideal toward which we should strive. Indeed, if the Court's conception of the judicial function in suits of this nature is to be carried to its logical conclusion, judges would abdicate all their duties under the Robinson-Patman Act whenever the Federal Trade Commission has failed to express an opinion on the subject in issue. They would refuse to entertain treble damage suits and would dismiss all criminal indictments brought on the basis of an alleged violation of the Act. It seems to me, however, that the judicial process has more vigor and responsibility than the Court seems willing to imply in this case. 44 6. Finally, the Court indicates that the fact that petitioner is a small business concern is a treacherous basis for deciding issues of law. As a general proposition, there can be no dispute with that attitude. But we must not blind ourselves to the equally important fact that the antitrust laws, of which the Robinson-Patman Act is an integral part, are designed primarily to aid the small business concerns and to curb the growth of giant monopolies. Many years ago this Court had occasion to point out that trade and commerce may be 'badly and unfortunately restrained by driving out of business the small dealers and worthy men whose lives have been spent therein, and who might be unable to readjust themselves to their altered surroundings. More reduction in the price of the commodity dealt in might be dearly paid for by the ruin of such a class and the absorption of control over one commodity by an all-powerful combination of capital.' United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 323, 17 S.Ct. 540, 552, 41 L.Ed. 1007. The same observation applies to this case. The Robinson-Patman Act was desig ed in large part to protect the small business concerns, Congress realizing the disastrous effects of their being the victims of discriminatory prices. A proper treatment of the Act demands appreciation of this purpose. 45 We should pause long before sanctioning the recovery of discriminatory prices which Congress has found inimical to the nation's welfare. We should be on guard against the use of the judicial process to augment the subtle destruction of small business contrary to the legislative will, and the erosion of the barriers which Congress has erected against the flood-tide of monopoly. To that end, therefore, we should reverse the judgment below and allow courts to give full effect to the Robinson-Patman Act. 46 Mr. Justice BLACK, Mr. Justice DOUGLAS and Mr. Justice RUTLEDGE join in this dissent. 1 On petitioner's first theory, clearly no recovery on quantum meruit could be had. The general rule is that a transaction wholly illegal will not support such a suit. See Williston, Contracts (Rev. ed., 1938) § 1786A; Restatement, Contracts, § 598, Comment c. And on Bruce's second theory, because of the leniency with which respondent extended credit, it would be impossible for respondent to show which cans the notes represent and it would of course be unable to establish their fair value. If we hold the notes uncollectible, therefore, respondent could not recover on quantum meruit, and Bruce would get a windfall. 2 His testimony on this point follows: 'Q. Mr. Bruce, do the notes evidence the purchase price of any particular size of cans you purchased from the American Can Co.? A. There is nothing on the face of the notes that shows what size they were. 'Q. During that period you purchased a certain size can? A. It was purchased during a certain period. 'Q. Did you run a separate account on the grocery can and on the soft drink can, or small and large? A. No sir. 'Q. The notes themselves simply represent that account, irrespective of the size of the cans? A. Yes sir, the blanket way. 'Q. In a blanket way. In other words there was no distinction made in your account between the large and small cans, I mean in the indebtedness? A. Not while the notes were accruing. 'Q. In other words the notes in question are for the purchase price of both large and small cans? A. That is right.' 3 If the notes are considered alternatively as representing respondent's price due on the latest purchases to that amount in late 1939 and early 1940, petitioner, on its theory, would be entitled to be excused payment of only about 5% Of the $114,000, because it is defending on the ground that it ought not to pay the allegedly discriminatory part of the price. But even for this limited purpose, it cannot be established what cans the $114,000 represents, so the court could not determine their fair value. In Penn-Allen Cement Co. v. Phillips, 182 N.C. 437, 109 S.E. 257, the specific sales were identified and the price unpaid. The court there held only that the buyer should be excused payment of the discriminatory part of the contract price. But the opinion was given after the court had decided that the appeal was prematurely taken. The defendant had counterclaimed for treble damages, comput d on the basis of the alleged overcharge. The plaintiff urged that treble damages could not be recovered in an action for the purchase price but that the defendant must pay first, and then sue on that claim. The court said simply, 'This matter also has not been passed upon by the court below, and there is nothing for us to consider.' 182 N.C. at page 441, 109 S.E. at page 259. But if the court was right in holding that plaintiff could not recover the overcharge, it would necessarily follow that the counterclaim should have been dismissed. For without paying the overcharge, the defendant would have had no basis on which to rest its claim that it had been damaged in that amount and therefore entitled to treble compensation. * Case pending. 4 In McMullen v. Hoffman, 174 U.S. 639, 19 S.Ct. 839, 43 L.Ed. 1117, for example, the Court refused to enforce a partnership contract which was based on an illegal and fraudulent agreement to submit collusive bids for public construction. The plaintiff argued that the partnership contract itself did not disclose any illegality, but even that was questionable. The Court, moreover, held that the agreement to be partners could not be separated from the general collusive agreement which gave rise to it. Agreements with third persons, not parties to the suit, however, were not relied upon by Court or litigants.

78

331 U.S. 70 67 S.Ct. 1062 91 L.Ed. 1346 INDEPENDENT WAREHOUSES, Inc., et al.v.SCHEELE, Recorder of Township of Saddle River, et al. No. 83. Argued Dec. 16, 1946. Decided April 14, 1947. Appeal from the Court of Errors and Appeals of the State of New jersey. Mr. Duane E. Minard, of Newark, N.J., for appellants. Messrs. Harry Lane, of Jersey City, N.J., and Ralph W. Chandless, of Hackensack, N.J., for appellees. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 An ordinance of Saddle River Township, New Jersey, forbids carrying on the business of storing goods for hire except upon the payment of an annual license tax.1 Independent Warehouses, Inc., and Thompson, an agent of that company, have been convicted and fined for conducting such a business without procuring the license or paying the tax. The convictions have been sustained by New Jersey's highest court.2 The appeal here seeks to have that judgment reversed on the basis that the business done was exclusively interstate and consequently the application made of the ordinance contravenes the commerce clause of the Federal Constitution, Art. I, § 8. Fourteenth Amendment objections also are raised.3 2 The main thrust of the argument has been toward the commerce clause phase of the case. In this the controversy is of the familiar 'interruption' or 'cessation' type. The issue accordingly requires only a determination of the proper application to be made of well-established legal principles to the particular circumstances. It is whether the cessation taking place in the movement of goods interstate, as shown by the record, is of a nature which permits the state or a municipality to tax the goods or services, here the business of storing them, rendered in connection with their handling.4 3 The governing principles were stated in State of Minnesota v. Blasius, 290 U.S. 1, 9, 10, 54 S.Ct. 34, 36, 78 L.Ed. 131, as follows: 4 '* * * the states may not tax property in transit in interstate commerce. But, by reason of a break in the transit, the property may come to a rest within a state and become subject to the power of the state to impose a non-discriminatory property tax.5 Such an exertion of state power belongs to that class of cases in which, by virtue of the nature and importance of local concerns, the state may act until Congress, if it has paramount authority over the subject, substitutes its own regulations. The 'crucial question,' in determining whether the state's taxing power may thus be exerted, is that of 'continuity of transit.' Carson Petroleum Co. v. Vial, 279 U.S. 95, 101, 49 S.Ct. 292, 293, 73 L.Ed. 626. 5 'If the interstate movement has not begun, the mere fact that such a movement is contemplated does not withdraw the property from the state's power to tax it. * * * If the interstate movement has begun, it may be regarded as continuing, so as to maintain the immunity of the property from state taxation, despite temporary interruptions due to the necessities of the journey or for the purpose of safety and convenience in the course of the movement. * * * Formalities, such as the forms of billing, and mere changes in the method of transportation, do not affect the continuity of the transit. The question is always one of substance, and in each case it is necessary to consider the particular occasion or purpose of the interruption during which the tax is sought to be levied. * * * 6 'Where property has come to rest within a state, being held there at the pleasure of the owner, for disposal or use, so that he may dispose of it either within the state, or for shipment elsewhere, as his interest dictates, it is deemed to be a part of the general mass of property within the state and is thus subject to its taxing power.' Since the circumstances characterizing the interruption are of controlling importance, we turn to the details of the movement and of the stoppage shown by the record. I. 7 The suit is the culmination of a controversy extending back to 1939, with earlier litigious chapters in the state and federal courts. It grows out of the operation of facilities for storing and handling coal under various arrangements between the Erie Railroad Company and other corporations affiliated for this and other enterprises by stock ownership or by contract. 8 The Pennsylvania Coal Company is a wholly owned subsidiary of Erie. It owns and operates coal mines in Pennsylvania. In 1901 it acquired 67.25 acres of land in Saddle River Township, New Jersey. This acreage and its faciliti s, known as Coalberg, are located on the New York, Susquehanna and Western Railroad and perform functions connected with that road's operations not material to this cause. Coalberg also is connected directly with the Bergen County Railroad, a freight cutoff of Erie. Its chief purpose, and the only one relevant to this controversy, is to provide storage for coal shipped in from the Coal Company's Pennsylvania mines and later shipped out to various destinations. 9 Prior to 1939, Coalberg was operated by the Coal Company or its lessees as a private business, not as a public utility. During this time the Township levied personal property taxes upon the coal in storage, assessing and collecting them from its owners.6 These were, as they are now, chiefly coal distributors using Coalberg's storage facilities, principally because of their accessibility to distributing centers, especially in the vicinity of New York City, and to shipping facilities both by rail and by water.7 10 In 1939, however, by arrangements to be set forth involving Erie, the Coal Company and Independent Warehouses, Coalberg was converted into a public utility to serve shippers of coal on Erie lines. Under New Jersey law, goods stored in warehouses conducted for hire are exempted from personal property taxes. Rev.Stat.N.J. § 54:4—3.20, N.J.S.A. The Township, despite the change in Coalberg's mode of operation, continued to levy such taxes on the stored coal until the 1940 assessment was invalidated in the state courts. Pattison & Bowns, Inc., v. Saddle River Township, 129 N.J.L. 135, 28 A.2d 485; Id., 130 N.J.L. 177, 32 A.2d 363. 11 The municipality's resulting loss in revenue amounted to about eight per cent of the total collected for local, county and state purposes. To make up for this, as its brief here candidly admits, the Township enacted the ordinance now in question, acting under other provisions of state law. N.J.Stat.Ann. §§ 40:52—1, 40:52—2. The effect was to shift the direct incidence of the tax from the owners of the coal i.e., the shipper-distributors, to the operator of the storage business and to change its character from a direct property tax to that of a license or franchise tax for the privilege of conducting that business in the state. The amount of revenue thus produced, though in dispute, substantially will repair the loss suffered from invalidation of the property tax. This suit is the outgrowth of the Township's effort to enforce the new taxing provisions. 12 It is necessary to state in some detail the arrangements made in 1939 by which the change was brought about in the mode of operating Coalberg. An agreement then made between the Coal Company and Erie provides that the former shall operate Coalberg 'as a public service facility for shippers of prepared anthracite coal on Erie lines desiring storage space in accordance with and under the rates named in a certain Tariff on file with the Interstate Commerce Commission and the Public Utilities Commission of the State of New Jersey. * * *' The agreement recites that it is made in view of the considerations that the Coal Company has no need for Coalberg's storage facilities and that they are of use to Erie in affording 'facilities for the storage of prepared anthracite coal for shippers on Erie lines whereon said Coalberg Storage Yard is located so that shipments of coal may not be diverted to other and competing lines on which facilities for coal storage are available. * * *' Erie pays the net monthly loss, i any, of operating the yard and the Coal Company remits to Erie the net monthly surplus, if any. Erie also undertakes to maintain an agent at Coalberg duly authorized on its behalf to issue warehouse receipts for coal placed in storage by shippers. 13 The Coal Company has discharged the operating function under its agreement with Erie by an arrangement also made in 1939 with Independent Warehouses, which is a New York corporation engaged in the warehousing business. The Coal Company leased Coalberg to Independent Warehouses for $1.00 a year and the latter undertook to operate the plant for a consideration which now amounts to approximately $500 a year. The agreement between the Coal Company and Erie governs the manner of Coalberg's operation by Independent Warehouses. 14 Under these arrangements purchasers from the Coal Company who ship coal from the mines designate the destination on the shipping papers. If they designate Coalberg, the coal is sent there on railroad cars. It is unloaded to the storage pile where it is kept until ordered out by the owner. It is then reloaded into railroad cars, and when it is reshipped there is a new billing to the new destination. Most of the coal, after it has been stored, goes to states other than New Jersey. Some, however, is marketed in New Jersey. It is disputed whether there is any local distribution in the Township, but if so the amount is comparatively insignificant. 15 The financial arrangements under the governing tariff are as follows. On arrival of the shipments at Coalberg the transportation charges on the movement from the mine to Coalberg are paid to the Erie freight agent at Coalberg. When the coal is moved again after storage, the remainder of the through tariff rate from the point of original shipment at the mine in Pennsylvania is paid. This arrangement is known as the transit privilege. 'The privilege of transit enables grain (here coal) to be shipped from point A to point B, there to be stored, marketed, or processed, and later reshipped to point C at a rate less than the combination of the separate rates from A to B and B to C.' Board of Trade of Kansas City, Mo., v. United States, 314 U.S. 534, 537, 538, 62 S.Ct. 366, 368, 86 L.Ed. 432, and authorities cited. 16 The storage facilities given to shippers are free for a period of two years,8 although a charge is made by Erie for unloading the cars into the stock pile and for reloading the cars for reshipment. A charge is also made by Independent Warehouses upon such coal owners as obtain warehouse receipts from it. 17 The licensing ordinance applied in this case was adopted in 1943, following upon the New Jersey decision in Pattison & Bowns, Inc., v. Saddle River Township, supra. The ordinance provides: 18 'No person, firm or corporation shall conduct or carry on the business of the storage of personal property in a warehouse engaged in storing goods for hire or work in, occupy, or, directly, or indirectly in any manner whatsoever, utilize and place or premises in which is conducted or carried on the storage of personal property in a warehouse engaged in the business of storing goods for hire, unless and until there shall be granted by the Township Committee of the Township of Saddle River in accordance with the terms of this ordinance, and shall be in force and effect, a license to conduct said business for the place and premises in or at which said business shall be conduc ed and carried on.' 19 The ordinance specifies that for the license there shall be charged and collected in advance an annual fee of three-quarters of a cent for each square foot of ground in the Township where the business is carried on. There is also a penalty clause,9 in addition to other provisions not now pertinent. 20 Independent Warehouses did not apply for the license or pay the tax for 1943. Consequently that company and Thompson were convicted in the Magistrate's Court before appellee Scheele, the Recorder of the Township, for having violated the ordinance by conducting the storage operations at Coalberg without complying with its requirements. Each was fined $200.10 The Coal Company and Erie were allowed to intervene when the case went before the New Jersey Supreme Court, because of their obvious interest in the outcome of the litigation. That court held the ordinance unconstitutional as an undue burden on interstate commerce and reversed the convictions. 132 N.J.L. 390, 40 A.2d 796. In turn the New Jersey Court of Errors and Appeals reversed the Supreme Court's determination. 134 N.J.L. 133, 45 A.2d 703. It held that the ordinance was valid under the provisions of state law, and that neither the commerce clause nor the Fourteenth Amendment guaranties relied upon had been infringed. The case comes hereon appeal, 66 S.Ct. 1342, pursuant to § 237(a) of the Judicial Code, 28 U.S.C.A. § 344(a). See King Mfg. Co. v. City Council of Augusta, 277 U.S. 100, 48 S.Ct. 489, 72 L.Ed. 801; Jamison v. State of Texas, 318 U.S. 413, 414, 63 S.Ct. 669, 87 L.Ed. 869. 21 That the storage of the coal is part of a transit privilege does not in itself sustain appellants' claim that the interstate movement had not stopped sufficiently for the state's taxing power to attach when the coal reached and was stored in Coalberg. Cf. State of Minnesota v. Blasius, supra; Bacon v. Peopel of State of Illinois, 227 U.S. 504, 33 S.Ct. 299, 57 L.Ed. 615. It has long been recognized that transit privileges rest 'upon the fiction that the incoming and the outgoing transportation services, which are in fact distinct, constitute a continuous shipment of the identical article from point of origin to final destination.' Central Railroad Co. of New Jersey v. United States, 257 U.S. 247, 257, 42 S.Ct. 80, 82, 66 L.Ed. 217. See also Atchison, Topeka, & Santa Fe R. Co. v. United States, 279 U.S. 768, 779, 780, 49 S.Ct. 494, 498, 73 L.Ed. 947. Of course this fiction, which may be desirable for ratemaking or other purposes, cannot control the power of a state or municipality to tax activities properly subject to exercise of that power apart from the fiction's application to them. 22 Indeed, the facts of this case demonstrate that here at least the fiction is complete. They show that the journey of the coal from the Pennsylvania mines to Coalberg and the subsequent journeys upon leaving Coalberg were not parts of a 'continuity of transit' in the sense held by this Court's previous decisions to preclude a valid exercise of the states' taxing or regulatory powers. See, e.g., Pittsburg & Southern Coal Co. v. Bates, 156 U.S. 57 , 15 S.Ct. 415, 39 L.Ed. 538; General Oil Co. v. Crain, 209 U.S. 211, 28 S.Ct. 475, 52 L.Ed. 754; Bacon v. People of State of Illinois, supra; Susquehanna Coal Co. v. City of South Amboy, 228 U.S. 665, 33 S.Ct. 712, 57 L.Ed. 1015. 23 A characteristic feature of those cases in which the state has been allowed to tax property which has come to rest after an interstate journey is that at the time the tax is laid it cannot be determined what the ultimate destination or use of the property may be. Thus in General Oil Co. v. Crain, supra, the oil was shipped to Memphis and held there until required to supply orders from out-of-state customers. In Brown v. Houston, 114 U.S. 622, 5 S.Ct. 1091, 29 L.Ed. 257, coal sent from Pennsylvania to New Orleans was held taxable in Louisiana because, although some of it was subsequently exported, it 'was being held for sale to any one who might wish to buy.' Champlain Realty Co. v. City of Brattleboro, 260 U.S. 366, 376, 43 S.Ct. 146, 67 L.Ed. 309, 25 A.L.R. 1195. In Bacon v. People of State of Illinois, supra, the grain sent to Bacon's elevator was at his complete disposal. 'He might sell the grain in Illinois or forward it, as he saw fit.' Although his intention was to forward it after inspection, grading, etc., this purpose was held irrelevant. 227 U.S. at page 516, 33 S.Ct. at page 303, 57 L.Ed. 615. And in Susquehanna Coal Co. v. City of South Amboy, supra, although there was an anticipation of orders for the coal unloaded at South Amboy, yet there were no actual orders from customers. See also Nashville, C. & St. L.R. Co. v. Wallace, 288 U.S. 249, 53 S.Ct. 345, 77 L.Ed. 730, 87 A.L.R. 1191; Edelman v. Boeing Air Transport, 289 U.S. 249, 53 S.Ct. 591, 77 L.Ed. 1155. 24 Those cases are indistinguishable from this one as to the facts and the effect of the stoppage. Once the coal has reached Coalberg, no one can determine, without receiving an order from the owner, to what point or person it finally will be sent or to what use it will be put. Indeed, at the actual time of storage, even the owner may not know where the coal will go next, for the very purpose of the storage is in part to meet seasonal demand.11 And while the form of billing is not conclusive, State of Minnesota v. Blasius, supra, the fact that the coal is billed to Coalberg and is not rebilled until the owner asks that it be released from storage further shows that the final destination is not known by the owner or by others. 25 Moreover, in all these cases the duration of the cessation of transit is indefinite and in this case may extend as long as two years without loss of transit privilege. Indeed, except for that loss it may extend indefinitely, since under the controlling tariff Erie does not require, but only reserves the right to require, removal at the end of two years.12 It is also significant that invariably the goods are fungibles, a fact pointing up the fictional basis of the intransit privilege. The goods which are sent initially into the interstate commerce stream are not the identical goods which finally arrive at the place of consumption. 26 In view of all these considerations, the case falls more appropriately in the category allowing the state's taxing power to apply, than in the one denying its applicability. The interruption hardly can be held to be 'due to the necessities of the journey of for the purpose of safety and convenience in the course of the movement,' State of Minnesota v. Blasius, 290 U.S. at pages 9, 10, 54 S.Ct. at page 37, 78 L.Ed. 131, broad as may be the latitude given for such incidents of transit. More is involved here than stopping to take advantage of such latitudes. The case therefore is one, again in the language of the Blasius case, 'where property has come to rest within a state, being held there at the pleasure of the owner, for disposal or use, so that he may dispose of it either within the state, or for shipment elsewhere, as his interest dictates * * *.' 290 U.S. at page 10, 54 S.Ct. at page 37, 78 L.Ed. 131. 27 The facts bring the case exactly within this description, although the record shows that most of the coal after storage goes to other states and little, if any, is distributed locally at Coalberg. Not what ultimately happens to the goods or where they finally go, but the occasion and purpose of the interruption are controlling. 'The question is always one of substance, and in each case it is necessary to consider the particular occasion or purpose of the interruption during which the tax is sought to be levied.' State of Minnesota v. Blasius, 290 U.S. at page 10, 54 S.Ct. at page 37, 78 L.Ed. 131. 28 Here the cessation takes place not simply for the carrier's transit reasons relating to the necessities or convenience of the journey, but for reasons primarily concerned with the owner's business interests, As in the Bacon and Susquehanna Coal cases, supra, he is entirely free to keep or market the goods in New Jersey or to send them elsewhere. Marketing considerations primarily, and it may be exclusively, determine this choice and many or all of the controlling factors may not arise until after the coal has reached Coalberg or indeed many months later. 29 The situation in this respect is not materially different from those involved in the Susquehanna Coal, Bacon, and other cases cited, or indeed from one in which a coal distributor might place his storage facilities at some distance from his place of market, as at a near-by way station, in order to reduce the cost of his storage operations. That reasons of economy and convenience or even of necessity arising from the absence or prohibitive cost of storage space at the immediate point of distribution might lead him thus to locate his storage operations, and thereby incur the necessity and expense of hauling the goods from storage to market, hardly could be held to make the interruption an incident of transit rather than one of his own business policy and interest. That he may secure the same advantages by using the storage facilities of others for like purposes, rather than his own, does not change the result. In neither case does the arrangement defeat the state's power to tax his property so located or his business thus conducted. 30 Moreover, as has been noted, some of the coal remains in New Jersey, being shipped out from Coalberg as the shipper directs. As to this all interstate transportation has ended. The fact that the owner elects to take advantage of Coalberg's storage facilities for conducting his storage operations rather than his own located at the point or points of final distribution in New Jersey, whether near to Coalberg or at some distance, does not make the final wholly intrastate movement between those points a leg of the initial interstate movement begun at the mine. 31 As for the coal moving out of Coalberg interstate, the fact that this movement crosses a state line makes it of course an interstate movement. But this does not make it part of a continuous journey beginning at the mine and ending in the second state of destination. Indeed, not until after the storage has taken place is it determined or can it be known whether this coal will move out of Coalberg interstate or intrastate. And this is because it cannot be known before that time whether the owner's interest, disconnected from the ordinary and usual incidents of transportation, will dictate one market or use rather than another. Interruptions thus governed cannot be classified as interruptions merely incident to transit or dictated by its necessities or convenience. 32 The 1939 change in Coalberg's mode of operation did not alter in any substantial way the character, duration or purpose of the stoppage. Since then as before, the primary reasons dictating the shippers' action in taking advantage of it are their business reasons rather than transit reasons as such. Accordingly the state's power to tax the goods stored could not be affected by that change. That the state has chosen to discontinue exercising it as a matter of state taxing policy can make no difference in this respect. Nor can this fact, or the change in method of operation, defeat the state's power to tax the business of furnishing the facilities for storage, since that business also becomes local or interstate depending upon the purposes of the stoppage, whether for transit reasons or chiefly for nontransit ones. 33 The authorities above cited, it is true, generally involved property taxes levied upon the stored coal. But their controlling principal applies equally to franchise or other taxes upon the business of furnishing the storage facilities. Cf. General Oil Co. v. Crain, 209 U.S. 211, 28 S.Ct. 475, 52 L.Ed. 754; American Steel & Wire Co. v. Speed, 192 U.S. 500, 24 S.Ct. 365, 48 L.Ed. 538. It would be an impermissible anomaly to hold that the goods stored may be taxed, because the interruption of transit is for nontransit purposes, but that the business of furnishing the facilities for storing them is not affected or governed legally by the same purposes, for applying the state's powers of taxation. 34 Accordingly, the case is governed by the prior decisions allowing states and municipalities to tax in situations of this sort. It follows that the tax is not forbidden because it is part of a licensing measure. Even where it is undisputed that the commerce is exclusively interstate in nature, 'not the mere fact or form of licensing, but what the license stands for by way of regulation is important.' Robertson v. People of State of California, 328 U.S. 440, 458, 66 S.Ct. 1160, 1170. See also Union Brokerage Co. v. Jensen, 322 U.S. 202, 64 S.Ct. 967, 88 L.Ed. 1227, 152 A.L.R. 1072; Federal Compress & Warehouse Co. v. McLean, 291 U.S. 17, 54 S.Ct. 267, 78 L.Ed. 622. Nor does anything in the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq. forbid local taxation where it is otherwise permissible. The tax therefore is valid under the commerce clause. III. 35 Whether the tax and the licensing meas re as applied may stand under the Fourteenth Amendment also must be considered. Appellants say that the ordinance is discriminatory and unreasonable. Discrimination is claimed because the ordinance is applicable only to commercial warehouses and not to private warehouses and because there are no other commercial warehousing facilities in the Township subject to the tax. This contention is grounded on the provisions of New Jersey law, noted above, exempting property stored in commercial warehouses from taxation. It also is closely related to the further claim that the tax is prohibitory and unreasonable, and the two claims may be considered together. 36 'It is inherent in the exercise of the power to tax that a state be free to select the subjects of taxation and to grant exemptions. Neither due process nor equal protection imposes upon a state any rigid rule of equality of taxation. * * * This Court has repeatedly held that inequalities which result from a singling out of one particular class for taxation or exemption, infringe no constitutional limitation.' Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 509, 57 S.Ct. 868, 872, 81 L.Ed. 1245, 109 A.L.R. 1327. 37 We need not consider in this connection the ultimate power of the state to tax,13 for we are of opinion that neither the selection made here nor the amount of the tax is barred by the Fourteenth Amendment. 38 The New Jersey Court of Errors and Appeals has held that the present tax is not an illegal evasion of the state laws exempting personal property in commercial warehouses from property taxes, and that the municipality was empowered by state law to levy this tax. Those rulings are conclusive upon us. Nor is it material to any question we have to decide that the practical result of the valid taxing power given the municipality enabled it to make up the loss in revenue suffered when Coalberg was transformed to a public facility. 39 Constitutionally speaking, the tax is not invalid as being unreasonably large for the privilege conferred.14 It is not shown that the exaction is unrelated to the value of the privilege conferred and the Court of Errors and Appeals found to the contrary.15 Private contractual arrangements, such as have been made here,16 cannot be effective to defeat the state's power to impose such a tax, with the practical effect of relieving the real beneficiaries of the privilege from all taxation by virtue of their success in shunting its burden contractually to the nominal operator.17 And the suggestion that the tax under the ordinance is prohibitive can carry no weight in view of the fact that substantially equal personal property taxes were paid prior to 1939.18 40 Appellants' other arguments may be given shorter disposition. The contention that Thompson's conviction is 'unlawful' is answered by the decision of the New Jersey Court of Errors and Appeals which held that the municipality possesses the power which it exercised to convict persons working in unlicensed warehousing premises as well as to prohibit corporations and others from carrying on the business of warehousing without obtaining a license. Thompson was convicted not for his employer's act but for his own. 41 It is suggested also that the ordinance gives to the municipality an uncontrolled discretion to revoke the license and is therefore invalid for uncertainty, since it permits of Township Committee to 'revoke any such license for sufficient cause after notice and hearing.' Appellants have made no attempt to secure a license and therefore are not in position to attack the revocation provisions of the ordinance. Cf. Bourjois, Inc., v. Chapman, 301 U.S. 183, 188, 57 S.Ct. 691, 694, 81 L.Ed. 1027, and authorities cited. 42 Finally the ordinance is said to be invalid because of the provision for cumulative penalties.19 The penal provisions however have not been imposed cumulatively in this case. Moreover the New Jersey Court has held them separable,20 if illegal. In such circumstances, the objection that the mere unapplied provision for cumulation violates the Fourteenth Amendment is without substance. Louisville & N.R. Co. v. Garrett, 231 U.S. 298, 311, 34 S.Ct. 48, 53, 58 L.Ed. 229, and authorities cited. 43 The judgment is affirmed. 44 Affirmed. 45 Mr. Justice FRANKFURTER, concuring. 46 The dissenting views lead me to add a few words to the Court's opinion, in which I join. 47 Nearly thirty-five years ago Mr. Justice Holmes observed that 'one in my place sees how often a local policy prevails with those who are not trained to national views and how often action is taken that embodies what the Commerce Clause was meant to end.' (Holmes, Speeches, Law and the Court, 98, 102). His concern has not lost force with time, and it is important to be duly mindful of it whenever a State claims the power to tax in a situation like that now before us. 48 Equally relevant are other observations by Mr. Justice Holmes regarding this problem. 'It being once admitted, as of course it must be, that not every law that affects commerce among the states is a regulation of it in a constitutional sense, nice distinctions are to be expected. Regulation and commerce among the states both are practical rather than technical conceptions, and, naturally, their limits must be fixed by practical lines.' Galveston, Harrisburg, etc. R. Co. v. State of Texas, 210 U.S. 217, 225, 28 S.Ct. 638, 639, 52 L.Ed. 1031. And so, this Court has sustained a tax upon the mining of ore although substantially all the ore left the State and was put upon cars for that purpose by the same act by which it was produced. Oliver Iron Mining Co. v. Lord, 262 U.S. 172, 43 S.Ct. 526, 67 L.Ed. 929. Mr. Justice Holmes joined in that opinion although 'There could not be a case of a State's product more certainly destined to interstate commerce.' Holmes J., dissenting in Commonwealth of Pennsylvania v. State of West Virginia, 262 U.S. 553, 600, 601, 43 S.Ct. 658, 666, 67 L.Ed. 1117, 32 A.L.R. 300. Again, the Court has held that a State may impose a non-discriminatory tax on goods which, although connected 'as a general course of business' with 'a flow of interstate commerce,' 'has come to rest and has acquired a situs within the state' at 'a depot * * * for another interstate journey.' State of Minnesota v. Blasius, 290 U.S. 1, 8, 11, 54 S.Ct. 34, 36, 37, 78 L.Ed. 131. For the practical purposes which determine the constitutional issue there can be no difference between taxing such goods as property and taxing the business of being a depot for such goods. In striking the constitutional balance between State and national powers, figures of speech are treacherous. The ore which Minnesota was allowed to tax in the Lord case, and the cattle which Minnesota was allowed to tax in the Blasius case, were in no practical sense less in the 'flow of commerce' than the coal the storage of which was the business subjected to a non-discriminatory license tax by New Jersey. 49 Nor can it make a difference that this storage business was conducted by a concern controlled by the coal-carrying road. If a wholly independent storage concern would have had to pay a license tax, the controlling constitutional principles require no different result because the storage facility is a subsidiary of a railroad. Presumably there are good business reasons for the use of such a subsidiary corporation. Compare Edwards v. Chile Copper Co., 270 U.S. 452, 456, 46 S.Ct. 345, 346, 70 L.Ed. 678. Those reasons are equally valid for the State's taxing purposes. It cannot be said that New Jersey has given no opportunities, has afforded no protection, and has conferred no benefits upon Independent Warehouses, Inc., merely because in an ultimate sense there is a financial identification between Independent Warehouses and the Erie Railroad. Compare State of Wisconsin v. J. C. Penney Co., 311 U.S. 435, 444, 61 S.Ct. 246, 249, 85 L.Ed. 267, 130 A.L.R. 1229. If what was here involved were merely an occasional and transient storage of coal moving from Pennsylvania to New York, New Jersey could not levy a property tax on the coal nor a license tax for the storing of it. The controlling consideration here is that there was storage of the coal precisely like the holding of the cattle in the Blasius case. In both cases there was a sufficiently distinct and permanent break in the process of transportation between the States so as to give rise to interests in the State of storage to justify the exertion of its non-discriminatory taxing power. For me this case is controlled by Susquehanna Coal Co. v. City of South Amboy, 228 U.S. 665, 33 S.Ct. 712, 714, 57 L.Ed. 1015. Here, as in that case, there was something more 'than an incidental interruption of the continuity' of the coal's 'journey through the state.' There was 'a business purpose and advantage in the delay which was availed of, and while it was availed of, the products secured the protection of the state.' 228 U.S. at pages 668 and 669, 33 S.Ct. at page 714, 57 L.Ed. 1015. Thereby the State's power to tax arose. 50 The fact that for railroad-rate purposes this storage was treated as part of a transit privilege does not affect the relation of the storage to the taxing powers of the State. Assuming that such a storage may properly be treated as a stop-over privilege under the Interstate Commerce Act, it does not follow that the break in the process of interstate transportation is not of such significance in its relation to a State as to allow that State to tax the protection given to the property during the break as well as the opportunity afforded in conducting the business for such separable and enduring storage in the State. 51 Mr. Justice JACKSON, with whom Mr. Chief Justice VINSON joins, dissenting. 52 The Erie Railroad Company is a common carrier engaged in interstate commerce. By a specific tariff filed with the Interstate Commerce Commission pursuant to the Interstate Commerce Act it and severa other rail carriers have long published a joint and proportional through-tariff on anthracite coal from coal mining stations in Pennsylvania to points in New York and New Jersey. The tariff provides for storage-in-transit services at Coalberg, New Jersey, with reshipment to destination under original agreements. Independent Warehouses, Inc., as contract agent for the Erie, operates these storage-in-transit facilities, has custody of the coal in storage under Erie tariffs as a public warehouseman, and issues warehouse receipts for coal received under railroad waybills. Title to Coalberg is in the Pennsylvania Coal Co., a wholly-owned subsidiary of Erie, and it receives from Independent Warehouses one dollar per year for its lease. The Erie ultimately bears all losses and gets all gains. It is apparent that Coalberg is a facility for storage in transit of coal operated as part of the Erie's interstate transportation service. 53 The function of the storage in transit is vital. During the summer season, consumption of anthracite coal is light and neither dealers nor consumers in the City of New York and elsewhere are able to store adequate winter reserves. At critical times there would be grave danger of inadequate fuel supplies from interruptions of transportation or of mining operations if stock piles were not accumulated near consuming centers, such as New York, to be drawn upon in periods of peak demand. Therefore, the railroad accepts coal shipments which it mingles in stock piles at Coalberg, near New York, with the privilege to the shipper of ordering the same grade and quantity sent on to destination as needed. When orders for reshipment come, they are drawn from stock piles and delivered. Storage-in-transit is a device to equalize the demands on coal transportation facilities and to provide a reserve supply of coal for periods when consumption exceeds production, to enable movement away from the mines during the period when production exceeds consumption, and to finance future purchases by warehouse receipts issued against coal in transit. It is an essential part of dependable and lowcost transportation of anthracite coal from the mines to the great metropolitan consuming area. 54 For the privilege of operating this storage-in-transit facility at Coalberg in New Jersey, the municipality demands an annual license fee, in advance, which it is alleged would amount to $20,475. This is merely for the privilege of doing the business. The property used in the operation is also subject to the usual property tax on a valuation of $133,875, which is not in question. 55 The issue is whether this local privilege tax unconstitutionally burdens interstate commerce. The burden and its substantiality are undeniable, but the Court concludes that these local assessments upon interstate traffic are within the power of the state and, of course, the amount, be it $20,000 per year or $20,000,000 per year, is wholly for the local authorities to determine if their power to tax is upheld. 56 I cannot agree that the commerce clause of the Federal Constitution has left interstate traffic vulnerable to such local permissions and burdens. Because the immediate impact of the tax is on a railroad, we should not delude ourselves as to its real effect. It is a tax on traffic—on the movement of goods—and its weight is shifted from the carrier to the consumer. There is, of course, a 'local incident,' a stoppage in transit, a reloading. 'Local incidents' of some sort can be identified in all interstate transportation. But in this case local sales or deliveries are insubstantial in amount. The whole operation is incidental to interstate transportation and not to any local business. It is integrated in operation, ownership and management with transportation. It is under the federal commerce power and under Interstate Commerce Commission regulation. The stoppage may be longer than many other stoppages in transit incident to railroading. But the storage of perpetually renewed and continuously drawn-upon stock piles is no longer than necessary to adapt transportation facilities to the needs of an economy, one end of which must engage in continuous production and the other in only seasonal consumption. That a single municipality or state can fasten local tax burdens upon such an incident makes interstate commerce vulnerable to the very barriers and obstructions the commerce clause of the Constitution was designed to end. 57 The unedifying story of Colonial rivalry in preying upon commerce, which more than any one thing made our Federal Constitution a necessity, is too often told by historians to justify repetition. This tax is reminiscent, however, of some phases of that commercial warfare. In 1787 New York was being supplied with firewood from Connecticut and much farm produce from New Jersey. It seized upon 'local incidents' to lay a tax. Every sloop which came down through Hell Gate, every cart of firewood entering the city, and every market boat rowed across the Hudson River had to pay heavy entrance duties. Then came retaliatory measures. See Fiske, The Critical Period of American History, Chap. IV. These chronic quarrels were destroying the trade of all the rivals, and it was sought by the Constitution to free trade from local burdens and controls. 58 This New Jersey tax on transportation of New York's coal supply is more dangerous in the end than the old New York tax on its own firewood. In that case the consumers who ultimately would pay the tax also controlled the government which shortsightedly laid the tax. It was a tariff, and the tariff-ridden people could remove it. 59 But here the ultimate burden of the tax falls on consumers of New York and elsewhere who have no representation in the government which lays the tax and fixes its amount. The authorities who fix the tax will never have to answer to those who pay it. That is the evil of 'taxation without representation.' Here is a tax that falls immediately upon a single taxpayer for it does not appear that any other is similarly affected. It is a tax that falls ultimately on non-residents of the taxing authority. If it is valid, I know of no reason why the community should bear any of its own tax burdens. This is the great vice of these local burdens on interstate movement of goods. It this is not the sort of burden and barrier to a nation's free trade that our commerce clause was designed to end, I should think one would be hard put to find an example. This decision represents a trend that seems to me quite out of the spirit of our history and quite as detrimental to our commercial welfare and unity. See my concurring opinion, Duckworth v. State of Arkansas, 314 U.S. 390, 397, 62 S.Ct. 311, 314, 86 L.Ed. 294, 138 A.L.R. 1144. I am not unaware of the needs of this locality, as of all others, for revenue. But it seems to me that the activities at Coalberg are as fully in the current of interstate commerce as those we held immune from state taxation in Freeman v. Hewit, 329 U.S. 249, 67 S.Ct. 274, and Joseph v. Carter & Weekes Stevedoring Co., 330 U.S. 422, 67 S.Ct. 815. The storage-in-transit service is as essential to maintaining and as much a part of the flow of coal as loading and unloading of goods shipped in interstate commerce is of that commerce. The Constitution laid restraints upon each locality lest their local advantages be pursued at the cost of the commerce on which the prosperity of all depends. I would reverse the judgment. 1 The material term of the ordinance appear at note 9 infra and text. 2 See text Part I infra. A prior suit in a federal district court to enjoin enforcement was dismissed because of the existence of a 'plain, speedy, and efficient remedy' in the state courts. Independent Warehouses v. Saddle River Township, D.C., 52 F.Supp. 96, 97; 28 U.S.C. § 41(1), 28 U.S.C.A. § 41(1). 3 Those objections are discussed in Part III of this opinion. 4 'A non-discriminatory tax upon the business of storing' goods which are not yet in interstate commerce is not forbidden. Federal Compress & Warehouse Co. v. McLean, 291 U.S. 17, 21, 54 S.Ct. 267, 269, 78 L.Ed. 622. 5 See note 4. 6 In 1921 the New Jersey Supreme Court sustained the imposition of these taxes against attack on various grounds. Pennsylvania Coal Co. v. Saddle River Tp., 96 N.J.L. 40, 114 A. 157. 7 Coalberg is located conveniently to tidewater ports, as well as rail facilities for distribution in northern New Jersey and elsewhere. The distributors using Coalberg's facilities forward their coal not only to the near-by metropolitan area of New York City and northern New Jersey, but also to the New England States. 8 The tariff provides: 'The period of time allowed for the storage privilege and protection of the through rate from point of origin to ultimate destination shall be two (2) years from the date of delivery at storage point, as shown on the inbound freight (expense) bill. The Erie Railroad reserves the right to require owners to remove their coal at the expiration of the two years period. Any coal which is not reshipped within two (2) years will lose the privilege of being reshipped at the through rates from point of origin to destinations beyond the storage yard. * * *' 9 'Any person, firm or corporation who shall violate any term or provision of this ordinance shall upon conviction thereof be subject to imprisonment in the County Jail or in any place provided by the Township of Saddle River for the detention of prisoners, for a term not exceeding ninety (90) days or to a fine not exceeding Two Hundred Dollars ($200.00) or both. Any person so convicted may, in the discretion of the Magistrate by whom he was convicted, in default of the payment of any fine be imprisoned in the County Jail or place of detention provided by the Township of Saddle River, for any term not exceeding ninety (90) days. * * * Each day that a violation of any of the terms or provisions of this ordinance shall continue shall constitute a separate offense.' 10 Thompson was to be imprisoned for 90 days in the event of default in payment of his fine. 11 It is to be noted however that the two-year period allowed by the tariff for storage, see note 8, is longer than is necessary to allow for meeting seasonal demand. Storage-in-transit privileges are supplied, it is said, 'as a result of traffic demands.' A witness gave the following illustrations: '(a) Coal is a commodity of seasonal consumption. Most of it is consumed in cold weather. If the mines could produce currently sufficient coal to meet cold weather requirements, the railroads would be swamped with coal traffic during the fall and winter months when other seasonal products are moving in large volume and weather conditions retard transportation operations. By spreading coal shipments for winter use over the months of most favorable operating conditions, a more uniform transportation revenue is assured. '(b) Coal dealers and consumers ship it more uniformly throughout the year by using storage-in-transit privileges under railroad tariffs, and use negotiable warehouse receipts to finance their purchases where necessary. '(c) The movement during warm weather of the bulk of the winter coal supply avoids car storage and releases cars more rapidly than if they arrived frozen solid, as they often do in winter, where delayed by bad weather or had to wait unloading and use at the place of consumption. '(d) Experience has shown many instances, like those of recent occurrence, when a supply of stored coal close to the market areas has been necessary to prevent or relieve acute shortages of fuel in cases of labor weather, or other interruptions in production or transportation. '(e) A uniform movement of coal during favorable operating conditions, avoids the congestion, delay and increased expense which otherwise attends rush and emergency transportation in winter weather. '(f) Such storage-in-transit facilitates a more uniform and steady employment, not only of the miners but also of railroad employees, as well as a more uniform and steady railroad revenue.' 12 See note 8. 13 See the dissenting opinion of Mr. Justice Brandeis in Liggett Co. v. Lee, 288 U.S. 517, at page 570 ff, 53 S.Ct. 481, 498, 77 L.Ed. 929, 85 A.L.R. 699. 14 The tax, however, may be somewhat larger than the aggregate of the former personal property taxes. Personal property taxes paid prior to 1939 amounted to about $12,000 a year. Estimates of this tax given in the record vary from about that sum to around $20,000 a year. The variation corresponds to different estimates of the area, in terms of footage, constituting the base for calculation of the tax. 15 See note 14. Cf. the dissenting opinion of Mr. Justice Brandeis in Liggett Co. v. Lee, 288 U.S. at page 573, 53 S.Ct. at page 499, 77 L.Ed. 929, 85 A.L.R. 699, 'The Federal Constitution does not require that taxes * * * be proportionate to the differences in benefits received by the taxpayers * * * or that taxes be proportionate to the taxpayer's ability to bear the burden.' 16 The record discloses that the present agreements between Independent Warehouses and the coal company are from year to year until terminated upon notice. 17 Cf. Browning v. City of Waycross, 233 U.S. 16, 23, 34 S.Ct. 578, 580, 58 L.Ed. 828; Federal Compress & Warehouse Co. v. McLean, 291 U.S. 17, 22, 54 S.Ct. 267, 269, 78 L.Ed. 622: 'It is not wi hin the power of the parties, by the descriptive terms of their contract, to convert a local business into an interstate commerce business protected by the interstate commerce clause.' 18 See note 14. 19 The ordinance makes each day's continuance of violation a separate offense. 20 The New Jersey Court of Errors and Appeals stated (45 A.2d 703, 709): 'The ordinance contains a provision that in case 'any section or part' thereof shall be held illegal or unconstitutional, such invalidity 'shall not be construed as impairing the force and effect of the remainder of the ordinance.' If it be conceded arguendo that the cumulative penalty clause is invalid in whole or in part, the remainder of the provision for sanctions is severable and would stand unaffected.'

78

331 U.S. 40 67 S.Ct. 982 91 L.Ed. 1328 TRAILMOBILE CO. et al.v.WHIRLS. No. 85. Argued Dec. 19, 1946. Decided April 14, 1947. As Modified April 28, 1947. Mr. Philip J. Schneider, of Cincinnati, Ohio, for petitioner trailmobile co. Messrs. Sol Goodman, of Cincinnati, Ohio, and Ernest Goodman, of Detroit, Mich., for petitioner International Union, etc., U.A.W.-C.I.O. Mr. Frederick Bernays Wiener, of Providence, R.I., for respondent. Mr. Justice RUTLEDGE delivered the opinion of the Court. 1 This case, like Fishgold v. Sullivan Drydock & Repair Corporation, 328 U.S. 275, 66 S.Ct. 1105, presents a problem in the seniority standing of a reemployed veteran. It arises under § 8 of the Selective Training and Service Act of 1940.1 The Fishgold case held that under the Act a veteran is entitled to be restored to his former position plus seniority which would have accumulated but for his induction into the armed forces.2 Here the question concerns the duration of the veteran's restored statutory seniority standing. The petitioners maintain that it ends with the first year of his reemployment. Respondent's position is that it last as long as the employment continues.3 A suggestion has also been made that occurrences taking place since the decision in the Circuit Court of Appeals may have rendered the cause moot. 2 The case is an aftermath of a general controversy over seniority rights which arose among the employees of two corporations following their consolidation on January 1, 1944. Because of the relation of the general controversy to this litigation a detailed statement of the facts becomes necessary. Prior to their consolidation the Highland Body Manufacturing Company had been a wholly owned subsidiary of the petitioner, the Trailmobile Company. The two corporations manufactured the same commodities in separate plants in Cincinnati, Ohio.4 During 1943 under the plan of consolidation the supplies and equipment and personnel of Highland were transferred gradually to the plant of Trailmobile. It took over the assets and business of Highland and assumed all its obligations. The employees of Highland were transferred to the payroll of Trailmobile as of January 1, 1944, when the consolidation became fully effective.5 3 The employees of both companies had been affiliated with the American Federation of Labor. 51 N.L.R.B. 1106, 1108. At the time of the consolidation the Highland group, including respondent, claimed seniority with Trailmobile § of the dates of their employment by Highland. The former Trailmobile employees opposed this, maintaining that the Highland personnel should be considered as new employees of Trailmobile, with seniority dating only from January 1, 1944. This dispute was submitted to national representatives of the A.F. of L. They decided in favor of the Highland group. 4 The former Trailmobile employees were dissatisfied with this decision. They outnumbered the Highland claimants about ten to one. Accordingly, reorganizing as a unit of the Congress of Industrial Organizations, they requested recognition as the exclusive bargaining agent of Trailmobile's employees, including the Highland transferees. An election was held under the auspices of the National Labor Relations Board, in which the new C.I.O. local was chosen as bargaining representative for a unit composed of both groups.6 5 Trailmobile accordingly negotiated with the C.I.O. and in July, 1944, a collective bargaining agreement was concluded, effective as of June 21, 1944. It provided that the seniority rights of former Highland employees should be fixed as of January 1, 1944, r gardless of the dates of their original employment by Highland. 6 Respondent Whirls had been in Highland's employ from 1935 to 1942, when he entered military service. He was honorably discharged and returned to his work with Highland in May, 1943.7 He was thus among the employees transferred from Highland to Trailmobile as of January 1, 1944, whose seniority was reduced so as to start as of that date by the July, 1944, collective agreement with the C.I.O. 7 The Highland group contested the agreement's validity in the Ohio courts in a class suit brought July 17, 1944, by Hess, one of their number, on behalf of himself and 178 others similarly situated. These included 104 persons actually at work, veterans and nonveterans, amoung whom was Whirls, and 74 employees then in the armed forces. The petition alleged that Trailmobile then had about 500 employees in military service, of whom apparently some 426 were outside the Highland group. 8 The theory of the class suit was that, although the plaintiffs were not then members of the C.I.O., the collective bargaining agent was the representative of all employees in the unit and hence could not legally deprive a minority of the employees which it represented of their accrued seniority and other rights by any collective agreement with the company.8 The petition alleged that the collective agreement arbitrarily and unlawfully deprived the plaintiffs of their 'vested individual rights' and asked mandatory injunctive relief restoring each to seniority status as of the date of his employment by Highland. The company and the collective agent stood upon the terms of the collective agreement and the agent's authority as certified representative to make it as justifying the action taken under it. 9 The Ohio courts held against the plaintiffs in the action, sustaining the position of the company and the union.9 They held in effect that the seniority rights in issue arose exclusively from contract, making no reference whatever to § 8 of the Selective Training and Service Act or any question relating to it;10 that the company and the collective representative were lawfully empowered to enter into the contract fixing those rights as of January 1, 1944; that the trial court was not authorized, in its own language, 'to contract for the plaintiff(s) or make a new contract,' since that power 'exists only in the collective bargaining agent under the provisions of the National Labor Relation's Act (29 U.S.C.A. § 151 et seq.), so long as that agent acts within the law.'11 10 Accordingly the suit was dismissed. The record here does not disclose the date of the trial court's judgment. But its decision was affirmed by the Ohio Court of Appeals before October 2, 1945, when the union's answer was f led in the present cause; and the case had been finally determined against the plaintiff's claims by the Supreme Court of Ohio prior to October 15, 1945.12 11 The record is not entirely clear concerning the exact character and sequence of events between July 15, 1944, when Whirls and other former Highland employees were notified that their seniority status would be changed, and September 18, 1945, when the present suit was filed in the District Court. Apparently, after the notice was given, Selective Service officials intervened in behalf of Whirls and other veterans,13 although his allegation that his seniority was restored as a result of that intervention was denied both by the company and by the union. There is ambiguity also concerning whether the closed-shop provision appeared in the 1944 agreement or only in the 1945 one between the company and the C.I.O. The facts of record, however, are more consistent with the view that it was not introduced until the latter year. 12 At any rate, in June or July, 1945, Whirls joined the C.I.O., union, thus complying with the closed-shop provisions ofthe collective agreement. And until about September 3 of that year he continued to be employed in the painting department, where he had the highest seniority and was drawing pay of $1.05 per hour. On or about that date, however, the company transferred him to the stock department, threatening to reduce his pay to $0.83 per hour and also to reduce his seniority rating in accordance with the collective agreement. 13 Whether or not the threatened reductions actually took effect is not clear from the record, for not long afterward Whirls was transferred again, to a position paying $1.18 per hour in another department. But before this was done, represented by the United States Attorney,14 he brought this suit in the District Court under the Selective Training and Service Act. He sought to enjoin the threatened decrease in pay and change in seniority status. He also asked for restoration to his former position in the painting department and to his seniority as fixed by his original employment with Highland. The employer answered and the local C.I.O. union intervened in support of the employer's position. However, since Whirls had been transferred again before the case came on for hearing, the parties agreed at the hearing to limit the issues to those affecting the question of seniority. This was presented in two forms, (1) on the merits, the facts being substantially stipulated; (2) on the question whether the state court proceeding in the class suit had determined the seniority rights of Whirls, making the issue now raised res judicata for this suit. See Angel v. Bullington, 330 U.S. 183, 67 S.Ct. 657. 14 Taking respondent's view in both respects, the District Court rendered judgment in his favor. The Circuit Court of Appeals for the Sixth Circuit affirmed the District Court's judgment. 154 F.2d 866. Besides holding res judicata inapplicable, both courts took the view, contrary to that later reached here in the Fishgold case, that the reemployed veteran was entitled to 'superseniority' for one year following his reemployment,15 and went on to hold that his statutory preferred status with respect to seniority and other incidents of his emplo ment did not end with the expiration of that year. Because of the bearing of the Fishgold decision upon the problem and the importance of the question presented, we granted certiorari. 328 U.S. 831, 66 S.Ct. 1364. I. 15 At the outset it is important, in view of certain questions which have been injected beyond the issues presented for decision, to state explicitly what is not before us. In the first place, we are not required to determine whether the class suit in the state courts constituted an adjudication of the rights of the parties involved in this litigation. That question was presented to the District Court and the Circuit Court of Appeals. Both determined it adversely to petitioners, but no error was assigned to this ruling in the petition for certiorari. The question is therefore not before this Court and we express no opinion concerning it. 16 The view entertained in this respect by the District Court and the Circuit Court of Appeals, however, has assumed tangental bearing in connection with the suggestion that the cause may have become moot. In its memorandum filed upon the application for certiorari and in its brief, the Government calls attention to certain events not appearing of record but taking place after the decision of the Court of Appeals. Though suggesting the facts for our attention, the Government maintains that they do not render the controversy moot. This Court, of course, does not render advisory opinions. And since the suggestion of the facts not only is sufficient to raise the question of mootness but has injected others not comprehended in the issues, it is necessary to dispose of the matter before undertaking a determination of the question otherwise properly here for decision. 17 It is suggested and not denied that under date of April 10, 1946, respondent was notified by the collective agent that he had been charged with conduct unbecoming a member of the union, namely, in bringing this suit without exhausting the remedies provided by its constitution and by-laws; in thereby violating the collective agreement; in negotiating with the employer through others than the union; and in conducting himself in a manner harmful to its interests and those of its members. Accordingly, on April 15, 1946, the union requested Trailmobile to suspend Whirls from work. In consequence, the company directed him not to report for duty. Since then, however, it has continued to keep him on the payroll, on leave of absence with full pay. Although the Government urges that Whirls thus continues in the company's employ and consequently the case is not moot, its suggestion of the facts has overlaid the only issue brought here by the petition for certiorari with questions of unlawful discrimination allegedly arising out of the suggested facts, under the decisions in Steele v. Louisville & Nashville R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173; Tunstall v. Brotherhood of Locomotive Firemen and Enginemen, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187; and Wallace Corporation v. National Labor Relations Board, 323 U.S. 248, 65 S.Ct. 238, 89 L.Ed. 216.16 18 The facts thus put forward have no proper bearing in this case otherwise than to suggest the question of mootness and to require that any decision which is made upon the merits here be made without prejudice to the f ture assertion of any rights of respondent which may have been violated by the conduct set forth. We agree that in the circumstances related he remains an employee of the company and the cause is not moot. 19 We also agree that the question of unlawful discrimination is not properly before us for decision.17 That question, insofar as it arose from events prior to this litigation, was involved in the Ohio class suit without reference, it would seem, to § 8 or its possible effects. And because the petition for certiorari, as we have noted, assigned no error to the Court of Appeals' ruling on the issue of res judicata arising from the outcome of the class suit, we are not at liberty now to consider the effect of that litigation or the issues of discrimination embraced in it. Insofar as any question of unlawful discrimination may be thought to arise from the facts said to have taken place after the decision of the Circuit Court of Appeals, we are also not free at this time to consider or determine such an issue. As the brief of the Government in respondent's behalf pertinently states, 'These points were not raised on respondent's behalf in the lower courts, and no evidence was introduced by any party to the issue of unfair discrimination. Cf. Hormel v. Helvering, 312 U.S. 552, 556, 61 S.Ct. 719, 721, 85 L.Ed. 1037. In view of that fact, and of the Hess litigation, we believe that it would be inappropriate, at this stage, to argue these issues.' 20 Wholly aside from any question of power, this disclaimer on behalf of the party affected is a sufficient reason to justify refusal to inject such an issue here or to volunteer aid not sought. We therefore are required to say no more concerning the matter now than that, if respondent has been unlawfully expelled, suspended or otherwise dealt with by the union for asserting his legal rights, the law has provided remedies for such injuries and they may be redressed in appropriate proceedings designed for that purpose upon proof of the facts constituting the wrong and due consideration of the legal issues they present. To assure this possibility, however, the remand which becomes necessary in this cause on the merits will be so framed as to preclude any foreclosure of such rights by possible future application of the doctrine of res judicata arising from this determination. 21 Since, moreover, in the view of the District Court and apparently of the Court of Appeals, the Ohio class suit was dispositive of issues of unlawful discrimination arising out of the facts presented in that litigation without reference to § 8,18 it may be added that the Ohio determination could not apply, of course, to such discrimination taking place by virtue of later events. 22 We turn therefore to consideration of the sole question presented on the merits, namely, whether under § 8 the veteran's right to statutory seniority extends indefinitely beyond the expiration of the first year of his reemployment, being unaffected by that event as long as the employment itself continues. II. 23 The relevant portions of §§ 8(a) and 8(b) are set out in the margin.19 But we are concerned particularly with § 8(c), which reads: 24 'Any person who is restored to a position in accordance with the provisions of paragraph (A) or (B) of subsection (b) shall be considered as having been on furlough or leave of absence during his period of active military service, shall be so restored without loss of seniority, shall be entitled to participate in insurance or other benefits offered by the employer pursuant to established rules and practices relating to employees on furlough or leave of absence in effect with the employer at the time such person was ordered into such service, and shall not be discharged from such position without cause within one year after such restoration.' 25 The Government argues on respondent's behalf that the correct meaning of § 8, and particularly of subsection (c), is that upon reemployment the veteran is entitled to retain indefinitely his prewar plus service-accumulated seniority.20 Under the statute, it says, this seniority cannot be taken away by a collective bargaining agreement or by the employer,21 either during the year in which the statute insures the veteran against discharge without cause or thereafter while the employment continues.22 Support for this view is thought to be derived from the syntax of the statutory language and from the legislative history. 26 It is argued that grammatically the 'within one year' provision applies only to the last clause of subsection (c), relating to discharge without cause, and does not refer to the 'other rights'23 given by subsections (b) and (c), including restored statutory seniority. Because the 'within one year' provision appears most proximately in connection with the prohibition against discharge, the Government seeks to give that prohibition, including its temporal term, effect as a command wholly distinct from and unrelated to anything preceding. It treats the clause as a grammatically independent sentence and a substantively unrelated provision, although it is separated from the earlier ones only by a comma followed by the conjunction 'and.' 27 On this premise of complete severability the Government builds its entire case. The premise necessarily regards § 8(c) as making no express provision for the duration of 'other rights,' but as leaving this to be found wholly by implication. The Government then goes on to conclude that the period to be implied is indefinite. Although the statutory security against discharge ends with the prescribed year, the protection given by § 8(c) to 'other rights' is said therefore not only to be effective for that year, cf. Fishgold v. Sullivan Drydock & Repair Corporation, supra, but to continue in full force for as long as the job may last beyond that time. In this view, of course, the result would be to 'freeze' the incidents of the employment indefinitely while 'freezing' the right to the job itself for only one year. 28 Difficulties arise in connection with this construction, both in its premise and in its conclusions. One is that the conclusion of indefinite duration would not follow necessarily, if the premise of complete severability were acceptable. On that basis 'indefinite duration' as the Government conceives it would not be the only tenable period or even the most probably contemplated one. Several alternatives would be presented. However, the statutory year would not be among them, since it is implicit in the premise of severability that the Act does not apply the concluding clause of § 8(c) to 'other rights' to secure their extension either during or after that time. On the other hand, the Government's view ignores the usual rule of construction where time is not expressly prescribed, but is evidently to be implied. For generally in such cases duration for a reasonable period is the term accepted by the law rather than permanency or indefinite extension.24 And this, in varying circumstances, might be found to be longer or shorter than the statutory year prescribed for the job itself. 29 The real trouble however is in the basic premise both grammatically and substantively. It assumes not only the complete independence of the last clause of § 8 from what precedes, but also that employment within the meaning of the Act is something wholly distinct and separate from its incidents, including seniority, rates of pay, etc. We think, however, that the idea of total severability is altogether untenable. To accept it would do violence both to the grammatical and to the substantive structure of the statute. 30 The clause is neither an independent sentence nor a disconnected prohibition without significant relationship to what precedes. 'From such position' has no meaning severed from the prior language. The restoration provisions define the very character of the place not only to which the veteran must be restored but equally from which he is not to be discharged. Neither grammatically nor substantively could the discharge provision be given effect without reference to the prior 'restoration' clauses. Fishgold v. Sullivan Drydock & Repair Corporation, supra. Indeed such reference is explicit both in the phrase 'from such position' and in the time provision itself, namely, 'within one year after such restoration.' 31 To tear the concluding clause from its context is therefore impossible. It is conjunctive with all that precedes. Nor is it any the more permissible to disconnect its constituent temporal term. There can be no doubt whatever that Congress intended by § 8(c) to secure the 'other rights' guaranteed by it for at least the minimum term of the prescribed one-year period. This indeed was a specific ruling of the Fishgold case. 32 The employee there had not been discharged in the sense of being thrown out of his job altogether. He simply had been deprived of the opportunity to work by the operation of the seniority system when there was not sufficient work for both himself and other employees with greater seniority after he had been accorded his full standing under the Act. That standing included not only his seniority status as of the time he entered the armed forces, but also all that would have accumulated had he remained at work until the date of his reemployment without going into the service. In the language of § 8(c) he is to be 'considered as having been on furlough or leave of absence during his period of active military service.' The Court held, indeed, that the Act did not give him standing to outrank nonveteran employees who had more than the amount of seniority to which he was entitled to be and had been restored; in other words, that he was not given so-called 'superseniority.' But it also squarely held that he was given security not only against complete discharge, but also against demotion, for the statutory year. And demotion was held to mean impairment of 'other rights,' including his restored statutory seniority for that year. 'If within the statutory period, he is demoted, his status, which the Act was designed to protect, has been affected and the old employment relationship has been changed. He would then lose his old position and acquire an inferior one. He would within the meaning of § 8(c) be 'discharged from such position." 328 U.S. at page 286, 66 S.Ct. at page 1112. 33 That § 8(c) applies to secure the protection of 'other rights' for at least the statutory year was therefore inherent in the rationalization of the Fishgold decision. To that extent at any rate the concluding clause was held applicable, not severable, concerning them. This of course destroys the Government's basic premise of the complete severability of that clause and its resulting non-applicability to 'other rights.' While the reemployed veteran did not acquire 'superseniority,' § 8(c) gave him the restored standing for the minimum duration of the prescribed year. 34 It is therefore clear that Congress did not confer the rights given as incidents of the restoration simply to leave the employer free to nullify them at will, once he had made it. Equally clearly Congress did not create them to be operative for the vaguely indefinite and variously applicable period of a reasonable time. But we cannot agree that they were given to last as long as the employment continues, unaffected by expiration of the one-year period. 35 To accept this conclusion, as we have said, would mean 'freezing' the incidents of the employment indefinitely while 'freezing' the right to employment itself for only one year. As long as the employee might remain in his job, his pay could not be reduced, his seniority could not be decreased, insurance and other benefits could not be adversely affected. And this would be true, although for valid reasons all of those rights could be changed to the disadvantage of nonveteran employees having equal or greater seniority and other rights than those of the veteran with restored statutory standing. The reemployed veteran thus not only would be restored to his job simply, as the Fishgold case required, 'so that he does not lose ground by reason of his absence.' 328 U.S. at page 285, 66 S.Ct. at page 1111. He would gain advantages beyond the statutory year over such nonveteran employees. 36 We do not think Congress had in mind such far-reaching consequence for the nation-wide system of employment, both public and private, when making the statutory provisions for the veteran's benefit. At the time it acted, we had not declared war and the men who were called to service were being inducted for a year's training, with the idea if not the assurance that they would return to civilian life and occupations at the end of that year, without prejudice because of their service. Visionary as this notion proved to be, it hardly can be taken to support the view that Congress contemplated 'freezing' the specified incidents of restored employment indefinitely. 37 The Fishgold case, it is true, concerned only events taking place within the statutory year. As the Court of Appeals pointed out in distinguishing this case, 154 F.2d at page 871, the issues there involved no question of the reemployed veteran's standing after the statutory year. But, as we have said, the decision did hold that § 8(c) applies to 'other rights' for the year. And the rationalization was wholly inconsistent with the idea that those restored rights continued indefinitely after the year, unaffected by its termination. The restored veteran, it was held, could not be disadvantaged by his service to the nation. He 'was not to be penalized on his return by reason of his absence from his civilian job.' 328 U.S. at page 284, 66 S.Ct. at page 1111. He was to be restored and kept, for the year at least, in the same situation as if he had not gone to war but had remained continuously employed or had been 'on furlough or leave of absence.' It is clear, of course, that this statutory addition to the veteran's seniority status is not automatically deducted from it at the end of his first year of reemployment. But the Fishgold decision also ruled expressly that he was not to gain advantage beyond such restoration, by virtue of the Act's provisions, so as to acquire 'an increase in seniority over what he would have had if he had never entered the armed services. * * * No step-up or gain in priority can be fairly implied.' 328 U.S. at pages 285, 286, 66 S.Ct. at page 1111. 38 For the statutory year indeed this meant that the restored rights could not be altered adversely by the usual processes of collective bargaining or of the employer's administration of general business policy.25 But if this extraordinary statutory security were to be extended beyond the statutory year, the restored veteran would acquire not simply equality with nonveteran employees having identical status as of the time he returned to work. He would acquire indefinite statutory priority over nonveteran employees, a preferred status which we think not only inharmonious with the basic Fishgold rationalization, but beyond the protection contemplated by Congress. 39 We are unable therefore to accept the Government's position. Aside from the events taking place after the Court of Appeals' decision, which as we have said are not properly here for consideration except upon the question of mootness. Whirls was treated exactly as were other employees in his group having the same seniority and status as he had on the date of his reemployment. There was no discrimination against him as a veteran or otherwise than as a member of that group. Both groups, the former Trailmobile employees and the former Highland employees, who composed his group, contained veterans and nonveterans in large numbers. Both contained veterans in active service and reemployed veterans when the collective agreement was made. Whirls was treated exactly as all other members of his group, the ex-Highland employees, veterans and nonveterans alike. Whether or not the collective agreement was valid, or infringed rights of Whirls and other members of that group apart from rights given by § 8(c), is not before us, for reasons we have stated. The only question here and the only one we decide is that § 8(c), although giving the reemployed veteran a special statutory standing in relation to 'other rights,' as defined in the Fishgold case, during the statutory year, and creating to that extent a preference for him over nonveterans, did not extend that preference for a longer time. 40 On the facts therefore we are not required to determine the further question whether the statute would give protection to a reemployed veteran after the statutory year, if it were shown that he then had been demoted beneath his rightful standing under the Act as of the date of his restoration, though nonveteran employees having the same seniority standing as of that time had not been demoted or adversely affected. No such question is presented on the facts of record properly before us for consideration and decision. It will be time enough to consider such an issue whenever it may be presented. 41 We find it unnecessary therefore to pass upon petitioners' position in this case, namely, that all protection afforded by virtue of § 8(c) terminates with the ending of the specified year. We hold only that so much of it ends then as would give the reemployed veteran a preferred standing over employees not veterans having identical seniority rights as of the time of his restoration. We expressly reserve decision upon whether the statutory security extends beyond the one-year period to secure the reemployed veteran against impairment in any respect of equality with such a fellow worker. 42 These reasons, founded in the literal construction of the statute and the policy clearly evident on its face, are sufficient for disposition of the case. They are not weakened by the Government's strained and unconvincing citation of the Act's legislative history. 43 That argument is grounded in conclusions drawn from changes made without explanation in committee with respect to various provisions finally taking form in § 8, changes affecting bills which eventually became the Selective Training and Service Act and the National Guard Act, 54 Stat. 858, 50 U.S.C.A.Appendix, § 401 et seq. Apart from the inconclusive character of the history, the Government's contention assumes that the only alternatives presented by the final form of the bill were indefinite duration for the incidents of the employment named and none at all. This ignores the other possibilities considered in this opinion, including duration for a reasonable time. Moreover, as has been noted, the most important committee changes relied upon were made without explanation.26 The interpretation of statutes cannot safely be made to rest upon mute intermediate legislative maneuvers.27 44 The argument for respondent in this case is of whole cloth in principle with the contention for 'superseniority' made and rejected in the Fishgold case, as indeed the District Court and the Court of Appeals regarded it. Lacking any better legislative footing, it equally cannot stand. 45 Accordingly the jud ment of the Court of Appeals is reversed. This however will be without prejudice from the decision here to respondent's assertion in the future of any rights he may have against Trailmobile or the collective agent on account of their acts not presented on this record or involved in the issues determined by this decision. It is so ordered. 46 Reversed. 47 Mr. Justice JACKSON, with whom Mr. Justice FRANKFURTER joins, dissenting. 48 Of the millions of wage earners whom the War took from their jobs into the armed services, some came from organized industries, others from unorganized industries; some had priority rights incident to their jobs, others had no such rights. For all, Congress provided the security of being able to get back their old jobs for at least a year after their return to civil life. But since industrial priority rights usually prevailing in organized industry have important bearing both on permanence of employment and wages, Congress guaranteed the veteran not merely 'against loss of position' but also against 'loss of seniority by reason of his absence.' 'He acquires not only the same seniority he had; his service in the armed services is counted as service in the plant so that he does not lose ground by reason of his absence.' Fishgold v. Sullivan Drydock & Repair Corporation, 328 U.S. 275, 285, 66 S.Ct. 1105, 1111. In brief, in employments that were governed by priority rights, absence in the armed services was treated as presence in the plant. The veteran acquired a rating which he would have had, had he not been away. 49 Congress thus dealt with two very different aspects of employment. It gave all wage earners the assurance of having their old jobs for a year. It further made imperative that wage earners who, by virtue of employment contracts, normally union contracts, had preferred positions should have the same preferred positions as those enjoyed by their fellows who had their status but remained behind. Congress limited the right to have a job to a year. But Congress, having assured a veteran the priority status he would have had had he remained at work, did not take away that status at the end of twelve months. Accordingly, because of the Congressionally assured status, whereby a veteran had a priority right that he would have had, had he never left, he has whatever rights that status gave an employee under the general law of contract and more particularly, as in this case, under the National Labor Relations Act. 50 The veteran at the end of the year certainly is not in a worse position than he would have been had he not been in the armed services. If he could not be deprived of his seniority rights under the employment contract had he remained behind, he cannot be deprived of them because he is a veteran. Therefore, if under the National Labor Relations Act, those wielding the power of an exclusive bargaining agency on behalf of the veteran could not have discriminated against him had he not been a veteran, they cannot discriminate against him because he is a veteran. Any other result would fly so completely in the face of what Congress was about in fashioning economic security for the returning veterans, that it would require language totally wanting in what Congress wrote to find such a strange purpose on its part. 51 Congress did not authorize arbitrary reduction of the seniority rights to which the veteran had been restored at the end of the year. If his rights under the contract of employment assure that he will not be discharged before an employee with lower seniority and that he is entitled to a certain wage scale, he continues in employment with this seniority status and is entitled to all its benefits, as long as others with lower seniority remain on the job. 52 In assuring not merely the retention of seniority status but its progression during the years in the service, Congress aimed to insure that the years which the veteran gave to his country should not retard his economic advancement. It is not likely that in furthering this policy Congress would say that an employee, because he is a veteran, should suffer the consequences of having been to war after a year's return. The equality of treatment which Congress designed as between employees who went and employees who stayed could not be achieved by delaying for one year the disadvantages of having been away and then letting them affect the veteran. 53 Whirls came back from the army to his old work, where he had certain advantages of seniority. Now he has lost his seniority, and because he asked the courts to say whether he lost it legally he was booted out of his job and, moreover, was expelled from the union he had been compelled to join by reason of a closed shop agreement. He may find other employment at his old craft closed to him. This is rather shocking and it is hard to believe that Whirls has no protection in law. 54 What happened to Whirls is this: The employer to whose service he returned was merged or consolidated with a bigger concern of the same kind—a corporation which had owned the company for which Whirls worked—and both businesses were continued under one ownership. This united the two working forces and the question arose as to relative seniority rights. Both groups had belonged to American Federation of Labor unions, so the problem was submitted to its national authorities. They ruled that each employee should retain seniority rights dating from the time he entered the employ of either company. 55 The bigger group revolted. They demanded their own seniority and demanded that the smaller group coming into the consolidation be treated as entirely new employees. They reorganized as a C.I.O. unit, demanded recognition as the exclusive bargaining agent of the whole enterprise and, of course, won the election. They then demanded and obtained a contract allowing their own seniority and establishing a closed shop. To keep his job at all, Whirls was obliged thereby to join the C.I.O. union and, with others, suffered reduction of pay and loss of seniority rights. 56 Believing that he and others had been unlawfully dealt with and being supported by the Government in the belief, he sought a remedy in the courts. His claim was not frivolous, for two courts below granted him relief. But because he tested his rights in court, he was expelled from the union on charges that he negotiated for himself through others than the union and acted in a way contrary and harmful to its interests. Since he was no longer a member of the union, it demanded under the closed shop agreement that the employer oust him from even the reduced job which its bargaining had left to him. The employer was obliged by its contract to comply but has been paying him on a leave-of-absence-with-pay basis. The short of it is that Whirls is out of seniority, out of work, and out of the union with all that this means in a closed shop industry. His predicament comes about not because of any fault of Whirls as a workman, nor because of his employer's wish. 57 The employer urges that we relieve it from the duty imposed by the court below of reinstating Whirls in his seniority rights because 'the majority union members may compel the employer to discharge such returning veteran after the expiration of said one-year period. As in this case, the union might expel the veteran from the union, and thereby compel this employer to discharge such veteran under its closed shop contract with the union.' One might have thought this an exaggerated fear conjured up in hostility to the union except that it is just what has happened, and that instead of repudiating it now the union endorses the threat. It says that the union 'must do one of two things, (a) either discriminate against the Trailmobile veterans and allow the Highland veterans to supersede them on the seniority list, or, (b) in fairness to the Trailmobile veterans, negotiate for the discharge of Highland veterans at the end of one year's guaranteed employment.' 58 This combines a false alternative with a disingenuous threat. Both alternatives presuppose that the employer has an absolute right to discharge veterans after reemploying them for a year, whether or not they work under a contract which gives them seniority rights. But the question for decision is whether the veteran is secured in his seniority rights by the Act. If he is, he is to the extent of those rights under the employment contract entitled to his job even after the assured year has ended. 59 There is neither need nor authority to discriminate against any veteran of either plant. The fair solution would be that each employee go on the seniority list as of the date he entered either of the two units now consolidated. That was the solution under the collective agreement by which Whirls worked at the time of the consolidation. To thwart it, the whole machinery of the National Labor Relations Board was set in motion and apparently has been used in disregard of Whirls' rights under the Labor Act. Before we reach the question whether rights under the Labor Act have been infringed, however, it should be clear that the Selective Service Act secured Whirls' seniority rights, for it is those rights which he asserts were taken from him. 60 Section 8(b)(B) refers to the job to which the veteran is entitled to be restored, i.e., simply the same job which he left, or its equivalent. Section 8(c) specifies what rights he shall have in that job. He is to have the seniority which would have accumulated while he was in service and he is to be assured against discharge for one year, regardless of what his or others' seniority rights are. Such assurance against discharge certainly does not terminate seniority rights after one year. Section 8(b)(B) together with the provision against arbitrary discharge is enough to assure that the veteran will remain in the same job for one year without diminution of its incidents. See Fishgold v. Sullivan Drydock & Repair Corporation, 328 U.S. 275, 286, 66 S.Ct. 1105, 1111, 1112, in which this Court said, 'What it (Congress) undertook to do was to give the veteran protection within the framework of the seniority system plus a guarantee against demotion or termination of the employment relationship without cause for a year.' 328 U.S. at page 288, 66 S.Ct. at page 1113. 61 That case interpreted the provisions against discharge as broad enough to prohibit also any reduction in status, pay, or seniority, during the year. But we did not hold that seniority rights ended with the year. Seniority rights are rights which, by their nature, endure as long as the employment does, and become more and more valuable in protecting that employment and enhancing its benefits. Ordinarily, one of their most important functions is to give a measure of security in the job. To have seniority rights for a year may not be an impossibility, but it is almost a contradiction in terms. 62 The job guaranteed against discharge for a year, then, is the job defined in § 8(b)(B). But the right to discharge after the year is not unconditional where the employee is the beneficiary of a seniority plan. Of course, where employees have no seniority rights, the guarantee of one year's employment is their only right. But if a seniority system does exist, the Congress gave the employee 'protection within the framework of the seniority system plus a guarantee against demotion or termination of the employment relationship without cause for a year.' (Emphasis added.) Fishgold v. Sullivan Drydock & Repair Corporation, 328 U.S. at page 288, 66 S.Ct. at page 1113. 63 It is to be noted that the seniority rights of Whirls were bargained away from him by a union which, under the National Labor Relations Act, was entitled to bargain as his representative. The Act makes the majority union 'the exclusive representatives of all the employees in such unit' for bargaining. 49 Stat. 453, § 9(a), 29 U.S.C. s 159(a), 29 U.S.C.A. § 159(a). We have held that this not only precludes the individual from being repre ented by others but also prevents him from bargaining for himself. J. I. Case Co. v. National Labor Relations Board, 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762. While the individual is thus placed wholly in the power of the union, it does not follow that union powers have no limit. Courts from time immemorial have held that those who undertake to act for others are held to good faith and fair dealing and may not favor themselves at the cost of those they have assumed to represent. The National Labor Relations Act, in authorizing union organizations 'for the purpose of collective bargaining or other mutual aid or protection,' 49 Stat. 452, § 7, 29 U.S.C. § 157, 29 U.S.C.A. § 157, indicates no purpose to excuse unions from these wholesome principles of trusteeship. 64 We have held under a similar Act that the courts may intervene to prevent a majority union from negotiating a contract in favor of itself against a colored minority. Speaking for all but two members of the Court, Chief Justice Stone, after recognizing that the representatives may make 'contracts which may have unfavorable effects on some of the members of the craft represented' in such matters as seniority, based on relevant differences of conditions, said: 'Without attempting to mark the allowable limits of differences in the terms of contracts based on differences of conditions to which they apply, it is enough for present purposes to say that the statutory power to represent a craft and to make contracts as to wages, hours and working conditions does not include the authority to make among members of the craft discriminations not based on such relevant differences.' Steele v. Louisville & Nashville Railroad Co., 323 U.S. 192, 203, 65 S.Ct. 226, 232, 89 L.Ed. 173. That opinion also declared that 'It is a principle of general application that the exercise of a granted power to act in behalf of others involves the assumption toward them of a duty to exercise the power in their interest and behalf, and that such a grant of power will not be deemed to dispense with all duty toward those for whom it is exercised unless so expressed.' 323 U.S. at page 202, 65 S.Ct. at page 232, 89 L.Ed. 173. And in Tunstall v. Brotherhood of Locomotive Firemen, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187, we held that where an individual is without available administrative remedies, the courts must grant him protection. 65 I do not think that Whirls' seniority rights after one year are made immutable or immune from collective bargaining. But the statute restored these rights to him as a veteran. They stand until they are lawfully modified. The record indicates that they have never been terminated or modified by good faith collective bargaining in the interests of the craft. It raises the suspicion that they were simply misappropriated to the benefit of the majority group which was under a duty to represent his interests as well as its own. 66 The courts cannot tolerate the expulsion of a member of a union, depriving him of his right to earn a living merely because he invokes the process of the courts to protect his rights—even if he does so mistakenly. The Labor Relations Act makes it an unfair labor practice by an employer 'To discharge or otherwise discriminate against an employee because he has filed charges or given testimony' in proceedings under it. 49 Stat. 453, § 8, 29 U.S.C. § 158, 29 U.S.C.A. § 158. Neither may a union use its own power over its members to by-pass the courts. Cf. Dorchy v. State of Kansas, 272 U.S. 306, 47 S.Ct. 86, 71 L.Ed. 248. 67 This action is equitable in character and equity traditionally adapts its remedies to the facts as developed by trial rather than to the form of pleadings. There could be no objection if the Court would remand the case for development of a more complete record. But I could not agree that it should be done with the suggestion that Whirls was not treated with discrimination because all in the Highland group were treated alike. If the Trailmobile Company had absorbed the wholly-owned Highland Company before Whirls returned and used the consolidation as an excuse to deny Whirls reemployment rights, this Court would hardly have approved so transparent a scheme. The union has no more right to rely on the consolidation to justify deprivation of seniority rights. 1 54 Stat. 885, 50 U.S.C.App. § 301 et seq., 50 U.S.C.A.Appendix, § 301 et seq. In 1944 there was a minor modification of § 8 not here relevant. 58 Stat. 798; Fishgold v. Sullivan Drydock & Repair Corporation, 328 U.S. 275, 278, note 1, 66 S.Ct. 1105. As amended the Selective Training and Service Act expired in its major part March 31, 1947. Public Law 473, 79th Cong., 2d Sess., 60 Stat. 341. But § 8 is saved indefinitely. 2 'He acquires not only the same seniority he had; his service in the armed services is counted as service in the plant so that he does not lose ground by reason of his absence.' 328 U.S. 275, 285, 66 S.Ct. 1105, 1111. 3 Though the fact does not appear affirmatively in the record, the parties agree that Whirls upon his reemployment after his military service received in addition to the seniority he had acquired at the time of his entry into military service also seniority accrued during the period of his service, consistently with the standard of the Fishgold case. This accorded with the then effective collective bargaining agreement which provided: 'In case of a national crisis, such as a declared or undeclared war, any man who relinquishes his job with the Company for services rendered to the Government, shall on his return retain his place on the seniority list with accumulation.' 4 See 51 N.L.R.B. 1106, 1107, for details of the companies' operations. 5 In the last full year of independent operation, 1942, Highland had approximately 100 employees and produced commodities worth approximately $1,500,000 and Trailmobile had approximately 1,000 employees and produced commodities worth $12,000,000. 6 51 N.L.R.B. 1106; 53 N.L.R.B. 1248. As the National Labor Relations Board determined that the appropriate bargaining unit was one composed of both Highland and Trailmobile employees, 51 N.L.R.B. at 113, the ex-Highland employees, of course, lost the election, since there were many more Trailmobile employees. See note 5. The bargaining unit excluded supervisory and certain miscellaneous employees of both companies 51 N.L.R.B. 1114, 1115. 7 See note 3. 8 These are holdings that, although a collective bargaining agent may be contract with the employer modify the seniority structure, it must act in good faith toward all employees. See Seniority Rights in Labor Relations (1937) 47 Yale L.J. 73, 90; Christenson, Seniority Rights under Labor Union Working Agreements (1937) 11 Temp.L.Q. 355, 370, 371. The class suit was filed and determined before the decisions were rendered here in Steele v. Louisville & Nashville R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173; Tunstall v. Brotherhood of Locomotive Firemen and Enginemen, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187; Wallace Corporation v. National Labor Relations Board, 323 U.S. 248, 65 S.Ct. 238, 89 L.Ed. 216. 9 Hess v. Trailer Co., 17 O.Supp. 39, 31 O.O. 566, affirmed by the Court of Appeals, Hamilton County, Ohio, motion to certify record to the Ohio Supreme Court overruled, 31 O.Law Rep. Oct. 15, 1945, 51; 18 Ohio Bar 314. 10 The pleadings in the class suit have been made part of the record in this case. Neither they nor the findings and judgment of the trial court in that cause disclose any reference to or consideration of § 8 or its possible effect upon that litigation. 11 See note 8 supra. 12 See note 9 supra. 13 Whirls' petition in this case alleged that after the notice of July 15, 1944, 'defendant herein again restored plaintiff to his date of hiring, as regulating his seniority, to-wit: February 8, 1935, pursuant to a directive of the Selective Service System of the United States, and he continued to benefit by such seniority status until on or about September 3, 1945, at which time' the defendant transferred him as stated below in the text and threatened, unless restrained, to reduce his pay and seniority rating. 14 Section 8(e) of the Selective Training and Service Act, quoted in Fishgold v. Sullivan Drydock & Repair Corporation, 328 U.S. at page 280, note 3, 66 S.Ct. at pages 1108, 1109. 15 The Court of Appeals expressly stated its disagreement with the views expressed by Judge Learned Hand, 2 Cir., 154 F.2d 785, writing for the majority of the Circuit Court of Appeals in the Fishgold case, the decision in which was affirmed here. 16 The Government's brief puts the suggestion and discussion it makes as a matter of not desiring its 'failure to explore the nature and causes' of the alleged discrimination to be taken 'as an admission either that' there was not unfair discrimination under the Steele, Tunstall and Wallace cases, supra; or that such discrimination 'cannot be redressed under § 8 * * * after the lapse of the initial year of reemployment. * * *' 17 See note 16. 18 The Court of Appeals, noting that Whirls was not named as a party to the class suit other than as a member of the class, pointed out that numerous members of the armed forces were involved in both groups of employees, but that their interests as veterans under § 8 were not common to the nonveteran employees in either group. Hence, it concluded, the class suit was not appropriate for rendering a judgment binding upon veteran members of the complaining class as to the question of their seniority under § 8. 6 Cir., 154 F.2d 866, 872. 19 'Sec. 8(a) Any person inducted into the land or naval forces under this Act for training and service, who, in the judgment of those in authority over him, satisfactorily completes his period of training and service under section 3(b) shall be entitled to a ertificate to that effect upon the completion of such period of training and service, which shall include a record of any special proficiency or merit attained. * * * '(b) In the case of any such person who, in order to perform such training and service, has left or leaves a position, other than a temporary position, in the employ of any employer and who (1) receives such certificate, (2) is still qualified to perform the duties of such position, and (3) makes application for reemployment within forty days after he is relieved from such training and service— '(A) if such position was in the employ of the United States Government, its Territories or possessions, or the District of Columbia, such person shall be restored to such position or to a position of like seniority, status, and pay; '(B) if such position was in the employ of a private employer, such employer shall restore such person to such position or to a position of like seniority, status, and pay unless the employer's circumstances have so changed as to make it impossible or unreasonable to do so; * * *.' 20 The Government states that a veteran could be reduced in seniority on account of bona fide changed circumstances or on account of cause or upon waiver. As to this, see note 25. 21 Seniority arises only out of contract or statute. An employee has 'no inherent right to seniority in service * * *.' Ryan v. New York Central R.R., 267 Mich. 202, 208, 255 N.W. 365; Casey v. Brotherhood, 197 Minn. 189, 191, 192, 266 N.W. 737. 'The seniority principle is confined almost exclusively to unionized industry.' Decision (1946) 46 Col.L.Rev. 1030, 1031, and authorities cited. 'In private employment seniority is typically created and delimited by a collective bargaining agreement. * * *' Ibid. 22 See note 20. 23 The Government's argument is limited to seniority. But it is equally applicable to the other components of 'position,' such as pay. Thus, if accepted, it would mean that after the guaranteed one year a veteran could be discharged but could not have his pay reduced. The position to which an employee must be restored is either the position previously held or 'a position of like seniority, status and pay.' See note 18. It is thus recognized that part of the restored 'position' is the seniority accrued prior to service in the armed forces and, under the Fishgold case, during service. 'Seniority' is part of 'position,' and therefore when the Act states in subsection (c) that the veteran may not be discharged 'from such position' it means both from the job itself and from the seniority which is part of the job. 24 See, e.g., Dillon v. Gloss, 256 U.S. 368, 375, 41 S.Ct. 510, 512, 65 L.Ed. 994; Sunflower Oil Co. v. Wilson, 142 U.S. 313, 322, 12 S.Ct. 235, 237, 35 L.Ed. 1025; 1 Williston, Contracts (Rev.Ed.) 152. 25 Section 8(c), it will be recalled, forbids discharge 'without cause within one year.' It may be that the 'without cause' qualification applies to 'other rights' as well as to total discharge, more especially in view of the position we take concerning the severability of the concluding clause of § 8(c). But no question is presented in this case whether the employer, for cause, could demote a reemployed veteran within the statutory year consistently with the requirements of § 8(c), and we express no opinion in this respect. 26 See S.Rep. 1987, 76th Cong., 2d Sess.; H.Rep. 2847, 76th Cong., 3d Sess.; H.Rep. 2874, 76th Cong., 3d Sess. 27 The Government also relies upon certain statements taken out of context from the debates. 'As is true with respect to all such materials, it is possible to extract particular segments from the immediate and total context and come out with road signs pointing in opposite directions.' Hust v. Moore-McCormack Lines, 328 U.S. 707, 733, 66 S.Ct. 1218, 1231. None of the selections is directed toward the question whether the veteran's seniority continues after the guaranteed one-year period so as to be not subject to modification by a collective bargaining agreement.

12

331 U.S. 1 67 S.Ct. 1047 91 L.Ed. 1301 CRANEv.COMMISSIONER OF INTERNAL REVENUE. No. 68. Argued Dec. 11, 1946. Decided April 14, 1947. Mr. Edward S. Bentley of New York City, for petitioner. Mr. J. Louis Monarch, of Washington, D.C., for respondent. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 The question here is how a taxpayer who acquires depreciable property subject to an unassumed mortgage, holds it for a period, and finally sells it still so encumbered, must compute her taxable gain. 2 Petitioner was the sole beneficiary and the executrix of the will of her husband, who died January 11, 1932. He then owned an apartment building and lot subject to a mortgage,1 which secured a principal debt of $255,000.00 and interest in default of $7,042.50. As of that date, the property was appraised for federal estate tax purposes at a value exactly equal to the total amount of this encumbrance. Shortly after her husband's death, petitioner entered into an agreement with the mortgagee whereby she was to continue to operate the property—collecting the rents, paying for necessary repairs, labor, and other operating expenses, and reserving $200.00 monthly for taxes—and was to remit the net rentals to the mortgagee. This plan was followed for nearly seven years, during which period petitioner reported the gross rentals as income, and claimed and was allowed deductions for taxes and operating expenses paid on the property, for interest paid on the mortgage, and for the physical exhaustion of the building. Meanwhile, the arrearage of interest increased to $15,857.71. On November 29, 1938, with the mortgagee threatening foreclosure, petitioner sold to a third party for $3,000.00 cash, subject to the mortgage, and paid $500.00 expenses of sale. 3 Petitioner reported a taxable gain of $1,250.00. Her theory was that the 'property' which she had acquired in 1932 and sold in 1938 was only the equity, or the excess in the value of the apartment building and lot over the amount of the mortgage. This equity was of zero value when she acquired it. No depreciation could be taken on a zero value.2 Neither she nor her vendee ever assumed the mortgage, so, when she sold the equity, the amount she realized on the sale was the net cash received, or $2,500.00. This sum less the zero basis constituted her gain, of which she reported half as taxable on the assumption that the entire property was a 'capital asset'.3 4 The Commissioner, however, determined that petitioner realized a net taxable gain of $23,767.03. His theory was that the 'property' acquired and sold was not the equity, as petitioner claimed, but rather the physical property itself, or the owner's rights to possess, use, and dispose of it, undiminished by the mortgage. The original basis thereof was $262,042.50, its appraised value in 1932. Of this value $55,000.00 was allocable to land and $207,042.50 to building.4 During the period that petitioner held the property, there was an allowable depreciation of $28,045.10 on the building,5 so that the adjusted basis of the building at the time of sale was $178,997.40. The amount realized on the sale was said to include not only the $2,500.00 net cash receipts, but also the principal amount6 of the mortgage subject to which the property was sold, both totaling $257,500.00. The selling price was allocable in the proportion, $54,471.15 to the land and $203,028.85 to the building.7 The Commissioner agreed that the land was a 'capital asset', but thought that the building was not.8 Thus, he dete mined that petitioner sustained a capital loss of $528.85 on the land, of which 50% or $264.42 was taken into account, and an ordinary gain of $24.031.45 on the building, or a net taxable gain as indicated. 5 The Tax Court agreed with the Commissioner that the building was not a 'capital asset.' In all other respects it adopted petitioner's contentions, and expunged the deficiency.9 Petitioner did not appeal from the part of the ruling adverse to her, and these questions are no longer at issue. On the Commissioner's appeal, the Circuit Court of Appeals reversed, one judge dissenting.10 We granted certiorari because of the importance of the questions raised as to the proper construction of the gain and loss provisions of the Internal Revenue Code.11 6 The 1938 Act,12 § 111(a), 26 U.S.C.A. Int.Rev.Code, § 111(a), defines the gain from 'the sale or other disposition of property' as 'the excess of the amount realized therefrom over the adjusted basis provided in section 113(b) * * *.' It proceeds, § 111(b), to define 'the amount realized from the sale or other disposition of property' as 'the sum of any money received plus the fair market value of the property (other than money) received.' Further, in § 113(b), 26 U.S.C.A. Int.Rev.Code, § 113(b), the 'adjusted basis for determining the gain or loss from the sale or other disposition of property' is declared to be 'the basis determined under subsection (a), adjusted * * * ((1)(B)) * * * for exhaustion, wear and tear, obsolescence, amortization * * * to the extent allowed (but not less than the amount allowable) * * *.' The basis under subsection (a) 'if the property was acquired by * * * devise * * * or by the decedent's estate from the decedent', § 113(a)(5), is 'the fair market value of such property at the time of such acquisition.' 7 Logically, the first step under this scheme is to determine the unadjusted basis of the property, under § 113(a)(5), and the dispute in this case is as to the construction to be given the term 'property'. If 'property', as used in that provision, means the same thing as 'equity', it would necessarily follow that the basis of petitioner's property was zero, as she contends. If, on the contrary, it means the land and building themselves, or the owner's legal rights in them, undiminished by the mortgage, the basis was $262,042.50. 8 We think that the reasons for favoring one of the latter constructions are of overwhelming weight. In the first place, the words of statutes—including revenue acts—should be interpreted where possible in their ordinary, everyday senses.13 The only relevant definitions of 'property' to be found in the principal standard dictionaries14 are the two favored by the Commissioner, i.e., either that 'property' is the physical thing which is a subject of ownership, or that it is the aggregate of the owner's rights to control and dispose of that thing. 'Equity' is not given as a synonym, nor do either of the foregoing definitions suggest that it could be correctly so used. Indeed, 'equity' is defined as 'the value of a property * * * above the total of the liens. * * *'15 The contradistinction could hardly be more pointed. Strong countervailing considerations would be required to support a contention that Congress, in using the word 'property', meant 'equity', or that we should impute to it the intent to convey that meaning.16 9 In the second place, the Commission's position has the approval of the administrative construction of § 113(a)(5). With respect to the valuation of property under that section, Reg. 101, Art. 113(a)(5)—1, promulgated under the 1938 Act, provided that 'the value of property as of the date of the death of the decedent as appraised for the purpose of the federal estate tax * * * shall be deemed to be its fair market value. * * *' The land and building here involved were so appraised in 1932, and their appraised value—$262,042.50—was reported by petitioner as part of the gross estate. This was in accordance with the estate tax law17 and regulations,18 which had always required that the value of decedent's property, undiminished by liens, be so appraised and returned, and that mortgages be separately deducted in computing the net estate.19 As the quoted provision of the Regulations has been in effect since 1918,20 and as the relevant statutory provision has been repeatedly reenacted since then in substantially the same form,21 the former may itself now be considered to have the force of law.22 10 Moreover, in the many instances in other parts of the Act in which Congress has used the word 'property', or expressed the idea of 'property' or 'equity', we find no instances of a misuse of either word or of a confusion of the ideas.23 In some parts of the Act other than the gain and loss sections, we find 'property' where it is unmistakably used in its ordinary sense.24 On the other hand where either Congress or the Treasury intended to convey the meaning of 'equity,' it did so by the use of appropriate language.25 11 A further reason why the word 'property' in § 113(a) should not be construed to mean 'equity' is the bearing such construction would have on the allowance of deductions for depreciation and on the collateral adjustments of basis. 12 Section 23(l) permits deduction from gross income of 'a reasonable allowance for the exhaustion, wear and tear of property * * *.' Sections 23(n) and 114(a), 26 U.S.C.A. Int.Rev.Code, §§ 23(n), 114(a), declare that the 'basis upon which depletion exhaustion, wear and tear * * * are to be allowed' is the basis 'provided in section 113(b) for the purpose of determining the gain upon the sale' of the property, which is the § 113(a) basis 'adjusted * * * for exhaustion, wear and tear * * * to the extent allowed (but not less than the amount allowable) * * *.' 13 Under these provisions, if the mortgagor's equity were the § 113(a) basis, it would also be the original basis from which depreciation allowances are deducted. If it is, and if the amount of the annual allowances were to be computed on that value, as would then seem to be required,26 they will represent only a fraction of the cost of the corresponding physical exhaustion, and any recoupment by the mortgagor of the remainder of that cost can be effected only by the reduction of his taxable gain in the year of sale.27 If, however, the amount of the annual allowances were to be computed on the value of the property, and then deducted from an equity basis, we would in some instances have to accept deductions from a minus basis or deny deductions altogether.28 The Commissioner also argues that taking the mortgagor's equity as the § 113(a) basis would require the basis to be changed with each payment on the mortgage,29 and that the attendant problem of repeatedly recomputing basis and annual allowances would be a tremendous accounting burden on both the Commissioner and the taxpayer. Moreover, the mortgagor would acquire control over the timing of his depreciation allowances. 14 Thus it appears that the applicable provisions of the Act expressly preclude an equity basis, and the use of it is contrary to certain implicit principles of income tax depreciation, and entails very great administrative difficulties.30 It may be added that the Treasury has never furnished a guide through the maze of problems that arise in connection with depreciating an equity basis, but, on the contrary, has consistently permitted the amount of depreciation allowances to be computed on the full value of the property, and subtracted from it as a basis. Surely, Congress' long-continued acceptance of this situation gives it full legislative endorsement.31 15 We conclude that the proper basis under § 113(a)(5) is the value of the property, undiminished by mortgages thereon, and that the correct basis here was $262,042.50. The next step is to ascertain what adjustments are required under § 113(b). As the depreciation rate was stipulated, the only question at this point is whether the Commissioner was warranted in making any depreciation adjustments whatsoever. 16 Section 113(b)(1)(B) provides that 'proper adjustment in respect of the property shall in all cases be made * * * for exhaustion, wear and tear * * * to the extent allowed (but not less than the amount allowable * * *.' The Tax Court found on adequate evidence that the apartment house was property of a kind subject to physical exhaustion, that it was used in taxpayer's trade or business, and consequently that the taxpayer would have been entitled to a depreciation allowance under § 23(l), except that, in the opinion of that Court, the basis of the property was zero, and it was thought that depreciation could not be taken on a zero basis. As we have just decided that the correct basis of the property was not zero, but $262,042.50, we avoid this difficulty, and conclude that an adjustment should be made as the Commissioner determined. 17 Petitioner urges to the contrary that she was not entitled to depreciation deductions, whatever the basis of the property, because the law allows them only to one who actually bears the capital loss,32 and here the loss was not hers but the mortgagee's. We do not see, however, that she has established her factual premise. There was no finding of the Tax Court to that effect, nor to the effect that the value of the property was ever less than the amount of the lien. Nor was there evidence in the record, or any indication that petitioner could produce evidence, that this was so. The facts that the value of the property was only equal to the lien in 1932 and that during the next six and one-half years the physical condition of the building deteriorated and the amount of the lien increased, are entirely inconclusive, particularly in the light of the buyer's willingness in 1938 to take subject to the increased lien and pay a substantial amount of cash to boot. Whatever may be the rule as to allowing depreciation to a mortgagor on property in his possession which is subject to an unassumed mortgage and clearly worth less than the lien, we are not faced with that problem and see no reason to decid it now. 18 At last we come to the problem of determining the 'amount realized' on the 1938 sale. Section 111(b), it will be recalled, defines the 'amount realized' from 'the sale * * * of property' as 'the sum of any money received plus the fair market value of the property (other than money) received,' and § 111(a) defines the gain on 'the sale * * * of property' as the excess of the amount realized over the basis. Quite obviously, the word 'property', used here with reference to a sale, must mean 'property' in the same ordinary sense intended by the use of the word with reference to acquisition and depreciation in § 113, both for certain of the reasons stated heretofore in discussing its meaning in § 113, and also because the functional relation of the two sections requires that the word mean the same in one section that it does in the other. If the 'property' to be valued on the date of acquisition is the property free of liens, the 'property' to be priced on a subsequent sale must be the same thing.33 19 Starting from this point, we could not accept petitioner's contention that the $2,500.00 net cash was all she realized on the sale except on the absurdity that she sold a quarter-of-a-million dollar property for roughly one per cent of its value, and took a 99 per cent loss. Actually, petitioner does not urge this. She argues, conversely, that because only $2,500.00 was realized on the sale, the 'property' sold must have been the equity only, and that consequently we are forced to accept her contention as to the meaning of 'property' in § 113. We adhere, however, to what we have already said on the meaning of 'property', and we find that the absurdity is avoided by our conclusion that the amount of the mortgage is properly included in the 'amount realized' on the sale. 20 Petitioner concedes that if she had been personally liable on the mortgage and the purchaser had either paid or assumed it, the amount so paid or assumed would be considered a part of the 'amount realized' within the meaning of § 111(b).34 The cases so deciding have already repudiated the notion that there must be an actual receipt by the seller himself of 'money' or 'other property', in their narrowest senses. It was thought to be decisive that one section of the Act must be construed so as not to defeat the intention of another or to frustrate the Act as a whole,35 and that the taxpayer was the 'beneficiary' of the payment in 'as real and substantial (a sense) as if the money had been paid it and then paid over by it to its creditors.'36 21 Both these points apply to this case. The first has been mentioned already. As for the second, we think that a mortgagor, not personally liable on the debt, who sells the property subject to the mortgage and for additional consideration, realizes a benefit in the amount of the mortgage as well as the boot.37 If a purchaser pays boot, it is immaterial as to our problem whether the mortgagor is also to receive money from the purchaser to discharge the mortgage prior to sale, or whether he is merel to transfer subject to the mortgage—it may make a difference to the purchaser and to the mortgagee, but not to the mortgagor. Or put in another way, we are no more concerned with whether the mortgagor is, strictly speaking, a debtor on the mortgage, than we are with whether the benefit to him is, strictly speaking, a receipt of money or property. We are rather concerned with the reality that an owner of property, mortgaged at a figure less than that at which the property will sell, must and will treat the conditions of the mortgage exactly as if they were his personal obligations.38 If he transfers subject to the mortgage, the benefit to him is as real and substantial as if the mortgage were discharged, or as if a personal debt in an equal amount had been assumed by another. 22 Therefore we conclude that the Commissioner was right in determining that petitioner realized $257,500.00 on the sale of this property. 23 The Tax Court's contrary determinations, that 'property', as used in § 113(a) and related sections, means 'equity', and that the amount of a mortgage subject to which property is sold is not the measure of a benefit realized, within the meaning of § 111(b), announced rules of general applicability on clear-cut questions of law.39 The Circuit Court of Appeals therefore had jurisdiction to review them.40 24 Petitioner contends that the result we have reached taxes her on what is not income within the meaning of the Sixteenth Amendment. If this is because only the direct receipt of cash is thought to be income in the constitutional sense, her contention is wholly without merit.41 If it is because the entire transaction is thought to have been 'by all dictates of common-sense * * * a ruinous disaster', as it was termed in her brief, we disagree with her premise. She was entitled to depreciation deductions for a period of nearly seven years, and she actually took them in almost the allowable amount. The crux of this case, really, is whether the law permits her to exclude allowable deductions from consideration in computing gain.42 We have already showed that, if it does, the taxpayer can enjoy a double deduction, in effect, on the same loss of assets. The Sixteenth Amendment does not require that result any more than does the Act itself. 25 Affirmed. 26 Mr. Justice JACKSON, dissenting. 27 The Tax Court concluded that this taxpayer acquired only an equity worth nothing. The mortgage was in default, the mortgage debt was equal to the value of the property, and possession by the taxpayer was forfeited and terminable immediately by foreclosure, and perhaps by a receiver pendente lite. Arguments can be advanced to support the theory that the taxpayer received the whole property and thereupon came to owe the whole debt. Likewise it is argued that when she sold she transferred the entire value of the property and received release from the whole debt. But we think these arguments are not so conclusive that it was not within the province of the Tax Court to find that she received an equity which at that time had a zero value. Dobson v. Commissioner, 320 U.S. 489, 64 S.Ct. 239, 88 L.Ed. 248; Commissioner v. Scottish American Investment Co., Ltd., 323 U.S. 119, 65 S.Ct. 169, 89 L.Ed. 113. The taxpayer never became personally liable for the debt, and hence when she sold she was released from no debt. The mortgage debt was simply a subtraction from the value of what she did receive, and from what she sold. The subtraction left her nothing when she acquired it and a small margin when she sold it. She acquired a property right equivalent to an equity of redemption and sold the same thing. It was the 'property' bought and sold as the Tax Court considered it to be under the Revenue Laws. We are not required in this case to decide whether depreciation was properly taken, for there is no issue about it here. 28 We would reverse the Court of Appeals and sustain the decision of the Tax Court. 29 Mr. Justice FRANKFURTER and Mr. Justice DOUGLAS join in this opinion. 1 The record does not show whether he was personally liable for the debt. 2 This position is, of course, inconsistent with her practice in claiming such deductions in each of the years the property was held. The deductions so claimed and allowed by the Commissioner were in the total amount of $25,500.00. 3 See § 117(a)(b), Revenue Act of 1938, c. 289, 52 Stat. 447, 26 U.S.C.A. Int.Rev.Code, § 117. Under this provision only 50% of the gain realized on the sale of a 'capital asset' need be taken into account, if the property had been held more than two years. 4 The parties stipulated as to the relative parts of the 1932 appraised value and of the 1938 sales price which were allocable to land and building. 5 The parties stipulated that the rate of depreciation applicable to the building was 2% per annum. 6 The Commissioner explains that only the principal amount, rather than the total present debt secured by the mortgage, was deemed to be a measure of the amount realized, because the difference was attributable to interest due, a deductible item. 7 See supra, note 4. 8 See § 117(a)(1), Revenue Act of 1938, supra. 9 3 T.C. 585. The Court held that the building was not a 'capital asset' within the meaning of § 117(a) and that the entire gain on the building had to be taken into account under § 117(b), because it found that the building was of a character subject to physical exhaustion and that petitioner had used it in her trade or business. But because the Court accepted petitioner's theory that the entire property had a zero basis, it held that she was not entitled to the 1938 depreciation deduction on the building which she had inconsistently claimed. For these reasons, it did not expunge the deficiency in its entirety. 10 2 Cir., 153 F.2d 504. 11 328 U.S. 826, 66 S.Ct. 980. 12 All subsequent references to a revenue act are to this Act unless otherwise indicated. The relevant parts of the gain and loss provisions of the Act and Code are identical. 13 Old Colony R. Co. v. Commissioner, 284 U.S. 552, 560, 52 S.Ct. 211, 213, 76 L.Ed. 484. 14 See Webster's New International Dictionary, Unabridged, 2d Ed.; Funk & Wagnalls' New Standard Dictionary; Oxford English Dictionary. 15 See Webster's New International Dictionary, supra. 16 Crooks v. Harrelson, 282 U.S. 55, 59, 51 S.Ct. 49, 50, 75 L.Ed. 156. 17 See §§ 202 and 203(a)(1), Revenue Act of 1916; §§ 402 and 403(a)(1), Revenue Acts of 1918 and 1921; §§ 302, 303(a)(1), Revenue Acts of 1924 and 1926; § 805, Revenue Act of 1932, 26 U.S.C.A. Int.Rev.Code, §§ 811, 812. 18 See Reg. 37, Arts, 13, 14, and 47; Reg. 63, Arts. 12, 13, and 41; Reg. 68, Arts. 11, 13, and 38; Reg. 70, Arts 11, 13, and 38; Reg. 80, Arts. 11, 13, and 38. 19 See City Bank Farmers' Trust Co. v. Bowers, 2 Cir., 68 F.2d 909, certiorari denied, 292 U.S. 644, 54 S.Ct. 778, 78 L.Ed. 1495; Rodiek v. Helvering, 2 Cir., 87 F.2d 328; Adriance v. Higgins, 2 Cir., 113 F.2d 1013. 20 See also Reg. 45, Art. 1562; Reg. 62, Art. 1563; Reg. 65, Art. 1594; Reg. 69, Art. 1594; Reg. 74, Art. 596; Reg. 77, Art. 596; Reg. 86, Art. 113(a)(5)—1(c); Reg. 94, Art. 113(a)(5)—1(c); Reg. 103, § 19.113(a)(5)—1(c); Reg. 111, § 29.113(a)(5)—1(c). 21 § 202(a)(3), Revenue Act of 1921; § 204(a)(5), Revenue Act of 1924; § 204(a)(5), Revenue Act of 1926; § 113(a)(5), Revenue Act of 1928; § 113(a)(5), Revenue Act of 1932; § 113(a)(5), Revenue Act of 1934; § 113(a)(5), Revenue Act of 1936; § 113(a)(5), Revenue Act of 1938; § 113(a)(5), Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 113(a)(5). 22 Helvering v. R. J. Reynolds Co., 306 U.S. 110, 114, 59 S.Ct. 423, 425, 83 L.Ed. 536. 23 Cf. Helvering v. Stockholmes Enskilda Bank, 293 U.S. 84, 87, 55 S.Ct. 50, 51, 79 L.Ed. 211. 24 Sec. 23(a)(1), 26 U.S.C.A. Int.Rev.Code, § 23(a)(1), permits the deduction from gross income of 'rentals * * * required to be made as a condition to the continued use * * * for purposes of the trade or business, of property * * * in which he (the taxpayer) has no equity.' Sec. 23(l) permits the deduction from gross income of 'a reasonable allowance for the exhaustion, wear and tear of property used in the trade or business * * *.' See also § 303(a)(1), Revenue Act of 1926, c. 27, 44 Stat. 9; § 805, Revenue Act of 1932, c. 209, 47 Stat. 280. 25 See § 23(a)(1), supra, note 24; § 805, Revenue Act of 1932, supra, note 24; § 3482, I.R.C., 26 U.S.C.A. Int.Rev.Code, § 3482; Reg. 105, § 81.38. This provision of the Regulations, first appearing in 1937, T.D. 4729, 1937—1 Cum.Bull. 284, 289, permitted estates which were not liable on mortgages applicable to certain of decedent's property to return 'only the value of the equity of redemption (or value of the property, less the indebtedness). * * *' 26 Secs. 23(n) and 114(a), in defining the 'basis upon which' depreciation is 'to be allowed', do not distinguish between basis as the minuend from which the allowances are to be deducted, and as the dividend from which the amount of the allowance is to be computed. The Regulations indicate that the basis of property is the same for both purposes. Reg. 101, Art. 23(1)—4, 5. 27 This is contrary to Treasury practice, and to Reg. 101, Art. 23(1)—5, which provides in part: 'The capital sum to be recovered shall be charged off over the useful life of the property, either in equal annual installments or in accordance with any other recognized trade practice, such as an apportionment of the capital sum over units of production.' See Detroit Edison Co. v. ommissioner, 319 U.S. 98, 101, 63 S.Ct. 902, 903, 87 L.Ed. 1286. 28 So long as the mortgagor remains in possession, the mortgagee can not take depreciation deductions, even if he is the one who actually sustains the capital loss, as § 23(l) allows them only on property 'used in the trade or business.' 29 Sec. 113(b)(1)(A) requires adjustment of basis 'for expenditures * * * properly chargeable to capital account * * *.' 30 Obviously we are not considering a situation in which a taxpayer has acquired and sold an equity of redemption only, i.e., a right to redeem the property without a right to present possession. In that situation, the right to redeem would itself be the aggregate of the taxpayer's rights and would undoubtedly constitute 'property' within the meaning of § 113(a). No depreciation problems would arise. See note 28. 31 See note 22. 32 See Helvering v. F. & R. Lazarus & Co., 308 U.S. 252, 60 S.Ct. 209, 84 L.Ed. 226; Duffy v. Central R. Co., 268 U.S. 55, 64, 45 S.Ct. 429, 431, 69 L.Ed. 846. 33 See Maguire v. Commissioner, 313 U.S. 1, 8, 61 S.Ct. 789, 794, 85 L.Ed. 1149. We are not troubled by petitioner's argument that her contract of sale expressly provided for the conveyance of the equity only. She actually conveyed title to the property, and the buyer took the same property that petitioner had acquired in 1932 and used in her trade or business until its sale. 34 United States v. Hendler, 303 U.S. 564, 58 S.Ct. 655, 82 L.Ed. 1018; Brons Hotels, Inc., 34 B.T.A. 376; Walter F. Haass, 37 B.T.A. 948. See Douglas v. Willcutts, 296 U.S. 1, 8, 56 S.Ct. 59, 62, 80 L.Ed. 3, 101 A.L.R. 391. 35 See Brons Hotels, Inc., supra, 34 B.T.A. at page 381. 36 See United States v. Hendler, supra, 303 U.S. at page 566, 58 S.Ct. at page 656, 82 L.Ed. 1018. 37 Obviously, if the value of the property is less than the amount of the mortgage, a mortgagor who is not personally liable cannot realize a benefit equal to the mortgage. Consequently, a different problem might be encountered where a mortgagor abandoned the property or transferred it subject to the mortgage without receiving boot. That is not this case. 38 For instance, this petitioner returned the gross rentals as her own income, and out of them paid interest on the mortgage, on which she claimed and was allowed deductions. See Reg. 77, Art. 141; Reg. 86, Art. 23(b)—1; Reg. 94, Art. 23(b)—1; Reg. 101, Art. 23(b)—1. 39 See Commissioner v. Wilcox, 327 U.S. 404, 410, 66 S.Ct. 546, 550; Bingham's Trust v. Commissioner, 325 U.S. 365, 369—372, 65 S.Ct. 1232, 1234—1236, 89 L.Ed. 1670. Cf. John Kelley Co. v. Commissioner, 326 U.S. 521, 527, 698, 66 S.Ct. 299, 302; Dobson v. Commissioner, 320 U.S. 489, 64 S.Ct. 239, 88 L.Ed. 248. 40 Ibid; see also § 1141(a) and (c), I.R.C., 26 U.S.C.A. Int.Rev.Code, § 1141(a, c). 41 Douglas v. Willcutts, supra, 296 U.S. at page 9, 56 S.Ct. at page 62, 80 L.Ed. 3, 101 A.L.R. 391; Burnet v. Wells, 289 U.S. 670, 677, 53 S.Ct. 761, 763, 77 L.Ed. 1439. 42 In the course of the argument some reference was made, as by analogy, to a situation in which a taxpayer acquired by devise property subject to a mortgage in an amount greater than the then value of the property, and later transferred it to a third person, still subject to the mortgage, and for a cash boot. Whether or not the difference between the value of the property on acquisition and the amount of the mortgage would in that situation constitute either statutory or constitutional income is a qu stion which is different from the one before us, and which we need not presently answer.

1112

331 U.S. 28 67 S.Ct. 1041 91 L.Ed. 1320 UNITED STATES NAT. BANK IN JOHNSTOWN et al.v.CHASE NAT. BANK OF NEW YORK CITY et al. No. 371. Argued Feb. 7, 1947. Decided April 14, 1947. Mr. Robert I. Rudolph, of Washington, D.C., for petitioners. [Argument of Counsel from page 29 intentionally omitted] Mr. William Dean Embree, of New York City, for respondents. Mr. Justice MURPHY delivered the opinion of the Court. 1 A problem arising under the Bankruptcy Act, 11 U.S.C.A. § 1 et seq., is presented by the unique facts of this case. 2 On June 10, 1926, Harvey C. Stineman was adjudicated a bankrupt upon a voluntary petition and the case was referred to a referee. The principal asset of the bankrupt estate was an undivided one-sixth interest in a large acreage of valuable coal lands, a large portion of which was operated by lessees and was producing substantial royalties. The value of the interest of the bankrupt estate in this asset is alleged to have been appraised at $90,000. 3 More than four months prior to the date when the petition was filed and the adjudication made, the United States National Bank of Johnstown, Pa., and the First National Bank of South Fork, Pa., had procured judgments against Stineman. These two judgments constituted first and second liens, respectively, on Stineman's interest in the coal lands. This interest had no other encumbrances upon it. 4 On January 8, 1927, the Johnstown bank filed its secured claim in the bankruptcy proceedings in the amount of $10,000, reciting as its security the first lien on the interest in the coal lands. This claim was allowed Subsequently, in 1932, the Johnstown bank filed an amended claim in the amount of $13,685, interest accruing after bankruptcy having been added to the original claim. The amended claim was allowed in the amount filed and formed the basis for the bank's participation in the dividends from the general fund, mentioned hereinafter. A court order in 1944 reduced this claim to $10,000. 5 The South Fork bank, on June 29, 1926, filed its secured claim with the referee for $11,290, reciting the second lien as its security, along with unsecured claims for $7,173.45. Dividends from the general fund were subsequently paid to the bank on the basis of the full amount of all its claims, $18,463.45. 6 Numerous general, unsecured claims were filed by other creditors, approximating $225,000 in amount. Included among these was the claim of the Chase National Bank of the City of New York, a claim which was allowed in the amount of $55,231.98. 7 The referee held a meeting of the creditors on December 31, 1929, more than three and a half years after the adjudication. The motive for this meeting appears to have been the fact that the Johnstown and South Fork banks, the judgment lien creditors, were pressing for payment of their secured claims. This meeting was attended by the bankrupt, the trustee in bankruptcy and representatives of the two judgment creditors, the Chase National Bank and certain other general creditors. Apparently not all of the general creditors appeared at this meeting. The consensus of opinion among those present was that the real estate had a value in excess of the liens but that 'if the lien creditors foreclosed upon their liens, little, if anything, would be left for general creditors.' 8 One of the attorneys present, P. J. Little, then made a suggestion. Mr. Little at this time was serving as counsel for the trustee, the Chase National Bank and several other general creditors. His suggestion was 'that under the law the estate should be divided into two items; one item showing funds arising wholly from real estate which does not include any of the leases or the funds from any of the leases; the other fund should be made u of all royalties, rentals, or dividends on stocks or bonds. The first fund to go to the first judgment creditor, the second fund to be divided pro rata among all the creditors.' The parties apparently agreed to this proposal. Although no supporting order of the referee appears in the record, the administration of the bankrupt estate proceeded as if a supporting order had been entered. The two judgment lien creditors assented to this course of events and it is asserted that all the creditors understood that the liens were to remain intact until the underlying claims had been paid in full. 9 Thereafter, four dividends were declared and distributed from the real estate fund, while seven dividends were declared and distributed from the general fund. The Johnstown bank received at least $1,364.76 from the real estate fund; the South Fork bank appears to have received nothing from that fund. Both of these banks shared with the other creditors in the seven distributions from the general fund, the Johnstown bank receiving $2,435.06 and the South Fork bank, $3,285.35. No exceptions were ever taken to any of the various orders of distributions. In addition, these two banks have carefully received their judgments during each five year period, making the trustee in bankruptcy a party to the proceedings. 10 In October, 1942, the Chase National Bank filed petitions for a decree to the effect that the two banks had waived their liens by sharing in the distributions from the general fund along with the general creditors and that the Johnstown bank should be compelled to return the $1,364.76 it had received from the real estate fund. The referee, however, held that both the Johnstown and South Fork banks were entitled to maintain their positions as lien creditors and at the same time participate in the distributions from the general fund. The District Court reversed the referee's decision, feeling that participation in distributions from both the real estate and general funds was contrary to accepted bankruptcy practice. In re Stineman, 56 F.Supp. 190. On rehearing, the District Court changed its mind; it became convinced that the Chase National Bank had recommended the arrangement, had acquiesced in its execution and was now estopped from objecting. In re Stineman, 61 F.Supp. 151. The Third Circuit Court of Appeals reversed, holding that the parties had completely disregarded the pertinent provisions of the Bankruptcy Act and that the Johnstown and South Fork banks had waived their liens and were entitled to share in the bankruptcy estate only as general creditors. In re Stineman, 155 F.2d 755. 11 Sections 65, sub. a, and 57, sub. h of the Bankruptcy Act are the ones pertinent to this case. Section 65, sub. a, provides: 'Dividends of an equal per centum shall be declared and paid on all allowed claims, except such as have priority or are secured.' 11 U.S.C. § 105, sub. a, 11 U.S.C.A. § 105, sub. a. Section 57, sub. h provides: 'The value of securities held by secured creditors shall be determined by converting the same into money according to the terms of the agreement pursuant to which such securities were delivered to such creditors, or by such creditors and the trustee by agreement, arbitration, compromise or litigation, as the court may direct, and the amount of such value shall be credited upon such claims, and a dividend shall be paid only on the unpaid balance. Such determination shall be under the supervision and control of the court.' 11 U.S.C. § 93, sub. h, 11 U.S.C.A. § 93, sub. h. 12 Under these provisions, there are several avenues of action open to a secured creditor of a bankrupt. See 3 Collier on Bankruptcy (14th Ed.) pp. 149—157, 255—259. (1) He may disregard the bankruptcy proceeding, decline to file a claim and rely sole upon his security if that security is properly and solely in his possession. In re Cherokee Public Service Co., 8 Cir., 94 F.2d 536; Ward v. First Nat. Bank of Ironton, Ohio, 6 Cir., 202 F. 609. (2) He must file a secured cla m, however, if the security is within the jurisdiction of the bankruptcy court and if he wishes to retain his secured status, inasmuch as that court has exclusive jurisdiction over the liquidation of the security. Isaacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 51 S.Ct. 270, 75 L.Ed. 645. (3) He may surrender or waive his security and prove his entire claim as an unsecured one. In re Medina Quarry Co., D.C., 179 F. 929; Morrison v. Rieman, 7 Cir., 249 F. 97. (4) He may avail himself of his security and share in the general assets as to the unsecured balance. Merrill v. National Bank of Jacksonville, 173 U.S. 131, 19 S.Ct. 360, 43 L.Ed. 640; Ex parte City Bank of New Orleans, 3 How. 292, 315, 11 L.Ed. 603. 13 Section 57, sub. h, is a codification of this fourth possibility. It permits the secured creditor to receive dividends along with the general creditors only on the balance remaining after the value of the security has been determined and deducted from the claim. This rule, commonly known as the bankruptcy rule, is designed to preclude any unwarranted advantage from accruing to the secured creditor. Grounded upon the statutory principle of equality and ratable distribution, it prohibits the secured creditor from reaping the whole benefit of his security while simultaneously taking dividends from the general assets on the basis of his entire claim as if he had no security. This rule differs from the one in equity, which allows the secured creditor to receive dividends on the full amount of his claim, crediting all dividends received and reserving the security against any deficiency. Merrill v. National Bank of Jacksonville, supra. And see 3 Collier on Bankruptcy (14th Ed.) p. 153; Hanson, 'The Secured Creditor's Share of an Insolvent's Estate,' 34 Mich.L.Rev. 309; 12 Ford.L.Rev. 77. 14 It is argued that the plan adopted in this case cannot be sanctioned under the foregoing principles. This plan allegedly called for the use of something similar to the equity rule of distribution. The judgment lien creditors were to retain their liens while sharing fully in the dividends from the general funds as if they had no liens, crediting the dividends received against their claims. But § 57, sub. h, is said plainly to outlaw the use of that rule; if the judgment lien creditors wished to retain their liens, they could share in the dividends only to the extent that their claims exceeded the value of their liens. Since they did not follow the provisions of § 57, sub. h, the conclusion is reached that they have waived their liens and must now be considered solely as unsecured creditors. 15 At this point it should be noted that the incomplete record before us fails to reveal the value of the interest in the coal lands to which the liens attached. The judgment lien creditors claim that the value was fixed at $90,000, but no such valuation appears in the record. That it might be less than $90,000 is indicated by the statement of these creditors that if they had foreclosed on their combined liens of $21,290, 'there would have been little, if anything, left for the general creditors.' But in the setting of this case, we believe it immaterial whether the value of the interest in the coal lands was greater or less than the amount of the secured claims. In either event, the problem before us concerns itself with the present validity of the liens. Has the conduct of the judgment lien creditors been such as to constitute a waiver of their judgment liens? That question we answer in the negative. 16 The fact that the judgment lien creditors received general dividends contrary to the scheme of § 57, sub. h, does not necessarily mean that they thereby waived their liens. Nothing in the language of § 57, sub. h, or of any other section of the Act makes such a receipt the necessary equivalent of a waiver. It is generally true that participation by a secured creditor in distributions from the general assets on the basis of his full claim indicates a waiver of the security and an election to be treated as an unsecured creditor. See In re O'Gara Coal Co., 7 Cir., 12 F.2d 426, 46 A.L.R. 916. But that is not an invariable result flowing from the application of any rigid statutory rule. The result depends, rather, upon the circumstances surrounding the receipt of the dividends. And in exceptional cases, those circumstances may demonstrate the continued vitality of the security as well as indicate that it would be inequitable to declare the security forfeited. See Wuerpel v. Commercial Germania Trust & Savings Bank, 5 Cir., 238 F. 269; Maxwell v. McDaniels, 4 Cir., 195 F. 426; Hartford Accident & Indemnity Co. v. Coggin, 4 Cir., 78 F.2d 471; Standard Oil Co. of Kentucky v. Hawkins, 7 Cir., 74 F. 395, 33 L.R.A. 739. 17 In the rare case where there is reasonable doubt as to whether a waiver has occurred, a careful examination must therefore be made to determine the conditions under which the dividends from the general assets were distributed to the secured creditor. And that examination must be made in the light of the recognized principles of equity. It has long been established that 'courts of bankruptcy are essentially courts of equity, and their proceedings inherently proceedings in equity.' Local Loan Co. v. Hunt, 292 U.S. 234, 240, 54 S.Ct. 695, 697, 78 L.Ed. 1230, 93 A.L.R. 195; Pepper v. Litton, 308 U.S. 295, 304, 60 S.Ct. 238, 244, 84 L.Ed. 281. In determining whether a waiver of liens has taken place, the bankruptcy court must accordingly look to the equities involved as well as to the intention of the parties. A waiver may be inequitable or unfair to the secured creditor; the receipt of dividends may not have caused permanent injury to the unsecured creditors; the dividends may have been received under a mistake of law or fact or pursuant to court approval; the objecting party may be estopped from questioning the validity of the liens. Such equitable considerations may well be decisive of a waiver or forfeiture in a particular case. 18 It is at once evident in this case that the judgment lien creditors received dividends from the general fund in good faith and without any intent to waive their liens. The principal asset of the estate was the interest in the coal lands and it was that interest to which the liens attached. Representatives of various general creditors believed that it would be to their advantage to have this interest remain intact, without being liquidated in whole or in part in order to satisfy the liens. Their thought was that by maintaining undiminished the royalties and rentals from this interest the unsecured claims could more rapidly be satisfied. To that end it was proposed that the judgment lien creditors refrain from immediate liquidation of their claims and share in the dividends from the general fund, a fund which included the royalties and rentals from the interest in the coal lands. The judgment lien creditors accepted this proposal, being willing to postpone any immediate realization of their security. But they did so with the distinct understanding that their liens were not forfeited and they took pains to renew the underlying judgments every succeeding five years in order to keep the liens alive. There is thus absent any element of an intentional waiver of the liens or any action inconsistent with a desire to retain the liens in the circumstances surrounding the receipt of the dividends by the judgment lien creditors. Cf. Thomas v. Taggart, 209 U.S. 385, 28 S.Ct. 519, 52 L.Ed. 845; In re Kaplan & Myers, 3 Cir., 241 F. 459. 19 Nor do we perceive any equitable reason why these liens should be declared forfeited. The incomplete record in this case does not indicate whether the referee or the bankruptcy court ever gave formal approval to the agreement under which the judgment lien creditors received dividends along with the unsecured creditors. But the bankruptcy proceedings went forward for more than 12 years as if such approval had been given, authorization being given for the distribution of numerous dividends pursuant to the plan. Certainly the agreement had the implied, if not the express, blessing of the referee and the bankruptcy court. Hence the judgment lien creditors cannot be accused of having participated in a plan which was unknown to, or disapproved by, those responsible for the proper administration of the proceedings. A forfeiture of the liens would only penalize unfairly the judgment lien creditors, who joined the plan in good faith and without any apparent intention of harming others or of securing any undue advantage for themselves. 20 It is further significant that the plan was proposed by an attorney for Chase National Bank, the general creditor now objecting. Apparently not all the general creditors were present or represented at the meeting on December 31, 1929, when the proposal was made and accepted. But the agreement, with its various dividend distributions taking place between 1935 and 1942, must have come to the attention of all the general creditors sooner or later; yet none of them raised any objection to the various distributions or to the agreement during this long period of time. No reason suggests itself why any of these general creditors should now be permitted to question the dividends received in the past by the judgment lien creditors or to demand that the liens be declared forfeited because of the receipt of such dividends. Especially is this so as to Chase National Bank. As the District Court noted, 61 F.Supp. at page 152, its counsel recommended and had full knowledge of the agreement; and Chase had knowledge of the subsequent dividend distributions, to which it did not demur. At this late stage, it is equitably estopped from raising any objection to the validity of the liens on the basis of the operation of the plan which it proposed. Cf. Merchants' Nat. Bank of New York v. Sexton, 228 U.S. 634, 33 S.Ct. 725, 57 L.Ed. 998; In re National Public Service Corporation, 2 Cir., 68 F.2d 859; In re American S.S. Nav. Co., D.C., 14 F.Supp. 106. 21 Moreover, the record does not indicate that any permanent injury to Chase National Bank or to the other general creditors resulted from the operation of the plan. The whole scheme was adopted with the idea that they would be benefited and we cannot say that this purpose has failed of achievement. Having proposed and acquiesced in the plan, the Chase National Bank cannot now be heard to complain of any resulting injury, especially an injury that is not apparent in the record. 22 We conclude from these various considerations that the liens should be held to be valid and in existence despite the failure to follow the provisions of § 57, sub. h, and despite the distribution of dividends contrary to § 65, sub. a. There was never any intention to waive the security and those who might have objected to the distributions are now estopped. But in view of the fact that the bankruptcy proceedings have been unduly prolonged for over 20 years, the bankruptcy court should now take steps to wind up the estate in accordance with the provisions of the Bankruptcy Act. Those provisions are designed to bring about the speedy distribution of the bankrupt's assets, a distribution of the type which definitely has not occurred in this case. 23 The judgment of the Circuit Court of Appeals is reversed and the case is remanded to the District Court for further proceedings consistent with this opinion. 24 Reversed. 25 Mr. Justice FRANKFURTER is of opinion that the order of the District Court should be restored on the ground that the creditors entered into an agreement which was not objectionable under § 57, sub. h, of the Bankruptcy Act, whereby the liens of the petitioners were saved. 26 Mr. Justice JACKSON concurs in the result. 27 Mr. Justice DOUGLAS dissents.

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331 U.S. 17 67 S.Ct. 1056 91 L.Ed. 1312 WALLING, Adm'r, Wage & Hour Div., U.S. Department of Labor,v.HALLIBURTON OIL WELL CEMENTING CO. No. 74. Argued Feb. 7, 10, 1947. Decided April 14, 1947. Mr. Morton Lixtin, of Washington, D.C., for petitioner. Messrs. Ben F. Saye, of Dundan, Okl., and Paul Sandmeyer, of Los Angeles, for respondents. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 This case brings here a question as to the application of the overtime provisions of the Fair Labor Standards Act1 to the payment of compensation pursuant to employment contracts similar to those in Walling v. A. H. Belo Corp., 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716. 2 Respondent is engaged in the business of cementing, testing and otherwise servicing oil wells, for which it uses its own peculiar equipment. To operate this equipment respondent retains a highly stabilized group of skilled and specially trained 'field employees.' The volume of respondent's business, however, is highly inconstant. Consequently, these employees are required to work a variable number of hours from day to day and from week to week. 3 Prior to passage of the Act in 1938, these employees were paid fixed monthly salaries. Thereafter, they were put on a 'weekly-guarantee' plan similar to that which was to be involved in the Belo case. This plan was abandoned March 1, 1942, under pressure from the Administrator of the Act, and reinstated July 1, 1942, after the Bel decision had seemed to end all questions as to its legality.2 Since its reinstatement the plan has been continuously in effect, and embodied in formal written contracts between respondent and the employees to whom it has applied. 4 The part of these contracts now in issue is respondent's agreement to pay these employees 'a regular basic rate of (a specified number of) cents per hour for the first 40 hours of any workweek, and not less than one and one-half times such basic hourly rate of pay for all time over 40 hours in any workweek, with a guarantee that Employee shall receive for regular time and for such overtime as the necessities of the business may demand a sum not less than $ (a specified number) for each workweek.'3 5 The regular basic rate so specified was in each case at or above the minimum prescribed by the Act or by the Administrator's order, but that rate was always so related to the guaranteed flat sum that the employee became entitled to more than the guarantee only in weeks in which he worked more than 84 hours.4 The compensation actually paid was regularly consistent with the contractual obligation as stated. 6 Petitioner sued respondent under § 17 of the Act to enjoin against future adherence to this plan, on the ground that it failed to include overtime compensation as required by § 7(a). He contended that the actual 'regular rate' of compensation payable under these contracts was not the specified basic rate, but rather the quotient of the amount of the correlative guarantee divided by the number of hours worked in that week. This was said to follow from the fact that the employees usually worked less than 84 hours a week and nevertheless received the full guaranteed sum. 7 The District Court (316 U.S. 627-629, 62 S.Ct. 1226) found, however, that the contracts were 'bona fide,' and that 'they were intended to, and did, really fix the regular rates' at which the men were employed. It denied relief5 and the Circuit Court of Appeals affirmed,6 both Courts relying on our decision in the Belo case. 8 Petitioner admits a close similarity of facts and of his basic contentions in this and the Belo case. He argues, however, that the Belo decision should not be followed: (a) because there are factual differences between the two cases adequate to distinguish them, (b) because Belo has been implicitly overruled by later decisions of this Court, and (c) because the Belo decision is erroneous. 9 As to the first of these arguments, we note that the contracts in Belo and in this case are substantially identical, except for the amount of the hourly rate and of the fixed guarantee. Under the Belo contract, however, overtime would be paid in addition to the guaranteed wage after 54 1/2 hours had been worked in any given week;7 under this contract, only after 84 hours. It is said that this 84 hours bears no relation to the usual workweek. 10 Actually, the employees in this case have no usual workweek. In many weeks they work more than 100 hours; in others less than 30. In about 20 per cent of the workweeks, they work in excess of 84 hours.8 Whenever they do, they are paid in accordance with the contract on the basis of the specified hourly rate with appropriate overtime. 11 No more can be said as to the relation between 54 1/2 hours and the usual workweek in Belo. It appears from the record in that case that the employees there involved also worked fluctuating workweeks, and that the average workweek was substantially less than 54 1/2 hours. Indeed, it appears that the Belo employees exceeded 54 1/2 hours in considerably less than 20 per cent of the weeks worked.9 When they did so, they too were paid at the contractual rate with appropriate overtime.10 There is nothing here to suggest different treatment of the two cases. 12 Petitioner also points to alleged differences in the fact that respondent in this case paid the full weekly guarantee given when its employees worked less than 40 hours in the week, and the fact that respondent carried fixed rather than fluctuating overtime rates on its payroll records. 13 As to the first of these points, there is actually no difference between this case and Belo. The employees in both cases had a contractual right to the full guarantee however short their workweek, and those in Belo were paid it as well as those here.11 The second fact we think without significance. The function of the payroll records was merely to show the amounts of compensation payable. These records did not affect respondent's contract obligations, nor suggest a practice at variance with the contract. 14 We think that whatever differences exist between this case and Belo are without substance, and that it must either be followed or overruled. 15 This brings us to petitioner's second argument, in which our attention is directed to three cases decided since Belo, wherein we held that certain plans of overtime compensation failed to meet the § 7(a) requirement. It is urged that the provisions for overtime compensation in these cases were legally no less adequate than, and that the principles on which they were decided are necessarily inconsistent with, the overtime provision and the principles of the Belo case. 16 In Belo itself, the specified basic hourly rate was held to be the actual regular rate because, as to weeks in which employees worked more than 54 1/2 hours, the specified rate determined the amount of compensation actually payable; as to weeks in which they worked less, the Court inferred from the collateral specification of a basic rate and provision for a legal but variable rate of overtime pay that the guaranteed flat sum then due also contemplated both basic pay and overtime.12 On the other hand, we find that in the three later cases relied on by petitioner, the agreed method by which wages were computed made a like inference impossible. 17 In Walling v. Halmerich & Payne, Inc., 323 U.S. 37, 65 S.Ct. 11, 89 L.Ed. 29, we considered a 'split-day plan,' under which a prescribed 'regular' hourly rate was payable for the first four hours of each eight-hour shift, and a prescribed 'overtime' rate, of one and one-half the 'regular' rate, was payable for the other four hours.13 In those weeks in which an employee worked statutory overtime, he was paid at the contract 'overtime' rate for many straight-time hours and at the contract 'regular' rate for many overtime hours. Obviously, these prescribed rates were not actual regular and overtime rates, although so named in the plan. Consequently, as in Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682, we held that the regular rate was to be determined by dividing the wages actually paid by the hours actually worked. In so deciding, we expressly noted that Belo was not controlling because the wage plans involved in the two cases posed entirely different questions as to the application of § 7(a).14 18 In Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 65 S.Ct. 1242, 1250, 89 L.Ed. 1705, and Walling v. Harnischfeger Corp., 325 U.S. 427, 65 S.Ct. 1246, 1250, 89 L.Ed. 1711, the contracts established two alternative methods for computing each employee's wages. One was to multiply his straight-time hours of work by a specified basic hourly rate, and his overtime hours by one and one-half that rate, and add the products. The other was to multiply the number of jobs done by a specified piecework rate. The employee was entitled to be paid the greater of these two sums.15 The method of computing the amount due at piece-work rates, which were constant for work done on both straight-time and overtime hours, of course negated any possible inference that the payment of such amount contemplated legal overtime compensation. The specified hourly rates were so low, however, relative to piecework rates, that the latter were always, or almost always, determinative of the wage actually to be paid. These cases held merely that such specified hourly rates were not the 'regular' rates of wage payments to which they were not related, and which were computed according to a necessarily inconsistent method. Again, Belo was expressly distinguished.16 19 Indeed, it would seem that the Court's opinions in these cases, far from undermining Belo, showed an affirmative concern that language appropriate to the situations then before us should not be extended to the different situation involved in this and the Belo case. 20 Finally, petitioner maintains that Belo was wrongly decided and that we should 'define the area of (its) continued vitality, if any.' His argument on this score is substantially the same as that advanced on behalf of the Administrator and considered by the Court in the Belo case itself. 21 The reasons stated in the Belo opinion for rejecting this argument are equally valid today, and need not be repeated. Moreover, our holding in Belo, has been a rule of decision in this Court for five years, and recognized as such on each appropriate occasion. Knowing of the Belo decision, the Congress has permitted § 7(a) to stand unmodified and the courts have applied it as so construed. Employers and employees (including those involved in this case) have regulated their affairs on the faith of it. Even if we doubted the wisdom of the Belo decision as an original proposition, we should not be inclined to depart from it at this time. 22 Affirmed. 23 Mr. Justice RUTLEDGE. 24 I concur in the Court's judgment upon the authority of Walling v. A. H. Belo Corp., 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716. I agree with Mr. Justice MURPHY that the Belo decision is inconsistent with later decisions here, in the view it takes concerning the legal effects of the Fair Labor Standards Act. But those cases are distinguishable upon their facts; the Belo case has been relied upon by the parties to this cause and no doubt also by others, in making their arrangements; and the facts here seem to me indistinguishable from those covered by the Belo decision. Accordingly, although I would restrict the effects of that decision narrowly to the factual situation presented, I join in the judgment now rendered. 25 Mr. Justice MURPHY, with whom Mr. Justice BLACK concurs, dissenting. 26 It is conceded that the weekly guaranty was sufficient to pay for 40 hours at the so-called 'regular basic rate' and for 44 additional hours at one and one-half times such 'basic hourly rate.' The contract overtime rate became effective only as to those hours of work in excess of 84. In other words, the 'regular basic rate' referred to in the contracts had no meaning or effect whatsoever unless the employee worked more than 84 hours in a week. Whether he worked 20 hours, 40 hours or 60 hours in a week, he was paid the guaranteed amount. 27 To square such a wage scheme with the plain requirements of § 7(a) of the Fair Labor Standards Act of 1938 is impossible. Time and again this Court has made it clear that the regular rate of compensation upon which overtime payments are to be based is the hourly rate actually paid to the employee for the normal, non-overtime workweek for which he is employed. Overnight Motor Trans. Co. v. Missel, 316 U.S. 572, 580, 62 S.Ct. 1216, 1221, 86 L.Ed. 1682; Walling v. Helmerich & Payne, 323 U.S. 37, 40, 65 S.Ct. 11, 13, 89 L.Ed. 29; United States v. Rosenwasser, 323 U.S. 360, 363, 65 S.Ct. 295, 296, 89 L.Ed. 301; Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 424, 65 S.Ct. 1242, 1244, 1250, 89 L.Ed. 1705; Walling v. Harnischfeger Corp., 325 U.S. 427, 430, 65 S.Ct. 1246, 1248, 1250, 89 L.Ed. 1711. 'The regular rate by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments. It is not an arbitrary label chosen by the parties; it is an actual fact. Once the parties have decided upon the amount of wages and the mode of payment the determination of the regular rate becomes a matter of mathematical computation, the result of which is unaffected by any designation of a contrary 'regular rate' in the wage contracts.' Walling v. Youngerman-Reynolds Hardwood Co., supra, 325 U.S. at pages 424, 425, 65 S.Ct. at pages 1244, 1245, 89 L.Ed. 1705. 28 Our attention in this case must therefore be focused upon the actual payments, exclusive of those paid for overtime, which the parties have agreed shall be paid during each workweek. And when we do that, we discover that the parties have agreed that the employees shall receive the guaranteed amount, not the so-called 'regular basic rate.' That guaranteed amount is thus the regular rate for purposes of § 7(a) of the Act, the so-called 'regular basic rate' being an obviously artificial one. 29 It is said, however, that this scheme is sanctioned by Walling v. A. H. Belo Corp., 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716. That is true, but it does not justify continuance of the erroneous Belo doctrine. The Belo case has been distinguished in subsequent opinions of this Court, but the distinctions were essentially ones of fact. On the basis of legal and statutory theory, the Belo case is irreconcilable with the later cases. The Belo case, which carries its own refutation in its dissenting opinion, should therefore be overruled. Otherwise we shall be perpetuating and augmenting the unrealities and confusion which have marked the application of the doctrine of that case. See Feldman, 'Algebra and the Supreme Court,' 40 Ill.L.Rev. 489; 'Legality of Wage Readjustment Plans under the Overtime Provision of the Fair Labor Standards Act,' 13 U. of Chi.L.Rev. 486; 44 Mich.L.Rev. 866. 1 52 Stat. 1060, 29 U.S.C. § 201 et seq., 29 U.S.C.A. § 201 et seq. The relevant overtime provisions, contained in § 7(a), 29 U.S.C. § 207(a), 29 U.S.C.A. § 207(a), are as follows: 'No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce— '(3) for a workweek longer than forty hours after the expiration of the second year from such date, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.' 2 This Court decided the Belo case June 8, 1942. 3 Compare the almost identical wording of the Belo contract, 316 U.S. at page 628, 62 S.Ct. at page 1225, 86 L.Ed. 1716. 4 For instance, the lowest specified basic rate in May, 1944, when this case was tried, was 40 cents an hour. Compensation at this rate for 40 hours and at one and one-half this rate for 44 additional hours equals $42.40. Actually, the correlative weekly guarantee was the slightly greater sum of $42.69. 5 57 F.Supp. 408. 6 152 F.2d 622. 7 See the statement and explanation of the Belo contract, 316 U.S. at pages 627—629, 62 S.Ct. at pages 1225, 1226, 86 L.Ed. 1716. 8 The record shows that of 4,284 manweeks worked by respondent's California field employees between July 5, 1942, and March 11, 1944, about 3% were less than 20 hours in length, about 13% were less than 40 hours, about 67% were from 40 to 84 hours, about 20% were over 84 hours, and about 7% over 104 hours, some running as high as 140 and 150 hours. This 'work-week' was the basis for determining compensation, but it did not represent the number of hours actually worked by the employee. In the course of typical cementing and testing operations, many hours counted as working time were spent waiting while the drilling crew was running the casing, the cement was setting, the perforation work was being done by another company, or the testing tool was standing in the well hole. 9 See Transcript of Record, Supreme Court of the United States, Walling v. A. H. Belo Corp., No. 622, O.T.1941, pp. 194-337. 10 316 U.S. at pages 631, 632, 62 S.Ct. at page 1227, 86 L.Ed. 1716. 11 Fleming v. A. H. Belo Corp., 5 Cir., 121 F.2d 207, at page 210, note 6. 12 316 U.S. at pages 631, 632, 62 S.Ct. at page 1227, 86 L.Ed. 1716. In Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682, decided the same day as Belo, the employees also worked an irregular number of hours each week, but were simply paid a fixed weekly wage. The Court noted the absence of any agreement between the contracting parties for the payment of a specified rate an overtime, and of any contractual limitation on the number of hours the employee could be required to work for the fixed wage. It also noted that these factors were not absent from the Belo plan. See 316 U.S. at page 581, 62 S.Ct. at page 1221, 86 L.Ed. 1682. 13 Theoretically, when an employee had so accumulated 40 'regular' hours in one week, all subsequent hours were compensable as 'overtime.' Actually, no employee ever did so. See 323 U.S. at page 41, 65 S.Ct. at page 13, 89 L.Ed. 29. 14 'Nothing in this Court's decision in Walling v. (A. H.) Belo Corp., supra, sanctions the use of the split-day plan. The controversy there centered about the question whether the regular rate should be computed from the guaranteed weekly wage or whether it should be identical with the hourly rate set forth in the employment contract. There was no question, as here, pertaining to the applicability of the regular rate to the first 40 hours actually and regularly worked, with the overtime rate applying to all hours worked in excess thereof.' Walling v. Helmerich & Payne, Inc., 323 U.S. 37, at page 42, 65 S.Ct. 11, at page 14, 89 L.Ed. 29. 15 In the Harnischfeger case, the scheme was actually a little different from that in the Youngerman-Reynolds case, which is stated in the text. In Harnischfeger, the employee was credited with (a) the product of the total number of hurs worked multiplied by the basic rate, plus (b) the amount by which piecework earnings during all hours worked exceeded the product in (a), plus (c) the product of the number of overtime hours worked multiplied by one-half the basic hourly rate. The difference is that in Harnischfeger some provision was made for over ime; but in both cases the provision for overtime was inadequate, and for the same reason. See 325 U.S. at pages 431, 432, 65 S.Ct. at pages 1248, 1249, 89 L.Ed. 1711. 16 'This Court's decision in Walling v. A. H. Belo Corp., 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716, lends no support to respondent's position. The particular wage agreements there involved were upheld because it was felt that in fixing a rate of 67 cents an hour the contracts did in fact set the actual regular rate at which the workers were employed. The case is no authority, however, for the proposition that the regular rate may be fixed by contract at a point completely unrelated to the payments actually and normally received each week by the employees.' Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, at page 426, 65 S.Ct. 1242, 1246, 89 L.Ed. 1705. See also the concurring opinion of Mr. Justice Frankfurter in Walling v. Harnischfeger Corp., 325 U.S. 427, 433, 65 S.Ct. 1246, 1249, 89 L.Ed. 1711. The Court did not expressly refer to Belo in its opinion in the Harnischfeger case; but, as it did in Youngerman-Reynolds, which involves substantially the same question and was decided the same day, we consider that further reference to Belo would have been redundant.

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331 U.S. 100 67 S.Ct. 1140 91 L.Ed. 1368 FLEMINGv.RHODES et al. No. 682. Argued April 7, 1947. Decided April 28, 1947. Mr. Samuel Mermin, of Washington, D.C., for appellant. No appearance for appellees. Mr. Justice REED delivered the opinion of the Court. 1 This appeal is from an interlocutory order of the District Court of the United States for the Northern District of Texas denying preliminary injunctions. Appellant's predecessor sued certain landlord appellees and the Sheriff and a constable of Tarrant County, Texas, in that United States district court for an injunction to stop eviction of tenants under state judgments that were recovered by the landlords in suits for restitution of leased property.1 The state suits were filed by the landlords without the certificates required by the Rent Regulations for Housing to maintain such actions. 8 F.R. 7322; 10 F.R. 11666; 11 F.R. 5824, 8106. The state judgments were entered after June 30, 1946, the termination date of the Emergency Price Control Act, and before July 25, 1946, the date of the approval by the President of the Price Control Extension Act. As there was no federal price control statute during this period, these judgments will be treated as valid when granted. 2 The decision of the district court, denying the motion as to the landlords and directing the entry of the order, was based on the unconstitutionality, as applied to these state judgments, of that portion of § 18 of the Price Control Extension Act of July 25, 1946, that declared, 'The provisions of this Act shall take effect as of June 30, 1946, * * *'.2 This provision the Court thought was unconstitutional (1) because the words affected the state judgments retroactively by bringing them under the Extension Act3 and (2) because the vested rights, created by the prior judgments in the landlords to obtain restitution of their leased properties, could not be destroyed by subsequent legislation. Apparently it was felt that the due process clause of the Fifth Amendment forbade such regulation of the incidents of judgments. The question is raised as to whether the Act of August 24, 1937, 50 Stat. 751, 28 U.S.C.A. §§ 17, 349a, 380a, 401, confers power upon this Court to review, on direct appeal, a ruling against the constitutionality of an act of Congress when the ruling of unconstitutionality is made in the application of the statute to a particular circumstance, as in this appeal, rather than upon the challenged statute as a whole. A reading of the first three sections of the act convinces us that Congress granted litigants in courts of the United States a direct appeal to this Court from decisions against the constitutionality of any act of Congress as applied in the pending litigation. 3 The first section only authorizesthe interv ention of the United States in private litigation, 'whenever the constitutionality of any Act of Congress affecting the public interest is drawn in question.'4 It has nothing to do with appeals. The second section allows an appeal to this Court from a final or interlocutory order only when the United States is a party, through the preceding § 1 or roiginally, and the decision is against the constitutionality of the federal law. It provides for expedition in our determination of the appeal. Section three relates to the allowance or refusal of injunctions staying acts of Congress in whole or in part on the ground of repugnancy to the Constitution, and requires a three-judge court, expedition in determination and notice to the United States. The specific provision for prompt review of judgments granting or denying 'in whole or in part' such an injunction is limited to applications for stays of acts of Congress because of their unconstitutionality. Thus the constitutionality of federal acts comes to us by direct appeal, under the Act of August 24, 1937, only when the United States is a party to the litigation below or an injunction is sought. This enables the United States to exercise large discretion, by its determination as to whether or not to intervene, as to what cases are reviewable directly in this Court.5 The Congress intended prompt review of the constitutionality of federal acts.6 Since § 1 allows intervention when the constitutionality of an act is 'drawn in question' and § 2 allows appeal after intervention, it follows that there is an appeal from an order that invalidates, as unconstitutional, a statute as applied. To limit the generality of the language of § 2 of the Act of August 24, 1937, to cases that involved only the constitutionality as a whole of the challenged statutes might seriously impair prompt determinations of matters of great public interest. Litigants may challenge the constitutionality of a statute only in so far as it affects them.7 We hold that jurisdiction of the appeal from the challenged order is conferred upon this Court by 28 U.S.C. § 349a, 28 U.S.C.A. § 349a. 4 The Court was also of the view that § 265 of the Judicial Code, 28 U.S.C.A. § 379, barred any injunction against the state officials. 5 The appellant sought njunctions against future eviction of these tenants through writs of restitution or other process by which eviction might be consummated. Sections 2(d), 4(a) and 205(a) of the Emergency Price Control Act of 1942, as amended, and Rent Regulation § 6(a), set out below.8 Such an injunction is in accord with the administrative Interpretations of the Rent Regulation.9 The properties involved in this litigation were defense-area housing accommodations. There is no suggestion that the heretofore referred to sections of the price control acts and § 6 of the Rent Regulations for Housing do not authorize these legal proceedings. The constitutionality of the price control acts, generally considered, is unquestioned. Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892. The sole inquiry for us, at this point, is whether it was erroneous for the district court to refuse to allow the temporary injunction, because to do so would invade the constitutional right of the landlord appellees to retain the fruits of their 'vested rights' in the valid judgments. 6 As the appellant is undertaking to enjoin future eviction of the tenants or lessees, our consideration is not affected by the proviso of § 18 of the Extension Act, set out in the margin.10 The retroactive provision of § 18, quoted above at note 2, is inapposite for the same reason. It is immaterial whether the state judgments were obtained before or after the effective date of the Extension Act. The effort of the appellant is to enjoin future proceedings for eviction after the acquisition by the landlord appellees through valid judgments of what the district court characterized as 'vested rights.' Federal regulation of future action based upon rights previously acquired by the person regulated is not prohibited by the Constitution. So long as the Constitution authorizes the subsequently enacted legislation, the fact that its provisions limit or interfere with previously acquired rights does not condemn it. Immunity from federal regulation is not gained through forehanded contracts. Were it otherwise the paramount powers of Congress could be nullified by 'prophetic discernment.'11 The rights acquired by judgments have no different standing.12 The protection of housing accommodations in defense-areas through the price control acts may be accomplished by the appellant notwithstanding these prior judgments. The preliminary injunctions should have been granted. 7 Only a word need be said as to the contention that § 265 of the Judicial Code forbids an injunction against the execution of state judgments by state officers.13 A contention was made before this Court in similar cases last term that § 265 forbade a federal injunction to stay such proceedings in any court of a state. The argument was not accepted. We thought that § 205 (a) of the Emergency Price Control Act of 1942 created an exception to § 265.14 No specific mention was made in these opinions as to whether state officers who were parties in the case could be enjoined. However, we do not see any ground, under § 265 of the Judicial Code, to differentiate as to stays against a sheriff or a constable or says against the parties to the litigation. We think the District Court had power to stay the sheriff and constable. 8 Judgment reversed. 9 Mr. Justice FRANKFURTER (dissenting). 10 In considering the scope of our appellate jurisdiction, great weight should be given to the strong policy of the Congress, ever since the Judiciary Act of 1891, to keep the docket of this Court within manageable proportions for the wise disposition of causes by the ultimate judicial tribunal. That consideration applies also to the few Acts, passed since the creation of the circuit courts of appeals, which allow cases to come here directly from the district court where issues of great public importance, such as the constitutionality of legislation, are at stake. 11 In Dahnke-Walker Milling Co. v. Bondurant, 257 U.S. 282, 42 S.Ct. 106, 107, 66 L.Ed. 239, this Court gave an expansive content to review, as a matter of right, of State court judgments where is drawn in question 'the validity of a statute.' Our jurisdiction was held to cover review of a finding of unconstitutionality in the application of a statute to a particular situation, though the statute is otherwise left in full force and effect. While, for the reasons set forth in the dissent of Mr. Justice Brandeis, I have never been reconciled to the soundness of that decision, I accept it. But I do not feel obliged to extend its scope beyond its requirements. 12 There is an important difference between review of State court decisions and decisions of the district courts. The latter are subject to review as a matter of course by the circuit courts of appeals. They are not dependent on review by grace through certiorari, as would be comparable State decisions except for the Dahnke-Walker doctrine. I do not feel myself required by the Act of August 24, 1937, to hold that direct appeal lies to this Court whenever a district court finds unconstitutional an application of a statute to the circumstances of a particular case. It is one thing not to allow final determination of the fate of a federal statute to be delayed until a decision of a district court can go through a circuit court of appeals and then reach this Court. It is quite another thing to bring here directly from a district court every decision indicating unconstitutionality in application, no matter how restricted its incidence. Of course this does not mean that direct review of district court decisions by this Court would be available only for cases that involve 'the constitutionality as a whole' of a challenged statute. The Act of 1937 refers explicitly to invalidation 'in whole or in part.' Although this is made explicit in § 3 of the Act, the scope of direct review here, on the score of unconstitutionality, ought not to be different under different sections of this Act. A direct appeal is called for only when a district court strikes down, in whole or in part, that which Congress has unequivocally written. It is unwarranted when all that is in issue is whether the allowable scope of what Congress has written excludes a particular situation. 13 The immediate case gives point to these general observations. The incidents of a judgment are not the same in all the States. The effect of this Act upon judgments in the different States may thus involve consideration of the procedure of a particular State. These are hardly questions of the kind which led to the authorization, by the Act of August 24, 1937, of direct review where a district court's decision 'is against the constitutionality of any Act of Congress.' 50 Stat. 751, 752, 28 U.S.C.A. § 401. 14 Nor should it be decisive of this Court's exceptional jurisdiction on direct appeal from the distict courts that the Government is the litigant. Like other litigants the Government at times attaches importance to a particular case out of all proportion to the more comprehensive factors that should control this Court's jurisdiction. We cannot be blind to the fact that review here is sometimes pressed in response to commendable administrative earnestness which fails, however, to take fully into account the demands of this Court's business. Moreover, it was not the interest of the Government as such which moved Congress to grant direct appeals from the district courts. By the Judiciary Act of 1925 Congress narrowly confined direct review here of district court decisions regardless of the character of the litigant, and the extension of such review by the Act of 1937 should be strictly confined. 15 I would dismiss this appeal and remand the case to the Circuit Court of Appeals. See Oklahoma Gas & Electric Co. v. Oklahoma Packing Co., 292 U.S. 386, 392, 54 S.Ct. 732, 735, 78 L.Ed. 1318, and Phillips v. United States, 312 U.S. 246, 254, 61 S.Ct. 480, 484, 85 L.Ed. 800. 1 Jurisdiction of suits for such injunctions is conferred upon the district courts of the United States by § 205 of the Emergency Price Control Act of 1942, 56 Stat. 23, 58 Stat. 632, 59 Stat. 306, and the Price Control Extension Act of July 25, 1946, Pub.Law No. 548, 79th Cong., 2d Sess., 50 U.S.C.A.Appendix, §§ 901 et seq., 925. 2 Price Control Extension Act of July 25, 1946, 50 U.S.C.A.Appendix, § 901a note, supra. 3 As this opinion relies upon the validity under the price control acts of the prohibition of future eviction of tenants in § 6 of the Rent Regulation for Housing, 8 F.R. 7322; 10 F.R. 11666; 11 F.R. 5824, 8106, it is unnecessary to consider further whether the mere inclusion of these past judgments within the reach of the price control legislation, by advancing the effective date of the act, is constitutional. Compare Blodgett v. Holden, 275 U.S. 142, 146, 276 U.S. 594, 48 S.Ct. 105, 106, 72 L.Ed. 206, and Untermeyer v. Anderson, 276 U.S. 440, 445, 48 S.Ct. 353, 354, 72 L.Ed. 645, with United States v. Hudson, 299 U.S. 498, 57 S.Ct. 309, 81 L.Ed. 370. 4 The last three words were construed in Dahnke-Walker Milling Co. v. Bondurant, 257 U.S. 282, 288, 42 S.Ct. 106, 107, 66 L.Ed. 239, to allow appeals under Judicial Code § 237, 28 U.S.C.A. § 344, to this Court from final judgments of state courts of last resort upholding the validity of state statutes against a challenge to their application to particular circumstances because of their repugnance to federal law. This was a settled construction for the words. See Kepner v. United States, 195 U.S. 100, 124, 24 S.Ct. 797, 802, 49 L.Ed. 114, 1 Ann.Cas. 655. 5 International Ladies Garment Workers' Union v. Donnelly Garment Co., 304 U.S. 243, 249, 250, 58 S.Ct. 875, 879, 82 L.Ed. 1316. 6 H.Rep.No.212, 75th Cong., 1st Sess., p. 2: 'The importance to the Nation of prompt determination by the court of last resort of disputed questions of the constitutionality of acts of the Congress requires no comment.' S.Rep.No.963, 75th Cong., 1st Sess., pp. 3, 4: 'The United States is not excluded by the principle thus stated, from drawing the judicial power to its proper assistance either as an original party, or as an intervenor, when, in private litigation, decision of the constitutional question may affect the public at large, may be in respect of matters which by the Constitution are entrusted to the care of the Nation, and concerning which the Nation owes a duty to all the citizens of securing to them their common rights.' 7 Blackmer v. United States, 284 U.S. 421, 442, 52 S.Ct. 252, 256, 76 L.Ed. 375; Virginian R. Co. v. System Federation, 300 U.S. 515, 558, 57 S.Ct. 592, 604, 81 L.Ed. 789; Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 513, 57 S.Ct. 868, 874, 81 L.Ed. 1245, 109 A.L.R. 1327. 8 Emergency Price Control Act of 1942, 56 Stat. 23, 58 Stat. 632, 59 Stat. 306: Section 2(d). 'Whenever in the judgment of the Administrator such action is necessary or proper in order to effectuate the purposes of this Act, he may, * * * regulate or prohibit * * * renting or leasing practices (including practices relating to recovery of the possession) in connection with any defense-area housing accommodations, which in his judgment are equivalent to or are likely to result in * * * rent increases, * * * inconsistent with the purposes of this Act.' Section 4(a). 'It shall be unlawful, regardless of any contract, agreement, lease, or other obligation heretofore or hereafter entered into, for any person to * * * do or omit to do any act, in violation of any regulation or order under section 2, * * * or to offer, solicit, attempt, or agree to do any of the foregoing.' Section 205(a). 'Whenever in the judgment of the Administrator any person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of section 4 of this Act, he may make application to the appropriate court for an order enjoining such acts or practices, or for an order enforcing compliance with such provision, and upon a showing by the Administrator that such person has engaged or is about to engage in any such acts or practices a permanent or temporary injunction, restraining order, or other order shall be granted without bond.' Rent Regulation for Housing, 8 F.R. 7322, 10 F.R. 11666; 11 F.R. 5824, 8106: 'Section 6. 'Removal of tenant—(a) Restrictions on removal of tenant. So long as the tenant continues to pay the rent to which the landlord is entitled, no tenant shall be removed from any housing accommodations, by action to evict or to recover possession, by exclusion from possession, or otherwise, nor shall any person attempt such removal or exclusion from possession, notwithstanding that such tenant has no lease or that his lease or other rental agreement has expired or otherwise terminated, and regardless of any contract, lease, agreement or obligation heretofore or hereafter entered into which provides for entry of judgment upon the tenant's confession for breach of the covenants thereof or which otherwise provides contrary hereto, * * *' 9 Pike & Fischer, OPA Service, Rent, Interpretations of the Rent Regulation for Housing, § 6—VI, issued July 25, 1946: '(a) Interpretation 6—VI. Evictions Pending On July 25, 1946. 'The Emergency Price Control Act of 1942, as amended, on July 25, 1946, was extended by striking out 'June 30, 1946' and substituting 'June 30, 1947,' as the expiration date of the Act. Section 18 provides that the provisions of the Act shall take ffect as of June 30, 1946. In this section a savings clause was inserted for the protection of persons who had acted contrary to the regulation during the interim period between Jun 30, 1946, and July 25, 1946. This savings clause provides that no act or transaction occurring between said dates shall be deemed a violation. As a result any eviction which occurred during the interim period was not a violation of the Act or regulation. By reason of this the tenant who has been in fact evicted during this interim period receives no protection. If, however, he is in possession on July 25, 1946, he is entitled to the protection of the eviction provisions of the regulation and it is a violation of the regulation for the landlord on or after that date to attempt to evict by court process or otherwise except in accordance with the provisions of Section 6 of the regulation.' 10 'Provided further, That no act or transaction, or omission or failure to act, occurring subsequent to June 30, 1946, and prior to the date of enactment of this Act shall be deemed to be a violation of the Emergency Price Control Act of 1942, as amended, or the Stabilization Act of 1942, as amended, or of any regulation, order, price schedule, or requirement under either of such Acts: * * *'. 11 Sproles v. Binford, 286 U.S. 374, 391, 52 S.Ct. 581, 586, 76 L.Ed. 1167; Louisville & Nashville R. Co. v. Mottley, 219 U.S. 467, 31 S.Ct. 265, 55 L.Ed. 297, 34 L.R.A.,N.S., 671; Philadelphia, B. & W.R. Co. v. Schubert, 224 U.S. 603, 32 S.Ct. 589, 56 L.Ed. 911; Calhoun v. Massie, 253 U.S. 170, 40 S.Ct. 474, 64 L.Ed. 843; Norman v. Baltimore & Ohio R. Co., 294 U.S. 240, 303 311, 55 S.Ct. 407, 414—417, 79 L.Ed. 885, 95 A.L.R. 1352; Guaranty Trust Co. of New York v. Henwood, 307 U.S. 247, 259, 59 S.Ct. 847, 853, 83 L.Ed. 1266. 12 Wright v. Union Central Ins. Co., 304 U.S. 502, 509, 58 S.Ct. 1025, 1030, 82 L.Ed. 1490; Paramino Lumber Co. v. Marshall, 309 U.S. 370, 60 S.Ct. 600, 84 L.Ed. 814. 13 Judcial Code § 265, 28 U.S.C.A. § 379: 'The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy.' 14 Porter v. Lee, 328 U.S. 246, 66 S.Ct. 1096; Porter v. Dicken, 328 U.S. 252, 66 S.Ct. 1094; Bowles v. Willingham, 321 U.S. 503, 510, 64 S.Ct. 641, 645, 88 L.Ed. 892.

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331 U.S. 111 67 S.Ct. 1129 91 L.Ed. 1375 FLEMING, Temporary Controls Administrator,v.MOHAWK WRECKING & LUMBER CO. et al. RALEY et al. v. FLEMING, Temporary Controls Administrator. Nos. 583 and 512. Argued and Submitted April 1, 1947. Decided April 28, 1947. Mr. David London, of Washington, D.C., for Philip B. Fleming. [Argument of Counsel from page 112 intentionally omitted] Mr. John W. Babcock, of Detroit, Mich., for Mohawk Wrecking & Lumber Co. and Harry Smith. Paul Flaherty and C. L. Dawson, both of Washington, D.C., for James G. Raley and Thomas E. Raley. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 These cases present the question whether the Emergency Price Control Act, 56 Stat. 23, as amended, 50 U.S.C.App.Supp. V, § 901 et seq., 50 U.S.C.A.Appendix, § 901 et seq., authorizes the Administrator to delegate to district directors authority to sign and issue subpoenas. In the first of these cases the Circuit Court of Appeals for the Sixth Circuit held that such authority did not exist, 156 F.2d 891; in the second, the Court of Appeals for the District of Columbia held that it did. 156 F.2d 561. The cases are here on petitions for writs of certiorari which we granted to resolve the conflict. 2 First. After we granted the petitions we ordered, on motion on the Acting Solicitor General, that Philip B. Fleming, Temporary Controls Administrator, be substituted as a party in each case in place of Paul A. Porter, Administrator, Office of Price Administration, resigned. Thereafter respondents in the first of these cases filed a motion to vacate the order of substitution, a motion which we deferred to the hearing on the merits.1 The question has now been briefed and argued and we conclude that the motion to vacate the order of substitution should be denied. 3 The Act was amended in 1946 to provide for its termination not later than June 30, 1947, saving, however, rights and liabilities incurred prior to the termination date.2 By November 12, 1946, almost all commodities (including services) were by administrative order3 made exempt from price control.4 Price control had thus entered a temporary transition period. On December 12, 1946, the President issued an Executive Order 'for the purpose of further effectuating the transition from war to peace and in the interest of the internal management of the Government.' That order consolidated the Office of Price Administration and three other agencies into the Office of Temporary Controls5—an agency in the Office for Emergency Management of the Executive Office of the President. The latter had previously been established pursuant to the Reorganization Act of 1939, 53 Stat. 561.6 The Executive Order provided a Temporary Controls Administrator, appointed by the President, to head the Office of Temporary Controls and vested in him, inter alia, the functions of the Price Administrator, including the authority to maintain in his own name civil proceedings, whether or not then pending, relating to matters theretofore under the jurisdiction of the Price Administrator Petitione r is the Temporary Controls Administrator appointed by the President. 4 It is argued that the President had no authority to transfer the functions of the Price Administrator to another agency and to vest in an officer appointed by the President the power which the Emergency Price Control Act, § 201, had conferred upon an Administrator appointed by the President by and with the advice and consent of the Senate. And it is said that even though such authority existed, it came to an end with the cessation of hostilities. 5 By § 1 of the First War Powers Act of 1941, 55 Stat. 838, 50 U.S.C.App.Supp. V, § 601, 50 U.S.C.A.Appendix, § 601, the President is 'authorized to make such redistribution of functions among executive agencies as he may deem necessary, including any functions, duties, and powers hitherto by law conferred upon any executive department, commission, bureau, agency, governmental corporation, office, or officer, in such manner as in his judgment shall seem best fitted to carry out the purposes of this title, and to this end is authorized to make such regulations and to issue such orders as he may deem necessary * * *.' That power may be exercised 'only in matters relating to the conduct of the present war,' § 1, and expires six months after 'the termination of the war.' § 401, 50 U.S.C.A.Appendix, § 621. 6 On December 31, 1946, after the creation of the Office of Temporary Controls, the President, while recognizing that 'a state of war still exists,' by proclamation declared that hostilities had terminated.7 The cessation of hostilities does not necessarily end the war power. It was stated in Hamilton v. Kentucky Distilleries & W. Co., 251 U.S. 146, 161, 40 S.Ct. 106, 110, 64 L.Ed. 194, that the war power includes the power 'to remedy the evils which have arisen from its rise and progress' and continues during that emergency. Stewart v. Kahn, 11 Wall. 493, 507, 20 L.Ed. 176. Whatever may be the reach of that power, it is plainly adequate to deal with problems of law enforcement which arise during the period of hostilities but do not cease with them. No more is involved here. 7 Section 1 of the First War Powers Act does not explicitly provide for creation of a new agency which consolidates the functions and powers previously exercised by one or more other agencies. But the Act has been repeatedly construed by the President to confer such authority.8 Such construction by the Chief Executive, being both contemporaneous and consistent, is entitled to great weight. See United States v. Jackson, 280 U.S. 183, 193, 50 S.Ct. 143, 146, 74 L.Ed. 361; Billings v. Truesdell, 321 U.S. 542, 552, 553, 6 S.Ct. 737 , 743, 744, 88 L.Ed. 917. And the appropriation by Congress of funds for the use of such agencies stands as confirmation and ratification of the action of the Chief Executive. Brooks v. Dewar, 313 U.S. 354, 361, 61 S.Ct. 979, 982, 85 L.Ed. 1115. 8 Nor do we think there is merit in the contention that the First War Powers Act gave the President authority to transfer functions only from agencies in existence when that Act became law. It is true that § 1 authorizes the President 'to make such redistribution of functions among executive agencies as he may deem necessary, including any functions, duties, and powers hitherto by law conferred upon' any agency. But the latter clause is only an illustration of the authority granted, not a limitation on it. It makes clear that the authority extends to existing agencies as well as to others. That construction is supported by § 5 of the Act which states that upon its termination all executive and administrative agencies 'shall exercise the same functions, duties, and powers as heretofore or as hereafter by law may be provided, any authorization of the President under this title to the contrary notwithstanding.' As stated by the Emergency Court of Appeals, unless § 1 authorizes the President to redistribute functions of agencies created after the passage of the Act, the reference in § 5 to functions 'hereafter' provided by law is 'wholly meaningless.' California Lima Bean Growers Ass'n v. Bowles, Em.App., 150 F.2d 964, 967. Nor is that result affected by the subsequent enactment of the Emergency Price Control Act which in § 201(b) authorized the President to transfer any of the powers and functions of the Office of Price Administration 'with respect to a particular commodity or commodities' to any government agency having other functions relating to such commodities. Whatever effect that provision may have, it does not purport to deal with general enforcement functions and so restricts in no way the authority of the President under the First War Powers Act to transfer them. Yet enforcement functions are all that are involved in the present cases. 9 We need not decide whether under the First War Powers Act the President had authority to transfer functions of an officer who need be confirmed by the Senate to one appointed by the President without Senate confirmation. For § 2 of that Act provides: 10 '(That) in carrying out the purposes of this title the President is authorized to utilize, coordinate, or consolidate any executive or administrative commissions, bureaus, agencies, governmental corporations, offices, or officers now existing by law, to transfer any duties or powers from one existing department, commission, bureau, agency, governmental corporation, office, or officer to another, to transfer the personnel thereof or any part of it either by detail or assignment, together with the whole or any part of the records and public property belonging thereto.' 11 The authority to 'utilize * * * offices, or officers now existing by law' is sufficient to sustain the transfer of functions under the Executive Order from Porter, resigned, to Fleming. For prior to the Act Fleming had been appointed by the President and confirmed by the Senate as Federal Works Administrator.9 He thus was the incumbent of an office 'existing by law' at the time of the passage of the Act and by virtue of § 2 could be the lawful ecipient t hrough transfer by the President of the functions of other agencies as well. To hold that an officer, previously confirmed by the Senate, must be once more confirmed in order to exercise the powers transferred to him by the President would be quite inconsistent with the broad grant of power given the President by the First War Powers Act. Any doubts on this score would moreover, be removed by the recognition by Congress in a recent apporopriation of the status of the Temporary Controls Administrator.10 That recognition was an acceptance or ratification by Congress of the President's action in Executive Order No. 9809. Swayne & Hoyt, Ltd. v. United States, 300 U.S. 297, 301, 302, 57 S.Ct. 478, 479, 480, 81 L.Ed. 659; Brooks v. Dewar, supra. 12 For these reasons Fleming is a successor in office of Porter and may be substituted as a party under Rule 25, Rules of Civil Procedure, 28 U.S.C.A. following section 723c. The rule requires a showing of 'substantial need' for continuing and maintaining the action. Though most of the controls have been lifted, the Act is still in effect. Liabilities incurred prior to the lifting of controls are not thereby washed out. United States v. Hark, 320 U.S. 531, 536, 64 S.Ct. 359, 362, 88 L.Ed. 290; Utah Junk Co. v. Porter, 328 U.S. 39, 44, 66 S.Ct. 889, 892; Collins v. Porter, 328 U.S. 46, 49, 66 S.Ct. 893, 894. And Congress has explicitly provided that accrued rights and liabilities under the Emergency Price Control Act are preserved whether or not suit is started prior to the termination date of the Act.11 If investigation were foreclosed at this stage, such rights as may exist would be defeated, contrary to the policy of the Act. 13 Second. We come then to the merits. The Administrator, by order, delegated the function of signing and issuing subpoenas to regional administrators and district directors.12 Section 201(a) of the Emergency Price Control Act provides in part: 14 'The Administrator, may subject to the civil-service laws, appoint such employees as he deems necessary in order to carry out his functions and duties under this Act, and shall fix their compensation in accordance with the Classification Act of 1923, as amended.' Section 201(b) of the Act provides: 15 'The principal office of the Administrator shall be in the District of Columbia, but he or any duly authorized representative may exercise any or all of his powers in any place.' 16 Practically identical provisions were included in § 4(b) and (c) of the Fair Labor Standards Act, 52 Stat. 1060, 1061, 1062, 29 U.S.C. § 204, 29 U.S.C.A. § 204. The Court held in Cudahy Packing Co. of Louisiana v. Holland, 315 U.S. 357, 788, 62 S.Ct. 651, 86 L.Ed. 895, that the latter provisions did not authorize the Administrator under that Act, to delegate his power to sign and issue subpoenas. Accordingly the main controversy here is whether the Cudahy decision controls this case. We do not think it does. 17 The legislative history of the Act involved in the Cudahy case showed that a provision granting authority to delegate the subpoena power had been eliminated when the bill was in Conference. On the other hand, the Senate Committee in reporting the bill that became the Emergency Price Control Act described § 201(a) as authorizing the Administrator to 'perform his duties through such employees or agencies by delegating to them any of the powers given to him by the bill.' And it said that § 201(b) authorized him or 'any representative or other agency to whom he may delegate any or all of his powers, to exercise such powers in any place.' S.Rep.No.931, 77th Cong., 2d Sess., pp. 20, 21. In the Cudahy case the Act made expressly delegable the power to gather data and make investigations, thus lending support to the view that when Congress desired to give authority to delegate, it said so explicitly. In the present Act, there is no provision which specifically authorizes delegation as to a particular function. In the Cudahy case, the Act made applicable to the powers and duties of the Administrator the subpoena provisions of the Federal Trade Commission Act, §§ 9 and 10, 38 Stat. 722, 723, 15 U.S.C. §§ 49 and 50, 15 U.S.C.A. §§ 49, 50, which only authorized either the Commission or its individual members to sign subpoenas. The subpoena power under the present Act is found in § 202(b)13 and is not dependent on the provisions of another Act having a history of its own. The Act involved in the Cudahy case granted no broad rule-making power. Section 201(d) of the present Act, however, provides: 18 'The Administrator may, from time to time, issue such regulations and orders as he may deem necessary or proper in order to carry out the purposes and provisions of this Act.' 19 Such a rule-making power may itself be an adequate source of authority to delegate a particular function, unless by express provision of the Act or by implication it has been withheld. See Plapao Laboratories, Inc., v. Farley, 67 App.D.C. 304, 92 F.2d 228. There is no provision in the present Act negativing the existence of such authority, so far as the subpoena power is concerned. Nor can the absence of such authority be fairly inferred from the history and content of the Act. Thus the presence of the rule-making power, together with the other factors differentiating this case from the Cudahy case, indicates that the authority granted by § 201(a) and (b) should not be read restrictively. 20 As stated by the court in Porter v. Murray, 1 Cir., 156 F.2d 781, 786, 787, the overwhelming nature of the price control program entrusted to the Administrator suggests that the Act should be construed so as to give it the administrative flexibility necessary for prompt and expeditious action on a multitude of fronts. The program of price control inaugurated probably the most comprehensive legal controls over the economy ever attempted. We would hesitate to conclude that all the various functions granted the Administrator need be performed personally by him or under his personal direction. Certainly, so far as the investigative functions were concerned, he could hardly be expected, in view of the magnitude of the task,14 to exercise his personal discretion in determining whether a particular investigation should be launched. Delay might do injury beyond repair. The pyramiding in Washington of all decisions on law enforcement would be apt to end in paralysis. To tempt the Administrator to solve the problem by supplying all his offices with subpoenas signed in blank would not further the development of orderly and responsible administration. These considerations reinforce the constrution of th e Act which allows the Administrator authority to delegate his subpoena power. 21 The other objections to the subpoenas are without merit. 22 We reverse the judgment in Fleming v. Mohawk Wrecking and Lumber Co., and affirm the judgment in Raley v. Fleming. 23 So ordered. 24 Judgment in first case reversed; judgment in second case affirmed. 25 Mr. Justice JACKSON, concurring. 26 I concur in the opinion and result. But the issue here is so related to other problems that I desire to state my grounds. 27 I would be reluctant to adopt a construction of an Act, such as the Emergency Price Control Act, which would certainly impede its administration unless it were necessary to carry out the intent of Congress or to protect fundamental individual rights. 28 If the Administrator may not delegate his power to sign subpoenas but must personally sign all subpoenas issued in the process of enforcement throughout the United States, one of two practices would be certain to result. He might sign large batches of blank subpoenas and turn them over to subordinates to be filled in over his signature. Or he might sign batches of subpoenas already made out by subordinates, probably without reading them and certainly without examining the causes for their issuance or the scope of the information required. The personal signature of the Administrator on the subpoena under those circumstances is no protection to individual rights. 29 Of all the subpoenas issued by administrative authority, a very small percentage are contested. The important thing for protection of the individual is that when he does have reasons for resisting obedience he can obtain a hearing. I am in doubt as to whether under this Act and the regulations for its administration a person who has reasons for resisting the subpoena has any administrative review or remedy. But in any event he cannot be punished for contempt until a court order for its enforcement has issued and has been disobeyed. 30 Enforcement of such subpoenas by the courts is not and should not be automatic. So long as they are subject to full inquiry at this point it does not seem to me important to the indivieual or inconsistent with the policy of Congress that the subpoena issue by a subordinate of the Administrator. If the courts were to be shorn of their power of independent inquiry before enforcement, and I have thought we were tending that way, Cf. dissent in Penfield Co. of California v. S.E.C., 67 S.Ct. 918, I should expect Congress to intend greater responsibility at the point of original issue. I concur only because I think adequate judicial safeguards exist. 1 Compare Porter v. American Distilling Co., D.C., 71 F.Supp. 483; Porter v. Bowers, D.C., 70 F.Supp. 751; and Bowles v. Ell-Carr Co., Inc., D.C., 71 F.Supp. 482, with Porter v. Wilson, D.C., 69 F.Supp. 447, and Porter v. Hirahara, D.C., 69 F.Supp. 441. 2 Pub.L. 548, 79th Cong., 2d Sess. Section 1(b) now provides: 'The provisions of this Act, and all regulations, orders, price schedules, and requirements thereunder, shall terminate on June 30, 1947, or upon the date of a proclamation by the President, or upon the date specified in a concurrent resolution by the two Houses of the Congress, declaring that the further continuance of the authority granted by this Act is not necessary in the interest of the national defense and security, whichever date is the earlier; except that as to offenses committed, or rights or liabilities incurred, prior to such termination date, the provisions of this Act and such regulations, orders, price schedules, and requirements shall be treated as still remaining in force for the purpose of sustaining any proper suit, action, or prosecution with respect to any such right, liability, or offense.' 3 Express provisions for decontrol where added by the 1946 amendments. See, for example, § 1a(b—h). 4 See Supplementary Order 193, November 12, 1946, 11 Fed.Reg.13464, as amended November 19, 1946, 11 Fed.Reg.13637. 5 Exec. Order No. 9809, 50 U.S.C.A.Appendix, § 601 note, 11 Fed.Reg.14281. 6 See Reorganization Plan I, 5 U.S.C. § 133t note, 5 U.S.C.A. § 133t note; 4 Fed.Reg.3864; 6 Fed.Reg.192. 7 Proclamation 2714, 50 U.S.C.A.Appendix, § 601 note, 12 Fed.Reg. 1. 8 Each of the following agencies was a new agency created by Executive Order to exercise powers formerly vested in other agencies or to perform new functions: National Housing Agency, Exec. Order No. 9070, 7 Fed.Reg.1529; War Food Administration, Exec. Order No. 9334, 8 Fed.Reg.5423; Office of War Mobilization, Exec. Order No. 9347, 8 Fed.Reg.7207; Office of Economic Warfare, Exec. Order No. 9361, 8 Fed.Reg.9861; Foreign Economic Administration, Exec. Order No. 9380, 8 Fed.Reg.13081; Surplus War Property Administration, Exec. Order No. 9425, 9 Fed.Reg. 2071. 50 U.S.C.A.Appendix, § 601 note. 9 December 4, 1941. See 87 Cong.Rec. 9413. 10 Pub.L. 20, 80th Cong., 1st Sess., 61 Stat. 14, under the heading 'Executive Office Of The President Office for Emergency Management,' the following: 'Office of Temporary Controls 'Salaries and expenses: For an additional amount, fiscal year 1947, for the Office of Price Administration transferred by Executive Order 9809 of December 12, 1946, to the Office of Temporary Controls, $7,051.752, to be available for the payment of terminal leave only: Provided, That it is the intent of the Congress that the funds heretofore and herein appropriated shall include all expenses incident to the closing and liquidation of the Office of Price Administration and the Office of Temporary Controls by June 30, 1947.' 11 See § 1(b) supra, note 2. And for the general statute preventing the extinguishment of liability under a repealed statute, unless the repealing act expressly provides for it, see Rev.Stat. § 13, as amended, 58 Stat. 118, 1 U.S.C.Supp. V, § 29, 1 U.S.C.A. § 29. 12 Revised General Order 53, May 13, 1944, 9 Fed.Reg. 5191. 13 Section 202(b) provides in part: 'The Administrator may administer oaths and affirmations and may, whenever necessary, by subpoena require any such person to appear and testify or to appear and produce documents, or both, at any designated place.' 14 The following statistics indicate the volume of litigation and investigations involved: 1943 1944 1945 1946 Civil Cases commenced by United States in District Courts under Emergency Price Control Act.* (Fiscal years ending June 30).2,219 .6,524 28,283 31,094 Investigations completed by Office of Price Administration.** (Calendar years) .652,851 .333,151 193,348 106,240 * (Rep. Dir. Adm. Off. U. S. Courts (1943) Table 7; Id., 1944 Table 7; Id.(1945) Table C3; Id. (1946) Table C3.) ** (Quarterly Rep. O. P. A.: Eighth, p. 71; Twelfth, p. 75; Seventeenth, p. 104; Eighteenth, p. 82; Nineteenth, p. 95.) First nine months only.

01

331 U.S. 132 67 S.Ct. 1168 91 L.Ed. 1391 AYRSHIRE COLLIERIES CORPORATION et al.v.UNITED STATES et al. No. 467. Argued and Submitted April 7, 8, 1947. Decided April 28, 1947. On Appeal from the Distrct Court of the United States for the Southern District of Indiana. Mr. Earl B. Wilkenson, of Chicago, Ill., for appellants Ayrshire Collieries Corporation and others. Mr. Carson L. Taylor, of Chicago, Ill., for appellant C.M. St. P. & P.R.R. co. Mr. Daniel W. Knowlton, of Washington, D.C., for appellees U.S. & I.C.C. Mr. Charles W. Stadell, of Chicago, Ill., for appellees Central Illinois District Coal Traffic Bureau and others. Mr. Erle J. Zoll, Jr., of Chicago, Ill., for appellees Alton R.R. Co. (Henry A. Gardner, Trustee) and others. Mr. Justice MURPHY delivered the opinion of the Court. 1 Appellants filed complaints in the United States District Court for the Southern District of Indiana seeking a temporary stay, an interlocutory injunction and a permanent injunction against the enforcement of an order of the Interstate Commerce Commission, dated July 9, 1945. This order had been entered in connection with findings by the Commission that certain railroad tarifs were un lawful and that other rates should be prescribed in lieu thereof. Coal to Beloit, Wis., and Northern Illinois, 263 I.C.C. 179. 2 The complaints requested that the court convene a specially constituted court of three judges, as required by the Urgent Deficiencies Act of October 22, 1913, 38 Stat. 208, 220, 28 U.S.C. § 47, 28 U.S.C.A. § 47, to hear the motions 'for a temporary or interlocutory injunction and for final hearing in this proceeding.' Circuit Judge Evans and District Judge Igoe were then assigned to sit with District Judge Baltzell to hear and determine these applictions, and the cases were consolidated for all purposes. The applications for a temporary stay and an interlocutory injunction were assigned for hearing on January 3, 1946. But on that day, it appearing that the Commission had postponed the effective date of its order to April 8, 1946, the court ordered that 'the hearing upon the petitioners' application for an interlocutoryinjunction and temporary stay heretofore assigned and set for January 3, 1946, be and the same hereby is, continued to the day of final hearing herein and that said final hearing shall be had on March 25, 1946 * * *.' The Commission made a further postponement of the effective date of its order to July 8, 1946, in order that the carriers subject to the order might avoid the necessity of preparing and filing new tariffs prior to the termination of the court proceeding. It also appeared that the illness of Judge Baltzell made it impossible for the court to convene as scheduled on March 25. And so that court reassigned the case for trial on April 22, with Judge Baltzell being replaced by Circuit Judge Major. 3 Argument was held on April 22 before Circuit Judges Evans and Major and District Judge Igoe at the 'final hearing upon the plaintiffs' petitions for a permanent injunction.' On June 5, 1946, findings of fact and conclusions of law were filed and entered under the signatures of Judges Major and Igoe; the Commission's order was sustained in all respects and a judgment was entered dismissing the complaints. The following natation was made in the margin of the findings of fact and conclusions of law: 'Judge Evan A. Evans became ill subsequent to the hearing of these causes and he is and has been unable to participate in a determination thereof. The findings of fact, conclusions of law and judgment have therefore been entered by the remaining judges of such court.' The case was brought here on direct appeal.1 We are of the opinion that the District Court's judgment was void, only two of the three judges having participated in the determination of the case. We accordingly do not reach the issues involving the Commission's authority and the merits of its order, issues that have been argued at length before us. 4 The applicable provisions of the Urgent Deficiencies Act, 38 Stat. 220, 28 U.S.C. § 47, 28 U.S.C.A. § 47, state: '* * * No interlocutory injunction suspending or restraining the enforcement, operation, or execution of, or setting aside, in whole or in part, any order made or entered by the Interstate Commerce Commission shall be issued or granted by any district court of the United States, or by any judge thereof, or by any circuit Judge acting as district judge, unless the application for the same shall be presented to a circuit or district judge, and shall be heard and determined by three judges, of whom at least one shall be a circuit judge, and unless a majority of said three judges shall concur in granting such application. When such application as aforesaid is presented to a judge, he shall immediately call to his assistance to hear and determine the application two other judges. * * * Provided, That in cases where irreparable damage would othrwise ensu e to the petitioner, a majority of said three judges concurring, may, on hearing, * * * allow a temporary stay or suspension, in whole or in part, of the operation of the order of the Interstate Commerce Commission for not more than sixty days * * * and upon the final hearing of any suit brought to suspend or set aside, in whole or in part, any order of said commission the same requirement as to judges and the same procedure as to expedition and appeal shall apply. * * *' 5 The requirement that three judges hear and determine suits to enjoin or set aside Interstate Commerce Commission orders had its origin in the provisions of the Expediting Act of February 11, 1903, 32 Stat. 823. That Act required three circuit Judges, or two circuit Judges and a district judge, to hear cases brought by the United States to enforce the antitrust and commerce laws. This feature was then extended by the Hepburn Act of 1906, 34 Stat. 584, 592, to all suits brought to enforce or enjoin any order of the Interstate Commerce Commission, 'including the hearing on an application for a preliminary injunction.' The Act of June 18, 1910, 36 Stat. 539, created the Commerce Court and vested in it jurisdiction over suits to enjoin Commission orders; that court was composed of five judges, four of them constituting a quorum and at least three being required to concur in all decisions. Finally, the Urgent Deficiencies Act of 1913 transferred this jurisdiction to three-judge district courts, as detailed above. United States v. Griffin, 303 U.S. 226, 232, 233, 58 S.Ct. 601, 604, 82 L.Ed. 764. 6 The policy of requiring the deliberation of three judges in suits to enjoin the enforcement of Interstate Commerce Commission orders is thus a well-established one. It is grounded in the legislative desire to guard against ill-considered action by a single judge in the important and complex situations frequently presented by Commission orders. Such matters are deemed to warrant the full deliberation which a court of three judges is likely to secure. 7 This requirement, of course, is necessarily technical. It is not a broad social measure to be construed with liberality. It is a technical rule of procedure to be applied as such. See Phillips v. United States, 312 U.S. 246, 250— 251, 61 S.Ct. 480, 483, 85 L.Ed. 800. While due consideration must be given to the statutory policy of expediting the disposition of applications en enjoin the enforcement of Commission orders, the plain language of the Urgent Deficiencies Act compels strict adherence to the command that such applications 'shall be heard and determined by three judges, of whom at least one shall be a circuit judge.' And we must insist upon obedience to that legistive will even though the disposition of some applications may thereby be delayed. 8 When the framers of the Urgent Deficiencies Act declared that these applications 'shall be heard and determined by three judges,' we assume that they meant exactly what they said. The requirement that three judges hear and determine an application means that they must adjudicate the issues of law and fact which are presented by the case, a function which implies that they must weigh the arguments and testimony offered by both sides and vote either to grant or deny the relief sought by the moving party.2 In addition, 'Compliance with the statute requires the assent of the three judges given after the application is made, evidence by their signatures or an announcement in open court with three judges sitting, followed by a formal order tested as they direct.' Cumberland Tel. & Tel. Co. v. Louisiana Public Service Commission, 260 U.S. 212, 218, 43 S.Ct. 75, 77, 67 L.Ed. 217. All three judges, in other words, must fully perform the judicial function.3 See Dohany v. Rogers, 281 U.S. 362, 369, 370, 50 S.Ct. 299, 302, 303, 74 L.Ed. 904, 68 A.L.R. 434. 9 It is significant that this Act makes no provision for a quorum of less than three judges. Two judges of a three-judge circuit court of appeals, on the other hand, ordinarily constitute a statutory quorum for the hearing and determination of cases.4 28 U.S.C. § 212, 28 U.S.C.A. § 212. The absence of such a quorum provision as to three-judge district courts is a strong corroborating indication that participation by all three judges is necessary to render a valid decision. The Act provides, it is true, that a decision may be reached by a three-judge court if a 'majority of said three judges' concur. But that means only that the decision of the three judges need not be unanimous; it does not imply that two judges alone may hear and determine the case. 10 Moreover, we cannot say that the failure of the third judge to participate in the determination of a case, where the other two are in agreement as to the result, is without significance. The decision reached by two judges is not necessarily the one which might have been reached had they had the benefit of the views and conclusions of the third judge. And should the latter have publicly indicated an opinion differing from that of his colleagues, his position might be helpful to the litigants and to this Court if the case were appealed. 11 It is readily apparent that this statutory requirement has not been met in this case. While all three judges of the specially constituted court heard the oral argument, only two of them participated in the determination of the case. The findings of fact, the conclusions of law and the judgment were all entered without the approval, concurrence or dissent of the third judge. He thus missed the very essence of the judicial function in this case—the actual adjudication of the issues of law and fact. All that we have here is an adjudication by two judges. But under the statute it is not enough that there be an adjudication by two judges. They lack any statutory authority to hear and determine an application to enjoin the enforcement of a Commission order. Any action of theirs in granting or denying such an application is as void as similar action by a single judge. See Cumberland Tel. & Tel. Co. v. Louisiana Public Service Commission, supra, 260 U.S. 218, 219, 43 S.Ct. 77, 67 L.Ed. 217; Stratton v. St. Louis S.W.R. Co., 282 U.S. 10, 16, 51 S.Ct. 8, 10, 75 L.Ed. 135. 12 It is suggested, however, that the three-judge requirement applies only to applications for interlocutory injunctions against the enforcement of Interstate Commerce Commission orders; and since the decision in this case was one denying a permanent injunction, no complaint can be made that the decision was rendered by less than three judges. Reference is made in this respect to § 266 of the Judicial Code, 28 U.S.C. § 380, 28 U.S.C.A. § 380, which deals with injunctions against the enforcement of state statutes or state administrative orders on the ground of unconstitutionality of the statute involved. Prior to 1925, that section indicated that a three-judge court was necessary only to pass upon applications for interlocutory injunctions. A single judge had jurisdiction to hear the cause on final hearing and to grant or deny a permanent injunction, thereby permitting him to reconsider and decide questions already passed upon by the three judges on the application for an interlocutory injunction. To end that anomalous situation, an amendment was added by the Act of February 13, 1925, 43 Stat. 938, to the effect that 'The requirement respecting the presence of three judges shall also apply to the final hearing in such suit in the district court.' The problem then arose as to whether the words 'such suit' in this amendment referred only to a suit in which an interlocutory injunction was in fact sought or to a suit in which it might have been, but was not, requested. A series of decisions by this Court has made it clear that the former interpretation is the correct one. A three-judge court must be convened for final hearings on applications for permanent injunctions against the enforcement of state statutes only where an interlocutory injunction has been sought and pressed to a hearing. Moore v. Fidelity & Deposit Co., 272 U.S. 317, 47 S.Ct. 105, 71 L.Ed. 273; Smith v. Wilson, 273 U.S. 388, 47 S.Ct. 385, 71 L.Ed. 699; Public Service Commission of Wisconsin v. Wisconsin Telephone Co., 289 U.S. 67, 53 S.Ct. 514, 77 L.Ed. 1036; McCart v. Indianapolis Water Co., 302 U.S. 419, 58 S.Ct. 324, 82 L.Ed. 336. Where an interlocutory injunction is not sought and pressed, a single judge may hear and determine the application for a permanent injunction. 13 By analogy, it is claimed that the same rule should obtain under the Urgent Deficiencies Act, that a three-judge court should be necessary for final hearings on applications for permanent injunctions only where interlocutory injunctions have been sought and pressed. While it is admitted that an interlocutory injunction was sought in this case, the argument is made that the application was not pressed to a hearing, the need for such temporary relief having been eliminated by the postoponement of the effective date of the Commission order. The whole emphasis of the Act, like that of § 266 of the Judicial Code, is said to be directed toward the prevention of improvident issuance of interlocutory injunctions or restraining orders. Since there was no uch danger in this case, the conclusion is reached that the underlying reason for the convening of a three-judge district court is absent here. 14 The answer to this argument is to be found in the clear language of the Act itself. It provides simply: 'and upon the final hearing of any suit brought to suspend or set aside, in whole or in part, any order of said commission the same requirement as to judges and the same procedure as to expedition and appeal shall apply.' Unlike § 266 of the Judicial Code, there is no reference here to 'such suit'—to a suit where an interlocutory injunction is sought and pressed. Rather there is an unambiguous reference to the final hearing of 'any suit' brought to enjoin the enforcement of a Commission order. That can only mean any suit seeking permanent relief, regardless of whether interlocutory relief is also requested. And since 'the same requirement as to judges' is to apply to the final hearing of any suit, three judges must hear and determine the matter. 15 In addition, this portion of the Urgent Deficiencies Act was part of the original enactment and was not added to meet a problem like that which arose under § 266 of the Judicial Code. It was drawn against a background of prior statutes which provided for injunctive relief against the enforcement of Commission orders without regard to the presence of a request for temporary relief. The Hepburn Act required a three-judge court for 'all' suits brought to enjoin a Commission order, 'including the hearing on an application for a preliminary injunction,'—a clear indication that a three-judge court was also necessary where only permanent relief was sought. And the statute which created the Commerce Court, from which the district courts inherited their jurisdiction in this instance, referred to 'cases' brought to enjoin or set aside Commission orders, making no distinction as to those in which only permanent relief was sought. We can only conclude that the framers of the Urgent Deficiencies Act meant to require a three-judge court in any suit brought to enjoin the enforcement of a Commission order, including a suit where an interlocutory injunction is not sought and pressed to a hearing. 16 Time and again this Court has referred to the three-judge court requirement under this Act without making the distinction which has been made under § 266 of the Judicial Code. Lambert Run Coal Co. v. Baltimore & Ohio R. Co., 258 U.S. 377, 381, 382, 42 S.Ct. 349, 350, 351, 66 L.Ed. 671; Baltimore & Ohio R. Co. v. United States, 279 U.S. 781, 784, 785, 49 S.Ct. 492, 493, 73 L.Ed. 954; United States v. Griffin, supra, 303 U.S. 232, 233, 58 S.Ct. 604, 82 L.Ed. 764. Indeed, without passing upon the precise problem, this Court has affirmed judgments of three-judge district courts which had granted permanent injunctions in cases where no interlocutory injunctions had been sought or pressed. See, e.g., United States v. State of Idaho, 298 U.S. 105, 56 S.Ct. 690, 80 L.Ed. 1070. And see Hudson & Manhattan R. Co. v. United States, D.C., 28 F.Supp. 137, 140. 17 The language and background of the Act, which have been augmented by the consistent understanding of this Court,5 thus combine to require the use of a three-judge district court in all cases in which a permanent or interlocutory injunction is sought against the enforcement of a Commission order. It matters not in a particular case whether an interlocutory injunction is requested or whether, if such relief is asked, the application is pressed to a hearing. This Act seeks to guard against more than an improvident issuance of interlocutory injunctions by single judges; it also seeks to prevent single judges from issuing permanent injunctions.6 To that end, Congress has required the use of a three-judge court and we are bound to carry out the letter and the spirit of that requirement. That two judges might, in a particular instance, give the same protection against single-judge action as three judges does no justify i gnoring or relaxing the plain requirement that three judges hear and determine all applications to enjoin the enforcement of Commission orders. If such an amendment to the Act is to be made, it must be made by Congress rather than by this Court. 18 Since the judgment entered by two judges in this case was void and without statutory authority, we have no alternative but to vacate the judgment and dismiss the appeal. Appellants will be free, of course, to suggest that the District Court be reconvened in accordance with the Act so that three judges may hear and determine the application to enjoin the Commission order in issue. So ordered. 19 Judgment vacated and appeal dismissed. 20 Mr. Justice RUTLEDGE dissents. 1 Urgent Deficiencies Act of October 22, 1913, 38 Stat. 208, 219, 220, 28 U.S.C. § 45 and 47a, 28 U.S.C.A. §§ 45, 47a; Judicial Code § 238, as amended by the Act of February 13, 1925, 43 Stat. 936, 938, 28 U.S.C. § 345, 28 U.S.C.A. § 345. 2 In State of Ohio v. United States, D.C., 6 F.Supp. 386, affirmed 392 U.S. 498, 54 S.Ct. 792, 78 L.Ed. 388, a cas e under the Urgent Deficiencies Act was argued before a court of three judges, all of whom participated in the discussions leading to a determination of the case. One of the judges died before the decision was announced. An opinion written by the judge who died was found among his papers after his death and was published as the opinion of the court, concurred in by the other two judges. The opinion had been written pursuant to an arrangement made at a prior conference of the three judges. The findings of fact and conclusions of law, which were filed some time after the opinion, were signed only by the two surviving judges. The matter, however, was not raised by the parties on appeal and was not considered or decided by this Court. The mere fact that the case was entertained by this Court is no basis for considering it as authoritative on the jurisdictional issue, it being the firm policy of this Court not to recognize the exercise of jurisdiction as precedent where the issue was ignored. United States v. More, 3 Cranch 159, 172, 2 L.Ed. 397; Snow v. United States, 118 U.S. 346, 354, 355, 6 S.Ct. 1059, 1063, 1064, 30 L.Ed. 207; Cross v. Burke, 146 U.S. 82, 87, 13 S.Ct. 22, 23, 36 L.Ed. 896; Louisville Trust Co. v. Knott, 191 U.S. 225, 236, 24 S.Ct. 119, 123, 48 L.Ed. 159; United States ex rel. Arant v. Lane, 245 U.S. 166, 170, 38 S.Ct. 94, 96, 62 L.Ed. 223. Cf. Frellsen & Co. v. Crandell, 217 U.S. 71, 30 S.Ct. 490, 54 L.Ed. 670, where this Court, after Mr. Justice Brewer's death, adopted as its opinion one previously written by him. 3 In James v. Clement, 5 Cir., 217 F. 51, a case had been argued and submitted to a three-judge circuit court of appeals and a decision rendered by a divided vote. A petition for rehearing had been filed and the court had decided that the prior decision was erroneous and that the opposite result should be announced without further briefs or argument. But before an order to that effect could be promulgated, one of the judges died. Since the other two judges were divided in their views, the case was restored for argument before a full bench of three judges. See also Ryan v. Pennsylvania Public Utility Commission, D.C., 44 F.Supp. 912, 914. 4 But see 32 Stat. 823, as amended by 58 Stat. 272, 15 U.S.C. § 29, 15 U.S.C.A. § 29, which provides that the senior circuit judge and the two circuit judges next in order of seniority shall 'hear and determine' appeals from district court judgments in antitrust cases where this Court is unable to consider the appeals because of a lack of a quorum. United States v. Aluminum Co. of America, 2 Cir., 148 F.2d 416. 5 The same understanding, that the Urgent Deficiencies Act requires three judges for all applications to enjoin Commission orders while § 266 of the Judicial Code requires a three-judge court only for applications for interlocutory injunctions, is shown in the remarks of Mr. Justice Van Devanter at the Hearing before the Subcommittee of the Senate Committee on the Judiciary on S. 2060 and S. 2061, 68th Cong., 1st Sess., p. 33 (S. 2060 later became the Act of February 13, 1925): 'Section 238 as amended and reenacted in the bill would permit cases falling within four particular classes, and those only, to come from the district courts directly to the Supreme Court. The first and fourth classes are confined to antitrust and interstate commerce cases covered by the second section of the expedition act of February 11, 1903, and the provision in the act of October 22, 1913, respecting the enforcement, suspension, etc., of orders of the Interstate Commerce Commission. These cases are heard in the district court by three judges, one of whom must be a circuit judge. This and the character of the cases make it suggest that they should go directly to the Supreme Court rather than through the circuit courts of appeals. The third class is confined to cases wherein the enforcement of a State statute or of an order of a State board or commission is suspended by an interlocutory injunction. Applications for such injunctions are heard in the district court by three judges, one being a circuit judge. These injunctions now go directly to the Supreme Court for review, and the bill continues that procedure. * * *' See also Mr. Justice Van Devanter's remarks at Hearing before House Committee on the Judiciary on H.R.8206, 68th Cong., 2d Sess., p. 15. 6 See also 50 Stat. 752, 28 U.S.C. § 380a, 28 U.S.C.A. § 380a, providing that no interlocutory or permanent injunction restraining the enforcement of, or setting aside, any Act of Congress on the ground of unconstitutionality shall be issued by a district court, unless the application shall be presented to a circuit or district judge and shall be heard and determined by three judges, of whom at least one shall be a circuit judge.

89

331 U.S. 125 67 S.Ct. 1136 91 L.Ed. 1386 CHAMPION SPARK PLUG CO.v.SANDERS et al. No. 680. Argued April 2, 3, 1947. Decided April 28, 1947. Mr. Samuel E. Darby, Jr., of New York City, for petitioner. Mr. John Wilson Hood, of New York Ciry, for respondents. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Petitioner is a manufacturer of spark plugs which it sells under the trade mark 'Champion.' Respondents collect the used plugs, repair and recondition them, and resell them. Respondents retain the word Champion' on the repaired or reconditioned plugs. The outside box or carton in which the plugs are packed has stamped on it the word 'Champion,' together with the letter and figure denoting the particular style or type. They also have printed on them 'Perfect Process Spark Plugs Guaranteed Dependable' and 'Perfect Process Renewed Spark Plugs.' Each carton contains smaller boxes in which the plugs are individually packed. These inside boxes also carry legends indicating that the plug has been renewed.1 But respondent company's business name or address is not printed on the cartons. It supplies customers with petitioner's charts containing recommendations for the use of Champion plugs. On each individual plug is stamped in small letters, blue on black, the word 'Renewed,' which at time is almost illegible. 2 Petitioner brought this suit in the District Court, charging infringement of its trade mark and unfair competition. See Judicial Code § 24(1), (7), 28 U.S.C. § 41(1), (7), 28 U.S.C.A. § 41(1, 7). The District Court found that respondents had infringed the trade mark. It enjoined them from offering or selling any of petitioner's plugs which had been repaired or reconditioned unless (a) the trade mark and type and style marks were removed, (b) the plugs were repainted with a durable grey, brown, orange, or green paint, (c) the word 'Repaired' was stamped into the plug in letters of such size and depth as to retain enough white paint to display distinctly each letter of the word, (d) the cartons in which the plugs were apcked carried a legend indicating that they contained used spark plugs originally made by petitioner and repaired and made fit for use up to 10,000 miles by respondent company.2 The District Court denied an accounting. See 56 F.Supp. 782, 61 F.Supp. 247. 3 The Circuit Court of Appeals held that respondents not only had infringed petitioner's trade mark but also were guilty of unfair competition. It likewise denied an accounting but modified the decree in the following respects: (a) it eliminated the provision requiring the trade mark and type and style marks to be removed from the repaired or reconditioned plugs; (b) it substituted for the requirement that the word 'Repaired' be stamped into the plug, etc., a provision that the word 'Repaired' or 'Used' be stamped and baked on the plug by an electrical hot press in a contrasting color so as to be clearly and distinctly visible, the plug having been completely covered by permanent aluminum paint or other paint or lacquer; and (c) it eliminated the provision specifying the precise legend to be printed on the cartons and substituted therefor a more general one.3 The case is here on a petition for certiorari which we granted because of the apparent conflict between the decision below and Champion Spark Plug Co. v. Reich, 121 F.2d 769, decided by the Circuit Court of Appeals for the Eighth Circuit. 4 There is no challenge here to the findings as to the misleading character of the merchandising methods employed by respondents, nor to the conclusion that they have not only infringed petitioner's trade mark but have also engaged in unfair competition.4 The controversy here relates to the adequacy of the relief granted, particularly the refusal of the Circuit Court of Appeals to require respondents to remove the word 'Champion' from the repaired or reconditioned plugs which they resell. 5 We put to one side the case of a manufacturer or distributor who markets new or used spark plugs of one make under the trade mark of another. See Bourjois & Co. v. Katzel, 260 U.S. 689, 43 S.Ct. 244, 67 L.Ed. 464, 26 A.L.R. 567; Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U.S. 183, 194, 57 S.Ct. 139, 144, 81 L.Ed. 109, 106 A.L.R. 1476. Equity then steps in to prohibit defendant's use of the mark which symbolizes plaintiff's good will and 'stakes the reputation of the plaintiff upon the character of the goods.' Bourjois & Co. v. Katzel, supra, 260 U.S. at page 692, 43 S.Ct. at page 245, 67 L.Ed. 464, 26 A.L.R. 567. 6 We are dealing here with second-hand goods. The spark plugs, though used, are nevertheless Champion plugs and not those of another make.5 There is evidence to support what one would suspect, that a used spark plug which has been repaired or reconditioned does not measure up to the specifications of a new one. But the same would be true of a second-hand Ford or Chevrolet car. And we would not suppose that one could be enjoined from selling a car whose valves had been reground and whose piston rings had been replaced unless he removed the name Ford or Chevrolet. Prestonettes, Inc., v. Coty, 264 U.S. 359, 44 S.Ct. 350, 68 L.Ed. 731, was a case where toilet powders had as one of their ingredients a powder covered by a trade mark and where perfumes which were trade marked were rebottled and sold in smaller bottles. The Court sustained a decree denying an injunction where the prescribed labels told the truth. Mr. Justice Holmes stated, 'A trade-mark only gives the right to prohibit the use of it so far as to protect the owner's good will against the sale of another's product as his. * * * When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth. It is not taboo.' 264 U.S. at page 368, 44 S.Ct. at page 351, 68 L.Ed. 731. 7 Cases may be imagined where the reconditioning or repair would be so extensive or so basic that it would be a misnomer to call the article by its original name, even though the words 'used' or 'repaired' were added. Cf. Ingersoll v. Doyle, D.C., 247 F. 620. But no such practice is involved here. The repair or reconditioning of the plugs does not give them a new design. It is no more than a restoration, so far as possible, of their original condition. The type marks attached by the manufacturer are determined by the use to which the plug is to be put. But the thread size and size of the cylinder hole into which the plug is fitted are not affected by the reconditioning. The heat range also has relevance to the type marks. And there is evidence that the reconditioned plugs are inferior so far as heat range and other qualities are concerned. But inferiority is expected in most second-hand articles. Indeed, they generally cost the customer less. That is the case here. Inferiority is immaterial so long as the article is clearly and distinctively sold as repaired or reconditioned rather than as new.6 The result is, of course, that the second-hand dealr gets som e advantage from the trade mark. But under the rule of Prestonettes, Inc., v. Coty, supra, that is wholly permissible so long as the manufacturer is not identified with the inferior qualities of the product resulting from wear and tear or the reconditioning by the dealer. Full disclosure gives the manufacturer all the protection to which he is entitled. 8 The decree as shaped by the Circuit Court of Appeals is fashioned to serve the requirements of full disclosure. We cannot say that of the alternatives available the ones it chose are inadequate for that purpose. We are mindful of the fact that this case, unlike Prestonettes, Inc., v. Coty, supra, involves unfair competition as well as trade mark infringement; and that where unfair competition is established, any doubts as to the adequacy of the relief are generally resolved against the transgressor. Warner & Co. v. Lilly & Co., 256 U.S. 526, 532, 44 S.Ct. 615, 618, 68 L.Ed. 1161. But there was here no showing of fraud or palming off. Their absence, of course, does not undermine the finding of unfair competition. Federal Trade Commission v. Winsted Hosiery Co., 258 U.S. 483, 493, 494, 42 S.Ct. 384, 385, 386, 66 L.Ed. 729; G. H. Mumm Champagne v. Eastern Wine Corp., 2 Cir., 142 F.2d 499, 501. But the character of the conduct giving rise to the unfair competition is relevant to the remedy which should be afforded. See Jacob Siegel Co. v. Federal Trade Commission, 327 U.S. 608, 66 S.Ct. 758. We cannot say that the conduct of respondents in this case, or the nature of the article involved and the characteristics of the merchandising methods used to sell it, called for more stringent controls than the Circuit Court of Appeals provided. 9 Mishawaka Rubber & Woolen Mfg. Co. v. S. S. Kresge Co., 316 U.S. 203, 62 S.Ct. 1022, 86 L.Ed. 1381, states the rule governing an accounting of profits where a trade mark has been infringed and where there is a basis for finding damage to the plaintiff and profit to the infringer. But it does not stand for the proposition that an accounting will be ordered merely because there has been an infringement. Under the Trade Mark Act of 1905,7 as under its predecessors, an accounting has been denied where an injunction will satisfy the equities of the case. Saxlehner v. Siegel-Cooper Co., 179 U.S. 42, 21 S.Ct. 16, 45 L.Ed. 77; Rowley Co. v. Rowley, 3 Cir., 193 F. 390, 393; Middleby-Marshall Oven Co. v. Williams Oven Mfg. Co., 2 Cir., 12 F.2d 919, 921; Golden West Brewing Co. v. Milonas & Sons, 9 Cir., 104 F.2d 880, 882; Hemmeter Cigar Co. v. Congress Cigar Co., 6 Cir., 118 F.2d 64, 71, 72; Durable Toy & Novelty Corp. v. J. Chein & Co., 2 Cir., 133 F.2d 853, 854, 855. The same is true in case of unfair competition. Straus v. Notaseme Co., 240 U.S. 179, 181—183, 36 S.Ct. 288, 289, 60 L.Ed. 590. Here, as we have noted, there has been no showing of fraud or palming off. For several years respondents apparently endeavored to comply with a cease and desist order of the Federal Trade Commission requiring them to place on the plugs and on the cartons a label revealing that the plugs were used or second-hand. Moreover, as stated by the Circuit Court of Appeals, the likelihood of damage to petitioner or profit to respondents due to any misrepresentation seems slight. In view of these various circumstances it seems to us that the injunction will satisfy the equities of the case. 10 Affirmed. 1 'The process used in renewing this plug has been developed through 10 years continuous experience. This Spark Plug has been tested for firing under compression before packing.' 'This Spark Plug is guaranteed to be a selected used Spark Plug, thoroughly renewed and in perfect mechanical condition and is guaranteed to give satisfactory service for 10,000 miles.' 2 The prescribed legend read: 'Used spark plug(s) originally made by Champion Spark Plug Company repaired and made fit for use up to 10,000 miles by Perfect Recondition Spark Plug Co., 1133 Bedford Avenue, Brooklyn, N.Y.' The decree also provided: 'the name and address of the defendants to be larger and more prominent than the legend itself, and the name of plaintiff may be in slightly larger type than the rest of the body of the legend.' 3 'The decree shall permit the defendants to state on cartons and containers, selling and advertising material, business records, correspondence and other papers, when published, the original make and type numbers provided it is made clear that any plug referred to therin is used and reconditioned by the defendants, and that such material contains the name and address of defendants.' 4 See Federal Trade Commission v. Winsted Hosiery Co., 258 U.S. 483, 493, 494, 42 S.Ct. 384, 385, 386, 66 L.Ed. 729; Warner & Co. v. Lilly & Co., 265 U.S. 526, 530, 44 S.Ct. 615, 617, 68 L.Ed. 1161. 5 Cf. Federal Trade Commission v. Klein, 5 F.T.C. 327. 6 See Federal Trade Commission v. Typewriter Emporium, 1 F.T.C. 105; Federal Trade Commission v. Check Writer Manufacturers, 4 F.T.C. 87; In the Matter of Federal Auto Products Co., 20 F.T.C. 334. 7 Section 19 of that Act, 33 Stat. 724, 729, 15 U.S.C. § 99, 15 U.S.C.A. § 99, provides in part, '* * * upon a decree being rendered in any such case for wrongful use of a trade-mark the complainant shall be entitled to recover, in addition to the profits to be accounted for by the defendant, the damages the complainant has sustained thereby, and the court shall assess the same or cause the same to e assessed under its direction.'

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331 U.S. 96 67 S.Ct. 1165 91 L.Ed. 1365 McCULLOUGHv.KAMMERER CORPORATION et al. No. 755. Argued April 8, 1947. Decided April 28, 1947. Mr. A. William Boyken, of San Francisco, Cal., for petitioner. Mr. Leonard S. Lyon, of Los Angeles, Cal., for respondent. Mr. Justice LACK deliv ered the opinion of the Court. 1 In an earlier phase of this patent infringement suit a patent owned by respondent Kammerer was held valid and infringed by the petitioner. An accounting for profits and damages was ordered. D.C., 39 F.Supp. 213. The Circuit Court of Appeals affirmed. 9 Cir., 138 F.2d 482. We granted certiorari to consider whether a license greement between respondents Kammerer and Baash-Ross contained restrictions which were contrary to public policy and unlawful so as to bar recovery against petitioner. On oral argument of the case here it developed that no findings of fact had been made by the District Court on this issue, nor had the question been presented to or passed on by the Circuit Court of Appeals. We therefore dismissed the writ of certiorari. 323 U.S. 327, 65 S.Ct. 297, 89 L.Ed. 273. 2 On remand, the Circuit Court of Appeals did not disturb its original affirmance of the District Court's holding that the patent was valid and infringed. But on motion of the petitioner, the court amended its judgment of affirmance so as to authorize the District Court to 'entertain a motion or motions * * * to modify or set aside its order or orders for * * * damages and accountings thereof, and take such action as it may determine' concerning petitioner's contention that respondents' unlawful use of the patent should bar all recovery for infringement. 9 Cir., 148 F.2d 525, 526. Thereafter the petitioner presented a motion to the District Court in which he alleged respondents had, contrary to the public interest, used the patent to restrain trade, fix prices, and suppress competition. Relying on these allegations, petitioner asked the Court to stay the accounting and to render a final judgment dismissing the complaint on the ground that respondents had illegally misused the patent. Without introducing further evidence both parties submitted the motion to the District Court on facts already in the record. After an argument, the Court made extensive findings of fact against petitioner, concluded that his defense had not been established, and entered an order denying his motion to stay the accounting and to enter a final judgment dismissing the complaint. The Circuit Court of Appeals dismissed petitioner's appeal from the District Court's disposition of his motion on the ground that the District Court's order was 'not a decree, final or othewise.' 9 Cir., 156 F.2d 343, 345. We hold that the appeal was erroneously dismissed. 3 The Act of February 28, 1927, 44 Stat. 1261, 28 U.S.C. § 227a, 28 U.S.C.A. § 227a, provides that 'when in any suit in equity for the infringement of letters patent for inventions, a decree is rendered which is final except for the ordering of an accounting, an appeal may be taken from such decree to the circuit court of appeals * * *.' The object of this 1927 amendment to § 129 of the Judicial Code was to make sure that parties could take appeals in patent equity infringement suits without being compelled to await a final accounting. The reports of the Congressional committees on the measure called attention to the large expenses frequently involved in such accountings and the losses incurred where recoveries were ultimately denied by reversal of decrees on the merits.1 And see Brick v. A. I. Namm & Sons, Inc., D.C., 21 F.2d 179. It was for this reason that Congress authorized departure in this type of case from the usual practice under which appeals are not allowed under which a final judgment which disposes of all phases of a controversy. See Catlin v. United States, 324 U.S.229, 233, 65 S.Ct. 631, 89 L.Ed. 911. 4 Nor do the unusual circumstances under which this order was rendered make it any the less appealable. Whether or not the District Court would have had authority on its own motion to reopen the proceedings to consider the alleged misuse of the patent, see Marconi Wireless Telegraph Co. v. United States, 320 U.S.1, 47, 48, 63 S.Ct. 1393, 1414, 1415, 87 L.Ed. 1731, it was proper for it to do so after the Circuit Court of Appeals amended its judgment as it did. After reopening the case, the District Court gave full consideration to the question presented by the motion and decided it upon the merits. See Bowman v. Loperena, 311 U.S. 262, 61 S.Ct. 201, 85 L.Ed. 177. There was then nothing that remained to be done except to conduct an accounting. Therefore, the resulting order falls squarely within § 129 as amended. The fact that the Court designated its action as an 'order' rather than a 'decree' is not of crucial significance. See Rule 54, Rules of Civil Procedure.2 For though called an 'order,' its binding effect in disposing of the question before it is the same as though it had been entitled a 'decree.' Nor is the order rendered non-appealable because one appeal had already been taken, any more than it would have been had the first decree been reversed in toto and this order entered after the reversal. Since the order denying petitioner's motion for a judgment of dismissal of respondents' claim is, within the meaning of § 129, 'final except for the ordering of an accounting,' it is appealable. 5 Reversed. 1 The House Committee on Patents expressed the belief that the legislation 'is needed to prevent a great burden of expense to litigants in actions to determine the validity of patents, where an accounting is involved. * * * Under present procedure appeals may be taken from the interlocutory decree upholding the patent but not until a full accounting has been made to the court. Under this bill uch appeal can be taken from such interlocutory decree * * * so as to obviate the cost of an accounting in the event the case is reversed on appeal.' H.R.Rep.No.1890, 69th Cong., 2d Sess. 1 (1927). The Senate Committee emphasized the same expense incident to conducting an accounting before the merits had been determined on appeal. It apparently went on the assumption that § 129 already authorized appeals prior to accounting from an injunction against infringement. It wanted to permit an appeal prior to accounting whether there was an effective injunction outstanding or not, even though a patent had expired making inappropriate an injunction against its continued violation. Sen.Rep.No.1319, 69th Cong., 2d Sess. 1 (1927). This case presents the precise situation which the Senate Committee thought the Act was designed to avoid in that it happens here that the patent has expired. But both reports indicate that the purpose of the Act was to permit appeals whenever everything but an accounting had been accomplished. 2 "Judgment' as used in these rules includes a decree and any order from which an appeal lies.' Rule 54, Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

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331 U.S. 247 67 S.Ct. 1160 91 L.Ed. 1468 RICE et al.v.BOARD OF TRADE OF CITY OF CHICAGO. ILLINOIS COMMERCE COMMISSION et al. v. SAME. Nos. 471, 473. Argued Feb. 14, 1947. Decided May 5, 1947. Lee A. Freeman, of Chicago, Ill., for petitioner Rice. William C. Wines, of Chicago, Ill., for petitioner Illinois Commerce Com'n. Howard Ellis, of Chicago, Ill., for respondent. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 These are companion cases to Rice v. Santa Fe Elevator Corp., and Illinois Commerce Commission v. Santa Fe Elevator Corp., 331 U.S. 218, 67 S.Ct. 1146. Respondent in these cases, the Chicago Board of Trade, was joined as a defendant in the proceeding brought by Rice before the Illinois Commerce Commission. As we have noted in our opinion in the companion cases, the Rice complaint charged the defendant warehousemen with maintaining excessive, unreasonable and discriminatory rates and practices, with operating inadequate and unsafe facilities and services, and with failure to comply with other requirements of Illinois law The Board of Trade, organized under a special Act of the Illinois legislature, Private Laws 1859, p. 13, operates a commercial grain exchange and has adopted rules and regulations governing transactions on the exchange. The complaint of Rice charges (1) that the rules and regulations of the Board are unreasonable and unsatisfactory in that, among other things, they favor warehousemen and sellers of grain and discriminate against grain buyers; and (2) that the Board has from time to time adopted rules and regulations, relating to the warehousing of grain in public warehouses and the custody of grain in private warehouses without securing the prior approval of the Illinois Commission. Under Illinois law, it is alleged, such rules may not become operative without approval by the Commission; and the Commission in turn has authority to adopt and promulgate rules of its own. Ill.Rev.Stat.1945, ch. 114, § 194b.1 Relief asked on this phase of the proceeding was a declaration that the Board's rules, which did not have the prior approval of the Commission, were void; and an order that the Board adopt and submit rules which were fair, equitable, adequate and specific. 2 The Board moved to dismiss the proceeding before the Commission on the ground that the Commodity Exchange Act, 49 Stat. 1491, as amended, 7 U.S.C. § 1 et seq., 7 U.S.C.A. § 1 et seq., and the regulations thereunder superseded the provisions of Illinois law which Rice sought to invoke. That motion was denied. Thereupon, these suits were instituted in the District Court to enjoin the proceedings before the Illinois Commerce Commission. The District Court dismissed the complaints. The Circuit Court of Appeals reversed. 7 Cir., 156 F.2d 33. The cases are here on certiorari. 3 The Chicago Board of Trade is 'the greatest grain market in the world.' Board of Trade of City of Chicago v. Olsen, 262 U.S. 1, 33, 43 S.Ct. 470, 476, 67 L.Ed. 839. Its activities have been regulated by Congress by the Future Trading Act, 42 Stat. 187, by the Grain Futures Act, 42 Stat. 998, and by the Commodity Exchange Act. See H.R.Rep. No. 421, 74th Cong., 1st Sess. The Board of Trade claims a status under the Commodity Exchange Act which, it is contended, precludes the Illinois Commission from entertaining the Rice complaint. 4 The Commodity Exchange Act provides comprehensive regulation of trading in futures on commodity exchanges which are designated as 'contract markets' by the Secretary of Agriculture. The Secretary is authorized to designate any board of trade as a contract market on its compliance with prescribed terms and conditions. § 5. The Chicago Board of Trade has been so designated. The Act contemplates that each contract market will adopt rules governing transactions in futures contracts. Approval of a board of trade as a contract market may be made only when 'the governing board thereof provides for the prevention of manipulation of prices and the cornering of any commodity by the dealers or operators upon such board.' § 5(d). The Act contains provisions which prohibit certain types of trading practices (see for example §§ 4b, 4c, 4h) and other provisions (as for example those dealing with excessive specultion, see § 4a) which limit or control buying and selling on contract markets. But we are not particularly concerned with those phases of the federal regulatory scheme. So far as the problem of supersedure is concerned, tis Act is unlike the one considered in the companion cases, as we shall see. Moreover, the subject matter of the complaint filed by Rice with the Illinois Commission against the Board of Trade relates only to the warehousing of grain. On that matter the Act has only two specific provisions. 5 It provides in the first place that receipts issued under the United States Warehoiuse Act, 39 Stat. 486, as amended, 7 U.S.C. § 241 et seq., 7 U.S.C.A. § 241 et seq., shall be accepted without discrimination in satisfaction of futures contracts made on or subject to the rules of the contract market, even though the warehouseman is not also licensed under state law or enjoys different privileges than those accorded by state law, provided inter alia, that 'the warehouse in which the commodity is stored meets such reasonable requirements as may be imposed by such contract market on other warehouses as to location, accessibility, and suitability for warehousing and delivery purposes.' § 5a(7). Moreover, each contract market has some control over warehouses in which or out of which any commodity is deliverable on any contract for future delivery made on or subject to the rules of the contract market. Thus the contract market must require the warehouse operators 'to make such reports, keep such records, and permit such warehouse visitation' as the Secretary may prescribe. § 5a(3). All rules and regulations of a contract market, and all changes and proposed changes, must be filed with the Secretary. § 5a(1). 6 Enough of the Act has been summarized to show that it imposes on contract markets, under the supervision of the Secretary, (1) duties of preventing or controlling certain trading practices and of supervising transactions in futures contracts, and (2) some responsibility for standardizing deliverable warehouse receipts and assuring their integrity. The failure or refusal of a board of trade to comply with the provisions of the Act or any of the rules and regulations of the Secretary is cause for suspension or revocation of the authority of the board to act as a contract market. § 5b. And see § 6a. Criminal penalties are provided for certain violations of the Act or of rules or regulations of the Secretary by a board of trade or any of its directors, officers, agents or employees. §§ 6b, 9. The Secretary has the power to 'make such investigations as he may deem necessary to ascertain the facts regarding the operations of boards of trade * * *.' § 8. And the Secretary is given broad rule making powers. § 8a(5). 7 The Secretary has promulgated numerous rules and regulations covering a veriety of subjects pertaining to contract markets and their activities.2 The following are relevant here, since they relate to the warehousing of grain: (1) a requirement that each contract market file information concerning warehouses in which or out of which commodities are deliverable in satisfaction of futures contracts made on the contract market, § 1.43; and (2) a provision that each contract market shall require operators of warehouses whose receipts are deliverable in satisfaction of futures contracts made on or subject to the rules of the contract market (a) to keep specified records, (b) to furnish information concerning stocks of commodities in warehouses, (c) to permit visitation of the premises and inspection of the books and records by duly authorized representatives of the Federal Government. § 1.44. 8 In pursuance of the latter regulation of the Secretary, the Board of Trade enacted the rules and regulations which Rice challenged in the proceedings before the Illinois Commission. One rule provides that deliveries shall be made by delivery of warehouse receipts issued by warehouses which have been declared 'regular' by the Board. Rule 281. The Board's regulations relating to warehousing of grain set forth the procedure and standards by which warehouses may be made 'regular.'3 9 It is apparent that the federal scheme of regulation of futures trading extends to the whole futures contract—to its satisfaction, as well as to its execution. It is also apparent that the Act provides some control over (1) warehouse receipts which are acceptable in satisfaction of sales and purchases on the contract market, and (2) the qualifications of the warehouses whose receipts will be accepted for such deliveries. But there is not contained in the Commodity Exchange Act, as there is in the United States Warehouse Act, see Rice v. Santa Fe Elevator Corp., supra, a declaration by Congress that the system which it has adopted for the regulation of trading on contract markets is exclusive of state regulation. Here Congress has gone no further than to write into the Act prohibitions and controls and to give the force of law both to them and to rules and regulations of the Secretary made within the scope of his statutory authority. With exceptions which we will note, state regulations which conflict with the requirements of the Act or with the rules and regulations of the Secretary would be superseded under the familiar rule. 10 Congress treated the rules and regulations of the Board of Trade differently from those of the Secretary. It did not undertake to put behind them civil or criminal sanctions.4 It merely furnished standards (or authorized the Secretary to do so) to which the rules and regulations of the Board were to conform. And while there is provision in some instances for disapproval of the Board's rules by the Secretary of Agriculture (see § 4c), there is no provision for his approval or disapproval of the rules challenged in the Illinois proceeding. Insofar as those rules are concerned, all that the Act and the regulations of the Secretary do is to define the area in which the Board may provide standards for warehouses whose receipts are acceptable in satisfaction of futures contracts. By the terms of § 5a(7) the requirements fixed by the Board must be 'reasonable' and they must relate to 'location, accessibility, and suitability for warehousing and delivery purposes.' If the Board transcends those bounds, it violates the Act. See § 6b. But within that area it has considerable discretion.5 11 Hence it seems to us that no action of the Illinois Commission within the zone where the Board has freedom to act would contravene the federal scheme of regulation.6 It would be quite a different matter if the Illinois Commision adopt ed rules for the Poard which either violated the standards of the Act or collided with rules of the Secretary. But such collision is not necessary; and we cannot assume that the Illinois Commission will take any action which in any way impairs the federal regulatory scheme. 12 There is other intrinsic evidence that Congress did not preclude state regulation which supplements or bolsters the federal scheme. Sections 4b and 4c of the Act make unlawful a variety of fraudulent and deceptive practices on contract markets. And § 4c provides that 'nothing in this section or section 4b of the title shall be construed to impair any State law applicable to any transaction enumerated or described in such sections.' These fraudulent practices, or many of them, have long been the occasion for the exercise by the States of their historic police powers. Federal regulation in those fields would therefore almost certainly conflict with state laws. Thus the provision in § 4c serves the function of preventing supersedure and preserving state control in two areas where state and federal law overlap. Where Congress used such care to preserve specific state authority, even when it duplicated federal regulation, it is a fair inference not only that supersedure was to take its natural course where rights not saved to the States were involved, First Iowa Hydro-Electric Co.-op. v. Federal Power Commission, 328 U.S. 152, 175, 66 S.Ct. 906, 916, but also that nonconflicting state authority was left undisturbed. Moreover the provision in § 12 of the Act that the Secretarry 'may cooperate with any department or agency of the Government, any State * * * or political subdivision thereof' supports the inference that Congress did not design a regulatory system which excluded state regulation not in conflict with the federal requirements. See Townsend v. Yeomans, 301 U.S. 441, 454, 57 S.Ct. 842, 848, 81 L.Ed. 1210; Union Brokerage Co. v. Jensen, 322 U.S. 202, 209, 64 S.Ct. 967, 972, 88 L.Ed. 1227. 13 Respondents' claim of supersedure is, therefore, premature. Until it is known what rules the Illinois Commission will approve or adopt, it cannot be known whether there will be any conflict with the federal law. Any claim of supersedure can be preserved in the state proceedings. And the question of supersedure can be determined in light of the impact of a specific order of the state agency on the Federal Act or the regulations of the Secretary thereunder. Only if that procedure is followed can there be preserved intact the whole state domain which in actuality funtions harmoniously with the federal system. For even action which seems pregnant with possibilities of conflict may, as consummated, be wholly barren of it. 14 Reversed. 1 That section provides: 'No rule or regulation of any board of trade or grain exchange which relates to the warehousing of grain in any public grain warehouse, or which relates to the custody of grain in any private warehouse, or the use or negotiation of custodian's receipts for such grain, shall be or become operative until such rule or regulation is approved by the Illinois Commerce Commission, and the Illinois Commerce Commission may adopt and promulgate reasonable rules and regulations consistent with the provisions of this Act for the purpose of making this Act effective.' 2 The rules and regulations are to be found in 17 C.F.R., Part I. 3 These reglations pr ovide, inter alia, that the warehouses must be 'conveniently approachable by vessels of ordinary draft', have 'customary shipping facilities', and charge rates not exceeding a specified maximum (Reg. 1620); must file a bond satisfactory to the Board (Reg. 1621); must have proprietors or managers in 'unquestioned good financial standing and credit' (Reg. 1624); must be connected by railroad tracks with one or more of the eastern railway lines' (Reg. 1625); and must be 'provided with modern improvements and appliances for the convenient and expeditious receiving, handling, and shipping of grain in bulk.' (Reg. 1626). Any 'regular' warehouse may be declared 'irregular' by the Board at any time for violation of the laws of Illinois or the rules and regulations of the board (Reg. 1623), or because of any important change in the conditions of any warehouse or disregard or evasion of the requirements governing regular warehouses (Reg. 1629). 4 We therefore have no attempt here to endow private groups with law making functions. Cf. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947; United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 225—227, 60 S.Ct. 811, 846, 84 L.Ed. 1129; Parker v. Brown, 317 U.S. 341, 350 352, 63 S.Ct. 307, 313, 314, 87 L.Ed. 315. 5 In the present proceeding the question of the validity of the existing rules and regulations of the Board of Trade under the Commodity Exchange Act is not in issue, and we intimate no opinion upon it. 6 It is suggested that the regulations of the Board of Trade or those which the Illinois Commerce Commission may impose on it are automatically invalid insofar as they relate to warehouses. For in Rice v. Santa Fe Elevator Corp., supra, we have held that the United States Warehouse Act excludes all state regulation, no matter how complementary, of those subjects touched by the federal regulatory scheme. But the situation here is quite different. In the first place, we are dealing with a measure of regulation over warehouse receipts not federal warehousemen; and the regulations which the Board of Trade is authorized to formulate do not carry civil or criminal sanctions. In the second place, Congress by granting the Board of Trade freedom to regulate within this narrow field has by that very act negatived any inference that the Federal Government has preempted it by requirements of its own.

910

331 U.S. 210 67 S.Ct. 1175 91 L.Ed. 1441 COMMISSIONER OF INTERNAL REVENUEv.MUNTER. COMMISSIONER OF INTERNAL REVENUE v. SAME. Nos. 674 and 675. Argued April 10, 1947. Decided May 5, 1947. Mr. Lee A. Jackson, of Washington, D.C., for petitioner. Mr. Samuel Kaufman, of Pittsburgh, Pa., for respondents. Mr. Justice BLACK delivered the opinion of the Court. 1 The Commissioner assessed deficiencies against respondents for failure to report as 1940 income dividends paid to them on stock of Crandall-McKenzie & Henderson, Inc., which respondents had bought earlier in that year.1 These dividends are taxable as income to the respondents if the corporation paid them out of its earnings and profits. Int.Rev.Code §§ 22(a), 115(a), (b), 26 U.S.C.A. Int.Rev.Code, §§ 22(a), 115(a, b). Since its organization in 1928, the corporation had not accumulated earnings and profits sufficient to pay the 1940 dividend in full.2 But the Commissioner found that the two old corporations which were merged in 1928 to form this ew corpora tion had at that time, and turned over to the new corporation, accumulated earnings and profits sufficient to cover these dividends. One of these old corporations, L. Henderson & Sons, Inc., had about $75,000 in earnings and profits accumulated since 1913; the other, Crandall-McKenzie Company, had about $330,000. Liability of respondents for these deficiencies depends upon whether the new corporation acquired and retained a sufficient amount of these earnings and profits of its predecessors to cover the 1940 dividends. 2 The 1928 merger took place under the following circumstances. Stockholders of Henderson and certain stockholders of Crandall-McKenzie agreed together with a firm of underwriters to effect a merger of the two corporations into a new one. The underwriters agreed to buy for cash 52% of the stock of the new corporation for public sale. In execution of this agreement the new corporation was formed, and acquired all the assets of Henderson and Crandall-McKenzie. The six stockholders of Henderson accepted stock in the new corporation as full payment for surrendering their old company stock. Holders of nearly one-half of the stock of old Crandall-McKenize did not accept new corporation stock, but were paid some $355,000 in cash for their old stock.3 The other old Crandall-McKenzie stockholders were satisfied to accept only new corporation stock. When the reorganization was complete the new corporation stock had been distributed as follows: 14,607 shares to old Crandall-McKenzie stockholders, 9,524 shares to old Henderson stockholders, and 25,869 shares to the general public through the participating underwriters. 3 The Tax Court found that there was a failure of proof that the earnings and profits of the old corporations had been distributed in 1928. Relying upon the rule of Commissioner of Internal Revenue v. Sansome, 2 Cir., 60 F.2d 931, which, for tax purposes, treats a reorganized corporation as but a continuation of its predecessors, the Tax Court determined that the new corporation acquired all the earnings and profits of its predecessors in 1928. Then, without analyzing the earnings and distribution history of the new corporation after its inception in 1928 and prior to the 1940 distribution, the Tax Court concluded that the new corporation's accumulated earnings and profits were sufficient in 1940 to make the questioned dividends taxable to respondents as income. 5 T.C. 108. The Circuit Court of Appeals for the Third Circuit reversed, 157 F.2d 132, folloing its ea rlier decision in Campbell v. United States, 3 Cir., 144 F.2d 177, which had narrowly limited the Sansome rule. The theory of the Campbell decision, so far as relevant to the only question directly presented here, was that change in ownership brought about by the participation of new investors in the reorganization made the new corporation such an entirely different entity that it could not properly be called, even for tax purposes, a continuation of its predecessors.4 Thus, it was concluded, earnings and profits of the predecessors were not acquired by the new corporation. 4 We granted certiorari because of an alleged conflict with the Sansome rule. 329 U.S. 709, 67 S.Ct. 369. In the state of the record presented we find it necessary to decide no more than whether the distinction of the Sansome rule made by the Campbell case is correct. 5 A basic principle of the income tax laws has long been that corporate earnings and profits should be taxed when they are distributed to the stockholders who own the distributing corporation. See Int.Rev.Code §§ 22, 115(a), (b). The controlling revenue acts in question, however, exempt from taxation distributions of stock and money distributions, at least in part, made pursuant to a reorganization such as transpired here in 1928. See Revenue Act of 1928, § 112(b), (c), (i)(1)(A); § 115(c)(h), 45 Stat. 791, 816—818, 822, 823, 26 U.S.C.A. Int.Rev.Acts, pages 377, 378, 379, 385. Thus unless those earnings and profits accumulated by the predecessor corporations and distributed in this reorganization are deemed to have been acquired by the successor corporation and taxable upon distribution by it, they would escape the taxation which Congress intended. See § 112(h), Revenue Act of 1928, 26 U.S.C.A. Int.Rev.Acts, page 379; Murchison's Estate v. Commissioner of Internal Revenue, 5 Cir., 76 F.2d 641; United States v. Kauffmann, 9 Cir., 62 F.2d 1045. 6 In Commissioner of Internal Revenue v. Sansome, supra, it was held that implicit in the tax exemption of reorganization distributions was the understanding that the earnings and profits so exempt were acquired by the new corporation and were taxable as income to stockholders when subsequently distributed. Congress has repeatedly expressed its approval of the so-called Sansome rule as a correct interpretation of the purpose of the tax laws governing reorganizations.5 And Congress has apparently been satisfied with Treasury Regulations which follow the Sansome doctrine.6 7 Of course, when, as in the Sansome case, all the stockholders of the old corporation swap all their old stock for identical proportions of the new, there can be no doubt that the earnings and profits of the old have not been distribued and are passed on to the successor corporation. But if the predecessors' earnings and profits are not distributed in the course of the reorganization, they do not disappear simply because the successor corporation has some assets and owners in addition to those of the old corporation or corporations. See Putnam v. United States, 1 Cir., 149 F.2d 721, 726. The congressional purpose to tax all stockholders who receive distributions of corporate earnings and profits cannot be frustrated by any reorganization which leaves earnings and profits undistributed in whole or in part. Insofar as accumulated earnings and profits have been distributed contemporaneously with the reorganization so as to become taxable to the distributees, they, of course, cannot be said to have been acquired by the successor corporation. But insofar as payments to the predecessor corporations or their stockholders do not actually represent taxable distributions of earnings and profits, those earnings and profits must be deemed to have become available for taxable distribution by the successor corporation. 8 It would be inappropriate for us to make the factual analysis of this record necessary to trace the earnings and profits involved in the 1928 reorganization in the absence of such a determination by the Tax Court and review by the Circuit Court of Appeals. See Helvering v. Rankin, 295 U.S. 123, 131, 132, 55 S.Ct. 732, 736, 79 L.Ed. 1343; Helvering v. Safe Deposit & Trust Co., 316 U.S. 56, 66, 67, 62 S.Ct. 925, 930, 86 L.Ed. 1266, 139 A.L.R. 1513; Commissioner v. Scottish American Investment Co., 323 U.S. 119, 124, 65 S.Ct. 169, 171, 89 L.Ed. 113. It might be that upon a full factual analysis the Tax Court would conclude that the new corporation acquired and had retained earnings and profits of Henderson sufficient to cover the 1940 distribution. Or the Tax Court may find it necessary to make further analysis of the 1928 distributions to Crandall-McKenzie's old stockholders. In this connection it is urged that the cash paid for part of the Crandall-McKenzie stock in 1928 constituted a taxable distribution of some or all of the accumulated earnings and profits. The Tax Court, however, has previously declined to consider these cash payments as such a distribution of earnings and profits in the absence of proof that the recipients had been taxed for them. But even if it were proved that old Crandall-McKenzie stockholders had been so taxed, the face amount of that tax would not necessarily reflect the earnings and profits distribution they received. For example part or all of their tax may have represented capital gain as distinguished from earnings and profits.7 Or the distribution may be found to have constituted a liquidation under § 115 of the Revenue Act of 1928.8 It may be necessary on remand, therefore, for the Tax Court to consider, in the light of §§ 112(c) and 115 of the Revenue Act of 1928, how much, if any, of the 1928 cash distribution to Crandall-McKenzie stockholders represented earnings and profits deductible from the earnings and profits transferred to the new corporation available for the 1940 dividend payments. 9 The decision of the Circuit Court of Appeals is reversed with directions that the cause be remanded to the Tax Court for proceedings not inconsistent with this opinion. 10 So ordered. 11 Reversed with directions. 1 The Tax Court incorporated by reference a fact stipulation of the parties as its finding of fact. Each of the respondents had bought 10,000 shares of the 38,922 shares of the corporation then outstanding. The dividends declared in 1940 amounted to $35,166.25, of which each of the taxpayers received $12,500. 2 At one point in the stipulation it was indicated that the new corporation had 'no earnings and profits accumulated from December 4, 1928, to December 31, 1939,' and no earnings or profits in the taxable year 1940. But elsewhere in the stipulation it appears there may have been some $32,000 earnings and profits accumulated between 1928 and 1940. The Tax Court apparently did not resolve these contradictory statements. 3 Some of the Crandall-McKenzie stockholders were paid $356 plus per share; others were paid $315.53 per share for identical stock. A part of the old Crandall-McKenzie stock for which cash was paid was bought for $300,000 cash by one old Crandall-McKenzie stockholder from another while the reorganization was being transacted. The stockholder who made this purchase thereupon surrendered his original Crandall-McKenzie holdings, together with his recently purchased shares, to the new corporation in exchange for sbares in the new corporation and $300,000 cash. We do not decide whether the sale from one old stockholder to another represents a transaction separate from the reorganization. Whatever may be the ultimate significance of this point, it does not affect the result we reach here. 4 There were two independent grounds for the decision in the Campbell case. One ground was that the earnings and profits of the predecessor corporation there had actually been distributed in the course of the reorganization. The Circuit Court of Appeals stated expressly that it did not rest its decision in the instant case on this theory. 5 The Senate Committee recommending adoption of § 115(h) of the Revenue Act of 1936, 26 U.S.C.A. Int.Rev.Acts, page 870, cited the Sansome case with approval. It described the new section as not changing 'existing law.' The Committee recommended the amendment only 'in the interest of greater clarity.' S.Rep.No.1256, 74th Cong., 2d Sess., (1936) 19. See also § 115(h) Revenue Act 1938, 52 Stat. 447, 26 U.S.C.A. Int.Rev.Acts, page 1057; H.R.Rep. 2894, 76th Cong., 3d Sess. (1940) 41; S.Rep. 2114, 76th Cong., 3d Sess. (1940) 25. 6 U.S.Treas.Reg. 94, art. 115—11 (1936); U.S.Treas.Reg. 103, § 19,115—11 (1940). See Taft v. Commissioner, 304 U.S. 351, 357, 58 S.Ct. 891, 895, 82 L.Ed. 1393, 116 A.L.R. 346; Helvering v. Winmill, 305 U.S. 79, 83, 59 S.Ct. 45, 46, 83 L.Ed. 52; Douglas v. Commissioner, 322 U.S. 275, 281, 282, 64 S.Ct. 988, 992, 88 L.Ed. 1271; Boehm v. Commissioner, 326 U.S. 287, 291, 292, 66 S.Ct. 120, 123. 7 Section 112(c)(1) of the Revenue Act of 1928 provides in effect if a cash or property distribution is made in the course of a reorganization 'then the gain, if any, to the recipient shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property.' But § 112(c)(2) makes taxable as dividend income that portion of the gain which represents the distributee's share of the distributing corporation's earnings and profits. 8 Section 115(c) of the Revenue Act of 1928 governs the taxability of distributions in liquidation.

1112

331 U.S. 199 67 S.Ct. 1178 91 L.Ed. 1432 149 MADISON AVE. CORPORATION et al.v.ASSELTA et al. No. 497. Argued Feb. 11, 1947. Decided May 5, 1947. Judgment Modified June 16, 1947. See 331 U.S. 795, 67 S.Ct. 1726. Mr. Robert R. Bruce, of New York City, for petitioners. Mr. Wilbur Duberstein, of New York City, for respondents. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 This employee suit was brought in the District Court to recover overtime compensation, liquidated damages, and a reasonable attorney's fee pursuant to §§ 7(a) and 16(b) of the Fair Labor Standards Act of 1938.1 Recovery was allowed in the District Court, 65 F.Supp. 385, and that judgment was affirmed in the Circuit Court of Appeals, Cir., 156 F.2d 139. We granted certiorari to consider the important questions presented relating to the application of the overtime provisions of the abovementioned statute. 2 Respondents are service and maintenance employees who, during the period in question, worked in a loft building owned by petitioner 149 Madison Avenue Corporation and managed by petitioner Williams & Co. It has been stipulated that respondents were engaged in the production of goods for commerce.2 We are here concerned with the period of employment extending from April, 21, 1942, to December 10, 1943. 3 Prior to April 21, 1942, employment relations between the petitioners and respondents were governed by a collective wage agreement, known as the Sloan Agreement.3 According to its terms, employees were paid flat weekly wages for workweeks of specified length which, in the case of most of the respondents, amounted to $25 for 47 hours of weekly employment. No hourly rates were specified, nor was any attempt made to compensate employees at the rate of time and one-half for hours worked in excess of 40 in any week. 4 As the expiration date of the Sloan Agreement drew near, negotiations between the interested parties were initiated for the purpose of reaching agreement on a new contract. After preliminary conferences proved fruitless, the case was certified to the War Labor Board. That agency stated its recommendations in a directive order issued July 29, 1942; and on September 1, 1942, the parties entered into the agreement in question, known as the National War Labor Board Agreement. It had been agreed that the terms of the new contract were to be made retroactive to April 20, 1942, the expiration date of the Sloan agreement. 5 The new contract provided for a workweek of 54 hours applicable to watchmen and a workweek of 46 hours for other regular employees. Weekly wages were established to compensate the 54 or 46 hours of labor which sums were stated to include both payments for the regular hours of employment and time and one-half for the hours in excess of 40. To derive the hourly rate from the weekly wage, the following formula was included: 6 'The hourly rates for those regularly employed more than forty (40) hours per week shall be determined by dividing their weekly earnings by the number of hours employed plus one-half of the number of hours actually employed in excess of forty (40) hours.' 7 Although a literal reading of the above language might seem to indicate the establishment of a variable hourly rate dependent upon the number of hours actually worked in any given week, such was not the practical construction of the parties. Instead of making use of the number of hours actually worked, only the hours the employee was scheduled to work and the weekly wage for such scheduled workweek entered into the calculation of the non-overtime hourly rate.4 The hourly rate as derived from the formula remained constant, therefore, regardless of whether the employee worked the scheduled number of hours during the week or a greater or lesser number. In effect, the agreement instead of directly stating a fixed hourly rate in terms of a stipulated amount per hour provided a formula whereby such a fixed hourly rate could be calculated. 8 Under the agreement, weekly compensation varied according to the number of hours worked in that week. Thus, in case an employee was unable to work all his scheduled hours due to an 'excusable cause,' he was paid at the formula rate with the provision, however, that six of the hours worked should be compensated as overtime regardless of whether the total of hours actually worked was greater or less than 40 in that week. If the employee's absence was not excusable, he was apparently paid a sum for the week obtained by multiplying the number of hours actually worked times the formula rate, being given credit for overtime only in case the number of hours worked exceeded 40.5 The agreement provided that all regular employees except watchmen should be compensated at a rate one and three-quarters times the hourly rate derived from the formula for hours worked in excess of 46. Watchmen were to be paid twice the formula rate for hours worked in excess of 54. Part-time workers employed for less than the scheduled workweek were hired at a specified schedule of hourly rates obtained by dividing the weekly wage paid the regular employees by the number of hours in the regular workweek. 9 It was not the purpose of Congress in enacting the Fair Labor Standards Act to impose upon the almost infinite variety of employment situations a single, rigid form of wage agreement. Walling v. A. H. Belo Corp., 1942, 316 U.S. 624, 62 S.Ct. 1223, 86 L.Ed. 1716. Section 7(a) of the Act requires, however, that any wage agreement falling within its purview must establish an hourly 'regular rate' not less than the statutory minimum and provide for overtime payments of at least one and one-half times the 'regular rate.' A wage plan is nt rendered invalid simply because instead of stating directly an hourly rate of pay in an amount consistent with the statutory requirements, the parties have seen fit to stipulate a weekly wage inclusive of regular and overtime compensation for a workweek in excess of 40 hours and have provided a formula whereby the appropriate hourly rate may be derived therefrom. The crucial questions in this case, however, are whether the hourly rate derived from the formula here presented was, in fact, the 'regular rate' of pay within the statutory meaning and whether the wage agreement under consideration, in fact, made adequate provision for overtime compensation. 10 We have held that the words 'regular rate,' while not expressly defined in the statute, '* * * mean the hourly rate actually paid for the normal, non-overtime workweek.' Walling v. Helmerich & Payne, Inc., 1944, 323 U.S. 37, 40 65 S.Ct. 11, 13, 89 L.Ed. 29. The regular rate is thus an 'actual fact,' and in testing the validity of a wage agreement under the Act the courts are required to look beyond that which the parties have purported to do. Walling v. Youngerman-Reynolds Hardwood Co., 1945, 325 U.S. 419, 424, 65 S.Ct. 1242, 1244, 89 L.Ed. 1705. It is the contention of the respondents that the rate derived by the use of the contract formula was not the regular rate of pay; that the regular rate actually paid was substantially that obtained by dividing the weekly wage payable for the working of the scheduled workweek by the number of hours in such scheduled workweek; and that consequently, the plan made no adequate provision for overtime compensation until employees regularly hired as watchmen had worked a total of 54 hours in one week and until other regular employees had worked a total of 46 hours. We believe that the record provides ample support for that view. 11 Thus, in determining a schedule of hourly rates payable to part-time workers employed less than 40 hours a week, no use whatsoever was made of the hourly rate derived from the formula. Part-time workers were paid a rate determined by dividing the weekly wage paid to the regular employees by the number of hours in the regular workweek despite the fact that, according to the terms of the formula, the weekly wage included both regular and overtime pay. Insofar as part-time workers were concerned, the agreement clearly indicated an intention to compensate an hour's labor by payment of a pro-ratashare of the weekly wage. 12 Nor was there consistent application of the hourly rate as determined by the formula to the work of regular employees hired for a full 46 hour week. Where such an employee was absent for an 'excusable cause,' his weekly compensation was not determined by multiplying the formula rate by the hours worked. Rather, six of the hours the employee worked were always treated as overtime and compensated at the rate of one and one-half times the formula rate regardless of the total hours actually worked, thus resulting in average hourly compensation considerably in excess of the formula rate. The payment of 'overtime' compensation for non-overtime work raises strong doubt as to the integrity of the hourly rate upon the basis of which the 'overtime' compensation is calculated. Cf. Walling v. Helmerich & Payne, Inc., supra. While the average hourly rate actually received by the employee in this situation was not precisely that which would have resulted from dividing the weekly wage by 46, it ordinarily approached that figure much more closely than it did the so-called hourly rate established by the formula.6 This method of payment reveals further evidence of an attempt to pay a pro-rata share of the weekly wage for an hour's labor regardless of the number of hours worked up to 46. 13 The agreement provided that hours worked in excess of the scheduled 46 hour wcek should be compensated at the rate of one and three-quarters of the formula rate.7 While the formula rate seems to have been consistently applied in such situations, it is significant to observe that the amount received by the worker under these circumstances approximates very closely that which he would have received had he been paid an hourly rate determined by dividing the weekly wage payable for the scheduled workweek by 46 with payment of time and one-half for hours worked in excess of 46.8 This approximation was not fortuitous. In the directive order of the National War Labor Board the origin and purpose of these provisions are discussed, and the following statement is made: 'Overtime over forty-six (46) hours is paid at a rate of time and three-quarters in an effort approximately to equal the overtime to which an employee would ordinarily be entitled, if it were computed on the basis of time and a half over a forty-six (46) hour week.'9 14 Petitioners have argued that none of these provisions provides a conclusive demonstration that the formula rate was not the actual regular rate of pay. It is said that part-time employees were paid a pro-rata hourly rate since they had no opportunity to earn overtime compensation; that the method of paying regular employees in case of excusable absences was merely a laudable effort on the part of the employee to compensate more fully than the Act requires when an employee failed to work his scheduled week because of illness or like causes; and that the time and three-quarters provision represented an additional premium for employees called upon to work hours substantially in exces of the n on-overtime week. We cannot ignore the fact, however, that the agreement on its face fails to provide for the consistent application of the formula rates in those situations where such rates should be expected to control. These deviations take on additional significance when it is observed that in every situation, with the relatively unimportant exception of that involving unexcused absences,10 the amount paid was either precisely or substantially that which employees would have been paid had the contract called for employment on a straight 46 hour week with payment of time and one-half only for hours worked in excess of 46. 15 Further light is thrown upon the nature of the wage agreement by a consideration of the plan in actual operation. During the period between April 21 and September 1, 1942, when the contract in question was the subject of negotiation, it was understood that the old Sloan Agreement should remain in effect but that the terms of the new contract should be given retroactive application to April 20. The Sloan Agreement provided for a minimum wage of $25 for a workweek of 47 hours with no provision for overtime for hours worked in excess of 40. It is obvious, therefore, that between the above-mentioned dates the employees were paid on a basis clearly repugnant to the requirements of § 7(a) of the Fair Labor Standards Act. Petitioners urge, however, that by making the retroactive payments as required by the agreement, any illegality in the method of payment during the period of negotiations was eliminated. But in attempting to satisfy the retroactive liability, petitioners completely ignored the formula rates and paid each of the respondents $2.50 for each week worked during the period, representing the increase in the minimum weekly wage for the scheduled workweek established by the new agreement, without attempting further adjustment. Petitioners admit that 'Undoubtedly some employees who worked no overtime in certain weeks were overpaid; other who worked beyond the scheduled workweek of 47 hours then prevailing may not have been paid enough.' It is apparent that the amount of wages paid the respondents for work performed during the period of negotiations was in no sense determined by application of hourly rates derived from the formula.11 16 The parties have called our attention to much other evidence which, it is asserted, reveals the practical construction given to the terms of the agreement in question. We do not feel that it is necessary to review these matters at length. It is sufficient to state that, after considering the terms of the agreement and the operation of the plan in actual practice, we have come to the conclusion that the agreement in this case was one calling for a workweek in excess of 40 hours without effective provision for overtime pay until the employees had completed the scheduled workweek and that the 'hourly rate' derived from the use of the contract formula was not the 'regular rate' of pay within the meaning of the Fair Labor Standards Act. This is not a case like Walling v. A. H. Belo Corp., supra, or Walling v. Halliburton Oil Well Cementing Co., 1947, 331 U.S. 17, 67 S.Ct. 1056. Unlike those cases there was here no provision for a guaranteed weekly wage with a stipulation of an hourly rate which under the circumstances presented could properly be regrded as th e actual regular rate of pay. 17 We hold for the reasons stated above that the District Court and the Circuit Court of Appeals properly determined that the wage agreement in question failed to satisfy the statutory requirements. Walling v. Helmerich & Payne, Inc., supra; Walling v. Youngerman-Reynolds Hardwood Co., supra; Walling v. Harnischfeger Corp., 1945, 325 U.S. 427, 65 S.Ct. 1246, 89 L.Ed. 1711. 18 Affirmed. 1 52 Stat. 1060, 29 U.S.C. § 201 et seq., 29 U.S.C.A. § 201 et seq. Insofar as pertinent, § 7(a) provides: 'No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce— '(3) for a workweek longer than forty hours after the expiration of the second year from such date, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.' Section 16(b) provides in part: 'Any employer who violates the provisions of section 6 or section 7 of this Act shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. * * *' 2 Petitioners have raised no objection as to the amount of the recovery allowed the respondents by the District Court if it be assumed that the lower courts otherwise correctly determined their liability. 3 The Sloan Agreement was negotiated between the Realty Advisory Board on Labor Relations, Incorporated, as agent for various owners of loft, office and apartment buildings located in the Borough of Manhattan in the City of New York, and Local 32—B of the Building Service Employees International Union on behalf of its members. The same parties negotiated the agreement in question. 4 In case of an employee hired for a regular 46 hour week at a weekly wage of $27.50, the 'hourly rate' was derived from the formula by means of the following calculation: $27.50 (46 1/2(46 40))=$.561 per hour. In effect, the formula rate is obtained, not by dividing the weekly wage by 46, the number of hours scheduled to be worked, but by dividing that sum by 49, a divisor determined by the formula. In the case of a watchman hired for a 54 hour week at the same weekly wage, the formula rate was determined by this calculation: $27.50 (54 1/2(54—40))=$.4508 per hour. 5 The agreement made no specific provision for situations involving unexcused absences. The above-described procedure seems to have been applied in practice, however. 6 Thus the employee Anderson worked only 39 hours in the week of Feb. 14, 1943, the 7 hours of absence apparently being due to an 'excusable cause.' Under the agreement, which would entitle him to six hours of 'overtime' pay, he should have receivd weekly c ompensation in the amount of $23.56. The actual average hourly rate during that week accordingly would be $.604. If Anderson had been paid on an hourly basis determined by dividing the weekly wage paid for a scheduled workweek by the number of hours in such workweek, he would have received $.598, whereas, had he been paid the straight formula rate he would have received $.561 per hour. So also, the petitioner Peterson in the week of Dec. 13, 1942, was absent 16 hours for excusable causes. The payroll records reveal he earned $18.50 or an actual average hourly rate of $.617 as compared to $.598, the average rate for a scheduled workweek, and to $.561, the formula rate. 7 In the case of watchmen, who were assigned a scheduled week of 54 hours, twice the formula rate was paid for hours worked in excess of 54. 8 Thus if an employee hired for a regular workweek of 46 hours at $27.50 worked 50 hours in one week, his total weekly compensation would amount to $31.43 if compensated in accordance with the terms of the agreement. If, instead, the employee were hired on a straight weekly basis at the same weekly wage with provision for time and one-half the average hourly rate, for hours worked in excess of 46, he would receive $31.09 as total weekly compensation for 50 hours of work. If a watchman, scheduled to work a 54 hour week at $27.50 actually worked 58 hours he would receive $31.11 weekly compensation if calculated according to the agreement, or $30.55 if calculated on a straight weekly basis with time and one-half for hours worked in excess of 54. 9 (Emphasis supplied.) The agreement in question also contained the following provision: 'Per diem rates of pay of any employee shall be arrived at by dividing the applicable weekly wage by the normal number of days per week worked by that employee in the building in question.' This provision is obviously at odds with the statement in the agreement that the weekly wage stipulated for a scheduled workweek included both regular pay and overtime for hours worked over 40. There is nothing in the record, however, to indicate that the per diem provisions were actually applied. Petitioner explains its presence in the agreement as an inadvertent hold-over from the earlier Sloan Agreement. 10 See note 5 supra. 11 A somewhat similar situation prevailed with respect to an increase of $1.40 in the weekly wage grantee on October 10, 1943, and made retroactive to April 21, 1943. It appears that petitioners made some effort to make adjustments consistent with the formula in payment to employees who had worked hours in excess of the scheduled workweek. It is conceded, however, that no such adjustments were made with respect to those who worked less than their scheduled hours in weeks during the retroactive period, such employees being paid the full weekly increase for each week employed regardless of hours actually worked.

67

331 U.S. 218 67 S.Ct. 1146 91 L.Ed. 1447 RICE et al.v.SANTA FE ELEVATOR CORPORATION et al. ILLINOIS COMMERCE COMMISSION et al. v. SAME. Nos. 470 and 472. Argued Feb. 13, 14, 1947. Decided May 5, 1947. [Syllabus from pages 218-220 intentionally omitted] Mr. William C. Wines, of Chicago, Ill., for petitioner Illinois Commerce Commission. Mr. Lee A. Freeman, of Chicago, Ill., for petitioner Rice. Mr. Leo F. Tierney, of Chicago, Ill., for respondents. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 Respondents in these two cases are warehousemen engaged in the business of operating public warehouses for the storage of grain in Illinois. Their warehouses are operated under licenses issued by the Secretary of Agriculture pursuant to the United States Warehouse Act, 39 Stat. 486, as amended, 7 U.S.C. § 241 et seq., 7 U.S.C.A. § 241 et seq. The Rice partnership, one of the petitioners, is an owner, shipper, and dealer in grain and is a customer of respondents. The Illinois Commerce Commission, another petitioner, has certain regulatory jurisdiction, to which we will later refer, over public grain warehouses and other public utility companies. 2 In 1944 Rice filed a complaint with the Commission, charging respondents1 with maintaining unjust, unreasonable, and excessive rates and charges contrary to the Illinois Public Utilities Act, Ill.Rev.Stats.1945, ch. 111 2/3. It charged them with discrimination in storage rates in favor of the Federal Government and its agencies and against other customers, contrary to the Public Utilities Act and the Illinois Grain Warehouse Act, Ill.Rev.Stats.1945, ch. 114, § 189 et seq. It alleged that respondents were both warehousemen and dealers in grain and by reason of those dual and conflicting positions had received undue preferences and advantages to the detriment of and in discrimination against petitioners and other customers of respondents,2 all in violation of provisions of the Public Utilities Act, the Grain Warehouse Act, or the Illinois Constitution of 1870, Article XIII, Smith-Hurd Stats. It charged respondents with having failed to provide reasonable, safe, and adequate public grain warehouse service and facilities, with issuing securities, with abandoning service, and with entering into various contracts with their affiliates without prior approval of the Commission; with rendering storage and warehousing services without having filed and published their rates; with operating without a state license; and with mixing public grain with grains of different grades—all in violation of provisions of the Public Utilities Act or the Grain Warehouse Act. Among the remedies sought were the fixing of just, reasonable, and non-discriminatory rates, the prohibition of unlawful discriminatory practices, the establishment of reasonable, safe and adequate storage and warehousing service, and the assessment of penalties for violaions of Il linois law, including the cancellation of grain warehouse licenses. 3 Respondents moved to dismiss on the ground that the United States Warehouse Act superseded the authority of the Commission to regulate in the manner sought by the complaint. The Commission denied the motion and set the cause for a hearing on the merits. Thereupon respondents brought these suits in the District Court to enjoin further proceedings before the Commission and to enjoin the Attorney General of Illinois from instituting any proceedings against respondents to enforce any order of the Commission in the matter. Motions of petitioners to dismiss were granted. On appeal the Circuit Court of Appeals reversed, holding that the United States Warehouse Act superseded state regulation of respondents as to the matters presented in petitioners' complaint.3 7 Cir., 156 F.2d 33. The cases are here on petitions for writs of certiorari which we granted because of the public importance of the questions presented. 4 The United States Warehouse Act, as originally enacted in 1916 (39 Stat. 486), made federal regulation in this field subservient to state regulation. It provided in § 29 that 'nothing in this act shall be construed to conflict with, or to authorize any conflict with, or in any way to impair or limit the effect or operation of the laws of any State relating to warehouses, warehousemen * * *.' And § 6 required an applicant for a federal warehouse license to provide a bond 'to secure the faithful performance of his obligations as a warehouseman' under state as well as under federal law. 5 In 1931 Congress amended the Act. 46 Stat. 1463. Section 29 was amended4 to provide that although the Secretary of Agriculture 'is authorized to cooperate with State officials charged with the enforcement of State laws relating to warehouses, warehousemen', and their personnel, 'the power, jurisdiction, and authority conferred upon the Secretary of Agriculture under this act shall be exclusive with respect to all persons securing a license hereunder so long as said license remains in effect.' Section 6 was amended to omit the requirement that the bond be conditioned on compliance with requirements of state law. 6 First. The chief matters which are the basis of the complaint before the Commission are treated as follows by the Illinois law and by the Federal Act: 7 (1) Just and reasonable rates. The complaint charges that respondents' rates are unjust and unreasonable. Under the Illinois statute public utility rates must be just and reasonable; and the Commission after a hearing may fix rates which meet that standard. §§ 32, 36, 41, Public Utilities Act. The Secretary of Agriculture is authorized by the Federal Act to license warehousemen5 on condition that they conform to the requirements of the Act and the rules and regulations prescribed thereunder.6 §§ 4, 9. Every receipt of a licensed warehouse must disclose 'the rate of storage charges.' § 18(e). Before a license is granted the applicant must file his proposed rates with the Secretary. Reg. 5, § 3. He must also file any proposed changes in rates before making them effective. Id. Rates which are 'unreasonable or exorbitant' are prohibited. Id. And the Secretary may, after hearing, suspend or revoke the license if 'unreasonable or exorbitant charges have been made for services rendered.' § 25; Reg. 2, § 7. 8 (2) Discrimination. The complaint alleges that respondents discriminate against the public and in favor of the Federal Government and its agencies by granting the latter preferential storage rates. The power of the Illinois Commission to fix rates, to which we have referred, includes the power to eliminate discriminatory rates. And see Gran Warehouse Act § 15. The Federal Act requires the publication and disclosure of licensed warehousemen's rates, as we have seen. Section 13 of the Federal Act makes it the duty of a licensed warehousean to rece ive agricultural products for storage 'in the usual manner in the ordinary and usual course of business, without making any discrimination between persons desiring to avail themselves of warehouse facilities.' And by § 25 the Secretary is granted authority to suspend or revoke any license of a warehouseman 'for any violation of or failure to comply with any provision of this act * * *.' 9 (3) Dual position of warehousemen. The complaint charged violations of Illinois law by acts of respondents in storing and dealing in their own grain while storing grain for the public. See Hannah v. People, ex rel. Attorney General, 198 Ill. 77, 64 N.E. 776. The Federal Act requires every receipt issued for agricultural products by a licensed warehouseman to disclose 'if the receipt be issued for agricultural products of which the warehouseman is owner, either solely or jointly or in common with others, the fact of such ownership * * *.' § 18(i). In addition, the receipts for grain must contain 'in event the relationship existing between the warehouseman and any depositor is not that of strictly disinterested custodianship, a statement setting forth the actual relationship. * * *' Reg. 4, § 1(a)(3). Moreover, § 5a(7) of the Commodity Exchange Act, 49 Stat. 1491, 1498, 7 U.S.C. § 7a(7), 7 U.S.C.A. § 7a(7), provides that receipts issued under the United States Warehouse Act 'shall be accepted in satisfaction of any futures contract * * * without discrimination and notwithstanding that the warehouseman issuing such receipts is not also licensed as a warehouseman under the laws of any State or enjoys other or different privileges than under State law * * *.' 10 (4) Mixing high quality public grain with inferior grain owned by respondents, delay in loading grain. The complaint charges that these practices7 are part of the abuses flowing from the conflicting positions of respondents as public grain warehousemen and dealers in grain. They are alleged to violate the rule of Hannah v. People, supra, and provisions of the Public Utilities Act which prohibit any preference or advantage to any person and which disallow any act of prejudice or disadvantage to any person. § 38. And see Grain Warehouse Act § 17. Section 13 of the Federal Act, as we have seen, provides that every licensed warehouseman 'shall receive for storage' any agricultural product 'without making any discrimination between persons desiring to avail themselves of warehouse facilities.' Section 15 provides for the inspection and grading of fungible agricultural products by federal inspectors. Section 16 permits licensed warehousemen 'if authorized by agreement or by custom' to mingle fungible products with other products 'of the same kind and grade.' Section 16 likewise prohibits the mixing of fungible products 'of different grades.'8 Section 30 provides fine and imprisonment for any person who fraudulently classifies, grades, or weighs any agricultural product stored under the provisions of the Act. Section 21 provides that a warehouseman in absence of some lawful excuse shall deliver 'without unnecessary delay' the stored products on proper demand. 11 (5) Sacrificing or rebating storage charges, retaining desirable transit tonnage, utilizing preferred storage space. These practices, charged in the complaint,9 are alleged to be other manifestations of the evils of a public warehouseman also being a dealer in grain. They are said t be violat ive of the principles announced in Central Elevator Co. v. People ex rel. Moloney, 174 Ill. 203, 208—209, 51 N.E. 254, 256, 43 L.R.A. 658. And these practices are said to be acts of prejudice or disadvantage outlawed by § 38 of the Public Utilities Act which we have already mentioned. On the other hand, the Federal Act, as we have seen, requires every licensed warehouseman to 'receive for storage' any agricultural product 'without making any discrimination between persons desiring to avail themselves of warehouse facilities.' § 13. 12 (6) Maintenance of unsafe and inadequate elevators; inadequate and inefficient warehouse service. The complaint alleges that as a result of these practices fire insurance premiums have become exorbitant and prohibitive; that owners of grain have suffered damages due to the deterioration of grain. The Illinois Commission is granted broad powers over the maintenance of facilities which are adequate and efficient (§§ 32, 49, Public Utilities Act) including the power to order the making of additions, extensions, repairs, improvements, or changes. Id., § 50. By § 3 of the Federal Act the Secretary of Agricultural is authorized 'to determine whether warehouses for which licenses are applied for or have been issued under this act are suitable for the proper storage of any agricultural product * * *.' Section 3 also grants the Secretary authority to prescribe the duties of warehousemen 'with respect to their care of and responsibility for agricultural products stored' in licensed warehouses.10 No license will be granted if the warehouse is found 'not suitable for the proper storage age of grain.' Reg. 2, § 5. Every warehouseman must exercise 'such care in regard to grain in his custody as a reasonably careful owner would exercise under the same circumstances and conditions.' Reg. 5, § 8. Every warehouseman must keep 'his warehouse reasonably clean at all times and free from straw, rubbish, or accumulations of materials that will increase the fire hazard or interfere with the handling of grain.' Reg. 5, § 15. 13 (7) Operating without a state license. The complaint charges that respondents may not lawfully operate without a license from Illinois. See Grain Warehouse Act § 3. The Federal Act gives the Secretary of Agriculture authority to issue licenses on terms and conditions specified. §§ 3, 4, 5. 14 (8) Abandonment of warehousing service. The complaint alleges that respondents have abandoned services without consent of the Illinois commission. Approval of the Commission to abandon or discontinue service is required. § 49a, Public Utilities Act. Licenses issued under the Federal Act 'shall terminate as therein (§§ 4, 9) provided, or in accordance with the terms of this act and the regulations thereunder * * *.' § 5. By § 25 the Secretary is authorized to suspend or revoke a license for any violation of the Act or the regulations. Among the grounds for revocation specified in the regulations is ceasing to conduct the licensed warehouse. Reg. 2, § 7. 15 (9) Failure to file and publish rate schedules; rendering warehousing service without filing and publishing schedules. These matters, charged in the complaint, are regulated by §§ 33 and 35 of the Public Utilities Act. Under the Federal Act a warehouseman must file his rate schedules before a license issues; proposed changes in them must be filed before made; the current schedule of charges must be posted in a conspicuous place in the principal office where receipts issued by the warehouseman are delivered to the public. Reg. 5, § 3; Reg. 2, § 6. 16 As we have seen, Congress in 1931 made the 'power, jurisdiction, and authority' of the Secretary of Agriculture conferred by the Ac 'exclusiv e with respect to all persons securing a license' under the Act, so long as the license remains in effect. It is argued by respondents that § 29 should be construed to mean that the subjects which the Secretary's authority touches may not be regulated in any way by any state agency, though the scope of federal regulation is not as broad as the regulatory scheme of the State and even though there is or may be no necessary conflict between what the state agency and the federal agency do. On the other hand, petitioners argue that since the area taken over by the Federal Government is limited, the rest may be occupied by the States; that state regulation should not give way unless there is a precise coincidence of regulation or an irreconcilable conflict between the two. 17 It is clear that since warehouses engaged in the storage of grain for interstate or foreign commerce are in the federal domain, United States v. Hastings, 296 U.S. 188, 56 S.Ct. 218, 80 L.Ed. 148, Congress may, if it chooses, take unto itself all regulatory authority over them (see New York Central R. Co. v. New York & Pennsylvania Co., 271 U.S. 124, 46 S.Ct. 447, 70 L.Ed. 865), share the task with the States, or adopt as federal policy the state scheme of regulation. See Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 430—436, 66 S.Ct. 1142, 1155—1159. The question in each case is what the purpose of Congress was. 18 Congress legislated here in field which the States have traditionally occupied. See Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77; Davies Warehouse Co. v. Bowles, 321 U.S. 144, 148—149, 64 S.Ct. 474, 477, 478, 88 L.Ed. 635. So we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress. Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 611, 47 S.Ct. 207, 209, 71 L.Ed. 432; Allen-Bradley Local v. Wisconsin Employment Relations Board, 315 U.S. 740, 749, 62 S.Ct. 820, 825, 86 L.Ed. 1154. Such a purpose may be evidenced in several ways. The scheme of federal regulation may be so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it. Pennsylvania R. Co. v. Public Service Commission, 250 U.S. 566, 569, 40 S.Ct. 36, 37, 64 L.Ed. 1142; Cloverleaf Butter Co. v. Patterson, 315 U.S. 148, 786, 62 S.Ct. 491, 86 L.Ed. 754. Or the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject. Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581. Likewise, the object sought to be obtained by the federal law and the character of obligations imposed by it may reveal the same purpose. Southern R. Co. v. Railroad Commission, 236 U.S. 439, 35 S.Ct. 304, 59 L.Ed. 661; Charleston & W.C.R. Co. v. Varnville Furniture Co., 237 U.S. 597, 35 S.Ct. 715, 59 L.Ed. 1137, Ann.Cas.1916D, 333; New York Central R. Co. v. Winfield, 244 U.S. 147, 37 S.Ct. 546, 61 L.Ed. 1045, L.R.A.1918C, 439, Ann.Cas.1917D, 1139; Napier v. Atlantic Coast Line R. Co., supra. Or the state policy may produce a result inconsistent with the objective of the federal statute. Hill v. Florida, 325 U.S. 538, 65 S.Ct. 1373, 89 L.Ed. 1782. It is often a perplexing question whether Congress has precluded state action or by the choice of selective regulatory measures has left the police power of the States undisturbed except as the state and federal regulations collide. Townsend v. Yeomans, 301 U.S. 441, 57 S.Ct. 842, 81 L.Ed. 1210; Kelly v. Washington, 302 U.S. 1, 58 S.Ct. 87, 82 L.Ed. 3; South Carolina State Highway Dept. v. Barnwell Bros., 303 U.S. 177, 625, 58 S.Ct. 510, 82 L.Ed. 734; Union Brokerage Co. v. Jensen, 322 U.S. 202, 64 S.Ct. 967, 88 L.Ed. 1227, 152 A.L.R. 1072. 19 A forceful argument is made here for the view that the Illinois regulatory scheme should be allowed to supplement the Federal Act and that the Illinois Commission should not be prevented from cting on a ny of the matters covered by Rice's complaint unless what the Commission does runs counter in fact to the federal policy. That is to say, the actual operation of the state system may be harmonious with the 'measure of control' over warehousemen which the Federal Act imposes. Federal Compress & Warehouse Co. v. McLean, 291 U.S. 17, 23, 54 S.Ct. 267, 269, 78 L.Ed. 622. That, it is said, can only be determined after the Illinois Commission has acted. 20 That argument is illustrated in several ways. The Illinois Commission may fix rates; the Secretary of Agriculture cannot. He may, to be sure, suspend or revoke licenses if unreasonable or exorbitant charges are made. If the Commission fixes unreasonable or exorbitant rates, there will be a conflict with the Federal Act and the state rate order must fall. But until it is known what the Commission will do, no conflict with the Federal Act can be shown. If indeed it reduces rates, as may be presumed, no conflict with the Federal Act will likely exist. Another illustration concerns the dual position of the warehousemen. It is pointed out that all the Federal Act requires is disclosure; that the more basic state policy of uprooting the practice of public warehousemen storing and dealing in their own grain is not inconsistent with the federal policy of disclosure. Another illustration relates to the preferential and discriminatory practices in connection with the rebate of storage charges, retention of desirable transit tonnage, and the utilization of preferred storage space. All the Federal Act requires is that warehousemen receive products for storage without making discriminations between persons. What the Illinois Commission promulgates or requires, if the proceedings before it are allowed to go ahead, might indeed strengthen and bolster the federal regulatory scheme and in no way dilute, impair or oppose it. Such reasoning could be applied to each of the nine charges which we have summarized, even including, perhaps, the requirements for a state license and the filing and publishing to rate schedules. See Union Brokerage Co. v. Jensen, supra. 21 At first blush that construction of the Federal Act has great plausibility. It preserves intact the federal system of warehouse regulation, leaves the State free to protect local interests, and strikes down state power only in case what the State does in fact dilutes or diminishes the federal program. 22 But the special and peculiar history of the Warehouse Act indicates to us that such a construction would thwart the federal policy which Congress adopted when it amended the Act in 1931. Prior to that time, as we have pointed out, the Federal Act by reason of its express terms had been subservient to state laws relating to warehouses and warehousemen. Congress in 1931 found that condition unfavorable and undertook to change it. If Congress had done no more than to eliminate from § 29 the language which resulted in the Act's subservience, there would be a strong case for holding that state regulatory systems were not to be affected unless they collided with the Act. That construction would receive reinforcement from the provision in § 29 that the Secretary 'is authorized to cooperate with State officials charged with the enforcement of State laws' relating to warehouses and warehousemen. Cf. Union Brokerage Co. v. Jensen, supra, 322 U.S. at page 209, 64 S.Ct. at page 972, 88 L.Ed. 1227, 152 A.L.R. 1072. But Congress did not choose that simple expedient. It went further and added to § 29 the mandatory words 'the power, jurisdiction, and authority' of the Secretary conferred under the Act 'shall be exclusive with respect to all persons' licensed under the Act. And the original provisions of § 6 requiring a bond from licensees securing the faithful performance of their obligations as warehousemen under state law were deleted. 23 These actions were explained in the Committee Reports. 24 The previous subservience of the Act to state law was said to have militated 'against the full value of Federal Warehouse receipts for collateral purposes'.11 S.Rep.No.1775, 71st Cong., 3d Sess., p. 2. The amendment to § 6 followed 'naturally' the revision of § 29. Id. The amendment to § 29 was designed to make 'the Federal act independent of State laws' and to 'place the Federal act on its own bottom.' Id. While a warehouseman need not operate under the Act, if he chose to be licensed under it, he would then 'be authorized to operate without regard to State acts and be solely responsible to the Federal act.' Id. Warehousemen, having made their choice to operate under state or federal law, should 'then be permitted to operate without interference on the part of any agency.' Id., pp. 2—3. Or, as stated by the House Committee, the purpose of the amendment to § 29 was to make the Act 'independent of any State legislation on the subject.' H.R.Rep.No.2314, 70th Cong., 2d Sess., p. 4. 25 That is strong language. It makes unambiguous what was meant by the deletion from § 6 of any requirement that federal licensees comply with state laws regulating warehousemen. It makes clear the significance to be attached to the special wording of § 29. The amendments to § 6 and § 29, read in light of the Committee Reports, say to us in plain terms that a licensee under the federal Act can do business 'without regard to State acts'; that the matters regulated by the Federal Act cannot be regulated by the States; that on those matters a federal licensee (so far as his interstate or foreign commerce activities are concerned) is subject to regulation by one agency and by one agency alone.12 That is to say, Congress did more than make the Federal Act paramount over state law in the event of conflict. It remedied the difficulties which had been encountered in the Act's administration by terminating the dual system of regulation. Cf. First Iowa Hydro-Electric Co-op. v. Federal Power Commission, 328 U.S. 152, 66 S.Ct. 906. As stated by the Supreme Court of South Dakota, warehousemen electing to come under the Federal Act need serve but one master, and that one the federal agency. In re Farmers Cooperative Ass'n, 69 S.D. at page 202, 8 N.W.2d 557. The cooperation which the Secretary was authorized to undertake with state officials was cooperation in harmonizing the exclusively federal and the exclusively state systems of regulation. 26 In this view of the Act Congress formulated a policy on numerous phases of the warehouse business.13 The policy on rates was not the fixing of them but control over them through issuance, suspension, or revocation of licenses. Dual or conflicting positions of warehousemen were regulated by disclosure, by general prohibitions against discrimination between customers, by control over the license. Unsafe and inadequate warehouses were protected by the power of the Secretary to determine whether the warehouses of applicants or licensees were suitable. Mixing of grain was authorized under specified conditions and prohibited under oters. On ea ch of the nine matters charged in the complaint and listed above Congress legislated. And as we read the Act Congress in effect said that the policy which it adopted in each of the nine was exclusive of all others; and that if a licensed warehouseman complied with each requirement, he did all that he need do. He could not be required by a State to do more or additional things or conform to added regulations, even though they in no way conflicted with what was demanded of him under the Federal Act. We recently noted that Congress can act so unequivocally as to make clear that it intends no regulation except its own. Bethlehem Steel Corp. v. New York State Labor Relations Board, 330 U.S. 767, 67 S.Ct. 1026. In these fields Congress has done just that by the 1931 amendments. 27 Thus, by eliminating dual regulation and substituting regulation by one agency Congress sought to achieve 'fair and uniform business practices' which, as noted in Federal Compress & Warehouse Co. v. McLean, supra, 291 U.S. at page 23, 54 S.Ct. at page 269, 78 L.Ed. 622, was the purpose of the amended Act. 28 The test, therefore, is whether the matter on which the State assets the right to act is in any way regulated by the Federal Act. If it is, the federal scheme prevails though it is a more modest, less pervasive regulatory plan than that of the State. By that test each of the nine matters we have listed is beyond the reach of the Illinois Commission since on each one Congress has declared its policy in the Warehouse Act. The provisions of Illinois law on those subjects must therefore give way by virtue of the Supremacy Clause. U.S.Const., Art. VI, Cl. 2. 29 Second. There were matters, other than those we have mentioned, which were charged in the complaint before the Commission. 30 (1) Failure to secure prior approval of the Illinois Commission for management, construction, engineering, supply, financial and other contracts between respondents and affiliates. Such approval is said to be required by § 8a (3) of the Public Utilities Act. 31 (2) Failure to secure prior approval of contracts and leases between respondents and other public utilities. Such approval is said to be required by § 27 of the Public Utilities Act. 32 (3) Failure to secure approval of issuance of securities payable at periods of more than twelve months after date. Such approval is said to be required by § 21 of the Public Utilities Act. 33 These regulatory measures, it is said, are designed to prevent unwarranted drains on utility fnds or the creation of unsound financial structures which would affect the ability of warehousemen to render adequate service at reasonable rates. 34 The United States Warehouse Act contains no provisions relating expressly to these three matters. And we are told that the Secretary of Agriculture has made no attempt to exercise any jurisdiction over them. But possibilities of conflict and repugnancy are conjured up. It is stated, for example, that the Secretary might determine that a warehouseman could not offer suitable warehouse service without an addition to his warehouse, that the financing of an addition might require the warehouseman to issue securities, that state disapproval of the issue might prevent the licensee from making the required additions. But it will be time to consider such asserted conflicts between the State and Federal Acts when and if they arise. Any such objections are at this stage premature. Congress has not foreclosed state action by adopting a policy of its own on these matters. Into these fields it has not moved. By nothing that it has done has it pre-empted those areas. And see Federal Compress & Warehouse Co. v. McLean, supra, 291 U.S. at page 23, 54 S.Ct. at page 269, 7, L.Ed. 622. In more ambiguous situations than this we have refused to hold that state regulation was superseded by a federal law. Penn Dairies, Inc. v. Milk Control Commission, 318 U.S. 261, 63 S.Ct. 617, 87 L.Ed. 748. 35 We accordingly affirm in part and reverse in part the judgment of the Circuit Court of Appeals and remand the cause to the District Court for proceedings in conformity with this opinion. 36 So ordered. 37 Affirmed in part and reversed in part. 38 Mr. Justice FRANKFURTER, with whom Mr. Justice RUTLEDGE concurs, dissenting. 39 More than seventy years ago this Court upheld the regulation of grain warehousing rates by Illinois and did so despite the relation of the great grain elevators to interstate commerce. Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77; and see Budd v. New York, 143 U.S. 517, 12 S.Ct. 468, 36 L.Ed. 247. State regulation of grain elevators had become so much part of our economic and political fabric, and so important was it deemed that the State laws remain in full force, that when Congress, in 1916, passed the first Warehouse Act (Part C of the Act of August 11, 1916, 39 Stat. 446, 486), it made that Act subordinate to the requirements of State Laws. The Court now holds that by the 1931 Amendment to that Act, 46 Stat. 1463, Congress not only made the federal legislation independent of State law to the full scope of federal regulation, but also nullified the extensive network of State laws regulating warehouses, even though such laws in their actual operation, in nowise conflict with the operation of the federal law. The Court thereby uproots a vast body of State enactments which in themselves do not collide with the licensing powers of the Secretary of Agriculture. It does so on the ground that Congress, by the 1931 Amendment, provided that 'the power, jurisdiction, and authority conferred upon the Secretary of Agriculture under this act shall be exclusive with respect to all persons securing a license hereunder so long as said license remains in effect.' The decision of the case turns on the 'power, jurisdiction, and authority' that Congress has deposited with the Secretary of Agriculture to the exclusion of action by a State. I could understand, though that is not my view, a holding that once a warehouseman chooses to obtain a federal license, he is quit of amenability to State law relating to the business of warehousing as such. On the other hand, the Amendment of 1931 may be read, without violence to its language, as designed not to displace all State regulation of warehousing, but merely to prevent conflict or even which occurrence as to the very matters with which the Secretary of Agriculture can deal. This would leave State law to operate where it could without impinging on the limited regulatory functions assumed by the Federal Government. Suh is my vi ew. The Court's conclusion is a kind of admixture of these two views. Today's decision, apparently, does not altogether free federally licensed warehouses from State warehouse regulation, nor yet subject them to State laws, even though these State laws may harmoniously function without impinging on the licensing powers of the Secretary. To my way of thinking, the justification for conceding an undefined area to the States equally justifies leaving to the States all that is not irreconcilable with the full exercise of the licensing authority given to the Secretary of Agriculture. 40 The facts of the case are not in dispute. Rice, an owner and shipper of grain, filed with the Illinois Commerce Commission a complaint charging respondent warehouse owners with violations of the Illinois Public Utility Act ((Ill.Rev.Stats.1945, c. 111 2/3), the Illinois Grain Warehouse Act (Ill.Rev.Stats.1945, c. 114, §§ 293—326(a))), and Art. XIII of the Illinois Constitution. The violations charged include operation without a State license, exaction of unreasonable rates, failure to publish rates, failure to provide appropriate facilities, improper mixing of grades, discrimination in rates, and conflict of interests as graindealer and warehouseman. The respondents moved to dismiss the complaint on the ground that federal license placed them under the exclusive jurisdiction of the United States Warehouse Act, and the State's authority was entirely superseded. Upon denial of this motion by the Illinois Commerce Commission, respondents applied to the United States District Court for an injunction against further State proceedings. What is before us is the ruling of the Circuit Court of Appeals that the District Court had erred in not granting the injunction. 41 This Court now orders the proceedings before the Illinois Commerce Commission to be enjoined, without knowledge on our part what it is that Illinois would exact of respondents. It has not yet been decided by the authoritative voice of Illinois law, the Supreme Court of Illinois, which of her regulatory requirements would survive respect by that Court for the controlling Federal Act. This Court has heretofore acted on the wise rule that it will not 'assume in advance that a State will so construe its law as to bring it into conflict with the federal Constitution or an act of Congress.' Allen-Bradley Local v. Wisconsin Employment Relations Board, 315 U.S. 740, 746, 62 S.Ct. 820, 824, 86 L.Ed. 1154. The suit in the District Court was, in any event, premature. It should, on familiar principles, be ordered held in the District Court until the claim of Illinois may be authoritatively ascertained in the State courts, thereby perhaps avoiding a claim of conflict between State and federal legislation. Compare the series of cases from Thompson v. Magnolia Petroleum Co., 309 U.S. 478, 60 S.Ct. 628, 84 L.Ed. 876, to Spector Motor Service v. McLaughlin, 323 U.S. 101, 65 S.Ct. 152, 89 L.Ed. 101. 42 On the merits of the controversy our problem is to determine what freedom to regulate its grain warehouses has been left to Illinois, after Congress exercised its constitutional power over such warehouses by adopting a licensing system to be administered by the Secretary of Agriculture under closely defined authority. Underlying the problem is the important fact that we are concerned with an economic enterprise which, while it has important radiations beyond State bounds, does not thereby lose special relations to the State in which it is conducted. And so we have once more the duty of judicially adjusting the interests of both the Nation and the State, where Congress has not clearly asserted its power of preemption so as to leave no doubt that the separate interests of the States are left wholly to national protection. 43 The general considerations to be taken into account in striking a balance, and not to be acknowledged merely platonically, have been indicated in my opinion in Bethlehem Steel Corporation v. New York State Labor Relations Board, Nos. 5 and 76, t his Term, 330 U.S. 767, 67 S.Ct. 1026. Suffice it to say that due regard for our federalism, in its practical operation, favors survival of the reserved authority of a State over matters that are the intimate concern of the State unless Congress has clearly swept the boards of all State authority, or the State's claim is in unmistakable conflict with what Congress has ordered. 44 Assuming that the undefined scope of Illinois law covers all the relief sought before the Illinois Commission, it is not suggested that there is actual conflict between the limited federal control through the licensing device and the policy of Illinois. Indeed, it seems to be admitted that the enforcement of the State Act might well effectuate, at least in some aspects, the policy of the federal statute. Moreover, despite a statement in the House Report that the purpose of the 1931 Amendment was to make the Act 'independent of any State legislation on the subject' (H.Rep. No. 2314, 70th Cong., 2d Sess., p. 4), the Court does not find that in making 'the power, jurisdiction, and authority conferred upon the Secretary of Agriculture * * * exclusive with respect to all persons securing a license' Congress insulated such licensed warehousemen from further regulation by a State. What the Court holds is that if Congress has touched a subject matter it becomes untouchable by the State, though there is neither paper nor operating conflict between federal and State spheres of authority. Thus, while Congress has not given to the Secretary of Agriculture rate-fixing power, Congress, it is said, has inferentially deprived Illinois of the power she has exercised for seventy years to fix grain warehouse rates. 45 I cannot agree. As to rates, for example, Congress has merely given the Secretary power to revoke a license if its holder charges 'unreasonable or exorbitant' rates. The practical assumption, I submit, is not that Congress has put an end to the tried machinery for rate-fixing by the States without putting another in its place. It is rather that it would permit its licensing authority to avail itself of the facilities of the established rate-fixing agencies of the States and cooperate with them in ascertaining whether Illinois licensees are charging 'unreasonable and exorbitant' rates. Such would be the practicalities of government where both State and Nation have converging yet separate interests, and such authorized collaboration between national and State governments should be the assumption in construing the Act unless Congress has left no doubt that it was so bent on avoidance of all possible conflict that it left no room for concert. Indeed, the very section which confers 'exclusive' authority upon the Secretary of Agriculture authorizes him 'to cooperate with State officials charged with the enforcement of State laws relating to warehouses * * *.' 46 Stat. 1465. 46 By the United States Warehouse Act Congress did not undertake a general, affirmative regulation of warehouses, even remotely comparable to its regulation of other public utilities. The Act was initiated as warehouse receipts legislation, written with the Uniform Warehouse Receipts Act in mind. Neither the language nor the history of the 1931 Amendment marks a departure from the basic design and policy of the legislation. Congress did not see fit to establish a compulsory, uniform, nation-wide system for the regulation of grain warehouses, essential links though they be in the chain of interstate commerce. Nor did Congress authorize the Secretary of Agriculture to formulate and enforce such a system. Even in its limited aspect, the Act does not apply to all warehouses affecting interstate commerce. Indeed, Congress exercised no compulsion over any warehouse. Congress merely offered to those who desired it the privilege of being a federal licensee. Anyone who wished might continue to operate as a warehouseman without a federal license. As to these there is no question but that State law controls. And even those who obtain a federal licese cannot be compelled to perform any positive duties. Except for certain penalties for fraud, the only sanction for disobedience of the few duties imposed is loss of the license. 47 Congress was content to allow two warehousemen in similar circumstances to operate under different rules if one chose to seek a federal license and the other did not. It offered perquisites incident to such a license to a warehouseman who wanted them. Such a scheme does not persuasively indicate a purpose to free such a federal licensee from regulations to which others are subject and which are not in practical conflict with the requirements of the federal law. For instance, has Congress really expressed with reasonable clarity its purpose to forbid to the States the fixing of warehouse rates and thus deprive the States of a long-standing regulatory power which the United States chose not to assume? Is it not more consistent with a proper regard for the interplay of State and national interests to assume that Congress was imposing a minimum of regulation for those who accepted federal licenses rather than to assume that by inferential sterilization of State laws Congress meant to make its optional and restricted requirements the maximum? The 'power, jurisdiction, and authority' of the Secretary of Agriculture which after 1931 was to be 'exclusive' are given full and fair scope if made to refer only to powers that the Secretary can effectively exercise. There is exclusion of State power as to what the Act, substantively speaking, includes, but not exclusion of a vast potential field of warehouse regulation, not within the active range of federal administration, simply because Congress dealt with a small part of it, and that only conditionally. 48 Nor is there anything in the history of the Federal Act which requires such destructive consequences to a longstanding body of State enactments. When the 1916 Act was passed, Congress emphasized the need for State regulation by subordinating federal action to such regulation. By 1931 forty States had laws regulating warehouses, laws which at least in some aspect did not conflict with the powers vested in the Secretary of Agriculture. An impressively large number of States fixed warehouse rates. The Court now finds in the legislative history of the 1931 Amendment a purpose to wipe out all these regulations as to the holders of federal licenses. 49 That Amendment eliminated the subservicence of the federal Act to the laws of the States, for such subservience really nullified the practical purposes at which Congress aimed in 1916 by a voluntary federal licensing system. The purpose was to make 'the federal Act independent of State laws,' and to 'place the Federal Act on its own bottom.' While such language in a Committee Report, treated merely as words, might be interpreted as an implicit, roughshod decimation of State authority over any aspect of warehousing which the federal licensing system touched, howsoever meagerly and indirectly, it is more consonant with a due regard for federal-state relations to find that the dominating object of the legislation controls what was meant by 'independent of State laws.' For the dominant object was removal of those matters which were entrusted to the Secretary of Agriculture from subordination to State action. By saving the authority which it had given to the Secretary of Agriculture from being rendered futile by State laws, Congress ought not to be held to have nullified State laws whose continuing force would not hamper the Secretary of Agriculture in exercising the powers that Congress gave him. Evidence is lacking that Congress felt that the correction of the inadequacy which had revealed itself regarding the 1916 Act required withdrawal of federal license holders from the requirements of non-conflicting State regulation. So long as full scope can be given to the amendatory legislation without undermining non-conflicting State laws, nothing but the clearest expression should persuade us that the federal Act wiped out Stae fixation of rates and other State requirements deeply rooted in their laws. When neither the mischief at which the 1931 Amendment was directed, nor the policy, terms and structure of warehousing legislation by Congress in its entirety necessitate it, disregard of the delicate balance of federal-State relations ought not to be attributed to Congress. 50 If so fundamental a change were designed, it would normally be reflected in the financial provisions made by Congress, and in the reports on the administration of the Act. The appropriations for administering the United States Warehouse Act show no substantial increase as a consequence of the 1931 Amendment. For the years preceding and those immediately following the Amendment, the appropriations were: 51 1929 (45 Stat. 539, 563)...................... $240,320 52 1930 (45 Stat. 1189, 1214).................... 256,000 53 1931 (46 Stat. 392, 419)...................... 241,000 54 1932 (46 Stat. 1242, 1270).................... 312,200 55 1933 (47 Stat. 609, 638)...................... 313,020 56 1934 (47 Stat. 1432, 1460).................... 296,220 57 1935 (48 Stat. 467, 494)...................... 271,383* 58 Moreover, those charged with the enforcement of the Act seem to have been unmindful of the far-reaching consequences now imputed to it. The reports of the Secretary of Agriculture, of the Chief of the Bureau of Agricultural Economics, and of the Chief of Agricultural Marketing Service, for the years after 1931, disclose administrative attitudes and practices no different from those of preceding years. No mention is made of the State laws which, the Court now holds, were superseded though not conflicting with federal administration. In citing the advantages incident to a federal license, no mention appears of so important an item as relief from existing State regulations. 59 The history of the federal act shows that at no time has Congress deemed it desirable to introduce compulsory uniformity of warehouse regulation. By freeing federal licensees from overriding State regulation Congress was not by indirection seeking to create such a uniform system. But the effect of the interpretation now given to the 1931 Amendment is the establishment of uniformity of non-regulation, in that it introduces laissez faire outside the very narrow scope of the Secretary's powers. It is easy to exaggerate the danger of undesirable consequences flowing from a rejected construction. But surely one does not draw on idle fears in suggesting that as a result of today's decision the gates of escape from deeply rooted State requirements will be open, although Congress itself has not authorized federal authority to take over the regulation of such activities and though their State enforcement does not at all conflict with, but rather promotes, the limited oversight of warehouses thus far assumed by the Federal Government The Court displaces settled and fruitful State authority though it cannot replace it with federal authority. 1 The Chicago Board of Trade was also joined as a defendant in the proceedings before the Illinois Commerce Commission. The issues raised concerning it are considered in the companion cases decided this day, Rice v. Board of Trade, and Illinois Commerce Commission v. Board of Trade, 331 U.S. 247, 67 S.Ct. 1160. 2 The preferences were alleged to have arisen from the practice of respondents in '(a) Mixing high quality public grain with inferior grain owned or acquired by the defendant warehouseman to reduce grain delivered to the point of minimum quality within the established grain trade (sic). (b) Sacrificing part of storage charges to effect purchases and sales of grain and otherwise manipulating and rebating storage charges on grain stored in private warehouse space. (c) Furnishing transit tonnage to owners of public grain of the most undesirable type, while withholding for their own use the most desirable transit tonnage, thereby placing the owners of public grain at a distinct disadvantage in merchandising grain in storage. (d) Providing for storage of public grain in old wooden warehouses carrying exorbitant insurance premium rates, while storing the warehousemen's own grain in modern warehouses with reasonable insurance premium rates. (e) Unduly and imprudently delaying loading of grain after return of warehouse receipt issued by the particular warehouseman, the tender of proper charges and the receipt of instructions to load grain for delivery.' 3 Accord: In re Farmers Co-op. Ass'n, 69 S.D. 191, 8 N.W.2d 557. 4 The Secretary of Agriculture who recommended the 1931 amendment to § 29 gave the following reasons: 'The amendment suggested relative to section 29 aims to make the Federal warehouse act independent of any State legislation on the subject. As the law now reads, it can be ullified b y State legislation. There are conflicts at present between the State laws and the Federal act. For instance, under certain State laws warehousemen are permitted to ship the products from their warehouses to a terminal or other warehouse while the receipts are outstanding. The prime purpose of the Federal warehouse act is to make it possible to finance, properly, agricultural products while in storage. No banker can safely loan on a warehouse receipt representing a product to be in a certain warehouse when, as a matter of fact, it may be moved under authority of State law to some ot'er and distant warehouse. The Federal warehouse act, as now worded, specifically prohibits removal of the product prior to the return of the receipts. This department emphatically believes that this requirement of the Federal act is sound and the banking fraternity generally shares that same feeling. It is at once apparent to you, of course, that if the Federal act may be nullified by State laws with respect to a feature as important as this that the value of Federal warehouse receipts might be destroyed. For that reason, then, we have suggested amending section 29 so as to make the Federal warehouse act independent of any State legislation on warehousing.' Hearings before Senate Committee on Agriculture and Forestry on H.R. 7, 71st Cong., 3d Sess., p. 10. And see id., pp. 22—26. Independent Gin & Warehouse Co. v. Dunwoody, 5 Cir., 40 F.2d 1, arose under the law as originally enacted. It was a suit brought by warehousemen, who were licensed under the Federal Act, to enjoin officials of Alabama from enforcing provisions of Alabama warehouse law. These were provisions requiring payment of a graduated license or privilege tax, for the giving of a bond, for the obtaining of a license and for submission to state regulation concerning the suitability and adequacy of the warehouse structure, the character of records to be kept, the inspection of the warehouse buildings and the audit of the books. Agr. Code Ala.1927, §§ 388—407. The Federal Act was construed not to exclude such state regulation. 5 Section 2 of the Act includes in the definition of 'warehouse' every building 'in which any agricultural product is or may be stored for interstate or foreign commerce * * *.' 6 The regulations are contained in 7 C.F.R., Part 102. 7 See note 2, supra. 8 The regulations promulgated under the federal Act implement these provisions. Reg. 5, § 12 provides that licensed warehousemen shall accept grain for storage and deliver grain out of storage in accordance with the grades of such grain determined by a federal inspector. Reg. 5, § 16 provides that such warehousemen shall deliver to the lawful holder of a receipt grain of the grade and quantity named in the receipt. Reg. 5, § 18 provides that grain of different grades may not be mixed except, inter alia, when the identity of the grain to be stored is to be preserved. 9 See note 2, supra. 10 And see § 23 requiring reports to the Secretary 'concerning such warehouse and the condition, contents, operation, and business thereof' and providing that the licensee 'shall conduct said warehouse in all other respects in compliance with this act and the rules and regulations made thereunder.' 11 The Senate Report also stated, p. 2: 'Bankers have repeatedly pointed out that this section of the warehouse act is its weakest feature. This amendment will clarify and remove many uncertainties from the credit man's viewpoint. As the law now reads, for fear the Federal act may be negatived by State legislation or regulation, a banker is obliged to follow closely the laws of the 48 different States, the regulations thereunder, and the administrative rulings thereunder. This is an impossible task. The suggested amendment will place the Federal act independent of State acts and should enhance the value of receipts for collateral purposes.' And see H.R.Rep.No.4, 71st Cong., 1st Sess. As stated in note 4, supra, the amendment was recommended by the Secretary of Agriculture 'so as to make the Federal warehouse act independent of any State legislation on warehousing.' 12 That is, of course, subject to those express exceptions in the Warehouse Act which subject phases of the business to state law. See e.g., §§ 18 and 20. 13 The basic program reflected in the Act was described in H.R.Rep.No.60, 64th Cong., 1st Sess., p. 1, as follows: 'The outbreak of the European war emphasized the fact that the farm marketing machinery of this country is seriously weak, insufficient, and inadequate—a condition which already had been more or less recognized by students of farm economics. From a very thorough study of our system of marketing there will appear: (1) A lack of adequate storage facilities; (2) a lack of proper control and regulation of such storage systems as exist; (3) an absence of uniformity in their methods of operation and the form of receipts issued; (4) a multiplicity of standards for grading and classification, or in some cases an entire absence of such standards for grading and classification; (5) a lack of disinterested graders, classifiers, and weighers; (6) a lack of proper relationship between the storage and banking systems of the country. 'The inauguration under this bill of a permissive system of warehouses licensed and bonded under authority of the Federal Government for the storage of staple and nonperishable agricultural products upon which uniform receipts may be issued, the weights and grades of the products specified therein having been previously determined by licensed weighers and graders in accordance with Government standards, would go far in the direction of standardizing warehouse construction, storage conditions, insurance, accounting, financing, and the handling and marketing of farm products.'

910

331 U.S. 145 67 S.Ct. 1098 91 L.Ed. 1399 HARRISv.UNITED STATES. No. 34. Argued Dec. 12, 13, 1946. Decided May 5, 1947. Rehearing Denied June 9, 1947. See 331 U.S. 867, 67 S.Ct. 1527. Messrs. Roy St. Lewis, of Washington, D.C., and Herbert K. Hyde, of Oklahoma City, Okl., for petitioner. Mr. Frederick Bernays Wiener, of Providence, R.I., for respondent. Mr. Chief Justice VINSON delivered the opinion of the Court. 1 Petitioner was convicted on sixteen counts of an indictment1 charging the unlawful possession, concealment and alteration of certain Notice of Classification Cards and Registration Certificates in violation of § 11 of the Selective Raining and Service Act of 1940,2 and of § 48 of the Criminal Code.3 Prior to the trial, petitioner moved to suppress the evidence, which served as the basis for the conviction, on the grounds that it had been obtained by means of an unreasonable search and seizure contrary to the provisions of the Fourth Amendment4 and that to permit the introduction of that evidence would be to violate the self-incrimination clause of the Fifth Amendment.5 The motion to suppress was denied, and petitioner's numerous objections to the evidence at the trial were overruled. The Circuit Court of Appeals affirmed the conviction. 10 Cir., 151 F.2d 837. Certiorari was granted because of the importance of the questio § presented. 66 S.Ct. 1360. 2 Two valid warrants of arrest were issued. One charged that petitioner and one Moffett had violated the Mail Fraud Statute6 by causing a letter addressed to the Guaranty Trust Company of New York to be placed in the mails for the purpose of cashing a forged check for $25,000 drawn on the Mudge Oil Company in pursuance of a scheme to defraud. The second warrant charged that petitioner and Moffett, with intent to defraud certain banks and the Mudge Oil Company, had caused a $25,000 forged check to be transported in interstate commerce, in violation of § 3 of the National Stolen Property Act.7 3 Five agents of the Federal Bureau of Investigation, acting under the authority of the two warrants, went to the apartment of petitioner in Oklahoma City and there arrested him. The apartment consisted of a living room, bedroom, bathroom and kitchen. Following the arrest, which took place in the living room, petitioner was handcuffed and a search of the entire apartment was undertaken. The agents stated that the object of the search was to find two $10,000 canceled checks of the Mudge Oil Company which had been stolen from that company's office and which were thought to have been used in effecting the forgery. There was evidence connecting petitioner with that theft. In addition, the search was said to be for the purpose of locating 'any means that might be used to commit these wo crimes, such as burglary tools, pens, or anything that could be used in a confidence game of this type.'8 4 One agent was assigned to each room of the apartment and, over petitioner's protest, a careful and thorough search proceeded for approximately five hours. As the search neared its end, one of the agents discovered in a bedroom bureau drawer a sealed envelope marked 'George Harris, personal papers.' The envelope was torn open and on the inside a smaller envelope was found containing eight Notice of Classification cards and 11 Registration Certificates bearing the stamp of Local Board No. 7 of Oklahoma County. It was this evidence upon which the conviction in the District Court was based and against which the motion to suppress was directed. It is conceded that the evidence is in no way related to the crimes for which petitioner was initially arrested and that the search which led to its discovery was not conducted under the authority of a search warrant.9 5 In denying the motion to suppress the District Court wrote no opinion. The Circuit Court of Appeals affirmed the conviction, finding that the search was carried on in good faith by the federal agents for the purposes expressed, that it was not a general exploratory search for merely evidentiary materials, and that the search and seizure were a reasonable incident to petitioner's arrest.10 6 If it is true, as petitioner contends, that the draft cards were seized in violation of petitioner's rights under the Fourth Amendment, the conviction based upon evidence so obtained cannot be sustained. Boyd v. United States, 1886, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746; Weeks v. United States, 1914, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652, L.R.A.1915B, 834, Ann.Cas.1915C, 1177; Agnello v. United States, 1925, 269 U.S. 20, 46 S.Ct. 4, 70 L.Ed. 145; Segurola v. United States, 1927, 275 U.S. 106, 48 S.Ct. 77, 72 L.Ed. 186. This Court has consistently asserted that the rights of privacy and personal security protected by the Fourth Amendment '* * * are to be regarded as of the very essence of constitutional liberty; and that the guaranty of them is as important and as imperative as are the guaranties of the other fundamental rights of the individual citizen * * *'. Gouled v. United States, 1921, 255 U.S. 298, 304, 41 S.Ct. 261, 263, 65 L.Ed. 647. 7 This Court has also pointed out that it is only unreasonable searches and seizures which come within the constitutional interdict. The test of reasonableness cannot be stated in rigid and absolute terms. 'Each case is to be decided on its own facts and circumstances.' Go-Bart Importing Company v. United States, 1931, 282 U.S. 344, 357, 51 S.Ct. 153, 158, 75 L.Ed. 374. 8 The Fourth Amendment has never been held to require that every valid search and seizure be effected under the authority of a search warrant. Search and seizure incident to lawful arrest is a practice of ancient origin11 and has long been an integral part of the law-enforcement procedures of the United States12 and of the individual states.13 9 The opinions of this Court have clearly recognized that the search incident to arrest may, under appropriate circumstances, extend beyond the person of the one arrested to include the premises under his immediate control. Thus in Agnello v. United States, supra, 269 U.S. at page 30, 46 S.Ct. at page 5, 70 L.Ed. 145, it was said: 'The right without a search warrant contemporaneously to search persons lawfully arrested while committing crime and to search the place where the arrest is made in order to find and seize things connected with the crime as its fruits or as the means by which it was committed, as well as weapons and other things of effect an escape from custody is not to be doubted.'14 It is equally clear that a search incident to arrest, which is otherwise reasonable, is not automatically rendered invalid by the fact that a dwelling place, as contrasted to a business premises, is subjected to search.15 10 Nor can support be found for the suggestion that the search could not validly extend beyond the room in which petitioner was arrested.16 Petitioner was in exclusive possession of a four room apartment. His control extended quite as much to the bedroom in which the draft cards were found as to the living room in which he was arrested. The canceled checks and other instrumentalities of the crimes charged in the warrants could easily have been concealed in any of the four rooms of the apartment. Other situations may arise in which the nature and size of the object sought or the lack of effective control over the premises on the part of the persons arrested may require that the searches be less extensive. But the area which reasonably may be subjected to search is not to be determined by the fortuitous circumstance that the arrest took place in the living room as contrasted to some other room of the apartment. 11 Similar considerations are applicable in evaluating petitioner's contention that the search was, in any even , too intensive. Here again we must look to the particular circumstances of the particular case. As was observed by the Circuit Court of Appeals (151 F.2d 837, 840): 'It is not likely that the checks would be visibly accessible. By their very nature they would have been kept in some secluded spot * * *.' The same meticulous investigation which would be appropriate in a search for two small canceled checks could not be considered reasonable where agents are seeking a stolen automobile or an illegal still. We do not believe that the search in this case went beyond that which the situation reasonably demanded. 12 This is not a case in which law enforcement officials have invaded a private dwelling without authority and seized evidence of crime. Amos v. United States, 1921, 255 U.S. 313, 41 S.Ct. 266, 65 L.Ed. 654; Byars v. United States, 1927, 273 U.S. 28, 47 S.Ct. 248, 71 L.Ed. 520; Nueslein v. District of Columbia, 1940, 73 App.D.C. 85, 115 F.2d 690. Here the agents entered the apartment under the authority of lawful warrants of arrest. Neither was the entry tortious nor was the arrest which followed in any sense illegal. 13 Nor is this a case in which law enforcement officers have entered premises ostensibly for the purpose of making an arrest but in reality for the purpose of conducting a general exploratory search for merely evidentiary materials tending to connect the accused with some crime. Go-Bart Company v. United States, supra; Lefkowitz v. United States, supra. In the present case the agents were in possession of facts indicating petitioner's probable guilt of the crimes for which the warrants of arrest were issued. The search was not a general exploration but was specifically directed to the means and instrumentalities by which the crimes charged had been committed, particularly the two canceled checks of the Mudge Oil Company. The Circuit Court of Appeals found and the District Court acted on the assumption that the agents conducted their search in good faith for the purpose of discovering the objects specified. That determination is supported by the record. The two canceled checks were stolen from the offices of the Mudge Oil Company. There was evidence connecting petitioner with that theft. The search which followed the arrest was appropriate for the discovery of such objects. Nothing in the agents' conduct was inconsistent with their declared purpose. 14 Furthermore, the objects sought for and those actually discovered were properly subject to seizure. This Court has frequently recognized the distinction between merely evidentiary materials, on the one hand, which may not be seized either under the authority of a search warrant or during the course of a search incident to arrest, and on the other hand, those objects which may validly be seized including the instrumentalities and means by which a crime is committed, the fruits of crime such as stolen property, weapons by which escape of the person arrested might be effected, and property the possession of which is a crime.17 Clearly the checks and other means and instrumentalities of the crimes charged in the warrants toward which the search was directed as well as the draft cards which were in fact seized fall within that class of objects properly subject to seizure. Certainly this is not a case of search for or seizure of an individual's private papers, nor does it involve a prosecution based upon the expression of political or religious views in such papers.18 15 Nor is it a significant consideration that the draft cards which were seized were not related to the crimes for which petitioner was arrested. Here during the course of a valid search the agents came upon property of the United States in the illegal custody of the petitioner. It was property to which the Government was entitled to possession.19 In keeping the draft cards in his custody petitioner was guilty of a serious and continuing offense against the laws of the United States. A crime was thus being committed in the very presence of the agents conducting the search. Nothing in the decisions of this Court gives support to the suggestion that under such circumstances the law-enforcement officials must impotently stand aside and refrain from seizing such contraband material. If entry upon the premises be authorized and the search which follows be valid, there is nothing in the Fourth Amendment which inhibits the seizure by law-enforcement agents of government property the possession of which is a crime, even though the officers are not aware that such property is on the premises when the search is initiated.20 16 The dangers to fundamental personal rights and interests resulting from excesses of law-enforcement officials committed during the course of criminal investigations are not illusory. This Court has always been alert to protect against such abuse. But we should not permit our knowledge that abuses sometimes occur to give sinister coloration to procedures which are basically reasonable. We conclude that in this case the evidence which formed the basis of petitioner's conviction was obtained without violation of petitioner's rights under the Constitution. 17 Affirmed. 18 Mr. Justice FRANKFURTER, with whom Mr. Justice MURPHY and Mr. Justice RUTLEDGE concur, dissenting. 19 Because I deem the implications of the Court's decision to have serious threats to basic liberties, I consider it important to underscore my concern over the outcome of this case. In Davis v. United States, 328 U.S. 582, 66 S.Ct. 1256, the Court narrowed the protection of the Fourth Amendment1 by extending the conception of 'public records' for purpose of search without warrant.2 The Court now goes far beyond prior decisions in another direction—it permits rummaging throughout a house without a search warrant on the ostensible ground of looking for the instruments of a crime for which an arrest, but only an arrest, has been authorized. If only the fate of the Davises and the Harrises were involved, one might be brutally indifferent to the ways by which they get their deserts. But it is precisely because the appeal to the Fourth Amendment is so often made by dubious characters that its infringements call for alert and strenuous resistance. Freedom of speech, of the press, of religion, easily summon powerful support against encroachment. The prohibition against unreasonable search and seizure is normally invoked by those a cused of crime, and criminals have few friends. The implications of such encroachment, however, reach far beyond the thief or the blackmarketeer. I cannot give legal sanction to what was done in this case without accepting the implications of such a decision for the future, implications which portend serious threats against precious aspects of our traditional freedom. 20 If I begin with some general observations, it is not because I am unmindful of Mr. Justice Holmes' caution that 'General propositions do not decide concrete cases.' Lochner v. State of New York, 198 U.S. 45, 76, 25 S.Ct. 539, 547, 49 L.Ed. 937, 3 Ann.Cas. 1133. Whether they do or not often depends on the strength of the conviction with which such 'general propositions' are held. A principle may be accepted 'in principle,' but the impact of an immediate situation may lead to deviation from the principle. Or, while accepted 'in principle,' a competing principle may seem more important. Both these considerations have doubtless influenced the application of the search and seizure provisions of the Bill of Rights. Thus, one's views regarding circumstances like those here presented ultimately depend upon one's understanding of the history and the function of the Fourth Amendment. A decision may turn on whether one gives that Amendment a place second to none in the Bill of Rights, or considers it on the whole a kind of nuisance, a serious impediment in the war against crime. 21 The provenance of the Fourth Amendment bears on its scope. It will be recalled that James Otis made his epochal argument against general warrants in 1761.3 Otis' defense of privacy was enshrined in the Massachusetts Constitution of 1780 in the following terms: 22 'XIV. Every subject has a right to be secure from all unreasonable searches, and seizures, of his person, his houses, his papers, and all his possession. All warrants, therefore, are contrary to this right, if the cause or foundation of them be not previously supported by oath or affirmation, and if the order in the warrant to a civil officer, to make search in suspected places, or to arrest one or more suspecte persons, or to seize their property, be not accompanied with a special designation of the persons or objects of search, arrest, or seizure; and no warrant ought to be issued but in cases, and with the formalities prescribed by the laws.' 23 In the meantime, Virginia, in her first Constitution (1776), incorporated a provision on the subject narrower in scope: 24 'Sec. 10. That general warrants, whereby an officer or messenger may be commanded to search suspected places without evidence of a fact committed, or to seize any person or persons not named, or whose offence is not particularly described and supported by evidence, are grievous and oppressive, and ought not to be granted.' 25 When Madison came to deal with safeguards against searches and seizures in the United States Constitution, he did not draw on the Virginia model but based his proposal on the Massachusetts form. This is clear proof that Congress meant to give wide, and not limited, scope to this protection against police intrusion. 26 Historically we are dealing with a provision of the Constitution which sought to guard against an abuse that more than any one single factor gave rise to American independence. John Adams surely is a competent witness on the causes of the American Revolution. And he it was who said of Otis' argument against search by the police, not unlike the one before us: 'American independence was then and there born.' 10 Adams, Works 247. That which lay behind immunity from police intrusion without a search warrant was expressed by Mr. Justice Brandeis when he said that the makers of our Constitution 'conferred, as against the government, the right to be let alone—the most comprehensive of rights and the right most valued by civilized men. To protect, that right, every unjustifiable intrusion by the government upon the privacy of the individual, whatever the means employed, must be deemed a violation of the Fourth Amendment.' 27 To be sure, that was said by him in a dissenting opinion in which he, with Mr. Justice Holmes, Mr. Justice Butler and Mr. Justice Stone, applied the prohibition of the Fourth Amendment to wiretapping without statutory authority. Olmstead v. United States, 277 U.S. 438, 478, 48 S.Ct. 564, 572, 72 L.Ed. 944, 66 A.L.R. 376. But with only an occasional deviation, a series of decisions of this Court has construed the Fourth Amendment 'liberally to safeguard the right of privacy.' United States v. Lefkowitz, 285 U.S. 452, 464, 52 S.Ct. 420, 423, 76 L.Ed. 877, 82 A.L.R. 775. (See an analysis of the cases in the Appendix to this opinion.) Thus, the federal rule established in Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652, L.R.A.1915B, 834, Ann.Cas.1915C, 1177, as against the rule prevailing in many States, renders evidence obtained through an improper search inadmissible no matter how relevant. See People v. Defore, 242 N.Y. 13, 150 N.E. 585, and Chafee, the Progress of the Law 1919-1922, 35 Harv.L.Rev. 673, 694 et seq. And long before the Weeks case, Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 764, gave legal effect to the broad historic policy underlying the Fourth Amendment.4 The Boyd opinion has been the guide to the interpretation of the Fourth Amendment to which the Court has most frequently recurred. 28 It is significant that the constitution of every State contains a clause like that of the Fourth Amendment and often in its precise wording. Nor are these constitutional provi ions historic survivals. New York was alone in not having a safeguard against unreasonable search and seizure in its constitution. In that State, the privilege of privacy was safeguarded by a statute. It tells volumes that in 1938, New York, not content with statutory protection, put the safeguard into its constitution.5 If one thing on this subject can be said with confidence it is that the protection afforded by the Fourth Amendment against search and seizure by the police, except under the closest judicial safeguards, is not an outworn bit of Eighteenth Century romantic rationalism but an indispensable need for a democratic society. 29 The Fourth Amendment, we have seen, derives from the similar provision in the first Massachusetts Constitution. We may therefore look to the construction which the early Massachusetts Court placed upon the progenitor of the Fourth Amendment: 'With the fresh recollection of those stirring discussions (respecting writs of assistance), and of the revolution which followed them, the article in the Bill of Rights, respecting searches and seizures, was framed and adopted. This article does not prohibit all searches and seizures of a man's person, his papers, and possessions; but such only as are 'unreasonable,' and the foundation of which is 'not previously supported by oath or affirmation.' The legislature were not deprived of the power to authorize search warrants for probable causes, supported by oath or affirmation, and for the punishment or suppression of any violation of law.' Commonwealth v. Dana, 2 Metc., Mass., 329, 336. 30 The plain import of this is that searches are 'unreasonable' unless authorized by a warrant, and a warrant hedged about by adequate safeguards. 'Unreasonable' is not to be determined with reference to a particular search and seizure considered in isolation. The 'reason' by which search and seizure is to be tested is the 'reason' that was written out of historic experience into the Fourth Amendment. This means that, with minor and severely confined exceptions, inferentially a part of the Amendment, every search and seizure is unreasonable when made without a magistrate's authority expressed through a validly issued warrant. 31 It is noteworthy that Congress has consistently and carefully respected the privacy protected by the Fourth Amendment. ecause they realized that the dangers of police abuse were persisting dangers, the Fathers put the Fourth Amendment into the Constitution. Because these dangers are inherent in the temptations and the tendencies of the police, Congress has always ways been chary in allowing the use of search warrants. When it has authorized them it has circumscribed their use with particularity. In scores upon score of Acts, Congress authorized search by warrant only for particular situations and in extremely restricted ways. Despite repeated importunities by Attorneys General of the United States, Congress long refused to make search by warrant generally available as a resource in aid of criminal prosecution. It did not do so until the first World War, and even then it did not do so except under conditions carefully circumscribed. 32 The whole history of legislation dealing with search and seizure shows how warily Congress has walked precisely because of the Fourth Amendment. A search of the entire premises for instruments of crime merely as an incident to a warrant of arrest has never been authorized by Congress. Nor has Congress ever authorized such search without a warrant even for stolen or contraband goods. On the contrary, it is precisely for the search of such goods that specific legislative authorization was given by Congress. Warrants even for such search required great particularity and could be issued only on adequate grounds. (For a table of Congressional legislation, with indication as to its scope, see the Appendix to the dissenting opinion in the Davis case, 328 U.S. at page 616, 66 S.Ct. at page 1273.) 33 This is the historic background against which the undisputed facts of this case must be projected. For me the background ground is respect for that provision of the bill of Rights which is central to enjoyment of the other guarantees of the Bill of Rights. How can there be freedom of thought or freedom of speech or freedom of religion, if the police can, without warrant, search your house and mine from garret to cellar merely because they are executing a warrant of arrest? How can men feel free if all their papers may be searched, as an incident to the arrest of someone in the house, on the chance that something may turn up, or rather, be turned up? Yesterday the justifying document was an illicit ration book, tomorrow it may be some suspect piece of literature. 34 The Court's reasoning, as I understand it, may be briefly stated. The entry into Harris' apartment was lawful because the agents had a warrant of arrest. The ensuing search was lawful because, as an incident of a lawful arrest, the police may search the premises on which the arrest took place since everything in the apartment was in the 'possession' of the accused and subject to his control. It was lawful, therefore, for the agents to rummage the apartment in search for 'instruments of the crime.' Since the search was lawful, anything illicit discovered in the course of the search was lawfully seized. In any event, the seizure was lawful because the documents found were property of the United States and their possession was a continuing crime against the United States. 35 Much is made of the fact that the entry into the house was lawful. But we are not confined to issues of trespass. The protection of the Fourth Amendment extends to improper searches and seizures, quite apart from the legality of an entry. The Amendment asserts the 'right of the people to be secure' not only 'in their persons, houses,' but also in their 'papers, and effects, against unreasonable searches and seizures.' It is also assumed that because the search was allegedly for instruments of the crime for which Harris was arrested it was ipso facto justified as an incident of the arrest. It would hardly be suggested that such a search could be made without warrant if Harris had been arrested on the street. How, then, is rummaging a man's closets and drawers more incidental to the arrest because the police chose to arrest him at home? For some purposes to be sure, a man's house and its contents are deemed to be in his 'possession' or 'control' even when he is miles away. Because this is a mode of legal reasoning relevant to disputes over property, the usual phrase for such non-physical control is 'constructive possession.' But this mode of thought and these concepts are irrelevant to the application of the Fourth Amendment and hostile to respect for the liberties which it protects. Due regard for the policy of the Fourth Amendment precludes indulgence in the fiction that the recesses of a man's house are like the pickets of the clothes he wears at the time of his arrest. 36 To find authority for ransacking a home merely from authority for the arrest of a person is to give a novel and ominous rendering to a momentous chapter in the history of Anglo-American freedom. An Englishman's home, though a hovel, is his castle, precisely because the law secures freedom from fear of intrusion by the police except under carefully safeguarded authorization by a magistrate. To derive from the common law right to search the person as an incident of his arrest the right of indiscriminate search of all his belongings, is to disregard the fact that the Constitution protects both unauthorized arrest and unauthorized search. Authority to arrest does not dispense with the requirement of authority to search. 37 But even if the search was reasonable, it does not follow that the seizure was lawful. If the agents had obtained a warrant to look for the cancelled checks, they could not be entitled to seize other items discovered in the process. Marron v. United States, 275 U.S. 192, 196, 48 S.Ct. 74, 76, 72 L.Ed. 231.6 Harris would have been able to reclaim them by a motion to suppress evidence. Such is the policy of the Fourth Amendment, recognized by Congress and reformulated in the New Rules of Criminal Procedure adopted only last year. 18 U.S.C.A. following section 687. See Rule 41(e) superseding the Act of June 15, 1917, 40 Stat. 228, 229, 18 U.S.C.A. §§ 625, 626. The Court's decision achieves the novel and startling result of making the scope of search without warrant broader than an authorized search. 38 These principles are well established. While a few of the lower courts have uncritically and unwarrantedly extended the very limited search without warrant of a person upon his lawful arrest, such extension is hostile to the policy of the Amendment and is not warranted by the precedents of this Court. 39 'It is important to keep clear the distinction between prohibited searches on the one hand and improper seizures on the other. See Mr. Justice Miller, in Boyd v. United States, 116 U.S. 616, 638, 641, 6 S.Ct. 524, 536, 538, 29 L.Ed. 746. Thus, it is unconstitutional to seize a person's private papers, though the search in which they were recovered was perfectly proper, E.g., Gouled v. United States, 255 U.S. 298, 41 S.Ct. 261, 65 L.Ed. 647. It is unconstitutional to make an improper search even for articles that are appropriately subject to seizure, e.g., Amos v. United States, 255 U.S. 313, 41 S.Ct. 266, 65 L.Ed. 654; Byars v. United States, 273 U.S. 28, 47 S.Ct. 248, 71 L.Ed. 520; Taylor v. United States, 286 U.S. 1, 52 S.Ct. 466, 76 L.Ed. 951. And a search may be improper because of the object it seeks to uncover, e.g., Weeks v. United States, 232 U.S. 383, 393, 394, 34 S.Ct. 341, 344, 345, 58 L.Ed. 652, L.R.A.1915B, 834, Ann.Cas.1915C, 1177, or because its scope extends beyond the constitutional bounds, e.g., Agnello v. United States, 269 U.S. 20, 46 S.Ct. 4, 70 L.Ed. 145, (51 A.L.R. 409). 40 'The course of decisions here has observed these important distinctions. The Court has not been indulgent towards inroads upon the Amendment. Only rar ly have its dicta appeared to give undue scope to the right of search on arrest, and Marron v. United States, supra, (275 U.S. 192, 48 S.Ct. 74, 72 L.Ed. 231), is the only decision in which the dicta were reflected in the result. That case has been a source of confusion to the lower courts. Thus, the Circuit Court of Appeals for the Second Circuit felt that the Marron case required it to give a more restricted view to the prohibitions of the Fourth Amendment than that court had expounded in United States v. Kirschenblatt, (2 Cir., 16 F.2d 202, 51 A.L.R. 416), see Go-Bart Importing Co. v. United States, sub nom., United States v. Gowen, 2 Cir., 40 F.2d 593, only to find itself reversed here, Go-Bart Importing Co. v. United States, supra, (282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374), partly on the authority of the Kirschenblatt decision which, after the Marron case, it thought it must disown. The uncritical application of the right of search on arrest in the Marron case has surely been displaced by Go-Bart Importing Co. v. United States, supra, and even more drastically by United States v. Lefkowitz, supra, (285 U.S. 452, 52 S.Ct. 420, 76 L.Ed. 877, 82 A.L.R. 775), unless one is to infer that an earlier case qualifies later decisions although these later decisions have explicitly confined the earlier case.' Davis v. United States, 328 U.S. at pages 612, 613, 66 S.Ct. at page 1271 (dissenting opinion). 41 It is urged that even if the search was not justified, once it was made and the illicit documents discovered, they could be seized because their possession was a 'continuing offense' committed 'in the very presence of the agents.' Apparently, then, a search undertaken illegally may retrospectively, by a legal figment, gain legality from what happened four hours later. This is to defeat the prohibition against lawless search and seizure by the application of an inverted notion of trespass ab initio. Here an unconstitutional trespass ab initio retrospectively acquires legality. Thus, the decision finds satisfaction of the constitutional requirement by circular reasoning. Search requires authority; authority to search is gained by what may be found during search without authority. By this reasoning every illegal search and seizure may be validated if the police find evidence of crime. The result can hardly be to discourage police violation of the constitutional protection. 42 If the search is illegal when begun, as it clearly was in this case if past decisions mean anything, it cannot retrospectively gain legality. If the search was illegal, the resulting seizure in the course of the search is illegal. It is no answer to say that possession of a document may itself be a crime. There is no suggestion here that the search was based on even a suspicion that Harris was in possession of illicit documents. The search was justified and is justified only in connection with the offense for which there was a warrant of arrest. But unless we are going to throw to the winds the latest unanimous decisions of this Court on the allowable range of search without warrant incidental to lawful arrest, Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374, and United States v. Lefkowitz, 285 U.S. 452, 52 S.Ct. 420, 76 L.Ed. 877, 82 A.L.R. 775, this was an unlawful search which rendered unavailable as evidence everything seized in the course of it. That the agents might have obtained a warrant to make the search only emphasizes the illegality of their conduct. In the words of Mr. Justice Holmes, speaking for the Court, the precious constitutional rights 'against unlawful search and seizure are to be protected even if the same result might have been achieved in a lawful way.' Silverthorne Lumber Co. v. United States, 251 U.S. 385, 392, 40 S.Ct. 182, 183, 64 L.Ed. 319, 24 A.L.R. 1426. Nor does the fact that the goods seized are contraband make valid an otherwise unlawful search and seizure. Agnello v. United States, 269 U.S. 20, 46 S.Ct. 4, 70 L.Ed. 145. Indeed it was for contraband g ods that search warrants, carefully hedged about, were first authorized by Congress. 43 The only exceptions to the safeguard of a warrant issued by a magistrate are those which the common law recognized as inherent limitations of the policy which found expression in the Fourth Amendment—where circumstances preclude the obtaining of a warrant (as in the case of movable vehicles), and where the warrant for the arrest of a person carries with it authority to seize all that is on the person, or is in such open and immediate physical relation to him as to be, in a fair sense, a projection of his person. That is the teaching of both the Go-Bart and the Lefkowitz cases, which effectually retract whatever may have been the loose consideration of the problem in Marron v. United States, 275 U.S. 192, 48 S.Ct. 74, 72 L.Ed. 231. Thus, the Go-Bart case emphasized that the things seized in the Marron case were 'visible and accessible and in the offender's immediate custody.' 282 U.S. 344, 358, 51 S.Ct. 153, 158, 75 L.Ed. 374. By 'immediate custody' was not meant that figurative possession which for some legal purposes puts one in 'possession' of everything in a house. The sentence following that just quoted excludes precisely the kind of thing that was done here. 'There was no threat of force or general search or rummaging of the place.' Ibid. 44 In our case, five agents came to arrest Harris on a charge of violating the Postal Laws and the National Stolen Property Act. Though the arrest was consummated in the living room, the agents were told to make 'a thorough search' of the entire apartment. In the bedroom they lifted the carpets, stripped the bed-linen, turned over the mattress. They combed the contents of the linen closet and even looked into Harris' shoes. The Selective Service cards, the items whose seizure is here in controversy, were discovered only after agents tore open a sealed envelope labeled 'personal papers' which they had found under some clothes in a drawer of a small bureau in the bedroom. If there was no 'rummaging of the place' in this case it would be difficult to imagine what 'rummaging of the place' means. 45 Again, in the Lefkowitz case, the Marron case was carefully defined and limited: 'There, prohibition officers lawfully on the premises searching for liquor described in a search warrant, arrested the bartender for crime openly being committed in their presence. He was maintaining a nuisance in violation of the act. The offense involved the element of continuity, the purchase of liquor from time to time, its sale as a regular thing for consumption upon the premises, and other transactions including the keeping of accounts. The ledger and bills being in plain view were picked up by the officers as an incident of the arrest. No search for them was made.' 285 U.S. at page 465, 52 S.Ct. at page 423, 76 L.Ed. 877, 82 A.L.R. 775. 46 Surely no comparable situation is now here. There was no search warrant, no crime was 'openly being committed' in the presence of the officers, the seized documents were not 'in plain view' or 'picked up by the officers as an incident of the arrest.' Here a 'thorough search' was made, and made without warrant. 47 To say that the Go-Bart and the Lefkowitz cases—both of them unanimous decisions of the Court—are authority for the conduct of the arresting agents in this case is to find that situations decisively different are the same. 48 It greatly underrates the quality of the American people and of the civilized standards to which they can be summoned to suggest that we must conduct our criminal justice on a lower level than does England, and that our police must be given a head which British courts deny theirs. A striking and characteristic example of the solicitous care of English courts concerning the 'liberty of the subject' may be found in the recent judgments in Christie v. Leachinsky. In that case the House of Lords unanimously ruled that if a policeman arrests without warrant, although entertaining a reasonable suspicion of felony which ould justify arrest, but does not inform the person of the nature of the charge, the police are liable for false imprisonment for such arrest. These judgments bear mightily upon the central problem of this case, namely, the appropriate balancing, in the words of Lord Simonds, of 'the liberty of the subject and the convenience of the police.' Christie v. Leachinsky, (1947) 1 All E.R. 567, 576.7 49 The English attitude was clearly evinced also in the famous Savidge case. 'Both the original incident and its sequel illustrate the sensitiveness of English opinion to even a suggestion of oppression by the police.' IV Reports of the National Commission on Law Observance and Enforcement ('Lawlessness in Law Enforcement') P. 261. For 'the high standards of conduct exacted by Englishmen of the police' (Id. at 259) see the debates in the House of Commons, 217 Hans. Deb. (Commons), cols. 1303 et seq. (May 17, 1928), and 220 Id.cols. 35 and 805 et seq. (July 20, 1928), and the Report of the Tribunal of Inquiry on the Savidge case, Cmd. 3147, 1928. There are those who say that we cannot have such high standards of criminal justice because the general standards of English life ensure greater obedience to law and better law enforcement. I reject this notion, and not the least because I think it is more accurate to say that the administration of criminal justice is more effective in England because law enforcement is there pursued on a more civilized level. 50 Of course, this may mean that it might be more difficult to obtain evidence of an offense unexpectedly uncovered in a lawless search. It may even mean that some offenses may go unwhipped of the law. If so, that is part of the cost for the greater gains of the Fourth Amendment. The whole point about the Fourth Amendment is that 'Its protection extends to offenders as well as to the law abiding,' because of its important bearing in maintaining a free society and avoiding the dangers of a police state. United States v. Lefkowitz, supra, 285 U.S. at page 464, 52 S.Ct. at page 423, 76 L.Ed. 877, 82 A.L.R. 775. But the impediments of the Fourth Amendment to effective law enforcement are grossly exaggerated. Disregard of procedures imposed upon the police by the Constitution and the laws is too often justified on the score of necessity. This case is a good illustration how lame an excuse it is that conduct such as is now before us is required by the exigencies of law enforcement. Here there was ample opportunity to secure the authority of law to make the search and later authority from a magistrate to seize the articles uncovered in the course of the search. Taylor v. United States, 286 U.S. 1, 6, 52 S.Ct. 466, 467, 76 L.Ed. 951; United States v. Kaplan, 2 Cir., 89 F.2d 869, 871. The hindrances that are conjured up are counsels of despair which disregard the experience of effective law enforcement in j risdictions where the police are held to strict accountability and are forbidden conduct like that here disclosed. 51 Stooping to questionable methods neither enhances that respect for law which is the most potent element in law enforcement, nor, in the long run, do such methods promote successful prosecution. In this country police testimony is often rejected by juries precisely because of a widely entertained belief that illegal methods are used to secure testimony. Thus, dubious police methods defeat the very ends of justice by which such methods are justified. No such cloud rests on police testimony in England. Respect for law by law officers promotes respect generally, just as lawlessness by law officers sets a contagious and competitive example to others. See IV Reports of the National Commission on Law Enforcement and Observance ('Lawlessness in Law Enforcement') passim, especially pp. 190—192. Moreover, by compelling police officers to abstain from improper methods for securing evidence, pressure is exerted upon them to bring the resources of intelligence and imagination into play in the detection and prosecution of crime. 52 No doubt the Fourth Amendment limits the freedom of the police in bringing criminals to justice. But to allow them the freedom which the Fourth Amendment was designed to curb was deemed too costly by the Founders. As Mr. Justice Holmes said in the Olmstead case, 'we must consider the two objects of desire both of which we cannot have, and make up our minds which to choose.' 277 U.S. at page 470, 48 S.Ct. at page 575, 72 L.Ed. 944, 66 A.L.R. 376. Of course arresting officers generally feel irked by what to them are technical legal restrictions. But they must not be allowed to be unmindful of the fact that such restrictions are essential safeguards of a free people. To sanction conduct such as this case reveals is to encourage police intrusions upon privacy, without legal warrant, in situations that go even beyond the facts of the present case. If it be said that an attempt to extend the present case may be curbed in subsequent litigation, it is important to remember that police conduct is not often subjected to judicial scrutiny. Day by day mischief may be done and precedents built up in practice long before the judiciary has an opportunity to intervene. It is for this reason—the dangerous tendency of allowing encroachments on the rights of privacy—that this Court in the Boyd case gave to the Fourth Amendment its wide protective scope. 53 It is vital, no doubt, that criminals should be detected, and that all relevant evidence should be secured and used. On the other hand, it cannot be said too often that what is involved far transcends the fate of some sordid offender. Nothing less is involved that that which makes for an atmosphere of freedom as against a feeling of fear and repression for society as a whole. The dangers are not fanciful. We too readily forget them. Recollection may be refreshed as to the happenings after the first World War by the 'Report upon the Illegal Practices of the United States Department of Justice', which aroused the public concern of Chief Justice Hughes8 (then at the bar), and by the little book entitled 'The Deportations Delirium of Nineteen-Twenty' by Louis F. Post, who spoke with the authoritative knowledge of an Assistant Secretary of Labor. 54 ore than twenty years ago, before democracy was subjected to its recent stress and strain, Judge Learned Hand, in a decision approved by this Court in the Lefkowitz case, expressed views that seem to me decisive of this case: 'After arresting a man in his house, to rummage at will among his papers in search of whatever will convict him, appears to us to be indistinguishable from what might be done under a general warrant; indeed, the warrant would give more protection, for presumably it must be issued by a magistrate. True, by hypothesis the power would not exist, if the supposed offender were not found on the premises; but it is small consolation to know that one's papers are safe only so long as one is not at home. Such constitutional limitations arise from grievances, real or fancied, which their makers have suffered, and should go pari passu with the supposed evil. They withstand the winds of logic by the depth and toughness of their roots in the past. Nor should we forget that what seems fair enough against a squalid huckster of bad liquor may take on a very different face, if used by a government determined to suppress political opposition under the guise of sedition.' United States v. Kirschenblatt, 2 Cir., 16 F.2d 202, 203, 51 A.L.R. 416. 55 For appendix, see 331 U.S. 175, 67 S.Ct. 1121. 56 APPENDIX to dissenting opinion by Justice Frankfurter. 57 See 67 S.Ct. p. 1104. 58 Analysis of Decisions Involving Searches and Seizures, 59 from Weeks v. United States, 232 U.S. 383,34 S.Ct. 341, 60 up to Davis v. United States, 328 U.S. 582, 66 S.Ct. 1256.* 61 1. Name of case 2. Charge on arrest 3. Authority for 62 arrest 63 Weeks v. United Use of mails to Arrested without a 64 States, 1914, 232 U. distribute lottery warrant and not 65 S. 383, 34 S.Ct. 341. tickets. during commission 66 of crime. 67 Schenck v. United Conspiracy to violate Indictment States, 1919, 249 U. Espionage Act of 68 S. 47, 39 S.Ct. 247. 1917, 50 U.S.C.A. §§ 69 33, 34, 18 U.S.C.A. 70 § 344. 71 Silverthorne Lumber Contempt of court No arrest Co. v. United for failure to States, 1920, 251 U. produce books and S. 385, 40 S.Ct. 182. documents required 72 by subpoena. (One 73 of defendants was 74 a corporation.) Order was based on 75 evidence secured 76 as indicated in 77 columns 3-7. 78 Gouled v. United Conspiracy and use Indictment 79 States, 1921, 255 U. of mails to defraud 80 S. 298, 41 S.Ct. 261. United States. 81 Amos v. United Removal of whiskey ....do States, 1921, 255 U. without payment S. 313, 41 S.Ct. 266. of tax; sale of 82 whiskey on which 83 no tax had been 84 paid. 85 Burdeau v. McDowell, Civil suit for return No arrest 1921, 256 U.S. of property in 465, 41 S.Ct. 574. hands of Assistant 86 to Attorney 87 General. 88 Essgee Co. of China Violation of import Warrants 89 v. United States, laws. (Corporate 1923, 262 U.S. 151, and individual 43 S.Ct. 514. defendants; only 90 later, of course, 91 were arrested.) 92 Carroll v. United Transportation of Arrested during 93 States, 1925, 267 U. alcoholic beverages. commission of 94 S. 132, 45 S.Ct. 280. crime. 95 Steele v. United 1. Action for return 1. No arrest 96 States, 1925, 267 U. of seized liquor. 97 S. 498, 45 S.Ct. 414. Id., 267 U.S. 505, 45 98 S.Ct. 417 (two cases). 2. Possession of 2. Information 99 liquor in violation of Prohibition Act, 27 100 U.S.C.A. § 1 et seq. 101 Dumbra v. United Motion to quash No arrest 102 States, 1925, 268 U. search warrant. 103 S. 435, 45 S.Ct. 456. 104 Agnello v. United Possession and sale Arrested during 105 States, 1925, 269 U. of cocaine without commission of 106 S. 20, 46 S.Ct. 4. registration or crime. 107 payment of tax. 108 Byars v. United Possession of Indictment 109 States, 1927, 273 U. counterfeit alcoholic 110 S. 28, 47 S.Ct. 248. beverage stamps. 111 McGuire v. United Possession of Information 112 States, 1927, 273 U. intoxicating liquor. 113 S. 95, 47 S.Ct. 259. 114 United States v. Lee, Conspiracy to violate Arrested while 115 1927, 274 U.S. 559, Prohibition Act. engaging in crime. 116 47 S.Ct. 746. 117 Segurola v. United Transportation of Arrested during 118 States, 1927, 275 U. intoxication liquor. commission of 119 S. 106, 48 S.Ct. 77. crime. 120 United States v. Civil suit to abate No arrestw47 121 Berkeness, 1927, 275 U. nuisance. 122 S. 149, 48 S.Ct. 46. 123 Marron v. United Violation of Indictment. (Crime 124 States, 1927, 275 U. Prohibition Act, 27 committed in presence 125 S. 192, 48 S.Ct. 74. U.S.C.A. § 1 et seq. of arresting 126 officers. Articles 127 seized, as described 128 in columns 4-7, 129 were taken at time 130 of arrest.) 131 Gambino v. United Transportation of Crime committed in 132 States, 1927, 275 U. intoxicating liquor. presence of arresting S. 310, 48 S.Ct. 137. officers (state 133 police). 134 Go-Bart Importing Possession, Invalid warrant 135 Co. v. United transportation, sale, 136 States, 1931, 282 U. etc., of intoxicating 137 S. 344, 51 S.Ct. 153. liquor. 138 Husty v. United Possession and Arrested during 139 States, 1931, 282 U. transportation of commission of 140 S. 694, 51 S.Ct. 240, intoxicating liquor. crime. 141 United States v. Conspiracy to violate Warrant of U. S. 142 Lefkowitz, 1932, 285 U. Prohibition Act, Commissioner. S. 452, 52 S.Ct. 420. including use of 143 premises for sale 144 and solicitation of 145 orders. 146 Taylor v. United Illegal possession of Arrest made on basis 147 States, 1932, 286 U. intoxicating liquor. of evidence S. 1, 52 S.Ct. 466. uncovered during 148 search. 149 Grau v. United Unlawful manufacture Indictment States, 1932, 287 U. and possession 150 S. 124, 53 S.Ct. 38. of liquor. 151 Sgro v. United Possession and sale Information States, 1932, 287 U. of intoxicating 152 S. 206, 53 S.Ct. 138. liquor. 153 Nathanson v. United Importation of Information, filed 154 States, 1933, 290 U. liquor without after seizure. S. 41, 54 S.Ct. 11. payment of import 155 duties. 156 Scher v. United Possession and Arrest during 157 States, 1938, 305 U. transportation of commission of crime. 158 S. 251, 59 S.Ct. 174. distilled alcohol on 159 which tax had not 160 been paid. TABLE CONTINUED 161 4. Articles seized 5. Articles seized 6. Articles seized 162 under warrant 163 incident to 164 lawful arrest 165 Personal papers and None None 166 lottery tickets, 167 taken from 168 defendant's home. 169 Leaflets counseling Leaflets counseling ....do 170 draft evasion. draft evasion. Warrant was directed 171 to search of Socialist 172 headquarters from 173 which leaflets were 174 mailed by 175 defendant. 176 Books and papers None ....do 177 seized under color 178 of invalid 179 subpoena. 180 4 documents taken 3 of the papers. ....do 181 from defendant's (The other was 182 office. taken by stealth 183 from the office by 184 a government 185 agent.) 186 Whiskey in question, None ....do 187 as result of search 188 without a warrant 189 in defendant's 190 absence. (Officers 191 admitted by 192 defendant's wife.) 193 Plaintiff's books and ....do ....do 194 papers had been 195 stolen from plaintiff's 196 possession by 197 a party unrelated 198 to the Federal 199 Government. 200 Corporate papers and Corporate papers and None 201 books books produced 202 under subpoena. 203 Alcoholic beverages None Whiskey uncovered 204 during search of 205 car in which it 206 was 207 being transported 208 at time of arrest. 209 1. Liquor 1. Liquor. (Warrant 1. None 210 was directed to 211 address not 212 specifically 213 stated to be 214 that of building 215 searched.) 216 2. Liquor 2. Liquor. (Warrant 2. None 217 was directed to 218 prohibition officer. Question of 219 reasonable cause for 220 its issuance was 221 not left to jury.) 222 Alcoholic wines. 223 Alcoholic wines Alcoholic wines None 224 Can of cocaine None ....do 225 seized at home of 226 one of defendants 227 while he was being 228 arrested several 229 blocks away. 230 Counterfeit alcoholic No Federal warrant ....do 231 beverage stamps. issued. But 232 warrant was issued by 233 state judge to state 234 officers to search 235 for liquor. Federal 236 officer accompanied 237 them on search 238 and uncovered 239 stamps. 240 Intoxicating liquor Intoxicating liquor. ....do 241 (Most of liquor 242 thus seized was 243 immediately 244 destroyed, with only 245 samples retained 246 for evidence.) 247 71 cases of grain None 71 cases of grain 248 alcohol. Cases were alcohol 249 seized on American 250 vessel more than 12 251 miles from shore. 252 Intoxicating liquor None The liquor 253 Liquor Liquor. Warrant None 254 was invalid for 255 failure of allegation 256 of sale on the 257 premises as basis 258 for its issue. 259 Intoxicating liquor, The intoxicating Ledger and bills. 260 ledger, and papers. liquor Court held that, 261 (Ledger was in while seizure was 262 closet in back of not authorized by 263 bar which the warrant, ledger 264 contained some of the and bills were 265 liquor; papers properly seized as 266 (bills) were on within the "immediate 267 table near cash possession 268 register.) and control" of 269 offender. 270 Intoxicating liquor None Liquor seized as 271 result of search 272 of 273 car in which 274 defendants were 275 when arrested. But Court found no 276 probable cause for 277 arrest. 278 Office papers and ....do None. (See column 279 records secured by 3.) 280 use of keys taken 281 from defendants at 282 time of their 283 arrest, and on false 284 statement that 285 they had a warrant 286 for the papers. 287 Intoxicating liquor. ....do Intoxicating liquor 288 uncovered during 289 search of 290 automobile 291 reasonably 292 believed 293 to contain 294 contraband. 295 Variety of papers ....do None. (Papers in 296 taken from desks, waste basket were, 297 cabinets, and of course, in open 298 wastebasket. view.) Among these 299 papers were lists of 300 names and 301 addresses, stationery, 302 bills directed to 303 customers, letters 304 of solicitation, etc. 305 122 cases of liquor. ....do None Agents investigated 306 and noticed odor 307 of alcohol coming 308 from garage. 309 defendant had been 310 under suspicion. Agents broke into 311 garage and 312 uncovered cache of 313 liquor. Defendant 314 was arrested when 315 he came to garage 316 during search. Still, its Still, its None 317 appurtenances, and 350 appurtenances, and 350 318 gallons of whiskey. gallons of whiskey. But warrant issued 319 on mere allegations 320 that defendant 321 had been seen 322 hauling cans often 323 used for liquor, 324 and bringing cane 325 sugar onto premises; 326 that full 327 cans were removed 328 from premises; 329 and that odors of 330 fumes of cooking 331 mash were noticeable. There was 332 no allegation of 333 any sale on premises. 334 Intoxicating liquor Intoxicating liquor. ....do 335 But warrant was invalid. When first issued, it was 336 not executed within 10 days: 337 reissued without new 338 evidence or affidavits. 339 ....do Intoxicating liquor. But ....do 340 warrant issued by state 341 judge at request of 342 customs agent on mere 343 allegation of belief by 344 customs agent that defendant 345 had violated the law. 346 Distilled alcohol on None Liquor seized during 347 which tax had not search of car 348 been paid. which officers had 349 followed into 350 garage adjoining 351 defendant's house. TABLE CONTINUED 7. Articles seized 352 incident to 8. Decision 353 authorized search 354 for other articles 355 None District court had 356 improperly admitted 357 in evidence 358 some of articles 359 seized; conviction 360 reversed. 361 ....do Evidence properly 362 admitted by trial 363 court for use 364 against defendant. 365 ....do Order directing 366 production of 367 evidence, which was 368 based on knowledge 369 secured in 370 violation of Fourth Amendment, was 371 error, and conviction 372 for failure to 373 obey order 374 reversed. (White, C. 375 J., and Pitney, J., 376 dissenting.) 377 ....do On certification, held 378 that papers were 379 inadmissible. Search warrant 380 may issue only 381 when interest of 382 public or 383 complainant in the 384 article is primary, 385 or when its possession 386 is unlawful; 387 it may not issue 388 merely to secure 389 evidence. 390 ....do Evidence improperly 391 admitted; 392 conviction reversed. 393 ....do District court had 394 held that retention 395 of paper for use as 396 evidence was in 397 violation of Fourth 398 and Fifth Amendments; 399 this Court 400 reversed. (Brandeis 401 and Holmes, JJ., dissenting.) None District court 402 admitted evidence 403 against both 404 corporate and 405 individual defendants. This Court 406 affirmed. 407 ....do Evidence was 408 properly admitted; 409 conviction affirmed. 410 (McReynolds and 411 Sutherland, JJ., 412 dissenting.) 413 1. None 1. Evidence properly 414 secured and need 415 not be returned. 416 2. None 2. Evidence properly 417 secured and properly 418 admitted by 419 district court; 420 judgment affirmed. None Warrant properly 421 issued on reasonable 422 ground; refusal of 423 district court to 424 quash search 425 warrant affirmed. 426 ....do Evidence improperly 427 admitted; conviction, 428 affirmed by 429 the C.C.A., here 430 reversed. Counterfeit alcoholic Conviction in 431 beverage stamps. district court, affirmed 432 (See column 5.) in the C.C.A., here 433 reversed, because 434 evidence was 435 improperly admitted. 436 None On certificate from C.C.A. after 437 conviction, held that 438 evidence was 439 properly admitted. Butler, J., concurring 440 in result. 441 ....do Defendant's conviction, 442 reversed by 443 the C. C. A. on 444 grounds of illegal 445 search, sustained 446 by this Court. 447 None Conviction, affirmed 448 by C. C. A., 449 affirmed by this 450 Court. 451 ....do District court 452 judgment excluding 453 evidence, affirmed by C. C. A., affirmed 454 by this Court. See explanation in Evidence properly 455 282 U.S. at page admitted; conviction 358, 51 S.Ct. at page sustained by 158, that the C. C. A. affirmed 456 articles "were visible here. 457 and accessible" 458 and that there was 459 no "rummaging of 460 the place." And 461 see 285 U.S. at page 465, 52 S.Ct. at page 423. 462 None Evidence improperly 463 admitted; conviction, 464 affirmed by 465 the C. C. A., 466 reversed here. 467 ....do Evidence must be 468 returned to defendants; 469 judgments of 470 district court and 471 the C. C. A. 472 reversed. 473 ....do Movable vehicle 474 authorizes search on 475 probable cause. Evidence properly 476 admitted. 477 ....do District court denied 478 motions for return 479 of papers; C. C. A. 480 reversed, and this Court affirmed 481 judgment of C. C. A. 482 ....do Evidence of seized 483 liquor improperly 484 admitted; conviction 485 and C. C. A. 486 affirmance reversed. 487 None Evidence of seized 488 goods improperly 489 admitted; conviction 490 in trial court 491 and affirmance of 492 (Stone and Cardozo, JJ., dissenting.) 493 ....do Evidence of seized 494 liquor improperly 495 admitted; conviction 496 and its affirmance 497 by C. C. A. 498 reversed. 499 (McReynolds, J., 500 concurring in special 501 opinion; Stone 502 and Cardozo, JJ., 503 dissenting.) 504 ....do Evidence of seized 505 liquor improperly 506 admitted; conviction 507 and affirmance 508 by C. C. A. reversed. 509 ....do Evidence properly 510 admitted conviction 511 and judgment 512 of C. C. A. affirmed. 513 Mr. Justice MURPHY, dissenting. 514 The Court today has resurrected and approved, in effect, the use of the odious general warrant or writ of assistance, presumably outlawed forever from our society by the Fourth Amendment. A warrant of arrest, without more, is now sufficient to justify an unlimited search of a man's home from cellar to garret for evidence of any crime, provided only that he is arrested in his home. Probable cause for the search need not be shown; an oath or affirmation is unnecessary; no description of the place to be searched or the things to be seized need be given; and the magistrate's judgment that these requirements have been satisfied is now dispensed with. In short, all the restrictions put upon the issuance and execution of search warrants by the Fourth Amendment are now dead letters as to those who are arrested in their homes. 515 That this decision converts a warrant for arrest into a general search warrant lacking all the constitutional safeguards is demonstrated most plainly by the facts. Two valid warrants were issued for the arrest of petitioner and one C. R. Moffett. The first warrant charged them with a violation of the mail fraud statute, § 215 of the Criminal Code; it was alleged that they sent a letter through the mails in connection with the execution of a scheme to defraud by negotiating and cashing a forged check drawn on the Mudge Oil Co. in the sum of $25,000. The second warrant charged that they caused the same check to be transported in interstate commerce in violation of § 3 of the National Stolen Property Act. 516 Two agents of the Federal Bureau of Investigation went to petitioner's apartment, armed with these warrants for arrest. Petitioner was placed under arrest in the living room of his apartment and was safely handcuffed. The agents, together with three others who had arrived in the meantime, then began a systematic ransacking of the apartment. Operating without the benefit of a search warrant, they made a search which they admitted was 'as thorough as we could make it.' For five hours they literally tore the place apart from top to bottom, going through all of petitioner's clothes and personal belongings, looking underneath the carpets, turning the bed upside down, searching through all the bed linen, opening all the chest and bureau drawers, and examining all personal papers and effects. Nothing was left untouched or unopened. 517 The agents testified that they were searching for 'two $10,000 cancelled checks of the Mudge Oil Company which our investigation established had been stolen from the offices of the Mudge Oil Company' and which might have been used in connection with forging the $25,000 check in issue. It was also admitted that they were searching 'for any means that might have been used to commit these two crimes (charged in the warrants for arrest), such as burglar tools, pens, or anything that could be used in a confidence game of this type'; 'we thought we might find a photostatic copy (of the $25,000 check)'; 'anything which would indicate a violation of the mail fraud statute and the National Stolen Property Act'; 'anything you could find in connection with the violation of the law for which he (petitioner) was then arrested.' One of them also admitted that they were 'searching for goods, wares, merchandise, articles, or anything in connection with the use of the mails to defraud, and also in connection with the violation of Section 415 of Title 18.' 518 Suffice it to say that they found no checks. The agents admitted seizing seven pens, tissue paper and twenty-seven pieces of celluloid, the latter being found wrapped in a towel in a drawer of the bedroom dresser. Petitioner charges, and it is undenied, that the agents also seized blank stationery of various hotels, blank ruled sheets of paper, several obsolete fountain pens, expense bills and receipts, personal letters, a bill of sale for petitioner's automobile, note books, address books and some mineral deeds. 519 Most significant of all, however, was the unexpected discovery and seizure, at the end of this long search, of a sealed envelope marked 'George Harris, personal papers.' This envelope, which was found in a dresser drawer beneath some clothes, contained eleven draft registration certificates and eight notices of draft classification. Petitioner was then charged with the unlawful possession, concealment and alteration of these certificates and notices and found guilty. Nothing has ever developed as to the forged $25,000 check, which was the basis of petitioner's original arrest. No evidence of the crimes charged in the warrants for arrest has been found; no prosecution of petitioner for those crimes has developed. 520 It is significant that the crime which was thus unexpectedly discovered—namely, the illegal possession of the draft certificates and notices—could not have been brought to light in this case through the use of ordinary constitutional processes. There was no prima facie evidence to support the issuance of a warrant for petitioner's arrest for the crime of possessing these items. Not was there any probable cause or any basis for an oath or affirmation which could justify a valid search warrant for these items. Their presence in petitioner's apartment could be discovered only by making an unlimited search for anything and everything that might be found, a search of the type that characterizes a general search warrant or writ of assistance. And it was precisely that type of search that took place in this case. 521 The Court holds, however, that the search was justified as an incident to petitioner's lawful arrest on the mail fraud and stolen property charges. It is said that law enforcement officers have the right, when making a valid arrest, to search the place and to seize the fruits and instrumentalities of the crime for which the arrest was made. And since the search here was made, at least in part, to find the instrumentalities of the alleged crimes, the search was valid and petitioner cannot be heard to complain of what was found during the course of that search. This conclusion bears further analysis, however. 522 It is undoubtedly true that limited seizures may be made without the benefit of search warrants under certain circumstances where a person has been arrested in his home. Due accommodation must be made for the necessary processes of law enforcement. Seizure may be made of articles and papers on the person of the one arrested. And the arresting officer is free to look around and seize those fruits and evidences of crime which are in plain sight and in his immediate and discernible presence. Weeks v. United States, 232 U.S. 383, 392, 34 S.Ct. 341, 344, 58 L.Ed. 652, L.R.A. 1915B, 834, Ann.Cas. 1915C, 1177; Agnello v. Unit d States, 269 U.S. 20, 30, 46 S.Ct. 4, 5, 70 L.Ed. 145. But where no properly limited search warrant has been issued, this Court has been scrupulously insistent on confining very narrowly the scope of search and seizure. The mere fact that a man has been validly arrested does not give the arresting officers untrammeled freedom to search every cranny and nook for anything that might have some relation to the alleged crime or, indeed, to any crime whatsoever. Authority to arrest, in other words, gives no authority whatever to search the premises where the arrest occurs and no authority to seize except under the most restricted circumstances. 523 Illustrative of the strict limitations which this Court has placed upon searches and seizures without a warrant in connection with a lawful arrest are the three cases of Marron v. United States, 275 U.S. 192, 48 S.Ct. 74, 72 L.Ed. 231; Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374, and United States v. Lefkowitz, 285 U.S. 452, 52 S.Ct. 420, 76 L.Ed. 877, 82 A.L.R. 775. In the Marron case, an individual was arrested while actually engaged in running an illegal saloon in pursuance of a conspiracy; a prohibition agent secured a warrant for a search of the premises and for the seizure of intoxicating liquors and articles for their manufacture. Liquor was found in a closet. While searching in the closet, the agents noticed a ledger showing inventories of liquor and receipts relating to the business. Alongside the cash register they found bills for utilities furnished to the premises. They took the ledger and the bills. This Court held that while the seizure of the ledger and bills could not be justified under the search warrant, because not mentioned therein, their seizure was proper as an incident to the arrest inasmuch as they were necessary to the carrying on of the illegal business. 524 The Marron case at first was widely misunderstood as having held that most of the restrictions had been removed on searches of premises incident to arrests. United States v. Gowen, 2 Cir., 40 F.2d 593; United States v. Poller, 2 Cir., 43 F.2d 911, 74 A.L.R. 1382. This misunderstanding was removed by the Go-Bart case, which made it clear that the items seized in the Marron case were visible and accessible and in the offender's immediate custody; it was further pointed out that there was no threat of force or general search or rummaging of the place in the Marron case. The inherent limitations of the Marron holding were demonstrated by the facts and decision in the Go-Bart case. There the defendant Bartels was placed under lawful arrest in his office on a charge of conspiracy to sell intoxicating liquors. Gowen, the other defendant, arrived and he also was placed under lawful arrest. Gowen was then forced to open a desk and a safe, which were searched by the agents along with other parts of the office. A large quantity of papers belonging to the defendants was seized. This Court held that such a seizure was unconstitutional, the search being general and unlimited in scope and being undertaken in the hope that evidence of the crime might be found. 525 In the Lefkowitz case, the defendants were placed under lawful arrest in their office on a charge of conspiracy to violate the liquor laws. The arresting officers then proceeded to search the desks, the towel cabinet and the waste baskets, seizing various books, papers and other articles. All of this was done without a search warrant. Once again the Court held that the Constitution had been violated. It was pointed out that the searches were exploratory and general and made solely to find evidence of the defendant's guilt of the alleged conspiracy or some other crime; the papers and other articles seized were unoffending in themselves. 526 Tested in the light of the foregoing principles and decisions, the search in the instant case cannot be justified. Even more glaring than the searches in the Go-Bart and Lefkowitz cases, the search here was a general exploratory one undertaken in the ope that evidence of some crime might be uncovered. The agents were searching for more than the fruits and instrumentalities of the crimes for which the arrest was made. By their own repeated testimony, they were searching for 'anything' in connection with the alleged crimes, for 'anything' that would indicate a violation of the laws in question. And their seizure of the draft certificates and notices demonstrates that they were also on the lookout for evidence of any other crime. In the absence of a valid warrant, such an unlimited, ransacking search for 'anything' that might turn up has been condemned by this Court in constitutional terms time and time again. Nothing in any of the previous decisions of this Court even remotely approves or justifies this type of search as an incident to a valid arrest; in this respect, today's decision flatly contradicts and, in effect, overrules the Go-Bart and Lefkowitz cases. 527 Moreover, even if we assume that the agents were merely looking for the fruits and instrumentalities of the crimes for which the arrest was made, the Constitution has been violated. There are often minute objects connected with the commission of a crime, objects that can be hidden in a small recess of a home or apartment and that can be discovered only by a thorough, ransacking search. Where the discovery of such objects requires an invasion of privacy to the extent evident in this case, the dangers inherent in such an invasion without a warrant far outweigh any policy underlying this method of crime detection. A search of that scope inevitably becomes, as it has in this case, a general exploratory search for 'anything' in connection with the alleged crime or any other crime a type of search which is most roundly condemned by the Constitution. 528 Thus when a search of this nature degenerates into a general exploratory crusade, probing for anything and everything that might evidence the commission of a crime, the Constitution steps into the picture to protect the individual. If it becomes evident that nothing can be found without a meticulous uprooting of a man's home, it is time for the law enforcement officers to secure a warrant. And if such a search has any reasonableness at all, it is a reasonableness that must be determined through the informed and deliberate judgment of a magistrate. 'Security against unlawful searches is more likely to be attained by resort to search warrants than by reliance upon the caution and sagacity of petty officers while acting under the excitement that attends the capture of persons accused of crime.' United States v. Lefkowitz, supra, 285 U.S. at page 464, 52 S.Ct. at page 423, 76 L.Ed. 877, 82 A.L.R. 775. 529 To insist upon a search warrant in the circumstances of this case is not to hobble the law enforcement process. Here there was no necessity for haste, no likelihood that the contents of the apartment might be removed or destroyed before a valid search warrant could be obtained. Indeed, the agents did get a warrant to search petitioner's office and automobile. It would have been no undue burden on them to obtain a warrant to search the apartment, guarding it in the meantime. Certainly the Constitution is not dependent upon the whim or convenience of law enforcement officers. Search should not be made without a warrant, in other words, where the opportunity for the issuance of a warrant exists. Carroll v. United States, 267 U.S. 132, 156, 45 S.Ct. 280, 286, 69 L.Ed. 543, 39 A.L.R. 790; Taylor v. United States, 286 U.S. 1, 6, 52 S.Ct. 466, 467, 76 L.Ed. 951. 530 The decision of the Court in this case can have but one meaning so far as searches are concerned. It effectively takes away the protection of the Fourth Amendment against unreasonable searches from those who are placed under lawful arrest in their homes. Small, minute objects are used in connection with most if not all crimes; and there is always the possibility that some fruit of the crime or some item used in the commission of the offense may take the form of a small piece of paper. Using the subterfuge of searching for such fruits and instrumentalities of the crime, law enforcement officers are now free to engage in an unlimited plunder of the home. Some of them may be frank enough, as in this case, to admit openly that the object of their search is 'anything' that might connect the accused with the alleged crime. Others may be more guarded in their admissions. But all will realize that it is now far better for them to forego securing a search warrant, which is limited in scope by the Fourth Amendment to those articles set forth with particularity in the warrant. Under today's decision, a warrant of arrest for a particular crime authorizes an unlimited search of one's home from cellar to attic for evidence of 'anything' that might come to light, whether bearing on the crime charged or any other crime. A search warrant is not only unnecessary; it is a hindrance. 531 The holding that the search in this case was proper and reasonable thus expands the narrow limitations on searches incident to valid arrests beyond all recognition. What has heretofore been a carefully circumscribed exception to the prohibition against searches without warrants has now been inflated into a comprehensive principle of freedom from all the requirements of the Fourth Amendment. The result is that a warrant for arrest is the equivalent of a general search warrant or writ of assistance; as an 'incident' to the arrest, the arresting officers can search the surrounding premises without limitation for the fruits, instrumentalities and anything else connected with the crime charged or with any other possible crime. They may disregard with impunity all the historic principles underlying the Fourth Amendment relative to indiscriminate searches of a man's home when he is placed under arrest. See Boyd v. United States, 116 U.S. 616, 624—632, 6 S.Ct. 524, 528-533, 29 L.Ed. 746; Weeks v. United States, supra; Byars v. United States, 273 U.S. 28, 47 S.Ct. 248, 71 L.Ed. 520. They may disregard the fact that the Fourth Amendment was designed in part, indeed perhaps primarily, to outlaw such general warrants, that there is no exception in favor of general searches in the course of executing a lawful warrant for arrest. As to those placed under arrest, the restrictions of the Fourth Amendment on searches are now words without meaning or effect. 532 Nor is the flagrant violation of the Fourth Amendment in this case remedied by the fact that the arresting officers, during the course of their ransacking search, uncovered and seized certain articles which it was unlawful for petitioner to possess. It has long been recognized, of course, that certain objects, the possession of which is in some way illegal, may be seized on appropriate occasions without a search warrant. Such objects include stolen goods, property forfeited to the Government, property concealed to avoid payment of duties, counterfeit coins, burglar tools, gambling paraphernalia, illicit liquor and the like. Boyd v. United States, supra, 116 U.S. at pages 623, 624, 6 S.Ct. at pages 528, 539, 29 L.Ed. 746; United States v. Lefkowitz, supra, 285 U.S. at pages 465, 466, 52 S.Ct. at pages 423, 424, 76 L.Ed. 877, 82 A.L.R. 775; Gouled v. United States, 255 U.S. 298, 309, 41 S.Ct. 261, 265, 65 L.Ed. 647. But the permissible seizure of such goods is necessarily dependent upon the seizure occurring (1) during the course of a reasonable, constitutional search, (2) as the result of ready observance of the surrounding premises by the arresting officers, or (3) as the result of the use of such objects in the commission of a crime in the presence of the officers. Never has it been suggested by this Court that law enforcement officers can use illegal means to seize that which it is unlawful to possess. To break and enter, to engage in unauthorized and unreasonable searches, to destroy all the rights to privacy in an effort to uproot crime may suit the purposes of despotic power, but those methods cannot abide the pure atmosphere of a free society. 533 he seizure here, as noted, did not occur during the course of a reasonable, constitutional search. Nor did it result from the ready observance of the surrounding premises; the draft certificates and notices were discovered only after a most meticulous ransacking. It is said, however, that the possession of these items by petitioner constituted a continuing offense committed in the presence of the arresting officers. This may be a dialectical way of putting the matter, but it would not commend itself to the common understanding of men. From a practical standpoint, these certificates and notices were not being possessed in the presence of the officers. They were hidden away in the bottom of a dresser drawer beneath some clothes. No arresting officer could possibly be aware of their existence or location unless he possessed some supernatural faculty. Indeed, if an arresting officer is to be allowed to search for and seize all hidden things the possession of which is unlawful, on the theory that the possession is occurring in his presence, there would be nothing left of the Fourth Amendment. Law enforcement officers would be invited to ignore the right to privacy executing warrants of arrest and searching without restraint and without regard to constitutional rights for those hidden items which were being illegally 'possessed' in their 'presence.' 534 The key fact of this case is that the search was lawless. A lawless search cannot give rise to a lawful seizure, even of contraband goods. And 'good faith' on the part of the arresting officers cannot justify a lawless search, nor support a lawless seizure. In forbidding unreasonable searches and seizures, the Constitution made certain procedural requirements indispensable for lawful searches and seizures. It did not mean, however, to substitute the good intentions of the police for judicial authorization except in narrowly confined situations. History, both before and after the adoption of the Fourth Amendment has shown good police intentions to be inadequate safeguards for the precious rights of man. But the Court now turns its back on that history and leaves the reasonableness of searches and seizures without warrants to the unreliable judgment of the arresting officers. As a result, the rights of those placed under arrest to be free from unreasonable searches and seizures are precarious to the extreme. 535 Now it may be that the illegality of the search and of the seizure in this case leads to the immunizing of petitioner from prosecution for the illegal possession of the draft certificates and notices. But freedom from unreasonable search and seizure is one of the cardinal rights of free men under our Constitution. That freedom belongs to all men, including those who may be guilty of some crime. The public policy underlying the constitutional guarantee of that freedom is so great as to outweigh the desirability of convicting those whose crime has been revealed through an unlawful invasion of their right to privacy. Lawless methods of law enforcement are frequently effective in uncovering crime, especially where tyranny reigns, but they are not to be countenanced under our form of government. It is not a novel principle of our constitutional system that a few criminals should go free rather than that the freedom and liberty of all citizens be jeopardized. 536 It is likely that the full impact of today's decision will not be apparent immediately. Petitioner is not an important or notorious criminal; and the investigation may have been undertaken with the best of motives. But apart from the fact that the Constitution was designed to protect the unimportant as well as the important, including those of criminal tendencies, the implications of what has been done in this case can affect the freedom of all our people. The principle established by the Court today can be used as easily by some future government determined to suppress political opposition under the guise of sedition as it can be used by a government determined to undo forgers and efrauders. See United States v. Kirschenblatt, 2 Cir., 16 F.2d 202, 203, 51 A.L.R. 416. History is not without examples of the outlawry of certain political, religious and economic beliefs and the relentless prosecution of those who dare to entertain such beliefs. And history has a way of repeating itself. It therefore takes no stretch of the imagination to picture law enforcement officers arresting those accused of believing, writing or speaking that which is proscribed, accompanied by a thorough ransacking of their homes as an 'incident' to the arrest in an effort to uncover 'anything' of a seditious nature. Under the Court's decision, the Fourth Amendment no longer stands as a bar to such tyranny and oppression. On the contrary, direct encouragement is given to this abandonment of the right of privacy, a right won at so great a cost by those who fought for freedom through the flight of time. 537 As Judge Learned Hand recently said, 'If the prosecution of crime is to be conducted with so little regard for that protection which centuries of English law have given to the individual, we are indeed at the dawn of a new era; and much that we have deemed vital to our liberties, is a delusion.' United States v. DiRe, 2 Cir., 159 F.2d 818, 820. 538 Mr. Justice FRANKFURTER and Mr. Justice RUTLEDGE join this dissent. 539 Mr. Justice JACKSON, dissenting. 540 This case calls upon the Court to say whether any right to search a home is conferred on officers by the fact that within that home they arrest one of its inhabitants. The law in this field has not been made too clear by our previous decisions. I do not criticize the officers involved in this case because this Court's decisions afford them no clear guidance. 541 The Fourth Amendment first declares in bold broad terms: 'The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated * * *.' Our trouble arises because this sentence leaves debatable what particular searches are unreasonable ones. Those who think it their duty to make searches seldom agree on this point with those who find it in their interest to frustrate searches. 542 The Amendment, having thus roughly indicated the immunity of the citizen which must not be violated, goes on to recite how officers may be authorized, consistently with the right so declared, to make searches: '* * * and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.' 543 Here endeth the command of the forefathers, apparently because they believed that by thus controlling search warrants they had controlled searches. The forefathers, however, were guilty of a serious oversight if they left open another way by which searches legally may be made without a search warrant and with none of the safeguards that would surround the issuance of one. 544 Of course, a warrant to take a person into custody is authority for taking into custody all that is found upon his person or in his hands. Some opinions have spoken in generalities of this right to search such property incidentally to arrest of the person as including whatever was in the arrested person's 'possession.' 545 Repeated efforts have been made to expand this search to include all premises and property in constructive possession by reason of tenancy or ownership. While the language of this Court sometimes has been ambiguous, I do not find that the Court heretofore has sustained this extension of the incidental search. Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374; United States v. Lefkowitz, 285 U.S. 452, 52 S.Ct. 420, 76 L.Ed. 877, 82 A.L.R. 775. In this respect, it seems to me, the decision of today goes beyond any previous one and throws a home open to search on a warrant that does not in any respect comply with the constitutional requirements of a search warrant and does not even purport to authorize any search of an premises. 546 The decision certainly will be taken, in practice, as authority for a search of any home, office or other premises if a warrant can be obtained for the arrest of any occupant and the officer chooses to make the arrest on the premises. It would seem also to permit such search incidentally to an arrest without a warrant if the circumstances make such arrest a lawful one. It would also appear to sanction a search of premises even though the arrest were for the most petty of misdemeanors. It leaves to the arresting officer choice of the premises to be searched insofar as he can select the place among those in which the accused might be found where he will execute the warrant of personal arrest. Thus, the premises to be searched are determined by an officer rather than by a magistrate, and the search is not confined to places or for things 'particularly described' in a warrant but, in practice, will be as extensive as the zeal of the arresting officer in the excitement of the chase suggests. Words of caution will hedge an opinion, but they are not very effective in hedging searches. 547 The difficulty with this problem for me is that once the search is allowed to go beyond the person arrested and the objects upon him or in his immediate physical control, I see no practical limit short of that set in the opinion of the Chief Justice—and that means to me no limit at all. 548 I am unable to suggest any test by which an incidental search, if permissible at all, can in police practice be kept within bounds that are reasonable. I hear none. I do not agree with other Justices in dissent that the intensity of this search made it illegal. It is objected that these searchers went through everything in the premises. But is a search valid if superficial and illegal only if it is thorough? It took five hours on the part of several officers. But if it was authorized at all, it can hardly become at some moment illegal because there was so much stuff to examine that it took overtime. It is said this search went beyond what was in 'plain sight.' It would seem a little capricious to say that a gun on top of a newspaper could be taken but a newspaper on top of a gun insulated it from seizure. If it were wrong to open a sealed envelope in this case, would it have been right if the mucilage failed to stick? The short of the thing is that we cannot say that a search is illegal or legal because of what it ends in. It is legal or illegal because of the conditions in which it starts. 549 I cannot escape the conclusion that a search, for which we can assign no practicable limits, on premises and, for things which no one describes in advance, is such a search as the Constitution considered 'unreasonable' and intended to prohibit. 550 In view of the long history of abuse of search and seizure which led to the Fourth Amendment, I do not think it was intended to leave open an easy way to circumvent the protection it extended to the privacy of individual life. In view of the readiness of zealots to ride roughshod over claims of privacy for any ends that impress them as socially desirable, we should not make inroads on the rights protected by this Amendment. The fair implication of the Constitution is that no search of premises, as such, is reasonable except the cause for it be approved and the limits of it fixed and the scope of it particularly defined by a disinterested magistrate. If these conditions are necessary limitations on a court's power expressly to authorize a search, it would not seem that they should be entirely dispensed with because a magistrate has issued a warrant which contains no express authorization to search at all. 551 Of course, this, like each of our constitutional guaranties, often may afford a shelter for criminals. But the forefathers thought this was not too great a price to pay for that decent privacy of home, papers and effects which is indispensable to individual dignity and self respect. They may have overvalued privacy, but I am not disposed to set their command at naught. 1 The indictment contained nineteen counts. Petitioner was convicted on the second which charged the fraudulent concealment of 8 Notice of Classification Cards, DSS Form 57, and 11 Registration Certificates, DSS Form 2; the third which charged fraudulent possession with intent to convert to his own use the abovementioned property; the fourth through tenth charging the unlawful alteration of a Notice of Classification card; the twelfth and fourteenth through nineteenth charging the unlawful possession of an altered Notice of Classification Card. Petitioner was acquitted on the first count which charged theft of government property. Count 11, which charged alteration of a Notice of Classification card, and Count 13, which charged possession of an altered card, were dismissed. Petitioner was sentenced to imprisonment for a term of five years on each of the sixteen counts indicated, the sentences to run concurrently. 2 54 Stat. 885, 894, 895, 50 U.S.C.App. § 311, 50 U.S.C.A.Appendix, § 311. Section 623.61—2 of the Selective Service Regulations states that 'It shall be a violation of these regulations for any person to have in his possession' a Notice of Classification not regularly issued to him or to alter or forge any Notice of Classification. Section 11 of the Act makes criminal the failure to perform any duty required by the Regulations punishable by imprisonment for not more than five years or a fine of not more than $10,000 or both. 3 35 Stat. 1098, 18 U.S.C. § 101, 18 U.S.C.A. § 101. Insofar as pertinent, the section provides: 'Whoever shall receive, conceal, or aid in concealing, or shall have or retain in his possession with intent to convert to his own use or gain, any * * * property of the United States, which has theretofore been embezzled, stolen, or purloined by any other person, knowing the same to have been so embezzled, stolen, or purloined, shall be fined not more than $5,000, or imprisoned not more than five years, or both; * * *'. 4 The Fourth Amendment provides: 'The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation. and particularly describing the place to be searched, and the persons or things to be seized.' 5 Insofar as pertinent, the Fifth Amendment provides: 'No person * * * shall be compelled in any Criminal Case to be a witness against himself, * * *'. 6 35 Stat. 1130, 1131, 18 U.S.C. § 338, 18 U.S.C.A. § 338. 7 53 Stat. 1178, 1179, 18 U.S.C. § 413 et seq., 18 U.S.C.A. § 413 et seq. 8 The agents who testified in the proceedings in the trial court clearly stated that the object of the search was the means employed in committing the crimes charged in the warrants of arrest. None of the subsequent statements of the agents, if read in their context, are in conflict with that assertion. 9 It appears that the checks were never found. Respondent concedes that in addition to the draft cards, seven pens and a quantity of tissue paper capable of being employed as instruments of forgery were seized. Also taken were 27 pieces of celluloid which at the trial were demonstrated to be useful in picking a lock. It was respondent's theory that petitioner had obtained the canceled checks by theft from the offices of the Mudge Oil Company and that entry into the offices had been achieved in that manner. Petitioner alleged in his motion to suppress that various other items were taken including sheets of blank paper, expense bills and receipts, personal mail letters, etc. 10 The opinion of the Circuit Court of Appeals is reported at 10 Cir., 151 F.2d 837. 11 See opinion of Cardozo, J., in People v. Chiagles, 1923, 237 N.Y. 193, 142 N.E. 583, 32 A.L.R. 676; Trial of Henry and John Sheares, 27 How.St.Tr. 255, 321 (1798). 12 Examples of the practice are to be found in numerous cases in this Court and in the lower federal courts. Weeks v. United States, supra; Agnello v. United States, supra; Carroll; Agnello v. United 1925, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543, 39 A.L.R. 790; United States v. Lee, 1927, 274 U.S. 559, 47 S.Ct. 746, 71 L.Ed. 1202; Marron v. United States, 1927, 275 U.S. 192, 48 S.Ct. 74, 72 L.Ed. 231; Go-Bart Importing Company v. United States, supra; United States v. Lefkowitz, 1932, 285 U.S. 452, 52 S.Ct. 420, 76 L.Ed. 877, 82 A.L.R. 775; Parks v. United States, 5 Cir., 1935, 76 F.2d 709; United States v. 71.41 Ounces Gold, 2 Cir., 1938, 94 F.2d 17; Matthews v. Correa, 2 Cir., 1943, 135 F.2d 534. 13 Argetakis v. State, 1923, 24 Ariz. 599, 212 P. 372; Commonwealth v. Phillips, 1928, 224 Ky. 117, 5 S.W.2d 887; Banks v. Farwell, 1839, 21 Pick., Mass., 156. And see cases cited in 32 A.L.R. 697; 51 A.L.R. 434. 14 Similar expressions may be found in the cases cited in notes 12 and 13. There is nothing in the Go-Bart and Lefkowitz cases, supra, which casts doubt on this proposition. 15 Stricter requirements of reasonableness may apply where a dwelling is being searched. Davis v. United States, 1946, 328 U.S. 582, 66 S.Ct. 1256; Mattews v. v. Correa, supra, 135 F.2d at page 537. 16 Searches going beyond the room of arrest were upheld in the Agnello and Marron cases, supra. The searches found to be invalid in the Go-Bart and Lefkowitz cases were so held for reasons other than the areas covered by the searches. It has not been the understanding of the lower faderal courts that the search in every case must be so confined. See, for example: United States v. Lindenfeld, 2 Cir., 1944, 142 F.2d 829; Matthews v. Correa, supra; United States v. 71.41 Ounces Gold, supra. 17 Boyd v. United States, supra, 116 U.S. at pages 623, 624, 6 S.Ct. at pages 528, 529, 29 L.Ed. 746; Weeks v. United States, supra, 232 U.S. at pages 392, 393, 34 S.Ct. at page 344, 58 L.Ed. 652, L.R.A.1915B, 834, Ann.Cas.1915C, 1177; Gouled v. United States, supra, 255 U.S. at page 309, 41 S.Ct. at page 265, 65 L.Ed. 647; Carroll v. United States, supra, 267 U.S. at pages 149, 150, 45 S.Ct. at pages 283, 284, 69 L.Ed. 543, 39 A.L.R. 790; Agnello v. United States, supra, 269 U.S. at page 30, 46 S.Ct. at page 5, 70 L.Ed. 145; Marron v. United Stat s, supra, 275 U.S. at page 199, 48 S.Ct. at page 77, 72 L.Ed. 231; United States v. Lefkowitz, supra, 285 U.S. at pages 465, 466, 52 S.Ct. at pages 423, 424, 76 L.Ed. 877, 82 A.L.R. 775. The same distinction is drawn in numerous cases in the lower federal courts: Matthews v. Correa, supra, 135 F.2d at page 537; United States v. Lindenfeld, supra, 142 F.2d at page 832; In re Ginsberg, 2 Cir., 1945, 147 F.2d 749, 751. 18 Entick v. Carrington, 19 How.St.Tr., 1030, 1073—1074. 19 Davis v. United States, supra, 328 U.S. at page 590, 66 S.Ct. at page 1260. And see Boyd v. United States, supra, 116 U.S. at pages 623, 624, 6 S.Ct. at pages 528, 529, 29 L.Ed. 746; Wilson v. United States, 1911, 221 U.S. 361, 380, 31 S.Ct. 538, 544, 55 L.Ed. 771, Ann.Cas.1912D, 558. 20 Milam v. United States, 4 Cir., 1924, 296 F. 629; United States v. Old Dominion Warehouse, 2 Cir., 1926, 10 F.2d 736; United States v. Two Soaking Units, 2 Cir., 1931, 48 F.2d 107; Paper v. United States, 4 Cir., 1931, 53 F.2d 184; Benton v. United States, 4 Cir., 1934, 70 F.2d 24; Matthews v. Correa, supra. 1 'The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.' 2 While this case presents a situation not involved in the Davis case, or in Zap v. United States, 328 U.S. 624, 66 S.Ct. 1277, so that the Court's conclusion cannot rest on those cases, it is appropriate to note that neither of those cases carries the authority of a majority of the Court. Aside from the fact that a constitutional adjudication of recent vintage and by a divided Court may always be reconsidered, I am loath to believe that these decisions by less than a majority of the Court are the last word on issues of such far-reaching importance to constitutional liberties. 3 For reports of Otis' famous argument, see 2 Adams, Works pp. 523—525; Tudor, Life of James Otis, c. VI; Quincy's Massachusetts Reports p. 471 et seq. (see also pp. 51—55); American History Leaflets, No. 33. And see the tribute of John Adams to Otis, Samuel Adams, and Hancock in 8 Old South Leaflets p. 57 (No. 179). 'The seizure of the papers of Algernon Sidney, which were made use of as the means of convicting him of treason, and of those of Wilkes about the time that the controversy between Great Britain and the American Colonies was assuming threatening proportions, was probably the immediate occasion for this constitutional provision. See Leach v. Money, Burr, 1742; S.C., 1 W.Bl. 555, 19 State Trials, 1001, and Broom, Const. Law, 525; Entick v. Carrington, 2 Wils. 275; S.C., 19 State Trials, 1030, and Broom, Const. Law, 558; May, Const.Hist., ch. 10; Trial of Algernon Sidney, 9 State Trials, 817.' Cooley, Principles of Constitutional Law, 1st Ed., 212, n. 2. 4 Compare the answers to certified questions given by this Court in Gouled v. United States, 255 U.S. 298, 41 S.Ct. 261, 65 L.Ed. 647, with the forecast made by a student of the subject, of known partiality in favor of civil liberties. Fraenkel, Concerning Searches and Seizures, 34 Harv.L.Rev. 361, 385—387. As pointed out by Professor Zechariah Chafee, Jr., in each instance where the Gouled case differs from Mr. Fraenkel's forecast, 'the court gave increased force to the constitutional guarantee.' Chafee, The Progress of the Law 1919—1922, 35 Harv.L.Rev. 673, 699. 5 It is not without interest to note the first appearance of provisions dealing with search and seizure in State constitutions: Alabama: art. I, § 9 (1819); Arizona: art. II, § 8 (1910); Arkansas: art. II, § 9 (1836); California: art. I, § 19 (1849); Colorado: art. II, § 7 (1876); Connecticut: art. I, § 8 (1818); Delaware: art. I, § 6 (1792); Florida: art. I, § 7 (1838); Georgia: art. I, § 18 (1865); Idaho: art. I, § 17 (1889); Illinois: art. VIII, § 7 (1818); Indiana: art. I, § 8 (1816); Iowa: art. I, § 8 (1846); Kansas: art. I, § 14 (1855); Kentucky: art. XII, § 9 (1972); Louisiana: Title VII, Art. 108 (1864); Maine: art. I, § 5 (1819); Maryland: Decl. of Rights, par. XXIII (1776); Massachusetts: Part I, Art. XIV (1780); Michigan: art. I, § 8 (1835); Minnesota: art. I, § 10 (1857); Mississippi: art. I, § 9 (1817); Missouri: art. XIII, § 13 (1820); Montana: art. III, § 7 (1889); Nebraska: art. I, § 7 (1875); Nevada: art. I, § 18 (1864); New Hampshire: Part I, art. XIX (1784); New Jersey: art. I, § 6 (1844); New Mexico: art. II, § 10 (1910); North Carolina: Decl. of Rights, par. XI (1776); North Dakota: art. I, § 18 (1889); Ohio: art. VIII, § 5 (1802); Oklahoma: art. II § 30 (1907); Oregon: art. I, § 9 (1857); Pennsylvania: Decl. of Rights, par. X (1776); Rhode Island: art. I, § 6 (1842); South Carolina: art. I, § 22 (1868); South Dakota: art. VI, § 11 (1889); Tennessee: art. XI, § 7 (1796); Texas: Decl. of Rights, par. 5 (1836), art. I, § 7 (1845); Utah: art. I, § 14 (1895); Vermont: chapter I, par. XI (1777); Virginia: Bill of Rights, § 10 (1776); Washington: art. I, § 7 (1889); West Virginia: art. II, § 3 (1861—63); Wisconsin: art. I, § 11 (1848); Wyoming: art. I, § 4 (1889). 6 'The requirement that warrants shall particularly describe the things to be seized makes general searches under them impossible and prevents the seizure of one thing under a warrant describing another. As to what is to be taken, nothing is left to the discretion of the officer executing the warrant.' 7 The extent to which such subordination of the police to law finds support in informed English opinion is reflected by the comments of the Solicitors' Journal. After nothing that, in the view of Lord Simon, 'Any other general rule would be contrary to our conception of individual liberty, though it might be tolerated in the time of the Lettres de Cachet in the eighteenth century in France or under the Gestapo,' the Journal observes: 'The importance of the reaffirmation of this principle cannot be exaggerated. The powers of private persons to arrest where a felony has been committed and there is reasonable ground for thinking that the person detained has committed it are important now that crimes of violence are more numerous, and the statutory powers of arrest without warrant under, e.g., the Malicious Damage Act, 1861, the Larceny Act, 1916, the Curtis Act of 1876, and many other Acts are more used than is generally appreciated. Of no less importance in such times as these is the assertion of our individual liberties to counteract any tendency which may appear for police powers to be exceeded.' 91 Solicitors' Journal 184—185 (April 12, 1947). 8 Address, Harvard Law School Centennial, June 21, 1920, Some Observations on Legal Education and Democratic Progress, p. 23: 'We cannot afford to ignore the indications that, perhaps to an extent unparalleled in our history, the essentials of liberty are being disregarded. Very recently information has been laid by responsible citizens at the bar of public opinion of violations of personal rights which savor of the worst practices of tyranny.' For a contemporaneous judicial account of searches and seizures in violation of the Fourth Amendment in connection with the Communist raids of January 2, 1920, see Judge George W. Anderson's opinion in Colyer v. Skeffington, D.C., 265 F. 17.

01

331 U.S. 284 67 S.Ct. 1207 91 L.Ed. 1492 STATE OF NEW YORK et al.v.UNITED STATES et al. HILDRETH, Governor, et al. v. SAME. ATCHISON, T. & S.F.R. CO. et al. v. SAME. Nos. 343 to 345. Argued March 3, 4, 5, 1947. Decided May 12, 1947. Rehearing Denied June 9, 1947. See 331 U.S. 866, 67 S.Ct. 1527. Appeals from the District Court of the United States for the Northern District of New York. [Syllabus from pages 284-286 intentionally omitted] Mr. Parker McCollester, of New York City, for appellants State of New York and others. Mr. Henry F. Foley, of Boston, Mass., for appellants State of Maine and others. Mr. Douglas F. Smith, of Chicago, Ill., for appellants A., T. & S.F.R. Co. and others. Mr. Edward H. Miller, of Washington, D.C., for The United States. Mr. Daniel W. Knowlton, of Washington, D.C., for Interstate Commerce Commission. Mr. J. V. Norman, of Washington, D.C., for Southern States & Southern Governors' Conference. Mr. Byron M. Gary, of Topeka, Kan., for States of Arkansas, Kansas, and others. Mr. Justice DOUGLAS delivered the opinion of the Court. 1 The orders of the Interstate Commerce Commission, which appellants seek to have set aside, resulted from two separate investigations instituted by the Commission on its own motion in 1939 to inquire into the lawfulness or unlawfulness of most of the then existing rate-making standards for interstate railroad class freight rates in the United States. One investigation related to classification1 under which commodities move by rail freight. The other related to class rates.2 The two investigations were consolidated and were covered by one report, as the problems of classification and of class rates3 are closely interrelated. The findings of the Commission as to classifications are not directly involved here. For the orders of the Commission under attack are interim orders which affect only class rates, increasing them in some areas and decreasing them in others. But a review and summary of the Commission's findings both on classifications and on class rates are essential for an understanding of the problem. 2 While there are three major classification territories, there are five major rate territories.4 Official Territory, roughly speaking, lies east of the Mississippi and north of the Ohio and Potomac Rivers; it includes most of Virginia. Southern Territory lies south of Official Territory and east of the Mississippi. Western Trunk-Line Territory is located approximately between Official Territory and the Rocky Mountains. Southwestern Territory lies south of Western Trunk-Line Territory and west of the Mississippi and includes Arkansas, Texas, Oklahoma, and part of Louisiana. Mountain-Pacific Territory includes Montana and New Mexico and all territory west of the Rockies. Only Mountain-Pacific Territory is not involved in these cases. 3 The three major classifications are Official, Southern and Western.5 But there is great lack of uniformity in the classifications. The problem is one with which the Commission has long wrestled.6 But prior to the present investigation its chief accomplishment in this field had been to establish classification uniformity within the separate territories. National classification uniformity was still in the main lacking. Many differences between classifications on a particular rating are matters of substance; others are matters of nomenclature. Moreover, there has been a tendency among carriers to work against the evolution of uniform classifications by making exceptions which remove commodities from the classifications for rate-making purposes. 4 Section 1(4) of the Interstate Commerce Act as amended, 24 Stat. 379, 54 Stat. 899, 900, 49 U.S.C. § 1(4), 49 U.S.C.A. § 1(4), provides that it shall be the duty of common carriers to establish just and reasonable classifications applicable to through freight rates and charges. Section 1(6) prohibits every unjust and unreasonable classification. Section 3(1), 49 U.S.C.A. § 3(1), prohibits discrimination. And § 15(1), 49 U.S.C.A. § 15(1), empowers the Commission to prescribe just, fair, and reasonable classifications, after a finding that existing classifications are unlawful. The Commission found that the existing classifications are unlawful and will continue to be unawful unti l there is national uniformity of classification. It found that differences in the applicable classifications affect the levels of the class rates as much as or more, in some instances, than the differences in the levels of the class rate scales themselves. It found that shippers in one territory pay more than shippers in another territory on the same article because of classification differences; that territorial boundaries separating classification territories are artificial and cause serious complications; that where geographic conditions produce divergent costs, revenue requirements, or other conditions requiring rate adjustments, the adjustments should be made not in the basic classification itself but in the rate levels or by the creation of legitimate exceptions to the classification; that amongst the classifications there was no real uniformity of classification ratings although the same classification principles are applicable throughout the nation. It concluded that without such uniformity it is impossible to maintain just and reasonable relationships between class rates for competing commodities; that it is feasible for the carriers to establish a uniform classification. The Commission gave the railroads the opportunity to take the initiative in preparing the new uniform classification—an invitation which, we are advised, has been accepted. 5 Prior to this proceeding the Commission made four major class rate investigations—one for each of the rate territories except Mountain-Pacific.7 These established class rate structures on a regional basis, i.e. they established some degree of uniformity in class rates within each territory or subdivision of a territory. But they did not deal with interterritorial class rates by harmonizing regional rate adjustments one with the other. As a result there are separate interterritorial rate structures applicable to freight traffic moving from one territory into another. 6 These territorial class rate structures are exceedingly complicated. There is no basic uniformity amongst them and they are computed by varying formulae. 7 The Commission found that class rates within Southern, Southwestern and Western Trunk-Line territories, and from those territories to Official Territory, were generally much higher, article for article, than the rates within Official Territory. It found that higher class rates have impeded the development and movement of class rate freight within Southern, Southwestern and Western Trunk-Line territories and from those territories to Official Territory. It concluded that neither the comparative costs of transportation service nor variations in the consists8 and volume of traffic within the territories justified those differences in the class rates. The Commission also determined that equalization of class rates is not dependent on equalization of nonclass rates and that interterritorial rate problems can be solved only by establishing substantial uniformity in class ratings and rates. 8 Section 1(4) and (5)(a) of the Act require rates and charges to be just and reasonable. The Commission found that the intraterritorial class rates applicable to the territories in question and the interterritorial class rates between the territories violate those provisions. 9 Section 3(1) of the Act outlaws undue or unreasonable preferences or advantages to any region, district, or territory. Te Commissi on found that the relation between the interterritorial class rates to Official Territory from the other territories in question and the intraterritorial class rates within Official Territory results in an unreasonable preference to Official Territory as a whole, and to shippers and receivers of freight located there, in violation of § 3(1). The Commission, acting pursuant to its authority under § 15(1) of the Act, prescribed reasonable and nondiscriminatory class rates to cure the preference found to exist, the new rates to become applicable simultaneously with the new revised classification which, as we have noted, the Commission ordered to be established. 10 But time will be required to formulate a uniform classification. And the Commission concluded that pending completion of that undertaking certain interim readjustments in the existing basis of class rates, based on existing classifications, could be made—readjustments which would be just and reasonable, and which would reduce to a minimum the preferences and prejudices which the Commission found to be unlawful in the existing system. It determined that the several intraterritorial freight-rate structures should be brought closer to the same level and be constructed on the same pattern or scheme. It concluded that as many differences as possible between the interterritorial rates and the intraterritorial rates should be eliminated. It accordingly ordered that existing interstate class rates9 applicable to freight traffic moving at the classification ratings within Southern, Southwestern, and Western Trunk-Line territories interterritorially between those territories, and interterritorially between each of those territories and Official Territory, be reduced 10 per cent subject to qualifications not important here. It also ordered that interstate class rates for freight traffic moving at classification ratings within Official Terriroty be increased 10 per cent, subject to qualifications not relevant to our problem. It found the new interim class rates just and reasonable. 262 I.C.C. 447, supplemental report, 264 I.C.C. 41. 11 The new interim rates were ordered to become effective January 1, 1946. Prior to that date, New York and other northern States, appellants in No. 343, filed their petition in the District Court to set aside the orders of the Commission. A statutory three judge court was convened and a temporary injunction was issued preventing the orders from going into effect. 38 Stat. 208, 220, 28 U.S.C. § 47, 28 U.S.C.A. § 47. The Governors of the six New England States (three of whose successors in office have been substituted as appellants in No. 344) intervened on the side of the plaintiffs, as did most of the appellants in No. 345. The Commission and others10 intervened on the side of the United States. Appellants in No. 345, including most of the western railroads, also filed their petition in the District Court seeking substantially the same relief as appellants in No. 343. The cases were consolidated and tried together, the District Court receiving additional evidence offered by the western railroads. The court sustained the orders of the Commission in all respects, 65 F.Supp. 856, but continued the injunction pending appeal to this Court.11 Judicial Code § 210, 28 U.S.C. § 47a, 28 U.S.C.A. § 47a. 12 First. The principal evil at which the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., was aimed was discrimination in its various manifestations. Louisville & N.R. Co. v. United States, 282 U.S. 740, 749, 750, 51 S.Ct. 297, 300, 301, 75 L.Ed. 672. Until 1935, § 3(1) of the Act prohibited discrimination only against a 'person, company, firm, corporation, or locality, or any particular description of traffic.' 24 Stat. 379, 380. The question arose whether 'locality' included a port insofar as the port was not a point of origin or destination but a gateway through which shipments were made. The Court held by a closely divided vote, and contrary to the ruling of the Commission, that it did not. Texas & Pacific R. Co. v. United States, 289 U.S. 627, 53 S.Ct. 768, 77 L.Ed. 1410. Thereafter Congress amended § 3(1) so as to extend the prohibition against discrimination to include a 'port, port district, gateway, transit point.' 49 Stat. 607. And see Albany Port District Commission v. Ahnapie & W.R. Co., 219 I.C.C. 151. That was in 1935. In 1940 Congress went further. By § 5(b) of the Transportation Act of 1940, 54 Stat. 899, 902, 49 U.S.C.A. § 3 note, known as the Ramspeck Resolution, it authorized and directed the Commission to institute an investigation into rates on commodities between points in one classification territory and points in another territory and into like rates within territories for the purpose of determining whether those rates were 'unjust and unreasonable or unlawful in any other respect in and of themselves or in their relation to each other, and to enter such orders as may be appropriate for the removal of any unlawfulness which may be found to exist * * *.'12 Congress also extended the prohibition against discriminations by adding to § 3(1) the words 'region, district, territory.'13 13 It is now asserted that the Commission has misunderstood its duties under these 1940 amendments. It is said that the Commission has construed this mandate of Congress to mean that identical rates, mile for mile, should be established everywhere in the country, in face of a long standing practice of rate-making (which the legislative history of the 1940 amendments shows was not intended to be changed) that allowed differences in rates which were based on differences in the length of haul, character of the terrain, density of traffic, and other elements of the cost of service. Thus it is argued that the Commission runs afoul of Ann Arbor R. Co. v. United States, 281 U.S. 658, 50 S.Ct. 444, 74 L.Ed. 1098, which involved the construction of a joint resolution of Congress directing the Commission to make an investigation to determine whether existing rates and charges were unjust, unreasonable, or unjustly discriminatory so as to give undue advantage 'as between the various localities and parts of the country * * *.' 43 Stat. 801, 802, 49 U.S.C.A. § 55. The Commission, reling on tha t mandate, condemned certain existing rates between California and eastern points. The Court set aside the order of the Commission, holding that the joint resolution did not purport to change the existing law but left the validity of rates to be determined by that law. 14 But the Commission in the present cases did not proceed on the assumption that the Ramspeck Resolution changed the substantive law. As we read its report, the Commission took the resolution only as a directive to investigate and correct violations of substantive law as it deemed that law broadened by the amendment to § 3(1). It said: 15 'By the amendment to the substantive antidiscrimination provisions of section 3(1) all discriminations in the form of undue or unreasonable preference or advantage, or undue or unreasonable prejudice or disadvantage, as between regions, districts, or territories, viewed as separate entities, were brought directly within the purview of the act along with all the other inhibitions previously included. We were then authorized and directed by the other provisions mentioned to remove any such discriminations found to exist in a proper proceeding. This means that such discriminations as those mentioned which result from differences in the methods of distributing the general rate burden in the several ratemaking territories, or from any other cause, if not justified upon proper consideration of recognized elements of rate making applied in the light of the amended law are unlawful and should be corrected.' 262 I.C.C. p. 692. 16 From this statement it is apparent that the Commission concluded that the 1940 amendment to § 3(1) enlarged the scope of the section. The Commission, indeed, stated that 'it is clear that the main purpose which Congress had in mind was to bring about a greater degree of equalization, harmony, and uniformity in the different regional or territorial rate structures of the country.' Id. p. 692. And see id. pp. 688—691. But it is suggested that discriminations based on geographic factors were outlawed prior to the 1940 amendment to § 3(1), as evidenced by its long standing condemnation of 'undue or unreasonable prejudice or disadvantage' to any 'locality' and, since 1935, to any 'port, port district, gateway, transit point.'14 It is, moreover, suggested that even the prohibition of discriminations against shippers was broad enough all along to ban discriminations based on the geographic location of the shippers. The contention is that without a change in the law the present orders were unwarranted; it is pointed out that the class rates now condemned had been found by the Commission itself to be just and reasonable in recent years. And it is asserted that the Commission did not take its present action on a showing of changed circumstances since those times. The conclusion, therefore, is that the present orders are not warranted by § 3(1). 17 We need not determine whether, prior to the 1940 amendment, § 3(1), by its ban on unlawful discriminations against a 'locality,' would have permitted the Commission to eradicate regional discriminations in class rates. For whatever doubt may have existed in the law was removed by the 1940 amendment which made abundantly clear that Congress thought that the problem of regional discriminations had been neglected and that if any such discriminations were found to be present, they should be eradicated.15 But, as the Commission concedes, the addition of 'region, district, territory' to § 3(1) did not change the law respecting discrimination by authorizing uniform freight rates, mile for mile, without regard to differing costs of the service. ongress, b y adding those words, made plain the duty of the Commission in determining whether discriminatory practices exist to consider the interests of regions, districts, and territories, and to eliminate territorial rate differences which are not justified by differences in territorial conditions. In other words Congress did not introduce a new standard of discrimination by its amendment to § 3(1); it merely made clear its purpose that regions, districts, and territories should be the beneficiaries of the law against discrimination. 18 Second. It is argued, however, that the findings of the Commission concerning regional discriminations in class rates are not supported by substantial evidence. 19 The great differences between territorial class rate levels are shown by the following table. It gives a comparison (in cents per 100 pounds) between the first-class rate scale within Official Territory and that within each of the other territories: Southern 20 scale Eastern Distance Scale 21 rate Percentage Rate of Eastern 22 50 miles......... 47. 57. --------- 23 100 miles........ 62. 79. --------- 24 150 miles........ 73. 96. --------- 25 200 miles........ 80. 112. --------- 26 300 miles........ 96. 134. --------- 27 400 miles....... 109. 156. --------- 28 500 miles....... 122. 173. --------- 29 600 miles....... 135. 189. --------- 30 700 miles....... 149. 206. --------- 31 800 miles....... 160. 222. --------- 32 900 miles....... 171. 235. --------- 33 1,000 miles..... 182. 249. --------- Average............... 137.7 TABLE CONTINUED WESTERN TRUNK-LINE SCALE Zone I Zone II Zone III Percentage Percentage Percentage Rate of Rate of Rate of Eastern Eastern Eastern 34 53 --------- 61 --------- 65 --------- 35 73 --------- 83 --------- 90 --------- 36 86 --------- 98 --------- 107 --------- 37 97 --------- 111 --------- 123 --------- 38 117 --------- 134 --------- 147 --------- 39 136 --------- 156 --------- 172 --------- 40 156 --------- 178 --------- 196 --------- 41 176 --------- 200 --------- 220 --------- 42 196 --------- 222 --------- 244 --------- 43 210 --------- 239 --------- 263 --------- 44 226 --------- 256 --------- 282 --------- 45 240 --------- 273 --------- 300 --------- 46 --------- 129.6 --------- 144.4 --------- 159.4 47 These first-class intraterritorial rates are used as bases in formulating rates on other classes of freight in the respective territories.16 48 The following tables compiled by Government counsel show the first-class rates for interritorial movements to Official Territory from each of the other territories as compared with intraterritorial movements for approximately equal distances within Official Territory: Disadvantage 49 of Southern Southern v. Official Territory shipper 50 compared with Official Territory 51 shipper First 52 class In In per 53 From— To— Miles rates cents cent 54 Nashville, Tenn.. Indianapolis, Ind..297 135 -------- -------- 55 Indianapolis, Ind.. Kent, Ohio.296.96 39 41 56 Knoxville, Tenn.. Columbus, Ohio.395.155 -------- -------- 57 Baltimore, Md. Warren, Ohio.392.103 52 50 58 Birmingham, Ala.. Muncie, Ind..536.179 -------- -------- 59 Pittsburgh, Pa. Rockford, Ill..538.128 51 40 60 Chattanooga, Tenn.. Chicago, Ill..594 187 -------- -------- 61 Philadelphia, Pa.. Toledo, Ohio.595.135 52 39 62 Atlanta, Ga. Chicago, Ill..731.210 -------- -------- 63 Danville, Ill. Washington, D. C..733 151 59 39 64 Macon, Ga. Chicago, Ill..819.223 -------- -------- 65 Trenton, N. J. Danville, Ill..819.163 60 37 Disadvantage 66 of Southwestern Southwestern v. Official Territory shipper 67 compared with Official Territory 68 shipper First 69 class In In per 70 From— To— Miles rates cents cent 71 Little Rock, Ark.Detroit,Mich.785.222 -------- -------- 72 Official Territory Point.Detroit, Mich 785 160 62 39 73 Oklahoma City, Okla.Cincinnati, Ohio.882 244 ------- -------- 74 Official Territory Point.Cincinnati, Ohio 882 171 73 43 75 Sheveport, La Cleveland, Ohio.1,013 264 -------- -------- 76 Offical Territory Point.Cincinnati, Ohio 1,013 185 79 43 77 Dallas, Tex Pittsburgh, Pa.1,224.304 -------- -------- 78 Official Territory Point.Pittsburgh, Pa 1,224 207 97 47 Disadvantage 79 of Western 80 Western Trunk-Line v. Official Territory shipper 81 compared with Official Territory 82 shipper First 83 class In In per 84 From— To— Miles rates cents cent 85 Des Moines,Iowa Toledo, Ohio.558.142.-------- -------- 86 Official Territory Point.Toledo, Ohio.558 118 24 20 87 St. Paul, Minn South Bend, Ind.491.138 -------- -------- 88 Official Territory Pt.South Bend, Ind.491 111 27 24 89 Lincoln, nebr Evansville, Ind.612.169 -------- -------- 90 Official Territory Point.Evansville,Ind 612 125 44 35 91 Denver,Colo Cleveland,Ohio.1329.289 ------- -------- 92 Officail Territory Point.Cleveland.1,329 200 89 45 93 The disadvantage to the Southern or Western shipper who attempts to market his product in Official Territory is obvious. Thus the first of these tables shows that a Nashville shipper pays 39 cents more on each 100 pounds of freight moving to indianapolis, Indiana than one who ships from Indianapolis to a point of substantially equal distance away (Kent, Ohio) in Official Territory. Similar disadvantages suffered by Southern and Western Shippers are revealed in the other comparable interritorial freight movements set forth in the tables. 94 That disadvantage is emphasized if the effects of classification differences on rates for identical commodities are considered. A comparison of rates in cents per 100 pounds for 200 miles shows that even though shippers in the South and West have the same or lower classification ratings for identical commodities they nevertheless on the whole pay higher charges than the shippers in Official Territory for equivalent service. Thus there are in class 100 (first class) for less-than-carload lots 2092 items common to the three classifications. In Official Classification all of these move at a rate of 80 cents per 100 pounds for a haul of 200 miles. In Southern, 2076 of these items are classified 100 and move at a rate of $1.12. Of the remaining 17 items 5 are classified in Southern in class 85 with a rate of 95, 2 in class 70 with a rate of 78, 7 in class 55 with a rate of 62, 2 in class 45, with a rate of 50, 1 in class 40 with a rate of 45. In Western Trunk-Line Zone I, 2076 of the 2092 items are classified 100 with a rate of 97, 4 in 85 with a rate of 82, 10 in 70 with a rate of 68, 2 in 55 wit a rate of 53. 95 In class 100 for carload lots there are 213 common items. In Official Classification all of these move at a rate of 80 cents for a haul of 200 miles. In Southern, 199 of these items are classified 100 and move at a rate of $1.12 for 200 miles. Of the remaining 14, 7 are classified in Southern in class 85 with a rate of 95, 2 in 75 with a rate of 84, 5 in 70 with a rate of 78. In Western Trunk-Line Zone I, 202 of the 213 items are classified 100 with a rate of 97, 7 in 85 with a rate of 82, 3 in 70 with a rate of 68, 1 in 55 with a rate of 53. Additional illustrations are too numerous and detailed to include in this opinion. But the ones given are representative of the rest and show how disparities in the rate levels are aggravated when the effects of classification differences on rates are considered. 96 There is rather voluminous evidence in the record tendered to show the effect in concrete competitive situations of these class rate inequalities. The instances were in the main reviewed by the Commission. They are attacked here on various grounds—that some of them involved rates other than class rates, that others were testified to by shippers who made no complaint of class rates, that others showed shippers paying higher rates yet maintaining their competitive positions and prospering. We do not stop to analyze them or discuss them beyond saying that some of the specific instances support what is plainly to be inferred from the figures we have summarized—that class rates within Southern, Southwestern and Western Territories, and from those territories to Official Territory, are generally much higher, article for article, than the rates within Official Territory. That was the basic finding of the Commission; and it is abundantly supported by the evidence. 97 Thus discrimination in class rates in favor of Official Territory and against the Southern, Southwestern and Western Trunk Line territories is established. But that is not the end of the matter. For 'mere discrimination does not render a rate illegal under section 3.' United States v. Illinois Central R. Co., 263 U.S. 515, 521, 44 S.Ct. 189, 192, 68 L.Ed. 417. Section 3 condemns 'any undue or unreasonable preference or advantage' and 'any undue or unreasonable prejudice or disadvantage' to any territory. And, as we have said, the 1940 amendment to § 3, by its addition of 'region, district, territory,' did not change the prevailing rules respecting unlawful discrimination; it merely enlarged the reach of § 3. Hence we must determine from the pre-existing law whether a discrimination against a territory is obnoxious to § 3. The rule is stated in United States v. Illinois Central R. Co., supra, 263 U.S. at page 524, 44 S.Ct. at page 193, 68 L.Ed. 417, as follows: 98 'To bring a difference in rates within the prohibition of section 3, it must be shown that the discrimination practiced is unjust when measured by the transportation standard. In other words, the difference in rates cannot be held illegal, unless it is shown that it is not justified by the cost of the respective services, by their values, or by other transportation conditions.' 99 It is on this principle that the findings of the Commission under § 3 are both defended and attacked. 100 Third. The Commission's findings under § 3(1) are first challenged on the ground that there is no finding that the corresponding class rates are actually charged to or demanded of competing shippers in the several territories. That is to say, no unlawful discrimination in favor of a shipper in Official Territory and against a shipper in Southern Territory can be said to exist unless it is shown that the southern competitor is actually required to pay the higher interterritorial class rates. It is contended that the record negatives the existence of facts which could support such a finding and that no such finding was made. Reliance is placed on two circumstances. In the first place, reference is made to the effect of classification ratins on class rates which we briefly summarized above. It is noted, for example, that the southern shipper in some instances actually pays less for the shipment of the same commodity than the shipper in Official Territory, e.g., where the Southern Classification carries the commodity in a lower class, which in turn exacts a rate less than that required of the higher classification granted by Official. It is apparent from the illustrations we have given that such is true in some cases. But that is not the dominant pattern. In the vast majority of the instances the classification ratings, like the class rate structure, work to the benefit of Official Territory and against the others. But the greater reliance is placed on the second circumstance—that only a minor portion of freight moves by class rates and of that a greater percentage moves in Official Territory than in the others. This point requires a more extended answer. 101 The Commission, indeed, found that by reason of non-use the class rates have become obsolete and no longer serve the purposes for which they were designed. They move a relatively small amount of freight. The following table indicates the percentages of carload traffic carried at class rates within and between territories in 1942: To From 102 Official Southern Southwestern Western 103 trunk-line Official..............5.8.12.6.22.5 12.3 Southern................9.1.8.6.1 1.5 Southwestern..........1.5.1.2.2.4 2.0 Western Truck Line....3.1.6.1.13.0 .6 104 In September, 1940, for example, less-than-carload ratings on about 3,000 commodities were removed from the Southern Classification by classification exceptions. The great bulk of the freight moves on exception rates and commodity rates.17 This trend, according to the Commission, has been the result of competitive forces. The creation of the exceptions has 'shorn the ratings in the classifications of much of their usefulness and proper function.' 262 I.C.C. p. 504. The record is replete with evidence supporting this finding of the Commission. And appellants seize on it as supporting their claim that since class rates have largely become paper rates, they are not the source of injury to shippers from the South and the West; that if the latter are prejudiced by the rate structure, the injury must flow from the exception rates and commodity rates not involved in this proceeding; and that in any event the case of unlawful discriminations in favor of Official Territory and against the other territories has not been founded on the actual use of disadvantageous class rates by shippers in the Southern, Southwestern, and Western Trunk-Line territories. 105 But that takes too narrow a view of the problem confronting the Commission. We start of course with some showing of actual discrimination against shippers by reason of their use of class rates. But the main case of discrimination made out by the record is one against regions and territories. We assume that a case of unlawful discrimination against shippers by reason of their geographic location would be an unlawful discrimination against the regions where the shipments originate. But an unlawful discrimination against regions or territories is not dependent on such a showing. As we stated in Georgia v. Pennsylvania R. Co., 324 U.S. 439, 450, 65 S.Ct. 716, 723, 89 L.Ed. 1051, 'Discriminatory rates are but one form of trade barriers.' Their effect is not only to impede established industries but to prevent the establishment of new ones, to arrest the development of a State or region, to make it difficult for an agricultural economy to evolve into an industrial one. Non-discriminatory class rates remove that barrier by offering that equality which the law was designed to afford. They insure prospective shippers not only that the rates are just and reasonable per se bt that the y are properly related to those of their competitors. Shippers are then not dependent on their ability to get exception rates or commodity rates after their industries are established and their shipments are ready to move. They have a basis for planning ahead by relying on a coherent rate structure reflecting competitive factors. 106 If a showing of discrimination against a territory or region were dependent on a showing of actual discrimination against shippers located in these sections, the case could never be made out where discriminatory rates had proved to be such effective trade barriers as to prevent the establishment of industries in those outlying regions. If that were the test, then the 1940 amendment to § 3(1) would not have achieved its purpose. We cannot attribute such futility to the effort made by Congress to make regions, districts and territories, as well as shippers, the beneficiaries of its anti-discrimination policy expressed in § 3(1). 107 So far as the remedy is concerned, the present cases might, of course, be different if the Commission had no power to prescribe classifications. But § 15(1) of the Act grants it full power, on finding that a classification is 'unjust or unreasonable or unjustly discriminatory or unduly preferential or prejudicial,' to determine and prescribe what classification will be 'just, fair, and reasonable.' The Commission's over-all conclusion was that the classifications in force and the class rates computed from them harbor inequities which result in unlawful discriminations in favor of Official Territory and against the other territories. The fact that relatively small amounts of freight move by class rates proves not that the regional and territorial discrimination is slight, but that the rate structure as constituted holds no promise of affording the various regions or territories that parity of treatment which territorial conditions warrant. The Commission in substance concluded that that result could not be achieved unless traffic was, in the main, moved on class rates. We will discuss later the appropriateness of the relief granted by the interim orders here challenged. It is sufficient here to note that the case of unlawful discrimination against these territories was chiefly founded on the absence of non-discriminatory class rates and uniform classifications which would remove the features of existing rate structures prejudicial to Southern, Southwestern, and Western Trunk-Line territories. 108 We are thus not primarily concerned with the adequacies of the Commission's findings showing discrimination against actual shippers located in a territory (cf. State of Florida v. United States, 282 U.S. 194, 51 S.Ct. 119, 75 L.Ed. 291; State of North Carolina v. United States, 325 U.S. 507, 65 S.Ct. 1260, 89 L.Ed. 1760; Interstate Commerce Commission v. Mechling, 330 U.S. 567, 67 S.Ct. 894), but with prejudice to a territory as a whole. 109 Fourth. The inquiry of the Commission into the effect of class rates on the economic development of Southern, Southwestern, and Western Trunk-Line territories took a wide range. It concluded that projudice to the territories in question had been established. We think that finding is supported by substantial evidence. 110 It is, of course, obvious that the causal connection between rate discrimination and territorial injury is not always susceptible of conclusive proof. The extent of that causal relation cannot in any case be shown with mathematical exactness. It is a matter of inference from relevant data. The Commission recognized, for example, that the fact that the South has fewer industries than the East results from a complex of causes—that the 'industrial development of the East is due to many factors other than transportation services and costs, such as climate, soil, natural resources, available water power, supplies of natural gas and coal, and early settlements of population which antedated the building of the railroads.' 262 I.C.C. p. 619. It notedthat in 19 39 freight revenues on commodities in the manufactures and miscellaneous group were but 5.3 per cent of the destination value of manufactured goods and that differences in freight charges resulting from differences in class rate levels were only a small fraction of that figure. But it nevertheless concluded that 'Nearness to markets and ability to ship to markets, on a basis fairly and reasonably related to the rates of competitors, are nevertheless potent factors in the location of a manufacturing plant. In fact, rate relations are more important to the manufacturer and shipper than the levels of the rates.' 262 I.C.C. 619, 620. 111 The great advance in industrialization of Official Territory over the other territories need not be labored, for it is obvious. Some manifestations of that development may be illustrated by the following tables: Gainful Value of Value added 112 Territory Land area, Workers manufactured by manufacture, 1949 1930 products, 1939 1939 Official.............13.5.51.1.67.8 71.4 Southern.............13.3.16.8.10 9.4 Western Trunk line...20.9.13.5.9.9 8.7 Southwestern.........14.2.9.3.4.5 3.3 Mountain Pacific.....38.1.9.3.7.8 7.2 Total..............100.0.100.0.100.0 100.0 113 Another measure of industrial growth is shown by the number of gainful workers and the manufacturing industries in the several territories: Actual increase Actual Increase Actual increase in value of in value added Territory in total gainful products in all by manufacture in 114 workers from manufacturing all manufacturing 1910 to 1930 industries from industries from 1909 to 1939 1909 to 1939 115 Official...........6,230,273.$23,561,190,000 $11,284,350,000 116 Southern.............652,755.4,299,396,000 1,662,336,000 117 Western Trunk Line...904,986.3,117,079,000 1,662,336,000 118 Southwestern.......1,011,151.1,942,378,000 580,388,000 119 Mountain Pacific...1,863,419.3,320,930,000 1,341,785,000 120 The value added by manufacture in all industries from 1849 to 1939 is shown for all the territories by the chart on the following page. 121 From this chart it is apparent that Official Territory has maintained its commanding lead in spite of recent market increases elsewhere, especially in the South. Similarly, for the period 1929 to 1939 the number of wage earners in manufacturing industries in the entire country decreased 11 per cent; in Official Territory, 12 per cent; while in the South there was an increase of 5 per cent. For the same period, values of manufactured products increased 1 per cent in the South, while they decreased 21 per cent for the entire country and 25 per cent in Official Territory. From 1930 to 1940, the number of gain 122 fully occupied workers in manufacturing in Official Territory decreased from 70.5 per cent to 69.4 per cent of the nation's total, while in the South there was an increase from 10 per cent to 11.9 per cent. A number of manufacturing activities have increased more rapidly in the South than in Official Territory, though the reverse has been true in other industries. But in spite of the growth in industrial activities in the South and West (which appellants stress heavily), the percentage comparisons are not particularly revealing because of the great disparity between the bases on which they are computed. 123 The fact remains that economic development in the South and West has lagged and still lags behind Official Territory. In 1940 the average annual dollar income per person employed in Official Territory was $1,988; in Southern, $940; in Southwestern, $1,177; in Western Trunk-Line, $1,411. Official has 69 per cent of all workers engaged in manufacturing in te United § tates and 29 per cent of all workers in extractive industries. It has, for example, a high concentration in the manufacture of steel and copper products, though less than 4 per cent of the iron ore reserves, and no reserves of metallic copper. The South and West furnish raw materials to Official and buy finished products back. They are also dependent to a great extent on the markets for their products in Official, which has over 48 per cent of the population of the country, 76 per cent of the national market for industrial machinery and raw materials, 64 per cent for all goods and sources, 62 per cent for consumer luxuries, and 53 per cent for consumer necessities. Yet the South and West suffer rate handicaps when they seek to reach those markets.18 One of the many illustrations will suffice. Cottonseed oil is a basic agricultural commodity. Class rates on it are 7 per cent higher from Southern to Official Territory than they are within Official Territory. If the cottonseed oil is manufactured into oleomargarine, the rates from Southern to Official Territory are 35 per cent higher than the rates within Official Territory. 124 It is said in reply, however, that the disparities which we have mentioned reflect only natural advantages which justify differences in rates. The great concentration of population in the East is said to show that its more favorable rates are justified by the fact that it has many more people to support the roads. The unfavorable income comparisons with the East are thought to establish one of the handicaps under which the roads in the South and West operate. It is pointed out that the heavy preponderance of the nation's total natural resource of energy supply is located in Official Territory—40 to 45 per cent of the total bituminous and semi-bituminous coal supply, practically all of the anthracite resources; 60 per cent of all electric energy originates there. It is said that Official Territory is the logical location for industries which use metals from other territories, since it has the natural supplies of coal. It is also pointed out that the gross income from crops and livestock in Official Territory is the highest in the country, amounting to 31 per cent of the total. From these and comparable data it is argued that the lower rates in Official territory reflect only inherent advantages which the other territories do not enjoy. It is, therefore, argued that what the Commission has sought to do is to equalize economic advantages, to enter the field of economic planning, and to arrange a rate structure designed to relocate industries, cause a redistribution of population, and in other ways to offset the natural advantages which the territory has over another. It is asserted that such a program is unlawful under Interstate Commerce Commission v. Diffenbaugh, 222 U.S. 42, 46, 32 S.Ct. 22, 24, 56 L.Ed. 83, where the Court held that the Act, in its condemnation of discrimination, 'does not attempt to equalize fortune, opportunities, or abilities.' And see United States v. Illinois Central R. Co., supra, 263 U.S. at page 524, 44 S.Ct. at page 193, 68 L.Ed. 417; Texas & Pacific R. Co. v. United States, supra, 289 U.S. at pages 637, 638, 53 S.Ct. at pages 771, 772, 77 L.Ed. 1410. 125 We will revert to this matter when we come to consider whether territorial conditions justify the differences in rates. It is sufficient at this point to say that the record makes out a strong case for the inference that natural disadvantages alone are not responsible for the retarded development of the South and the West, that the discriminatory rate structure has also played a part. How much a part cannot be determined, for every effect is the result of many factors. But the inference of prejudice from the discriminatory rate structure is irresistible. If this discriminatory rate structure is not justified by territorial conditions, then its continued maintenance preserves not the natural advantages of one region but man-made trade barriers which have been imposed upon the country. Such a result cannot be reconciled with the great purposes of § 3(1) as amended in 1940. 126 Fifth. The Commission found that conditions peculiar to the respective territories did not justify the differences in the territorial class-rate structures. In reaching that conclusion it first inquired whether the differences in the costs of furnishing the railroad service in the several rate territories justified the existing differences in the levels and patterns of the class rate scales.19 The basis of its inquiry was a cost study submitted by its staff. For cost analysis purposes the United States is divided into areas roughly but not exactly approximating the classification territories. Thus there are three districts: Eastern, Southern and Western. Southern district is further divided into Pocahontas region and Southern region. Eastern district plus Pocahontas region is substantially the equivalent of Official territory.20 In the cost study, railroads were assigned to geographical areas; expenses for individual roads were divided into groups, each group being associated with appropriate service units which included revenue car-miles, revenue gross ton-miles, and cars originated and terminated; unit costs were then obtained by dividing the aggregate of the territorial expenses in each group by the applicable territorial units; the costs of particular services were then built up from the unit costs. Costs were put into two classes—(1) out-of-pocket or variable expenses which vary directly with the kind of traffic handled; (2) constant or fixed costs not capable of assignment to particular kinds of traffic costs21 which normally must be borne by the various types of traffic in proportion to the ability of each to pay. The details of the cost study are too intricate and voluminous to relate here. They have been summarized by the Commission. 262 I.C.C. pp. 571—592. It should be noted, however, that allowances for return—computed at both 4 per cent and 5 3/4 per cent—were included among costs. The allowances for return were based on recommended rate-making values furnished by the Bureau of Valuation. The territorial cost comparisons were principally based on he 4 per c ent return figure, the Commission noting that the figure was relatively close to the return earned by the carriers in the year covered by the study, viz., 1939. 127 To summarize very briefly, the expenses of the carriers were first broken down and translated into territorial average unit costs of performing each of the kinds of services involved in moving a specific shipment or in furnishing a given amount of transportation service in each territory. These unit costs were then multiplied by the number of units of each of the services found to be employed in moving the specific shipment or furnishing the given amount of service in the territory. The process was repeated for a series of different shipments or services sufficient to make the result representative of territorial conditions. Once the average costs for each rate territory were computed, territorial average costs were compared. The principal comparisons were based on the year 1939, although supplementary studies were also made for the periods 1930—1939, inclusive, 1937 1941, inclusive, and 1941. The territorial cost comparisons showed, for example, the costs of hauling given weight loads in a certain type of car for given distances in each territory. They also showed the relative costs of handling the entire traffic consist of each territory. This was designed to eliminate the effects of any differences in consists of traffic between territories compared, by determining first the cost in the territory in which it actually moved and then the cost in each of the other territories. The cost study gave consideration to freight moving for various distances in all kinds of equipment—box, hopper, gondola, tank, stock, flat, and refrigerator cars. Costs were compared for identical loads hauled in the principal types of equipment. Standard loads were then taken. The average weight loads experienced in each territory for various types of equipment were also taken. The aim was to make adjustment for the different types of equipment used and the different average loads between territories. Likewise, comparisons were made of the cost of hauling the entire consist of the traffic of one territory, at the average loads and unit costs applicable in that territory, with the cost of hauling the identical traffic at the average loads and unit costs applicable to the other territories. Comparisons were also made (for the distances the traffic actually moved, by classes of equipment, and at actual average loads) of the relative cost of hauling the consist of traffic of the entire United States, and the costs of carrying the Eastern, Southern and Western consists respectively in each of the several territories. 128 When it came to the Eastern district computations were made which both excluded and included the Pocahontas region. That region, for purposes of the study, represented the operation of three railroads—Chesapeake & Ohio, Norfolk & Western, and the Virginia—about 84 per cent of whose freight traffic is coal. For purposes of such a comparative study as this, the exclusio of Pocaho ntas is considered desirable, since its costs are low because of the very heavy coal tonnage.22 129 The Commission attached principal weight to the haul of 300 miles per shipment originated, as that distance most closely approximated the length of haul in each territory in 1939. Relative territorial23 costs (fully distributed) for traffic moving that distance in box car and gondola cars were as follows: 130 [U.S. average=100] 131 Box cars Gondola and hopper cars Assumed Actual Assumed Actual 132 25 ton load average load 50 ton load average load 133 Eastern (excl. Pocahontas) 102 103 100 100 134 Southern 96 97 99 102 135 Western 108 108 109 115 136 The Commission computed that on the foregoing analysis for 100, 300 and 500 miles, the fully distributed costs for the South are generally a little lower than for the East, Pocahontas excluded, while the fully distributed costs in the West exceed those of the East by from 6 to 15 per cent. Similar cost comparisons were made for the several territories for stock-car, refrigerator car, tank car, and flat car traffic. Based on the actual average loads experienced for each class of equipment, the Commission found the costs for the South lower than those for the East (Pocahontas excluded) for traffic moving in all those classes of equipment. The costs for the West are also lower than those for the East as to stock car, refrigerator car, and flat car traffic, but higher for tank car traffic. 137 A territorial comparison of fully distributed costs for carload traffic moving 300 miles in all classes of equipment shows the following:24 138 [U.S. average=100] Identical Actual 139 loads average 140 loads Eastern (excl. Pocahontas) 102 102 Pocahontas 67 67 Eastern including Pocahontas 95 85 Southern 98 101 Western 108 110 141 The fully distributed costs on identical loads in the South are 4 per cent below those for the East, excluding Pocahontas. The same comparison shows the costs for the West 6 per cent higher than those in the East, excluding Pocahontas. Costs in the South, based on the actual average loads are 1 per cent below those for the East, excluding Pocahontas. In the West they are 8 per cent higher than the latter. 142 Territorial comparisons based on average net ton-mile carload costs (1930-1939) adjusted for differences in the length of haul and the consist of the traffic were made. They showed that the costs for the South are approximately 1 or 2 per cent below those for the East, excluding Pocahontas. On the other hand, those costs for the West exceeded those of the East, excluding Pocahontas by from 5 to 7 per cent. 143 Territorial comparisons of the less-than-carload costs were also prepared. They showed that those costs are lower in the Soth than in the East whether assumed identical loads or actual average loads are taken, and even if Pocahontas is included in the East. They are higher in the West than in the East. If Pocahontas is excluded from the East the following table shows the comparison for a 300 mile haul: Assumed identical load Actual average load Out of Out of pocket Out of Out of pocket pocket plus constant1pocket plus constant1 Eastern (excl. Pocahontas) 105 101 94 93 Southern 89 87 88 86 Western 104 109 120 121 1 Constant costs common to all traffic are not included. 144 In all territories less-than-carload traffic (1939) was carried at a deficit, Southern making the best showing, Western the worst. That is revealed in the following table: Revenues Costs1 Deficit 145 Eastern (excl.) Pocahontas) $107,155,756 $133,308,907 $26,153,151 146 Southern 46,635,725 47,451,184 815,459 147 Western 88,797,938 123,146,215 34,348,277 1 Out-of-pocket cost plus total solely related expenses plus collection and delivery. 148 The Commission found that the difference in fully distributed costs for all traffic between the East and we West is largely in the constant or fixed expenses and the passenger and less-than-carload deficits. Out-of-pocket expenses in the South and West are frequently as low as, or even lower than, the out-of-pocket costs in the East. The Commission further found that the increase in freight traffic volume received by the carriers subsequent to 1939 served to reduce the unit costs of transportation in the South and West in a proportionately greater degree than in the East. A somewhat larger percentage of out-of-pocket expenses in the East is variable with added traffic than is true of the South and West, due apparently to the fact that the East, with its higher traffic density, is closer to its maximum capacity than is true of the others. Thus the influence of added traffic in reducing average costs is greater in the West. On the other hand constant costs (proportionately larger in the South and West) do not increase with added traffic. As illustrative of those circumstances the Commission noted the effect of increases in 1941 of the ton-miles of revenue freight. They increased in 1941, as compared with 1939, 43 per cent in the East, 27 per cent in Pocahontas, 44 per cent in Southern and 46 per cent in Western Territory. The cost per revenue ton-mile decreased by only about 5 per cent in the East and in Pocahontas, as compared with decreases in excess of 10 per cent in the South and West. 149 The Commission summarized the results of the territorial cost comparisons as follows: There is little significant difference in the cost of furnishing transportation in the South as compared with the East, Pocahontas excluded. It is principally the low terminal costs in the South that account for its relatively low total costs. Based on the year 1939 and the period 1930—1939, the costs in the South are equal to or a little lower than those in the East. Based on the period 1937—1941, the costs in the South are substantially lower than those in the East.25 Based on the year 1939 and the period 1930—1939, the cost of rendering transportation service in the West is between 5 and 10 per cent higher than in the East, excluding Pocahontas. Based on 1941, that difference is reduced to 5 per cent or less.26 150 The Commission recognized, of course, that carriers must obtain their revenue from the traffic which moves in their respective territories. Hence the revenue-producing or rate-bearing characteristics of the different commodities which compose the traffic of the several territories, i.e., the consists and volumes of traffic, are also important in determining whether territorial conditions justify differences in territorial rates. 151 The percentage distribution of total tons carried and revenue by commodity groups for 1939 is shown in the following table: Eastern Eastern Southern Western district (including region district Pocahontas) Percent percent percent percent percent percent percent percent 152 of tonn- of tonn- of tonn- of tonn- of tonn- of tonn- of tonn- of tonn- age age age age age age age age Group I: Products of 153 agriculture 6.57 8.73 6.07 8.03 10.8 17.73 18.88 23.7 Group II: Animals 154 and products 1.64 4.72 1.47 4.23 1.45 3.51 3.00 6.3 Group III: Products 155 of mines 58.06 34.85 61.53 40.24 46.39 23.65 36.64 13.98 Group IV: Products 156 of forests 2.43 2.74 2.43 2.69 11.4 9.45 10.59 9.31 Group V: Manufactures 157 and miscellaneous 29.57 41.41 26.89 37.75 27.21 34.66 29.3839.94 Total all carload 158 traffic 98.27 92.45 98.39 92.94 97.25 89.00 98.49 93.23 All less-carload 159 traffic 1.73 7.55 1.61 7.06 2.75 11.00 1.51 6.77 160 The Commission also considered the distribution of carload tra ffic based on revenue ton-miles for 1939 which it summarized as follows: Eastern Pocahontas Southern Western 161 Item district region region district 162 Products of agriculture. 10.7 2.7 15.8 26.8 163 Animals and other products 3.8 .5 2.2 4.5 Products of mines. 49.3. 87.4 40.8 20.1 Products of forests. 3.1 1.6 11.6 13.6 164 Manufactures and miscellaneous 33.1 7.8 29.6 35.0 165 Grand total, carload. 100.0 100.0 100.0 100.0 And the contribution which the major classes of commodities (carload lots) make in excess of out-of-pocket costs (1939) appears as follows: 166 Eastern Pocahontas Southern Western Unit 167 Item district region region district States 168 Products of Agriculture. 4.2 3.1 15.8 18.0 10.8 169 Animals and products. 1.5 1.1 3.4 4.3 2.7 170 Products of mines. 38.0. 73.4 21.2 13.9 29.7 171 Products of forests. 2.8 2.8 9.4 8.1 5.7 172 Manufactures and miscellaneous 53.5 19.6 50.2 55.7 51.1 173 Grand total, carload. 100.0 100.0 100.0 100.0 100.0 174 A large volume of all traffic moves across territorial boundaries and therefore becomes common to two or more territories. And as respects the balance, the Commission found striking similarity in the consists of the traffic so far as its revenue-producing characteristics are concerned. The manufactures and miscellaneous commodity group embraces traffic which moves at relatively high rates, i.e., rates which, ton-mile for ton-mile, make a substantially greater than average contribution to the constant costs. The percentages of the total tons carried in that group and the corresponding percentages for revenue producedby them ar e quite close to each other—particularly the East and the West. 175 The Commission stated that the revenue-producing qualities, or rate-bearing characteristics, of the commodities which compose the traffic in those several territories constituted 'the governing factor' so far as the problem of the consists and volume of traffic was concerned. 262 I.C.C. p. 694. It appraised the evidence we have related as meaning that 'the differences that exist in the consists of traffic in these respective territories are not so substantial or of such character as to warrant the present differences in class rates.' Id., p. 695. 176 The findings of the Commission both as to the consists of the freight and the costs of rendering the service in the respective territories are vigorously challenged, especially by the western roads. 177 As to the consists, it is said that the eastern roads have a much heavier percentage of freight of a kind that produces excess revenue to carry the general expenses. Findings of the Commission are relied upon as showing that the eastern roads' preponderance of high-grade traffic affords a greater source of revenue than does the high percentage of law rate products carried by the western roads.27 These undisputed facts are said to disprove the Commission's finding that the consists of traffic in the respective territories do not warrant the present differences in class rates. 178 These facts, however, relate to density of traffic,28 the effect of which is merged in the final cost figures. But the relation of the consist problem to the problem of rate structures is somewhat different. It is relevant in order to determine whether the consists of traffic are so different in the several territories that separate rate structures with different distributions of the transportation burden amongst commodities and classes of freight are necessary. It is apparent from the statistics which we have reviewed that, while there is a diversity in traffic moved in the several territories, the diversity largely disappears when commodity groups are considered. Then, also, the percentages of the total traffic in each territory which fall under the several commodity groups are not only very siilar in th e East, South, and West, but each group yields about the same percentage of the total revenues in each of the territories. The choice of groupings is plainly a specialized problem in transportation economics upon which the Commission is peculiarly competent to pass. Its judgment that the differences in consists between the territories do not justify the present differences in interterritorial class rates is, indeed, an expert judgment entitled to great weight. We could not disturb its findings on the facts of this record without invading the province reserved for the expert administrative body. 179 As to the cost study little need be said concerning the South. Once the integrity of the cost study is assumed,29 the finding of the Commission that there is little significant difference in the cost of furnishing transportation in the South as compared with the East has support in the facts. Moreover, the data on rates of return and freight operating ratios, to which we will shortly refer, corroborate the conclusion reached from the cost study that the differences in class rates between the East and the South are not justified by territorial conditions. The finding that the discrimination against the South is unlawful under § 3(1) is thus amply supported—a conclusion that the southern carriers do not challenge here. 180 The question is a closer one when we turn to the West. For, as we have seen, the costs in the West on the average run higher than those in the East. Based on the year 1939 and the period 1930 1939, the cost of rendering transportation service in the West is between 5 and 10 per cent higher than in the East, excluding Pocahontas. Based on 1941, that difference is reduced to 5 per cent or less. 181 As we have seen, the class rate structure is discriminatory as between the East and the West. The level of class rates in the West is from 30 to 59 per cent higher than that in the East. The problem of the Commission, therefore, was to determine whether that disparity is justified by territorial conditions. The Commission found that it was not so justified. The problem for us is whether the Commission had a basis for its conclusion. 182 While the western roads vigorously challenge the Commission's finding, their argument is in the main directed to the point that some disparity in rates between East and West is justified by differing territorial costs. No particular effort is made to prove that those costs are a fair measure of the existing rate differences. 183 We start, of course, from the premise that on a subject of transportation economics, such as this one, the Commission's judgment is entitled to great weight. he apprais al of cost figures is itself a task for experts, since these costs involve many estimates and assumptions and, unlike a problem in calculus, cannot be proved right or wrong. They are, indeed, only guides to judgment. Their weight and significance require expert appraisal. 184 The Commission has concluded that while cost studies are highly relevant to these rate problems they are not conclusive. It said in this case: 185 'Discretion and flexibility of judgment within reasonable limits have always attended the use of costs in the making of rates. Costs alone do not determine the maximum limits of rates. Neither do they control the contours of rate scales or fix the relations between rates or between rate scales. Other factors along with costs must be considered and given due weight in these aspects of rate making.' 262 I.C.C. p. 693. 186 In appraising the cost figures relevant here the Commission proceeded on the assumption that the 1941 traffic level is most likely to prevail in the post-war period. It therefore started with the assumption that the margin of difference between the costs in the West and those in the East was slight and no accurately measured by 1939 figures, and that if, as has been the fact,30 the freight carried in the West increased above that level the unit costs of transportation in the West would be reduced to a greater degree than those in the East, for reasons which we have already stated. 187 The Commission also had before it certain data relative to the financial condition of the various roads, data which we have not yet discussed. Thus comparative analyses of the rates of return of the roads in the several territories showed that while the western roads have had many lean years, the recent period has put them ahead of the roads in the East. The following table shows the rates of return in percentages based on the net railway operating income and the book investment, increased for cash, materials and supplies: 188 1936 1937 1938 1939 1940 1941 1942 1943 189 Eastern district. 2.67 2.27 1.26 2.34 2.66 3.62 4.9 4.32 190 Southern region. 2.52 2.35 1.9 2.5 2.57 4.24 6.51 5.73 191 Pocahontas region. 7.58 6.61 4.54 5.89 6.21 6.67 5.29 5.22 192 Western district. 1.88 1.71 1.09 1.65 2.06 3.36 5.8 5.22 193 The Commission also considered the territorial freight operating ratios—the per cent of operating revenues from freight absorbed by operating expenses attributed to the freight.31 They are shown in the following table: 194 1936 1937 1938 1939 1940 1941 1942 1943 195 Eastern district. 64.95 67.86 68.98 64.88 63.92 63.04 61.93 66.23 196 Southern region. 65.38 67.77 66.73 64.99 65.34 61.07 56.84 59.41 197 Pocahontas region. 47.04 50.63 53.59 50.71 49.77 48.12 49.62.... 52.86 198 Western district. 65.07 66.93 67.13 65.01 63.63 60.98 55.79 59.47 In light of such data the Commission said: 199 'Making due allowance for a substantial decline in traffic from the war peak and for the fact that in the decade preceding 1940 the earnings of the western rail respondents were relatively low, nevertheless, insofar as the prospects of traffic and revenues in the immediate future can be foreseen, there is no reason to conclude that the interim adjustment will have any serious effect upon those respondents.' 264 I.C.C. 63—64. 200 The Commission went on to note that intrastateclass rate § generally in most of the western States and many of the interstate class rates in western territory were already lower than those prescribed in the interim orders. It accordingly concluded that the western roads 'cannot consistently maintain these sub-normal class rates and continue to maintain the relatively high basis of interstate class rates.' 264 I.C.C. p. 64. 201 Moreover, as we have already noted, class rates have to a great extent fallen into disuse. This fact is relevant here in two respects. In the first place, the orders of the Commission affect class rates and class rates alone, the Commission not dealing with exception and commodity rates by the interim action which it has taken. So far as present freight movement is concerned, the orders affect a much smaller fraction of the traffic in the West than in the East. The Commission said: 202 'The record does not support the contention that the revenue needs of the western rail respondents with respect to their class-rate traffic are greater than those of the eastern rail respondents. From the carriers' reports to us for the years 1942, 1943, as shown in our original report, and 1944, it clearly appears that there is a greater need for revenue by rail carriers in the eastern district as compared with rail carriers in the western district or in the southern region. The report shows also that a much larger percentage of the total traffic in the eastern district moves on class rates than in the western district or in the southern region.' 264 I.C.C. pp. 64, 65. 203 In the second place, the existing rate structure single out the class rate traffic in the West for the payment of unusually high rates. The class rate traffic is largely that of small shippers, who do not have the ability to obtain the benefit of the lower exception or commodity rates. 204 We cannot, therefore, treat this case as if it were one where the Commission, in spite of a showing of some increased cost in the West, reduced all freight rates to a level of equality with the East. It is a case of determining whether the discrimination against one small class of traffic is warranted by the showing of some increased cost in the West. The earning power of the carriers, their freight operating ratios, their rates of return, the estimate of the volume of traffic in the future, the nature and amount of traffic presently involved in the class rate movements are all relevant to the finding of unlawful discrimination. We cannot say that these considerations do not counterbalance or outweigh the disparity in costs between East and West. The appraisal of these numerous factors is for transportation experts. They may err. But the error, if any, is not of the egregious type which is within our reach on judicial review. 205 As we have noted, Interstate Commerce Commission v. Diffenbaugh, supra, 222 U.S. at page 46, 32 S.Ct. at page 24, 56 L.Ed. 83, held that the Act, in its condemnation of discrimination, 'does not attempt to equalize fortune, opportunities, or abilities.' But the Commission made no such effort here. It eliminated inequalities in the class rates because it concluded that the differences in them were not warranted by territorial conditions. We think that the findings supporting that conclusion are based on adequate evidence. 206 It is argued that the comparison of rates of return and freight operating ratios overlooks the fact that both reflect the higher freight revenue level that prevails in the West. And it is urged that without the rate advantage which the western carriers now enjoy, any comparison which now appears to favor the western carriers would disappear. That argument assumes a constancy in freight traffic and on that assumption could be mathematically demonstrated. But we are dealing here with a problem of discrimination—a western rate structure which, as compared with the East, is not warranted by territorial conditions and which prejudicies the growth and development of the West. It would be a large orderto say tha t the removal of that trade barrier will have no effect in increasing traffic. The assumption on which the finding of prejudice is made is, indeed, to the contrary. Moreover, that argument would protect a discriminatory rate structure from the power of revision granted the Commission under § 3(1) by the easy assumption that without discrimination the carriers would not thrive. But that flies in the face of history and is contrary to the Commission's expert judgment on these facts. 207 Sixth. An extended argument is made by the western roads, challenging the class rate reduction on less-than-carload lots. The argument is twofold—first, that the case of unlawful discrimination has not been made out for this type of class rate traffic; second, that the new less-than-carload class rates are confiscatory. 208 We have referred to some of the cost figures on less-than-carload lots. We have seen that those cost figures run higher in the West than in the East; that even when no constant costs common to all traffic are allocated to less-than-carload traffic, the deficit in the West is substantially higher than that in the East. The Commission noted that less-than-carload traffic as a whole is carried at a deficit in all territories, except possibly in the South. It also noted that in all territories it was not bearing its proper share of the costs of transportation; that, apart from wartime loading, it was not yielding, on the average, its out-of-pocket costs plus constant expenses solely related to less-than-carload traffic32 plus the cost of collection and delivery, in any territory except possibly the Southern. 262 I.C.C. p. 697. 209 Little need be said concerning the argument that a case of unlawful discrimination has not been established in the case of less-than-carload traffic. The Commission concluded that it less-than-carload class rates were left unchanged while carload class rates in Southern, Southwestern and Western Trunk-Line territories were reduced 10 per cent, 'the competitive relations between shippers shipping in less-than-carload quantities and those shipping in carloads' would be materially affected. 264 I.C.C. p. 66. Less-than-carload traffic is less than 2 per cent of total railroad freight tonnage, and much of that moves, not on class rates, but on exception rates and commodity rates. In Western Trunk-Line and Southwestern territories many intrastate and interstate class rates are now voluntarily maintained on less-than-carload traffic which are lower than the corresponding reduced interstate class rates required by the interim orders. There are other circumstances, to which we will shortly advert, which reinforce the action of the Commission in reducing class rates on less-than-carload traffic. But the ones we have mentioned are adequate to support the Commission on the discrimination phase of the problem. The Commission was dealing not with discrimination against a particular commodity but with discrimination against entire regions. It was a complete rate structure that was subject to inquiry and revision. Once the Commission concluded that unlawful discrimination existed in the main features of that rate structure, it was justified in removing it. In eliminating the discrimination and establishing the uniformity required by the law, it was warranted in making minor collateral readjustments so that the Commission itself would not in turn create new discriminations. The adjustment of the less-than-carload class rates was permissible on that ground alone. The traffic affected was only a fraction of 2 per cent of the total traffic. Without that readjustment that class of traffic would be prejudiced. With that readjustment the prejudice would be removed and the entire rate structure—intrastate and interstate—would be more narly ratio nalized. 210 That does not, of course, answer the argument on confiscation. The latter requires more extended treatment. 211 The western roads in their petition for rehearing before the Commission raised the confiscation point. But in doing so they rested on the record before the Commission and tendered no additional evidence. In the District Court, however, they presented further evidence which was received over objection and considered by that court. 212 This, therefore, is not a case like Baltimore & Ohio R. Co. v. United States, 298 U.S. 349, 363, 371, 372, 56 S.Ct. 797, 805, 809, 80 L.Ed. 1209, where the Commission refused to receive evidence proffered on the point of confiscation. Here, as we have said, the Commission received all evidence that was offered; and when its order was announced and made known and the petition for rehearing was filed, the opportunity to tender additional evidence to bolster the confiscation point was not accepted. As stated in Manufacturers R. Co. v. United States, 246 U.S. 457, 489, 490, 38 S.Ct. 383, 392, 393, 62 L.Ed. 831, and in St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 53, 54, 56 S.Ct. 720, 726, 727, 80 L.Ed. 1033, correct practice requires that where the opportunity exists, all pertinent evidence bearing on the issues tendered the Commission should be submitted to it in the first instance and should not be received by the District Court as though it were conducting a trial de novo. The reason is plain enough. These problems of transportation economics are complicated and involved. For example, the determination of transportation costs and their allocation among various types of traffic is not a mere mathematical exercise. Like other problems in cost accounting, it involves the exercise of judgment born of intimate knowledge of the particular activity and the making of adjustments and qualifications too subtle for the uninitiated.33 Moreover, the impact of a particular order on revenues and the ability of the enterprise to thrive under it are matters for judgment on the part of those who know the conditions which create the revenues and the flexibility of managerial controls. For such reasons, we stated in Board of Trade of Kansas City, Mo. v. United States, 314 U.S. 534, 546, 62 S.Ct. 366, 372, 86 L.Ed. 432: 213 'The process of rate making is essentially empiric. The stuff of the process is fluid and changing—the resultant of factors that must be valued as well as weighed. Congress has therefore delegated the enforcement of transportation policy to a permanent expert body and has charged it with the duty of being responsive to the dynamic character of transportation problems.' 214 Thus we think that if the additional evidence was necessary to pass on the issue of confiscation, the cause should have been remanded to the Commission for a further preliminary appraisal of the facts which bear on that question. But we do not take that course here for reasons which will shortly appear. 215 The Commission explained its finding that less-than-carload traffic was being carried at large deficits and was not bearing its proper share of transportation costs. That finding was based on the operation of the roads in 1939 when the average load per car of less-than-carload shipments amounted to only 4.3 tons in the West. Since 1939 there has been a substantial increase in the average loading of such shipments, which was brought about under wartime conditions an which has materially decreased the unit costs attributable to less-than-carload traffic. In the judgment of the Commission it was not shown that loadings in the immediate postwar period were likely to decline to 1939 levels. Moreover, the cost date on less-than-carload traffic related to such traffic as a whole and not solely to that moving on class rates. As we have noted, much of this traffic moves not on class rates but on exception rates and commodity rates. The class-rate traffic bears the highest rates. The past failure of this traffic, as a whole, to carry its proper share of the costs may well have been due in large measure to the maintenance of exception and commodity rates. 216 The western roads present elaborate analysis (based both on the Commission's cost figures and on costs as adjusted by the evidence introduced in the District Court) which shows less-than-carload traffic largely carried at deficits irrespective of the class rate paid under the interim orders. They contend that the loading figure of 4.3 tons is the only reliable one to use in projecting the costs and revenues into the postwar period, since it was in fact the average loading prior to the war, and will be once more, as soon as the order of the Office of Defense Transportation which requires ten-ton loading is revoked. And computations are presented based on that figure which shows deficits in less-than-carload traffic, deficits which are increased when the Commission's cost figures are adjusted to reflect cost increases to January 1, 1946. All of those computations include as constant costs only those which related to this traffic. And it is pointed out that if all constant costs were included, the computed deficits would substantially increase. 217 On the other hand the Commission shows that on the basis of the new interim rates this traffic in the West would produce revenues in excess of out-of-pocket expenses plus 4 per cent return plus collection and delivery expenses plus loss and damage payments. That computation is based on a ten-ton loading figure. And on the basis of those types of costs, there is an excess of revenue even though the costs are increased to the January 1, 1946 level. The 1939 less-than-carload costs34 in the West were 30 per cent greater than revenues from all such traffic. If the classrate portion of less-than-carload traffic is taken, the costs are 81 per cent of the revenues, provided certain adjustments are made: (1) increased revenues from the increase in the minimum charge per shipment from 55 to 75 cents which the Commission authorized in this proceeding; (2) the elimination of less-than-carload traffic moving on exception, commodity, and intrastate rates; (3) a 10 ton load; and (4) a 2.47 per cent rate of return, which was the actual rate of return of 1939. 218 We do not stop to analyze the various computations in order to ascertain the exact relation between revenues and costs of less-than-carload traffic. That, indeed, would not be feasible on this record. For even the Commission made no attempt to determine what share of all costs should fairly be allocated to less-than-carload traffic. Hence, if the Commission had spoken its final word, and if it were believed necessary as a matter of constitutional law, see Northern Pacific R. Co. v. State of North Dakota, 236 U.S. 585, 35 S.Ct. 429, 59 L.Ed. 735, L.R.A.1917F, 1148, Ann.Cas.1916A, 1; cf. Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 602, 64 S.Ct. 281, 288, 88 L.Ed. 333, to fix a less-than-carload class rate which produced a fair return on that particular traffic, the case would have to be remanded to the Commission for appropriate findings on this phase. The difficulty of treating the issue on the present record is illustrated in another way. Less-than-carload traffic, more than carload traffic, carries costs which to a degree are dependent on the carrier. Heavy or light loadings, speed of service, rati of empty return cars, methods of loading freight so as to reduce damage claims, substitution of auxiliary truck service and the like turn on competitive conditions. Certainly rates need not compensate carriers for the most expensive way of handling less-than-carload service. Yet the present findings do not illuminate that problem nor provide the standard in terms of service for measuring the compensatory character of the less-than-carload class rates. And on such a problem the Commission's highest expert judgment would be called into play. 219 But the Commission has not finished with this problem. In the first place, as we point out hereafter, the Commission, subsequent to the issuance of these interim orders, granted a nationwide increase in freight rates, including an increase on less-than-carload rates. The temporary injunction has prevented the interim orders reducing class rates in the West by 10 per cent from going into effect. When, therefore, the interim orders do go into effect, the actual rates chargeable presumably will be increased from the level fixed by the interim orders to the level prescribed by the recent order increasing all freight rates. Thus no loss has been suffered by the 10 per cent reduction on less-than-carload class rates; and any loss which would have been suffered by that rate reduction has probably been at least lessened, if not eliminated, by the general rate increase. Though it is argued that such is not the case, the showing is too speculative on this record for us to decide what the precise effect of the revised class rates on less-than-carload traffic will be. In the second place, as we have noted, the Commission made the present interim adjustment of class rates on less-than-carload traffic as a consequence of its reduction in carload class rates so that less-than-carload shippers would not suffer a disadvantage from the removal of the major discrimination in the class rate structure. The interim or temporary nature of the adjustment was recognized by the Commission when it admonished the carriers 'to give careful consideration to the rates maintained by them on less-than-carload traffic with a view to making readjustments in ratings or rates, as promptly as possible, which will insure that the rates on such traffic are on a compensatory level.' 264 I.C.C. 66—67. And it recognized but left untouched the problem of determining what would be the proper share of transportation costs to be borne by less-than-carload traffic. 220 The justification the Commission had for leaving the problem in that condition at this stage of the proceedings is apparent. The carriers are now preparing the new uniform classification. They have it within their power to follow the lead suggested by the Commission and to propose classification differences between carload and less-than-carload traffic which will obviate any issue of confiscation respecting less-than-carload rates. And it has likewise left open the question of readjustment of the class rates on less-than-carload traffic when the total program, of which these interim orders are but a part, is put into effect. 221 Where the result of a rate order is not clearly shown to be confiscatory but its precise effect must await operations under it, the Court has refused to set it aside despite grave doubts as to its consequences. See City of Knoxville v. Knoxville Water Co., 212 U.S. 1, 17, 18, 29 S.Ct. 148, 153, 154, 53 L.Ed. 371. And see Willcox v. Consolidated Gas Co., 212 U.S. 19, 54, 55, 29 S.Ct. 192, 200, 201, 53 L.Ed. 382, 48 L.R.A.,N.S., 1134, 15 Ann.Cas. 1034; Darnell v. Edwards, 244 U.S. 564, 570, 37 S.Ct. 701, 703, 61 L.Ed. 1317; Brush Electric Co. v. City of Galveston, 262 U.S. 443, 446, 43 S.Ct. 606, 607, 67 L.Ed. 1076; St. Joseph Stock Yards Co. v. United States, supra, 298 U.S. at page 69, 56 S.Ct. at page 733, 80 L.Ed. 1033. The reasons for following a like course are equally impelling here. The Commission has not placed the western roads in a straight jacket. It has made an interim reduction onless-than- carload class rates as an incident to its removal of discriminations in carload class rates. It has indicated the course to be followed by the carriers, as a part of the overall classification and class rate problem, to make certain that these rates are compensatory. We are thus dealing with a problem which is in flux, an interim order made necessary as a result of a comprehensive revision of entire rate structures. Moreover, the conclusion to be drawn from the recent general increase in freight rates is too uncertain and speculative on this record for us to pass on the confiscation issue. See Brush Electric Co. v. City of Galveston, supra. The District Court amply protected appellants when it overruled their claim that the interim rates are confiscatory without prejudice to another suit to challenge the legality of those rates if, after a fair test, they prove to be below the lowest reaches of a reasonable minimum or if the permanent rates do not meet that standard. See Darnell v. Edwards, supra, 244 U.S. at page 570, 37 S.Ct. at page 703, 61 L.Ed. 1317. 222 Seventh. It was held in Texas & Pacific R. Co. v. United States, supra, 289 U.S. at page 650, 53 S.Ct. at pages 776, 777, 77 L.Ed. 1410, what where the Commission makes an order under § 3 to remove an unlawful discrimination, the carriers must be afforded the opportunity to 'abate the discrimination by raising one rate, lowering the other, or altering both.' But that ruling was qualified by the statement that the Commission need not follow that course in case it acts under § 15(1). Id., p. 650, note 39. Section 1(5)(a) of the Act provides that all charges for the transportation of property 'shall be just and reasonable, and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful.' And see § 1(4). Section 15(1) provides that when the Commission finds that 'any individual or joint rate, fare, or charge' of a common carrier is 'unjust or unreasonable or unjustly discriminatory or unduly preferential or prejudicial,' the Commission may determine and prescribe 'what will be the just and reasonable' rate. And see § 15(3). The words 'unjustly discriminatory or unduly preferential or prejudicial' plainly refer to practices condemned by § 3(1). A proper finding of unlawful discrimination under § 3(1) thus enables the Commission not only to direct the carriers to eliminate the practice but also, pursuant to § 15, to prescribe the alternative. See Youngstown Sheet & Tube Co. v. United States, 295 U.S. 476, 55 S.Ct. 822, 79 L.Ed. 1553. Thus the Commission in this type of situation, as in the case where intrastate commerce is involved, Georgia Public Service Commission v. United States, 283 U.S. 765, 51 S.Ct. 619, 75 L.Ed. 1397, may remove unlawful discriminations and prescribe new rates. 223 In Texas & Pacific R. Co. v. United States, supra, 289 U.S. at page 650, 53 S.Ct. at page 776, 77 L.Ed. 1410, it was also stated that, 'A carrier or group of carriers must be the common scource of the discrimination—must effectively participate in both rates, if an order for correction of the disparity is to run against it or them.' And it was held in Central R. Co. of New Jersey v. United States, 257 U.S. 247, 259, 42 S.Ct. 80, 83, 66 L.Ed. 217, that mere participation in joint rates does not make connecting carriers partners in discrimination; that they can be held responsible for unjust discrimination only if each carrier has participated in some way in the practice which causes the discrimination, 'as where a lower joint rate is given to one locality than to another similarly situated.' It is argued that the same rule applies in this case since, for example, the western carriers have no control of or participation in the lower Official intraterritorial rates, although they do participate in the joint or through interterritorial rates. 224 In reply it is said that carriers in Official Territory control rates within that area and also control, joinly with th e carriers in each of the other territories, the rates from each of them into Official. That common stock of discrimination is said to be sufficient to sustain the Commission's action. See St. Louis, Southwestern R. Co. v. United States, 245 U.S. 136, 35 S.Ct. 49, 62 L.Ed. 149; Chicago I. & L.R. Co. v. United States, 270 U.S. 287, 46 S.Ct. 226, 70 L.Ed. 590. But we do not need to decide the question. For the principle announced in Central R. Co. v. United States and Texas & Pacific R. Co. v. United States, supra, is applicable only where the Commission is directing the carriers to remove the discrimination. Those cases hold that the Commission may not require carriers to do what they are powerless to perform. But the Court recognized in Central R. Co. v. United States, supra, 257 U.S. at page 257, 42 S.Ct. at page 82, 66 L.Ed. 217, that where the Commission acts pursuant to § 1 to require carriers to establish, in connection with through routes and joint rates, reasonable rules and regulations, that problem is not involved. For then the Commission corrects the unlawful discriminatory practice in the case of each carrier by prescribing the just and reasonable rate or practice. The same is true where, as here, the Commission in order to eliminate territorial discriminations proceeds under § 15(1) to fix new reasonable rates. If the hands of the Commission are tied and it is powerless to protect regions and territories from discrimination unless all rates involved in the rate relationship are controlled by the same carriers, then the 1940 amendment to § 3(1) fell far short of its goal. We do not believe Congress left the Commission so impotent. 225 It may not be said in this case, as it was held in Texas & Pacific R. Co. v. United States, supra, 289 U.S. at page 633, 53 S.Ct. at page 770, 77 L.Ed. 1410, that there was no evidence of the unreasonableness of the rates, or that that question was not in issue. The Commission here found that the rates were unjust and unreasonable under § 1 and it proceeded to fix new rates under § 15(1). The facts which establish that the differences in rates as between the several territories are not warranted by territorial conditions plainly sustain its findings under § 1. 226 As we have said, this proceeding pertains only to class rates, which move but a small percentage of the traffic. It is, therefore, argued that the Commission should not have made adjustments in those rates without bringing about some equalization of exception and commodity rates under which the bulk of the traffic is moved. But there is no reason in law why the Commission need tackle all evils in the rate structure or none. It may take one step at a time. Cf. United States v. Wabash R. Co., 321 U.S. 403, 64 S.Ct. 752, 88 L.Ed. 827. The 10 per cent interim rate order did not attempt to bring about complete elimination of the discriminatory features of the class rate structure. It was only an approximation of that result, the complete step awaiting the new uniform classification. But the reasons justifying that partial measure likewise support the action of the Commission in commencing with class rates when it tackled the problem of territorial discriminations. 227 Eighth. A different problem is presented when we turn to the 10 per cent increase in class rates which the Commission prescribed for Official Territory. Appellants strenuously urge that this action of the Commission was unauthorized under the Act, even if the other portions of its orders were justified. 228 The finding of the Commission on this phase of the case was that the present class rates in Official Territory were below a just and reasonable level and should be increased 10 per cent as a part of the adjustment of the rate structure in order to remove the unlwfulness both as respects their unreasonable low level and their unduly preferential character. 262 I.C.C. 700, 701, 704, 705; 264 I.C.C. 62. That finding is said to be without support in the record and to lack the prelimiary findin gs necessary to support it. 229 It is argued that rates are not unreasonably low in violation of § 1 unless they are either noncompensatory or otherwise threaten harmful effects upon the revenues and transportation efficiency of the carriers in question, or of their competitors. It is said, as is the fact, that no such findings were made by the Commission and that on this record there are no facts which could support such a finding. 230 If this were a case of determining whether existing rates passed below the lowest or above the highest reaches of reasonableness, the point might be well taken.35 See United States v. Chicago, M. St. P. & P.R. Co., 294 U.S. 499, 506, 55 S.Ct. 462, 465, 79 L.Ed. 1023. But we do not have here such a revenue problem. This case presents problems in rate relationships, that is to say, problems of a discriminatory rate structure condemned by § 3(1). The Commission may remove a discrimination effected by rates even when they are within the zone of reasonableness, if the discrimination is forbidden by § 3(1). As Mr. Justice Brandeis stated in United States v. Illinois Central R. Co., supra, 263 U.S. at page 524, 44 S.Ct. at page 193, 68 L.Ed. 417, the mere fact that one rate is 'inherently reasonable and that the rate from competing points is not shown to be unreasonably low, does not establish that the discrimination is just. Both rates may lie within the zone of reasonableness and yet result in undue prejudice.' The Commission has the power to adjust the rates, upwards and downwards, within that zone, in order to eradicate the discrimination. That power is not unlimited; there are standards which control its exercise. But as we shall see, the Commission acted within permissible limits here. 231 Once the Commission has found rates to be 'unjust or unreasonable or unjustly discriminatory or unduly preferential or prejudicial,' it is empowered to prescribe rates which are 'just and reasonable' or 'the maximum or minimum, or maximum and minimum, to be charged * * *.' § 15(1). In Youngstown Sheet & Tube Co. v. United States, supra, the Commission, acting under § 15(1), increased rail rates by prescribing what it found to be reasonable minimum rates. There was no finding that the existing, lower rates were not compensatory. The finding of reasonableness was premised on the grounds that 'lower rates would create undue discrimination against shippers in origin districts who cannot use the waterrail route, and would tend to disrupt the rate structure, and to destroy the proper differentials between various producing districts on shipments to Ohio destinations.' Page 479 of 295 U.S., page 823 of 55 S.Ct., 79 L.Ed. 1553. The Commission relied not only on evidence bearing upon the character of the service and cost but also on a comparison of other rates in the same or adjacent territory. The Court sustained the order saying, 'The existing rate structure furnished support for the finding of reasonableness.' Page 480 of 295 U.S., page 824 of 55 S.Ct., 79 L.Ed. 1553. In Scandrett v. United States, D.C., 32 F.Supp. 995, 996, affirmed 312 U.S. 661, 61 S.Ct. 736, 85 L.Ed. 1108, the Commission had found that proposed reduced rates were 'compensatory, considering all costs' but that they were below a minimum reasonable level and therefore unlawful. It took that action to prevent destructive competition between rail, water, and motor carriers. The court sustained the order. And see Jefferson Island Salt Min. Co. v. United States, D.C., 6 .2d 315. 232 These cases, to be sure, recognize the power of the Commission so to fix minimum rates as to keep in competitive balance the various types of carriers and to prevent ruinous rate wars between them. That plainly is one of the objectives of the Act, and one of the reasons why the Commission was granted the power to fix minimum rates by the Transportation Act of 1920, 49 U.S.C.A. § 71 et seq. See H.R.Rep.No.456, 66th Cong., 1st Sess., p. 19. Cf. Mississippi Valley Barge Line Co. v. United States, 292 U.S. 282, 54 S.Ct. 692, 78 L.Ed. 1260. But the elimination of discrimination occupies an equally high place in the statutory scheme. And, as we have said, the power granted the Commission under § 15(1) includes the power to prescribe rates which will substitute lawful for discriminatory rate structures. If the Commission were powerless to increase rates to a reasonable minimum in order to eliminate an unlawful discrimination, unless existing rates were shown to be non-compensatory or unless ruinous competition would result, it would in some cases be powerless to prescribe the remedy for unlawful practices. The present case is a good illustration. A 10 per cent reduction of rates in the South and West would remove only part of the discrimination. On this record it is most doubtful that a full reduction of those rates to the level of Official Territory would be warranted. Yet if the rates in Official Territory may not be increased unless the present ones are shown to be non-compensatory, discrimination against the South and West and in favor of Official Territory would continue to thrive. For shippers in Official Territory would still have a preferred rate, as compared with shippers from the South and West, in reaching the great markets of the East—a preference not shown to be warranted by territorial conditions. The raising of rates to a reasonable minimum was, therefore, as relevant here as it was in Youngstown v. United States, supra, to the Commission's task of providing a rational rate structure. 233 The authority of the Commission to increase rates in order to remove discrimination, even though existing rates may be compensatory, is not unlimited. Section 15a(2) of the Act provides: 234 'In the exercise of its power to prescribe just and reasonable rates the Commission shall give due consideration, among other factors, to the effect of rates on the movement of traffic by the carrier or carriers for which the rates are prescribed; to the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management to provide such service.' 235 The balancing and weighing of these interests is a delicate task. 'Whether a discrimination in rates or services of a carrier is undue or unreasonable has always been regarded as peculiarly a question committed to the judgment of the administrative body, based upon an appreciation of all the facts and circumstances affecting the traffic.' Swayne & Hoyt, Ltd. v. United States, 300 U.S. 297, 304, 57 S.Ct. 478, 481, 81 L.Ed. 659. And see United States v. Chicago Heights Trucking Co., 310 U.S. 344, 352, 353, 60 S.Ct. 931, 935, 936, 84 L.Ed. 1243; Barringer & Co. v. United States, 319 U.S. 1, 6, 7, 729, 63 S.Ct. 967, 970, 971, 87 L.Ed. 1171. We may assume, however, that if the rates of return of the eastern carriers were substantially above that for the South and the West, an increase of the rates for the former would not be permissible, even in order to remove a discrimination. But, as we have seen, the rate of return in recent years36 has favored the southern and western carriers, as have the freight operating ratios. The Commission took those factors, as well as the others we have reviewed, into consideration in determining that an increase in rates in Official Territory was warranted. 264 I..C. 61, 62 . 236 Revenue needs, like costs of rendering the transportation service, are germane to the question whether differences in territorial rate structures are justified by territorial conditions. They are amongst the standards written into § 15; they reflect the totality of conditions under which the carriers in the respective territories operate. Should the Commission fail to consider them in determining whether the discrimination inherent in the rate structures was unwarranted, it would have not completed its task. There may be differences of opinion concerning the weight to be given those factors, especially the weight to be given the rate of return in the current years as opposed to that in the preceding decade. But their significance is for the Commission to determine; and, though we had doubts, we would usurp the administrative function of the Commission if we overruled it and substituted our own appraisal of these factors. 237 Ninth. After the present interim orders were issued, the Commission granted a nationwide increase in all freight rates.37 It is argued that this rate increase has rendered the interim orders with which we are here concerned obsolete and unenforcible. It is said that in making the general rate increase, the Commission found greatly different conditions affecting transportation rates from those it found in these proceedings; that the greater increases allowed in Official Territory38 undo the uniformity policy on which the interim orders are framed; and that the enforcement of the interim orders in light of these changed conditions would produce results plainly not contemplated. 238 This is not a case where by reason of changed conditions the record is stale. The changed circumstances do not affect the issues here. Cf. Interstate Commerce Commission v. Jersey City, 322 U.S. 503, 515, 64 S.Ct. 1129, 1135, 88 L.Ed. 1420; United States v. Pierce Auto Freight Lines, 327 U.S. 515, 35, 66 S.C t. 687, 697. To repeat, this is a proceeding to eliminate territorial rate differences not justified by territorial conditions. The general rate increase recently granted by the Commission was a revenue proceeding. Revenue adjustments can be and are superimposed on such rate structures as exist. The fact that revenue adjustments may produce lack of uniformity in rates is not inconsistent with the decision in the present case. As we said earlier, § 3(1) does not dicate a policy of national uniformity in rates; it only requires that the lack of uniformity in rates among and between territories be justified by territorial conditions. The finding of the Commission, if supported by evidence, that the revenue needs of carriers in one territory demand a lower or a higher rate in that territory is a justification for a difference in rates as between that territory and other territories. The order of the Commission granting the general rate increase is not before us and we intimate no opinion on it. It is sufficient for our present purposes to say that it emphasizes the distinction between revenue and rate relationship cases and in no way impairs the finding in the present case that the existing class rate structure that has prevailed in the several territories stands condemned under § 3(1). Nor is there any inherent inconsistency between the interim orders reducing class rates and the recent order increasing all rates. The latter was based on conditions in a period subsequent to the discrimination proceedings. Whether the general rate increase will require adjustments in the new permanent uniform scale which awaits the new uniform classification is a question for the Commission when the new classification is ready.39 239 Other issues raised by appellants need not be discussed. The injunction staying the orders of the Commission is vacated and the judgment of the District Court dismissing the petitions is affirmed. 240 Affirmed. 241 Mr. Justice FRANKFURTER, dissenting. 242 In the case involving issues much narrower than those now here, the Court, only the other day, struck down an order of the Interstate Commerce Commission for want of adequate findings. Interstate Commerce Commission v. Mechling, 330 U.S. 567, 67 S.Ct. 894, at page 902. Although in that case there were explicit findings, the Court deemed them inadequate because they were based on 'unsifted averages.' In a series of cases the Court has set aside orders of the Interstate Commerce Commission because of the failure of the Commission to ascertain and to formulate with clarity and definiteness the transportation and economic circumstances which alone could justify the order, and thereby afford this Court assured basis for concluding that the Commission had duly exercised its allowable judgment on the factors underlying the ultimate issues. See State of Florida v. United States, 282 U.S. 194, 51 S.Ct. 119, 75 L.Ed. 291; United States v. Baltimore & Ohio R. Co., 293 U.S. 454, 55 S.Ct. 268, 79 L.Ed. 587; Atchison, Topeka & Santa Fe R. Co. v. United States, 295 U.S. 193, 55 S.Ct. 748, 79 L.Ed. 1382; United States v. Carolina Freight Carriers Corporation, 315 U.S. 475, 62 S.Ct. 722, 86 L.Ed. 971; City of Yonkers v. United States, 320 U.S. 685, 64 S.Ct. 327, 88 L.Ed. 400; Eastern-Central Motor Carriers Association v. United States, 321 U.S. 194, 64 S.Ct. 499, 88 L.Ed. 668; State of North Carolina v. United States, 325 U.S. 507, 65 S.Ct. 1260, 89 L.Ed. 1760; State of Alabama v. United States, 325 U.S. 535, 65 S.Ct. 1274, 89 L.Ed. 1779. Not one of these cases involved an order having a reach comparable to the reach of the order now before us. We are asked to sustain an order that readjusts the class rates of the whole country barring only the territory west of the Rockies—an order that changes not only the rates within the various rate territories in this vast region, but changes the relation of the rates inter-territorially. I am not unmindful of the complicated nature of the problem which confronted the Commission, of the empiric character of the process of rate-making, of the limited scope for judicial review in this process, of the respect to be accorded to the Commission's conclusions. Board of Trade of Kansas City, Mo. v. United States, 314 U.S. 534, 62 S.Ct. 366, 86 L.Ed. 432. But when the outcome of legal issues is bound to cut deeply into economic relations on such a scale, it is not asking too much to ask the Commission to be explicit and definite in its findings on the elements that are indispensable to the validity of its order. 243 When inter-territorial discrimination is complained of, at least two basic issues confront the Commission: (1) Is there discrimination? (2) If there is, how is the discrimination to be abated? The Commission cannot eliminate discrimination—i.e., harmonize the rate relations between territories—in disregard of the reasonableness of the readjusted rates within each territory. The Interstate Commerce Act must be applied in its entirety and the different sections which make an articulated whole cannot be treated disjointedly. Such is the teaching of our cases, especially of Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553, 9 Ann.Cas. 1075, and Intermountain Rate Cases (United States v. Atchison, T. & S.F.R. Co.), 234 U.S. 476, 34 S.Ct. 986, 58 L.Ed. 1408—the two cases which beyond all others give the controlling considerations in construing the Interstate Commerce Act. 244 And so the Commission is not empowered to remoe discrimi nation between two territories without at the same time considering whether the remedies proposed for such removal fit the requirement of reasonableness of rates. It may not lower the rates in a territory beyond the level which gives the carriers an income sufficient to enable them to operate effectively as part of the nation's transportation system. And the Commission may not raise rates to a leval which would exact freight charges from shippers beyond a rate structure that is reasonable. The small proportion of freight that moves on class rates is no measure of the importance of those rates to the total earnings of carriers. Unreasonable rates—whether unreasonably high or unreasonably low—even on a fraction of the freight, may make the difference between earnings to which carriers are entitled under the Interstate Commerce Act and those to which they are not entitled for discharging their duty as part of the national transportation system. We are without informing findings on these issues. But even if one were to consider questions of discrimination is isolation, inequality—the essence of discrimination—cannot be dealt with mechanically by taking a percentage off one territory and adding it to another. The Procrustean bed is not a symbol of equality. It is no less inequality to have equality among unequals. The findings do not reveal how it happened that putting 10% on and taking 10% off respectively will beget just the right adjustment. I am not suggesting that one might not dig out of the record inexplicit, argumentative support for the view that an increase of 10% in Official Classification Territory rates will still leave the level of rates within that Territory not unreasonable, and that a decrease of 10% in Western Territory will leave the carriers the required reasonableness of rates within that Territory. But it is not conducive to a fair administration of the Interstate Commerce Act, nor is it consonant with the proper discharge of this Court's task, to require us to dig out indications or evidence giving appropriate answer to these issues from a record consisting of nearly 13,000 pages spread over 21 volumes, which led to a report by the Commission of 320 pages. 245 The District Court acknowledged the absence of finding on such issues. Said the court: 'it has been argued that there can be no increase in class rates in Official Territory unless there is first a so-called primary finding, supported by substantial evidence that the present rates are not compensatory. While that fact, if proved, would have been of much significance, the failure to prove it and the consequent lack of a finding that present rates are confiscatory does not leave the Commission's finding that the rates are unlawful unsupported by substantial evidence.' 65 F.Supp. 856, 873. But the fact that the rates in Official Territory may, as a matter of abstract comparison, be out of line with the rates in Western or Southern Territory is hardly proof that the rates in Official Territory should be increased by the same flat percentage as the rates in the other territories should be decreased. Such a flat increase in Official Territory may make the proposed new rates unlawful because unreasonable. While a 10% decrease in rates in Western Territory may eliminate unfairness to shippers in that territory, it does not follow that a corresponding 10% increase in Official Territory rates will not result in unfairness to shippers there. 246 One can hardly read the concurring and dissenting views to the Commission's Report without being left with uncertainty regarding the basis of the Commission's order. 247 'The report does not show, except in nebulous fashion, that the cost figures represent apportionment of totals, based on estimates; that they involve many assumptions and acts of judgment; and are not computations from direct, original cost figures for particular movements. These, however, are thefacts. It omits evidence showing that 59 out of 117 items of basic data used n the stud ies were estimated, and that 458 out of 500 sequences were wholly or partly estimated. It fails to disclose clearly that when making the studies it was assumed that the consist of the traffic is the same in the different territories, when the fact is, as I have pointed out, that the traffic consist differs widely in the respective territories. The result is that theoretical costs are produced, based upon assumptions which are not facts, and upon comparisons of unlike things.' (Commissioner Porter, dissenting, 262 I.C.C. 447, 709, 717; and see dissenting views of Commissioner Barnard, Id. at 725.) 248 According to two of the Commissioners the record is wholly inadequate to support a finding that class rates within Official Territory are unreasonable under § 1 of the Act. See 264 I.C.C. 69, 70. Certainly the Commission did not make an explicit finding that they are unreasonable. If there is any such finding it must be sought for as would a needle in a haystack. The Commission's order ought not to be allowed to rest on such dubious foundations. 249 Nor can such a mechanical or abstractly mathematical readjustment of rates interterritorially be justified as a tentative adjustment. Of course, the Commission may generalize a sufficient number of typical instances and make a flat readjustment within a territory, leaving instances of unreasonableness to be taken out of such an order upon individual application. This is what the Commission did, and what this Court sustained, in the New England Divisions Case (Akron, C. & Y.R. Co. v. United States), 261 U.S. 184, 43 S.Ct. 270, 67 L.Ed. 605. The order in that case, directing a 15% increase in the share of the New England railroads in the joint throughfreight rates, was based upon evidence 'which the Commission assumed was typical in character, and ample in quantity, to justify the finding made in respect to each division of each rate of every carrier.' 261 U.S. at pages 196, 197, 43 S.Ct. at page 275, 67 L.Ed. 605. The Court found that the established practice in rate litigation, the nature of the hearing before the Commission, the evidence submitted, the findings made, the opportunities to apply for modifications in typical situations, amply supported the Commission's findings. The present record, as reflected in the Commission's report, does not present a comparable situation. One gets the impression that the adjustment of a flat 10% decrease in the rates outside the Official Territory and a flat increase of 10% within that Territory is attributable, fundamentally, to a laudable desire on the part of the Commission to secure uniform classification throughout the country. The Commission was not prepared to make such a classification, but it made these rate changes in the hope that they would exert pressure on the carriers to agree upon a uniform classification. It is in relation to that hope that it is urged that the order is merely a conditional or tentative order—conditioned upon agreement by the carriers upon a uniform classification. But to condition the order on the realization of that hope is to condition it, if experience be any guide, on the Greek kalends. 250 What this Court said in United States v. Chicago, Milwaukee, St. Paul & Pacific R. Co., 294 U.S. 499, 510, 511, 55 S.Ct. 462, 467, 79 L.Ed. 1023, involving a rate adjustment within a very limited territory, with no such far-reaching consequences as the order now under review, has enhanced applicability to the present order of the Commission. 'We would not be understood as saying that there do not lurk in this report phrases or sentences suggestive of a different meaning. One gains at places the impression that the commission looked upon the proposed reduction (initiated by a carrier) as something more than a disruptive tendency * * *. The difficulty is that it has not siad so with the simplicity and clearness through which a halting impression ripens into reasonable certitude. In the end we are left to spell out, to argue, to choose betwee conflicti ng inferences. Something more precise is requisite in the quasi jurisdictional findings of an administrative agency. Beaumont, S.L. & W. Ry. Co. v. United States, 282 U.S. 74, 86, 51 S.Ct. 1, (6), 75 L.Ed. 221; (State of) Florida v. United States, 282 U.S. 194, 215, 51 S.Ct. 119, (125), 75 L.Ed. 291. We must know what a decision means before the duty becomes ours to say whether it is right or wrong.' 251 Administrative experts no doubt have antennae not possessed by courts charged with reviewing their action. And so it may well be that to the expert feel the justifiable correction of an imbalance between Official Territory rates and the rates of other territories is a shift of 10% in the respective rates—Official Territory rates increased 10% and rates elsewhere decreased 10%. But courts charged as they are with the review of the action of the Commission, ought not to be asked to sustain such a mathematical coincidence as a matter of unillumined faith in the conclusion of the experts. 252 I would reverse the decree and order the proceedings returned to the Interstate Commerce Commission. 253 Mr. Justice JACKSON, dissenting. 254 I find it impossible to agree with this extraordinary decision. I will discuss but one of its phases—that which is treated in subdivision Eighth of the Court's opinion. This holds that the Interstate Commerce Commission has, and rightfully has exercised, the power to add 10% to certain basic freight rates affecting the Northeastern part of the United States. This increase was not asked by the railroads, goes to the prosperous and the insolvent ones alike, and is not even claimed to be necessary to pay the cost of service and a fair return on the property used in rendering it. This additional assessment is in no sense compensation for handling the traffic which the railroads concede was adequately compensated before. It is really a surtax, see Brandeis, J., in New England Divisions Case (Akron, C. & Y.R. Co. v. United States), 261 U.S. 184, 196, 43 S.Ct. 270, 275, 67 L.Ed. 605, added solely to increase shipping costs in the Northeastern part of the United States for the purpose of handicapping its economy and in order to make transportation cost as much there as it does in areas where there is less traffic to divide the cost. The surcharge bundens the territory where fifty percent of the consuming population of the United States resides by adding an estimated $15,000,000 per year to its shipping bills. It adds that muh to the r evenues of the Northeastern railroads with no showing or finding that it is needed to meet costs of furnishing railroad service. 255 The most important reason advanced for sustaining this order is the claim that this surcharge is to cure a discrimination in favor of the Northeastern territory against the South and West. Briefly and generally, the discrimination is said to consist in this: Mile for mile, a higher average charge is made for transportation under the present classifications in the more sparsely settled areas of the South and West than is more in the denser traffic regions of the Northeast. Why, then, should not the alleged discrimination be removed by lowering the high rates of the South and West? The answer is that they cannot be reduced further than the ten percent already ordered in this proceeding, because the railroads of the South and West, in view of their costs, could not bear further decrease. So the only other way of equalizing the rates and making it as costly to move goods there as anywhere in the United States, is to make the shippers in the Northeastern territory pay the railroads this additional 10% which they have not asked and do not need. 256 The Court's approval of this order is based on an entirely new theory of 'discrimination.' It has never before been thought to be an unlawful discrimination to charge more for a service which it cost more to render. Discrimination heretofore has been found to exist only when an unequal charge was exacted for a like service, or vice versa. But now it is held to be an unlawful discrimination if railroads of the Northeast do not make the same charge as other railroads in the South or West, for a different transportation under different cost conditions. The Government frankly advocates this new concept of discrimination as necessary to some redistribution of population in relation to resources that will reshape the nation's social, economic and perhaps its political life more nearly to its heart's desire. It says in its brief to us: 257 'There is no direct relation between the distribution of natural resources and the distribution of population in the United States. It happens that some of the areas richest in natural resources in the United States are sparsely populated. If the raw materials making up those natural resources are to be converted into finished products in that vicinity, allowing the area some economic benefit from their conversion, it will be necessary to transport considerable volumes of finished goods for long distances. Necessarily minerals are obtained where the deposits occur, and agricultural products must be produced in areas of suitable soil and climate. It is the task of the transportation system to carry commodities from points of production to consuming centers throughout the United States and to the ports for export. The more freely and cheaply the products are carried, the more competition there will be, the more production there will be, and the better will our transportation system serve our national economy. 258 'The maintenance of a sound national economy requires the proper use of natural resources to insure reasonable economic opportunity of a stable nature for the people in each of the regions of the country. As indicated, population distribution is not in accord with the distribution of natural resources, and it would inquire many years for people to move to where these resources are, assuming it possible to induce such millions to migrate, or that it would be wise policy to do so even if possible. There are also areas of one-crop agriculture in which the people face readjustments to restore and protect the land and to obtain additional sources of livelihood. 259 'In view of all this, one of the basic principles in making freight rates should be the elimination of rate barriers against regional development, not to charge our economy, but to remove discriminatory conditions which unfairly and unlawfully prevent the possibility of change.' 260 TheCourt's en tire discussion of the discrimination feature of this case is an acceptance of the Government's position without which the last support for this order would fail. 261 No authority can be found in any Act of Congress for the imposition of this surcharge on the Northeast solely to penalize it for being able to transport goods cheaper due to its density of population and volume of traffic. The policy of Congress remains as it long has stood: 'adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service.' Interstate Commerce Act, § 15a(2), 48 Stat. 220, 54 Stat. 912, 49 U.S.C. § 15a(2), 49 U.S.C.A. § 15a(2). Congress has never intimated, much less declared a purpose to deprive the territory in which fifty percent of the nation's consumers reside of the benefit of this policy. The Ramspeck resolution did no more than to direct the Commission's attention to earnest complaints that the South and West were being mistreated in the matter of rail rates, and very properly to direct that they determine such complaints on their merits. True, in 1940 the provision prohibiting undue prejudice and preference was amended by the addition of 'region, district, territory,' to the list of persons or things not to be unduly prejudiced or preferred. Transportation Act, 1940, § 5(a), 54 Stat. 902, 49 U.S.C. § 3(1), 49 U.S.C.A. § 3(1). But the Act already prohibited undue prejudice or preference to any 'locality' and it is conceded that the 1940 Act made no change in the substantive law of discrimination. Senator Wheeler, Chairman of the Interstate Commerce Committee of the Senate, showed clearly that while it would 'make toward the equalization of rates,' 84 Cong.Rec. 6072, it was not intended to accomplish what is here attempted. The following colloquy occurred: 262 'Mr. Frazier. Is it the expectation of the committee that by the amendment in section 52 (now section 5(b) of the Act) the rates in the various classification territories will be equalized or made the same in different territories? 263 'Mr. Wheeler. I do not think that is possible. 264 'Mr. Frazier. I do not see how it is possible. I was wondering what the intention was. 265 'Mr. Wheeler. It is not possible for a number of reasons. For example, it costs more to carry freight over the mountains in two trains than to carry it on the plains in one train. Likewise, we must recognize the fact that railroad transportation service and rates depend somewhat on the intensity of the traffic. In long stretches of territory with no traffic, shippers must pay more for railroad service than do shippers in a densely settled part of country where traffic is plentiful and where there is much competition from busses, trucks, and things of that kind. However, it seems to me from my study of the question that apparent inequalities ought to be corrected. * * * 266 'Mr. Frazier. In North Dakota we have a large volume of wheat to transport in the fall of the year, and because we have that large volume, and because our territory is practically level, we have a rather beneficial rate on wheat as compared with some other territories. Our railroad commission and traffic experts are afraid that the provision to which reference has been made will take that special rate away from us. 267 'Mr. Wheeler. I believe this provision will help the people of the Senator's State rather than harm them in many respects. 268 'Mr. Frazier. We have a much lower rate than prevails in many other sections of the country. If rates are to be equalized, it will mean raising our rates. 269 'Mr. Wheeler. The bill does not mean that rates are to be equalized. * * * The people of the Senator's State might just as well disabuse their minds of the fear that as a result of the bill they will lose any benefit which they now have. * * *' (84 Cong.Rec. 5890.) 270 The Court never before has confided to any regulatory body the reshaping of our national economy. In Texas & Pacific R. Co. v. United States, 289 U.S. 67, 53 S.Ct . 768, 772, 77 L.Ed. 1410, the following statement of the law was made: 'A tariff published for the purpose of destroying a market or building up one, of diverting traffic from a particular place to the injury of that place, or in aid of some other, is unlawful; and, obviously, what the carrier may not lawfully do, the Commission may not compel.' 289 U.S. at page 637, 53 S.Ct. at apge 772, 77 L.Ed. 1410. See also Southern Pacific Co. v. I.C.C., 219 U.S. 433, 31 S.Ct. 288, 55 L.Ed. 283; I.C.C. v. Diffenbaugh, 222 U.S. 42, 46, 32 S.Ct. 22, 24, 56 L.Ed. 83; United States v. Illinois Central R. Co., 263 U.S. 515, 524, 44 S.Ct. 189, 193, 68 L.Ed. 417. 271 The Interstate Commerce Commission also accepted this as the law. In Stoves, Ranges, Boilers, etc., 182 I.C.C. 59, the majority said, 'It is not within our power to equalize natural disadvantages of locations,' 182 I.C.C. at 68, the Commissioner Eastman was even more explicit, saying, 182 I.C.C. at 74: 272 'However, it is undeniable, I think, that in the past both southern manufacturers and southern carriers have shows a tendency to demand that the rates to the North be equalized in level with those within the North, on the ground that such equalization is commercially essential to the southern industries. It is a sufficient answer to say that it is not our province to equalize commercial conditions. However, the evidence in this case has served a useful purpose in making it quite clear that the southern manufacturers have certain advantages over their northern rivals, so far as operating and overhead costs are concerned, which would have to be taken into consideration if it were our duty to equalize commercial conditions through an adjustment of freight rates.' 273 The Court shrouds this simple legal issue as to whether there is power to levy this surtax on the Northeast, in elaborate discussions of the evils of existing freight classifications and affirmations of the Commission's power to correct them. Neither of these propositions have ever been in doubt. But what importance can the Commission's power over classifications have in testing validity of this order? To correct classification was the asserted object of this proceeding, but that power has not been exercised at all. Not one classification is changed. Instead, a flat boost is made against traffic in the Northeast and a flat reduction for traffic in the South and West is ordered, leaving every inequality, discrimination, injustice or illegality in classifications just where the Commission found them. If there is proof of specific discrimination, injustice and illegalities in this case, why are they not now ordered corrected? If there is not sufficient proof of any specific discrimination, how can we hold that there is a general discrimination so extensive as to warrant this levy on the Northeast to correct them? 274 Perhaps the most incomprehensible of the Court's grounds for sustaining this order is that we do not have here a 'revenue problem.' It is admitted that the Northeastern rates before increase are not proved nor found by the Commission to be noncompensatory to the railroads, or otherwise wise to threaten harmful effects upon the revenues and transportation efficiency of the carriers who get the increase. It also is admitted that the absence of such proof and findings might be fatal to this increased rate, for 'If this were a case of determining whether existing rates passed below the lowest or above the highest reaches of reasonableness, the point might be well taken.' Can the label affixed to a proceeding make legal what under another label would be invalid? Because the proceeding professes to correct classifications, a purpose now long and indefinitely deferred, may it be used incidentally to raise the rates of the whole Northeastern territory without any showing of need therefor? Whether we call the case a 'revenue case' or something else, and whether we decline to denominate the problem a 'revenue problem' and style it someting else, the order under review is a revenue order and nothing else. It adds 10% to the revenues of the Northeastern roads from traffic moving under the rates in question; it knocks 10% off from the Southern and Western traffic under them. It exacts for the railroads added revenues; it lays on shippers the burden of providing those added revenues. This order admittedly might be invalid if the increased revenue were given to the railroads because they had made a claim to need it, and had only the present evidence and findings to support an allowance of their claim. So the conclusion is that the order is valid only because the railroads have no revenue problem and have not made a case entitling them to increased revenue. That is all I can get from the answer that it is a valid order only because 'we do not have here such a revenue problem.' I long have heard the complaint that freight rates discrimination against the South. I have been inclined to suspect it to be true and have hoped to see an impartial and exhaustive study and decision on the subject. But this case does not meet that description. The student of economics will be puzzled at the Court's citation of the fact that the average employed person in the South earns only half as much as those in the Northeast as being in some way attributable to these freight rates. And the student of the judicial process will find instruction in the contrast between today's decision and that of Interstate Commerce Commission v. Mechling, 67 S.Ct. 894, in its regard for inherent advantages, in its attitude to 'unsifted' averages as a basis for raising rates and in its deference to the administrative expertise of the Interstate Commerce Commission. 275 I am not unaware of the difficult position in which the Interstate Commerce Commission finds itself in cases of this character. Commissioner Eastman gave voice to it in dissent in State of Alabama v. New York Central R. Co., 235 I.C.C. 255, 333, as follows: 276 'The Commission is called upon to decide this case, on the record, after it had in effect been decided, in advance and without regard to the record, by many men in public life, of high and low degree, who have freely proclaimed their views on what they conceive to be the basic issues. Their thesis has been that the section of our country generally known as the South is our 'Economic Problem No. 1', because, among other things, it is low in industrial development, and that a major reason for this condition has been and is an unfair adjustment of freight rates which has favored the producers of the North and burdened those of the South. It has become a political issue. While, however, the South gave birth to the issue, public representatives of the West now cry out against like supposed oppression, and public representatives of the North or East, as it is variously called, have risen in defense of their section. 277 'Under such conditions, it is not easy to decide the case without being influenced by emotional reactions, one way or the other, which should play no part in the decision.' 278 But by administrative succession and judicial fiat the regulatory power of the Federal Government over commerce is now used to force a surtax on transportation of one section of the country admittedly not needed to compensate the railroad for the carriage but to take away from its inhabitants one of the advantages inherent in its density of population, regardless of the disadvantages which density of population also causes. 279 The observation of Commissioner Mahaffie in this case seems to me appropriate and accurate: 280 '* * * In a country so vast as this with its widely varied resources and differing transportation needs it seems to me a mistake to try to compel general equality in rates except to the extent equality is justified by transportation conditions. I think the effort to do so must necessarily fail. But I am afraid the process of finding out whether it can be done will be painful and costly. The prejudice finding on which the new adjustment is largely predicated are calculated, if carried to a logical conclusion, to lead to a rigid rate structure based on mileage. While this may seem on its face to be equitable its accomplishment would entail radical industrial and agricultural readjustments. I doubt if the country should be required to incur the expense of making them.' (262 I.C.C. at 708.) 281 Mr. Justice FRANKFURTER joins in this opinion. 1 Commodities are grouped into classes, those commodities in each class paying the same freight rate per 100 pounds. Frequently a commodity is in several classes depending upon whether carload or less-than-carload lots are involved, and upon the method of packaging. One class is called first-class or class 100 and each other class has been fixed as a percentage, or multiple, of first-class. Thus the freight classifications involved in these cases consist of lists containing descriptions of every commodity moving by freight and the class or classes to which it is assigned, i.e., its classification rating or ratings. See 262 I.C.C. pp. 465—472. 2 The class rates are in the form of a schedule which shows the price per 100 pounds for moving first-class freight every possible distance it may be moved. the cost of shipment for a given commodity is determined by ascertaining its classification rating, the first-class rate per 100 pounds or the hau l involved, and the percentage of the first-class rate to which the classification rating in question is subject. See 262 I.C.C. pp. 515—519. 3 There are three other kinds of rates: Exception rates are rates resulting from the transfer of a commodity our of its regularly assigned class in the classification and into another class. Commodity rates are special rates established for particular commodities. For purposes of these rates a commodity is not given a classification rating; the result is that the commodity rates have no fixed percentage relationships to first-class rates. Column rates are fixed as definite percentages of first-class rates but like commodity rates they apply only to particular commodities and are assigned to regular class. See 262 I.C.C. p. 562. 4 Some rate territories have subdivisions in which rate differentials are applicable which vary the class rates within the territory in question. 5 The Official Classification applies within Official Territory and from Western Trunk-Line Territory to Official. The Sourthern Classification applies within Southern Territory, between Official and Southern, and from Western Trunk-Line to Southern. Western Classification includes Western Trunk-Line, Southwestern and Mountain Pacific rate territories. It applies within those three territories, between Southwestern and Official, between Southwestern and Southern, from Official to Western Trunk-Line, between Mountain Pacific and Official, from Southern to Western Trunk-Line, and between Mountain-Pacifie and Southern. 6 Western Classification, 25 I.C.C. 442; Consolidated Classifications, 54 I.C.C. 1; Southern Class Rate Investigation, 100 I.C.C. 513; Consolidated Southwestern, 123 I.C.C. 203; Western Trunk-Line Class Rates, 164 I.C.C. 1; Eastern Class Rate Investigation, 164 I.C.C. 314. 7 Eastern Class Rate Investigation, 164 I.C.C. 314, 171 I.C.C. 481, 177 I.C.C. 156, 203 I.C.C. 357; Southern Class Rate Investigation, 100 I.C.C. 513, 109 I.C.C. 300, 113 I.C.C. 200, 128 I.C.C. 567; Western Trunk-Line Class Rates, 164 I.C.C. 1, 173 I.C.C. 637, 178 I.C.C. 619, 181 I.C.C. 301, 196 I.C.C. 494, 197 I.C.C. 57, 204 I.C.C. 595, 210 I.C.C. 312, 246 I.C.C. 119; Consolidated Southwestern Cases, 123 I.C.C. 203, 205 I.C.C. 601. See the discussion in 262 I.C.C. pp. 526 et seq. 8 The consist of freight in a given territory is the totality of commodities carried in that territory. 9 No change in intrastate class rates was made. Nor was any change made in existing exception, column or commodity rates. See note 3, supra. 10 Alabama, Arkansas, Florida, Georgia, Kansas, Louisiana, Mississippi, Minnesota, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, the State Commissions of a number of these States, the Southern Governors' Conference, and the Southeastern Association of Railroad and Unilities Commissioners. 11 We denied the motion of the United States to dissolve the injunction. 328 U.S. 824, 66 S.Ct. 1355. See Federal Rules of Civil Procedure, rule 62(g), 28 U.S.C.A. following section 23c. 12 The Commission advised Congress that its investigations instituted in 1939 (the basis of the orders challenged in the present cases) would be carried out pursuant to this mandate. See 262 I.C.C. p. 689. 13 Section 3(1) now reads: 'It shall be unlawful for any common carrier subject to the provisions of this (part) to make, give, or cause any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic, in any respect whatsoever; or to subject any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever: Provided, however, That this paragraph shall not be construed to apply to discrimination, prejudice, or disadvantage to the traffic of any other carrier of whatever description.' 14 It is pointed out in this connection that Texas & Pacific R. Co. v. United States, supra, while holding that a port was not a 'locality' when it was only a gateway through which shipments were made, recognized that a port was a 'locality' when it was a point of origin or destination. 289 U.S. at page 638, 53 S.Ct. at page 772, 77 L.Ed. 1410. 15 Senator Wheeler who had charge of the bill on the floor of the Senate stated concerning the amendment to § 3(1): 'The previous provision with regard to 'discrimination' simply referred to discrimination as to 'locality, port, port district, gateway, transit point' without specifying the region, district or territory. So we felt that by broadening the language we would at least take away that excuse, and we would provide expressly that the Commission should not discriminate in its rate structures.' 84 Cong.Rec., p. 5889. 16 See note 2, supra. 17 See note 3, supra. 18 The Commission stated, 262 I.C.C. pp. 695, 696: 'Although manufacturing has grown in the South and Southwest and to a lesser extent in western trunk-line territory in the last decade, it is still vastly less in diversification and amount than in official territory. The increases in manufacturing in these territories has created a demand for rates which will at once permit the free movement of the manufactured articles, but because of the leval of the intrateritorial and interterritorial class rates, such free movement has been impeded insofar as such commodities move at class rates. In most instances it has been necessary either to reduce the class-rate levels or to establish exception or commodity rates in order that the manufactured products may move freely, and this action has frequently been subject to long delays because of the failure of individual carriers or groups of carriers to agree upon a basis. Official territory is the greatest consuming territory in the country, and is the market that nearly all manufacturers desire to reach, particularly where they have a surplus of their products to sell. In shipping to official territory, manufacturers in the other territories not only have the disadvantage of location, but are subjected to an additional burden in those instances where they must pay class rates on a much higher level than their competitors in official territory. This situation reacts to the disadvantage of manufacturers in the other territories, and to the advantage of those in official territory, tends to restrict the growth and expansion of the manufacturers in the other territories, and, to some extent, to prevent the establishment of new manufacturing plants in those territories.' 19 In Northern Pacific R. Co. v. State of North Dakota, 236 U.S. 585, 597, 35 S.Ct. 429, 433, 59 L.Ed. 735, L.R.A.1917F, 1148, Ann.Cas.1916A, 1, the Court stated, 'The outlays that exclusively pertain to a given class of traffic must be assigned to that class, and the other expenses must be fairly apportioned. It may be difficult to make such an apportionment, but when conclusions are based on cost, the entire cost must be taken into account.' 20 For description of exact boundaries, see 262 I.C.C. 605. For some cost purposes the United States is also divided into 11 cost territories, various combinations of which are equivalent to the rate territories. For definitions of these cost territories, and a collection of a substantial portion of the Commission's cost data, see S. Doc. No. 63, 78th Cong., 1st Sess. 21 The sum of the out-of-pocket costs plus a pro rata distribution of the constant or fixed costs is referred to as fully distributed cost. 22 262 I.C.C. p. 578. Similar conditions call for the exclusion of Kentucky in considering figures for the Southern region. And see General Commodity Rate Increases, 223 I.C.C. 657. 23 Not including Pocahontas in Eastern Territory figures. Relative costs were not shown separately for Western Trunk-Line, Southwestern, and Mountain Pacific territories, the Commission noting that differences between costs for the total West and for each of those three rate territories were relatively small. 262 I.C.C. p. 578. 24 Weighting given to the costs for each class of equipment was based on the volume of traffic handled in each type of equipment in the United States. Terminal costs for each class of equipment were weighted for the total United States traffic handled in each class of equipment as measured by tons originated plus tons terminated. Line-haul costs by classes of equipment were weighted for the ton-miles of traffic handled in each class of equipment. 25 If Pocahontas is included in the East, the costs for the South, based on the year 1939, are between 3 and 6 per cent above those for the East; for the years 1930—1939, between 6 and 8 per cent higher; for the years 1937—1941, about the same. 26 If Pocahontas is included in the East for 1930—1939, the cost in the West is 18 percent highe r; based on 1939, approximately 15 per cent higher; based on 1941, about 10 per cent higher. 27 It is pointed out, as the Commission found, that livestock is a commodity which cannot do more than pay its own way; that products of the forest are subject to freight rates below the higher brackets; that agricultural products carry a low rate. The western district roads originated 36.91 per cent of the total tons of carload traffic originated in the United States (excluding Pocahontas) in 1941, while the eastern roads originated 47.40 per cent. To that disparity is added the fact that of the total agricultural products originated in the country in 1941 the western district roads originated 68.82 per cent as contrasted to 20.88 per cent by the eastern carriers excluding Pocahontas. For manufactures and miscellaneous tonnage the percentages were 28.06 per cent and 60.66 per cent, respectively. It is pointed out that while the difference between the percentage of agricultural products originated by the western carriers (68.82 per cent) and the percentage of manufactures and miscellaneous originated by the eastern carriers (60.66 per cent) is only 8 per cent, the eastern roads' tonnage of the latter group of commodities (which are high-grade traffic) is almost three times the tonnage of products of agriculture originated by the western carriers. Like comparisons are made between other groups of commodities carried by the eastern and western carriers respectively. Of the total tons of animals and products originated in the country in 1941 (excluding Pocahontas), the western roads originated 63.03 per cent, the eastern, 28.51 per cent. Of the total tons of products of forests originated in 1941, the respective percentages were 58.73 per cent and 7.52 per cent. And for products of mines the percentages were 33.31 per cent and 49.85 per cent, respectively. 28 The 1941 revenue ton miles per mile of line were as follows: Eastern District (excluding Pocahontas). 3,392,964 Pocahontas Region.......... 7,519,840 Western District........... 1,358,041 29 Costs developed in the cost scales and the carriers' total known expenses by cost territories were reconciled within a very close margin as appears from the following table: Aggregate expenses, increased for a 4- Actual expenses as Ratio (percent) percent return reported by carriers of computed Territory computed by applying increased for a 4- expenses to costs to traffic percent return (1939) actual expenses handled (1939) Eastern. $1,426,950,260. $1,451,484,949 98.3 Pocahontas. 183,076,590. 185,387,990 98.8 Southern. 450,448,155. 449,001,663 100.3 Western. 1,382,549,982. 1,395,188,845 99.1 United States. 3,443,024,987 3,481,063,447 98.9 The Commission stated, 'Judging from the above table, whatever errors may exist in the * * * studies, they have not had the effect of overstating or understating the carriers' costs in the aggregate to any appreciable degree.' 262 I.C.C. p. 587. 30 In the twelve months ended October 31, 1946, the revenue tons carried in the West were 26 per cent higher than for the year 1941, and the revenue ton miles were 43 per cent higher than in 1941. 31 See White, Analysis of Railroad Operations (1946) pp. 14, 15, pp. 69, et seq.; Locklin, Economics of Transportation (1938) p. 581; Miller, Inland Transportation (1933) pp. 500—502. 32 Constant costs solely related to less-than-carload traffic are those costs which do not vary with the volume of the traffic, but which could be eliminated if no less-than-carload traffic were handled. 33 See Hamilton, Cost as a Standard for Price, 4 Law & Contemp. Prob., 321, 329: 'Now and then a hardy soul, equipped with simple faith and a calculating machine, essays the adventure of rates based upon the true costs of particular services. The feat is, of course, technically impossible, for value judgments or empirical rules are essential to the distribution of overhead. A calculation of the real cost of transporting cottonseed in less than carload lots from Lampassas, Texas to Kankakee, Illinois, is a stubborn exercise in imputation.' 34 Out-of-pocket costs plus solely related constant costs. 35 The point might also be well taken if this were a proceeding under § 13(4), 49 U.S.C.A. § 13(4), to determine whether intrastate traffic was producing its fair share of the earnings required to meet maintenance and operating costs and to yield a fair return on the property devoted to interstate and intrastate transportation. State of Florida v. United States, supra; United States v. State of Louisiana, 290 U.S. 70, 54 S.Ct. 28, 78 L.Ed. 181; State of North Carolina v. United States, supra. 36 As we point out hereafter, after the present interim orders were issued, the Commission granted a general freight rate increase. See Ex parte No. 162, note 37, infra. In that case it reviewed the rates of return of the roads in the several territories based on the rates in effect at the time, which of course did not include the 10 per cent increase in class rates for Official Territory authorized in this proceeding but stayed by the District Court. What the Commission said in Ex parte No. 162 corroborates its finding in the present case concerning the greater relative revenue needs of the roads in Official Territory: 'On the basis of the interim rates in effect since July 1, 1946, the rate of return for the eastern district will be considerably less for 1946 than in the Pocahontas region, the southern region, or the Western district, even though an additional increase of 5 per cent in certain rates in official territory was authorized and has been in effect since July 1, 1946. It also appears that even on the basis of the increases sought in Ex parte No. 162 and the railroads' estimates of revenue, the rate of return in the eastern district for 1946 will be less than the rate of return in the Pocahontas region, the southern region, or the western district.' 266 I.C.C. 548. The latter estimates of the rate of return in per cent are as follows: Eastern District.................... 2.06 Pocahontas Region................... 6.26 Southern Region..................... 4.01 Western District.................... 3.31 37 Ex parte No. 162, interim report 264 I.C.C. 695, final report December 5, 1946, 266 I.C.C. 537. This increased most basic freight rates by 15 to 25 per cent. Rates on articles under the general commodity grouping of Manufactures and Miscellaneous, class rates and rates on less-than-carload and any-quantity traffic were increased 25 per cent in Official Territory, 20 per cent within and between other territories, and 22.5 per cent between Official Territory and points in other territories. Express rates were increased October 28, 1946. Ex parte No. 163, 266 I.C.C. 369. 38 See note 37, supra. 39 That the order granting the general freight rate increase did not affect the orders in the present proceeding is made clear by the following provision: 'That outstanding unexpired orders in other proceedings are hereby modified so as to permit the increases in freight rates and charges herein authorized to be established; Provided, however, that the provisions of this paragraph shall not be construed to suspend or supersede or modify or affect the findings and order entered in Class Rate Investigation, 1939, Docket No. 28300, the operation of which is stayed by court order. * * *' See Ex parte No. 162, supra, note 37.

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