Document: 358 U.S. 534 79 S.Ct. 383 3 L.Ed.2d 490 YOUNGSTOWN SHEET AND TUBE COMPANY, Appellant,v.Stanley J. BOWERS, Tax Commissioner of Ohio. UNITED STATES PLYWOOD CORPORATION, Petitioner, v. CITY OF ALGOMA. Nos. 9, 44. Argued Nov. 12, 13, 1958. Decided Feb. 24, 1959. [Syllabus from pages 534-535 intentionally omitted] Mr. Carlton S. Dargusch, Sr. Columbus, Ohio, for appellant Youngstown Sheet & Tube Co. William Saxbe and John M. Tobin, appellee Bowers. Roger C. Minahan, Milwaukee, Wis., petitioner Plywood Corp. Edwin Larkin, Mondovi, respondent City Algoma. Justice WHITTAKER delivered the opinion Court. 1 The principal question presented by these cases is whether in No. Company, 44, United States Corporation, have so acted upon materials which they imported use their manufacturing operations as to cause them lose distinctive character 'imports,' within meaning that term used Import-Export Clause, Art. 1, § 10, cl. 2, Constitution.1 Supreme Courts concerned held manufacturers done so. Our task decide whether, on particular facts involved, those holdings violate Clause Constitution. 2 case are stipulated. In essence, Youngstown, an Ohio corporation, operates industrial plant or near where it manufactures iron steel. addition domestic ores, imports ores five countries 'for ultimate (its) open hearth (and) blast furnaces' its processes. arrive shiploads 'in bulk' either at Atlantic a Lake Erie port entry unloaded ship into railroad cars thereby transported Youngstown's enclosed wire fence. Within enclosure 'adjacent (the) facilities' several 'ore yards' storage supplies ore.2 Each ore yard consists 'two parallel walls, there (is) movable bridge.' When this final destination, one yards but, because each country different others use, kept segregated origin being 'placed separate pile area yard.' daily needs taken piles. As needed, conveyed piles selected 'stock bins' houses,' holding two days' supply located close proximity furnaces, fed furnaces. 'pile' thus consumed, other like similarly same brought top remainder pile. This course continuously repeated. endeavors maintain 'a meet estimated requirements period least three months.' not resale,' but (at plant).' Acting under statutes provide, inter alia, 'All personal property business state (shall be) subject taxation * *'3 'Personal 'used' 'used business' when stored hand material, parts, products, merchandise *,'4 proposed assess ad valorem tax against based average value during year ended January 1954.5 contested assessment. It contended, among things, had lost were therefore immune I, 4 After exhaustion administrative proceedings, reached Court 'protection (of cannot) extend such (1) after has been commingled with time, even though grade was place, (2) portions removed manufacturing.' then entered judgment sustaining tax, 166 St. 122, 140 N.E.2d 313, 317, we noted probable jurisdiction appeal. 355 911, 78 340, 272. 5 Corporation found detail trial court findings challenged here. (petitioner) Algoma, Wisconsin, veneered wood products. uses both lumber veneers shipped directly Canada petitioner's plant. unfinished, received bulk loose, individual pieces boards. also 'green' must be dried before can petitioner. Upon arrival carted yard, 'adjacent' plant, stacked way allow air freely circulate through stacks 'dominant purpose' air-drying it. method does completely dry make kiln-drying unnecessary, materially reduce time expense process. From much about put products placed kiln drying completed readied use. countries. They bundles form piles, separated specie, needed day-to-day 6 On assessment date May 1955, Assessor acting what now Wis.Stat.1957, 70.01, W.S.A., assessed one-half hand. Petitioner paid sued recovery. 'was part (petitioner's) practices,' that, air-drying, 'entered process manufacture' 'import,' all might lawfully taxed city. further manufacturing' Algoma importation journeys definitely ended; (one-half amounts hand) irrevocably committed 'use 'necessarily required current operational needs,' manufacturing,' 'imports' local taxation. city, and, appeal, Wisconsin affirmed. Wis.2d 567, 87 N.W.2d 481. Because importance constitutional granted certiorari. 356 957, 994, 1065. 7 Constitution confers Congress power lay collect import duties, 8, provides 'No State shall, without Consent Congress, any Impost Duties Imports Exports, except may absolutely necessary executing it's inspection Laws *.' 2. That provisions intended confer National Government exclusive act plain terms. And early our national history Chief Marshall held, landmark Brown Maryland, 12 Wheat. 419, L.Ed. 678, who goods purpose selling them, had, 'by payment duty States, (acquired the) right dispose his merchandise, well bring country' (id., page 442), could 'while remaining importer, warehouse, original package imported.'6 Id., 442. But he made very clear '* point prohibition ceases, commences.' 441. Elaborating concept, said: 8 'The certainly come conflict acknowledged persons territory. power, restriction it, quite distinguishable do approach other, yet nearly perplex understanding. Yet distinction exists, marked arise. Till arise, premature rule universal application. sufficient present say, generally, importer thing imported, become incorporated mixed up mass country, has, perhaps, import, taxing State. *' 441—442. (Emphasis added.) 9 While did undertake definitively just acts conduct would deemed 'so imported' 'mixed county (and lose) import,' specify some result. He 'sells them,'7 '(breaks) packages, (travels) itinerant pedlar.' 443. More important confronting us, (3) own use' here him regarded 'the common mass' taxation.8 10 Hooven Allison Evatt, 324 652, 65 870, 89 1252, 'use' share immunity 'sale,' manufacture (do not) sooner more readily than sale' 667, 878); 'when (the are) cease exemption end.' 665, 877. 11 Thus, supra, holds exempted are, agree Compare 441—443. Do stipulated considered light applicable legal principles, show committing ended, 'entering' 'using' place' manufacturers, relying understanding case, argue not, concluded do. 13 taxpayer bales hemp fibers warehouse factory intention eventually using cordage similar sought taxpayer's warehouse. contended 'thought laid down only sale, became, storage, if still package, intermingled taxation' (324 655, 872), ground upheld tax. Court, applies 'until (they were) 877), shown record 'subjected taxpayer's) packages' US. 878), reversed judgment. present, reach decide, Indeed, expressly reserved 14 '(I)t unnecessary purposes immunity, presence essential said manufacture, hence already packages. Even inventory raw material thought process, decision rest ground, affords no basis saying fibers, immediate needs. Hence occasion consider question.' 878. 15 Unlike Hooven, mere eventual Here courts effect rested judgments, major least, ground. precisely case. 16 We confronted practical, albeit vexing, problem reconciling competing demands State's borders. design prevent '(t)he great importing (from laying) non-importing States,' ultimately destined, discriminate 'would necessarily produce countervailing measures whose situation less favourable importation.' 440, 678. See Madison, Debates Federal Convention 1787, August 28, 1787 (Hunt Scott ed.). see, e.g., Cook Pennsylvania, 97 566, 574, 24 1015; Richfield Oil Board, 329 69, 76—77, 67 156, 91 80. immunize pass, long retain imports. Hence, impinged phases 'put (were) (Hooven 657, 873), inasmuch reconciliation state's extremely practical matter' 668, 878, 1252), 873) full awareness realities treat way. 17 stipulation shows operation plant; 'to (manufacturing) requirements' arrived 'piles' journey destination; supply, Does actually plant? seems us inescapably establish (imported ores)' (Brown 441), imported,' process' 877) such. 18 deny houses' Is real distinction? possible differences sizes distances Surely size material. Just surely short distance between smaller larger distinction. If stood higher adjoining feed gravity former latter difference actual argued processes other. entirely used, ones constantly supplied. '(R)econciliation (being) taxability cannot depend place fabrication consumption little less. 19 types involved—unfinished 'bundles.' believing operating veneers. ensuing litigation, date) These amply supported evidence think clearly materials)' 441) that—like case—they 20 fact 'bundles' opened until controlling Whatever significance retaining 'original package' sale supra; Waring (City Mobile) Mayor, Wall. 110, 122—123, 342; Low Austin, 29, 32—33, 517; 573, New Orleans, 178 496, 501, 507—508, 976, 977, 979 980, 44 1165), exempt taxation, package,' if, here, imported.' 873. Breaking ways packaged Another putting Id. broken is, therefore, factors factually determining fully finding 21 views expressed, discuss conclusion manufacture,' reason also, import. 22 manufacturer's When, indiscriminate whole needs, relation circumstances, nor every sense, imported. impute Framers discrimination favor result approved pressed manufacturers. 509, 980. 23 portion public docks shore 'merchandise only' 5701.08(A),9 section nonresidents residents stocks denied resident equal protection laws violation Fourteenth Amendment answered contention saying: 'For reasons stated Allied Stores Inc., Bowers, Com'r (166 116), 411, contentions (in respect) rejected 124, 316. today affirmed Com'r, 522, 437, hold 5701.08(A) questioned thereunder Equal Protection Amendment. follows 25 Affirmed. 26 STEWART took consideration cases. 27 FRANKFURTER, whom HARLAN joins, dissenting main issue. 28 tortuous anguished free trade Western Europe, unhampered interior barriers, opposition inert narrow conceptions self-interest component nations, admiration farsighted statecraft intensified. Guided experience evils generated parochialism new wise men Philadelphia expansive withdraw selfish exercise over foreign trade, export. accomplished Constitution: Commerce Clause. 29 aim, matter settled judicial construction, placing regulation commerce hands insofar predominantly interests give concurrent displaced congressional legislation. leeway established Cooley Board Wardens, How. 299, 996, foreshadowed Marshall's Willson Black-bird Creek Marsh Co., Pet. 245, 412. permissive action given rise, know too well, multitudinous litigation. 30 dealing left leeway. rigorously confined 'absolutely necessary,' permission terms drastically limited, beyond necessary' barred consent expressive interest. hardly room construction command, Imposts strict limitation qualified requirement 'net Produce Imposts, shall Use Treasury States; Revision Control Congress.' 31 For hundred thirty-two years, following seminal discussion single deviation, while retained 'package'1 prior sale. Today I am bound most respectfully disregards historic adjudication allowing despite clause authoritatively interpreted so, moreover, overruling decisions logic reading longer sustain. remain confusing series conflicting amidst blindly move extent confusion substituted principle application controversies far-reaching provision numbered dozen entire history. Of course, believe should overrule consistent decisions. merit explicit announcement policy, concomitant repercussions economic life. 32 Since analysis taxes derive due regard precise circumstances based, becomes set forth us. 33 petitioner, York corporation licensed attacks validity levied stock Canada, France Belgian Congo. comes birch veneer, France, French oak Africa, species vener known korina fuma. wooden crates secured metal straps. packages take factory. lumber, cedar, Ontario, Canada. piled preparatory manufacture. 34 total day—May 1955. city amount 'current 35 below needs' sustained alternative dominant piling prepare drying, Most Canadian green good practice, customary running kilns remove moisture. 36 challenges Appellant purchases grades ore: Brazilian ore, Cuban Mexican Liberian Seine River ore. loaded ports chartered vessels, carries cargo vessels entry, discharged appellant's Youngstown. adjacent A maintained property. months maintained. bins need arises houses prepatory shipment designated grade, i.e., pile, etc. diminished day's need, augmented next subsequently grade. 37 conceded once bins. decided including State, mingling coupled parts manufacturing, terminated subjected 38 Primary forces led inclusion Constitution, deeply felt necessity vesting relations Government.2 control imposts, subsidies instrument encouragement growth recognized Framers. effective speak voice regulating commercial intercourse nations. Orderly policy impossible thirteen interests, often conflicting, another, allowed initiative affairs. prohibited regulation—they forbidden, leave duties exports. Second goal importance, secure source revenue.3 assumed many prime funds; revenue constant flow government depend. fiscal well-being ensure access Government. Subordinate goals desire seaboard possessed levying flowing inland States.4 advantage favorable geographical position order exact price consumers dwelling advantageously situated country. fear tribute especially forceful expression absolute exports Nation States. 39 Import safeguard realize necessities. considerations governing interpretation out special path stream adjudication—a diverged respects Clause: broad grant designed primarily assure difficult, continually delicate, impact directness burden commerce, potential interstate proper evaluation pertinent assessing charged bar imports, exclusive; absolute.5 Thus objects relevant inquiry carefully circumscribed. Once clear, fact, goods, always answer question. 1827 Maryland: Have status importer? invalid. general involves essentially determination physical goods. But, however variant situations, determinative principles remained constant. rules careful authoritative exposition Maryland. levies enough effect. Every day this, applying standards formulated Maryland ends begins.6 words grown familiar statement, deserving repetition guide decision. '(T)here time,' postulated, commences; State; plainly escape constitution.' 40 Since, object reasoned Justice, entitled aim Although subtle, befogging imagined, 'plain' levies. 41 counsel Attorney General, B. Taney. Twenty years later, sitting Taney 'further mature reflection' wisdom predecessor. 'Indeed,' Taney, 'goods shape sense usually support government.'7 42 needless review consistency repeated applied formulas few examples will serve concrete illustrations. 517, California champagne commission merchant, unable discern 'reason why exposed store merchant constitute wealth situated.'8 reasoning invalidated wine. '(G)oods 'do passed Whilst shape, prohibition.'9 Similarly, Anglo-Chilean Nitrate Sales Alabama, 288 218, 53 373, 77 710, bags Chilean nitrate importer's awaiting franchise Alabama. demonstrated lucidly instances importer. indubitable demonstration involved altered become, action, ingredient State.10 43 recent reaffirmation 1252. compelling parallels cases, unless overruled expressed adopted Court's views. Company subsequent importation, During hearings Appeals company accustomed keep merely 'minimum working inventory' hemp, compensate three-to six-month delay shipping grounds having immunity. quoted proceedings admitted inventory.' urged request affirmance.11 45 Stone spoke Court: 46 'Although dissented voice, things conferred Constitution; survives continues sold, 873, 47 ever intimated liable contrary, affirming doctrine appeared declared, affirm: 'Indeed, government.' 48 perceive preserved all, survive landing continue reached, capable determination, fairly taxable state, cases.' 666—667, 49 Indeed logic, dextrous, strike processing preliminary since, retains opportunity impose first taxes, manufacturer lesser privilege. Goods lying container displayed crates, sale; 'interception' immediately Clearly represent extension context distinguish reject it.12 50 lucid developed guidance disposition accept drying. Having However, neither manufacturing. area, 'form shape,' initial processing. adjudications situated, constitutionally proscription 51 choose Rather effectively departed upholds taxes. theory elusive opposed authority—a unsupported invoked 'realities,' turns progeny hoc results unrelated rationale, harmonious adjudication. 52 finds language Allison. 'Unlike Hooven,' told, 'these needs.' assumption governed adjudication, since 'irrevocably destination,' petitioners 'imports." giving asserted law appearance fact? vital how, when, 'imported vast purposes—to committed' sold normally, dumped sea, tea Boston Tea Party. purpose. sit idly area. relied affirmance Allison, overwhelmingly demonstrates.13 One say passage Stone's statement 'unlike Allison,' proposition.14 54 Putting side unwarranted reliance let examine upheld. Both holds, 'not plant'. Again ask phrases mean them—use processed, changed upon, physically slightest, mingled 'used,' anything them. simply areas To 'were plant,' affirms obvious unaffected abroad deposited, awaited intended, begun, handling alteration, reference prospective role 'needed.' supply,' 'actually plant.' end 55 Furthermore, substitute 'place sale,' 'plant' reasoning—and vouchsafed abstract disallow identical enumeration virtually 'needed, effect, today's means taxable. useless, 56 examination makes apparent reversal previous justifies concern holding. 'at least' months' generally (R. 35.) There stipulations, findings, rate immediacy added old removed.15 manufacture.' fit underlie define Nothing ore; sound accounting, relevant, assume fictionalize facts. exist. By assuming strips relevance impliedly rejects unbroken 57 Nor strengthened suggestion contest houses, taxed, incongruous. proceeding knowledge what, any, underwent assigning hypothetical argumentative figment upholding 58 31) Formulas discussed courts, here.16 half, properly reiterate 'actually' never be, assignment germane transformation hitherto vulnerable asserts truism equally 59 summarizes stating 'stood *'17 continues: 60 'In manufacturers.' exactly argument offered Austin. unanimously thereafter won acceptance. Whether imposition resulted countries' validity. struck non-discriminatory fell situated. provided brief content command: imports,' discriminatorily.' late refuse attribute freeing consistently assumed.18 61 Moreover, 'discrimination' receiving determined range imposts pay Only know, reality, discrimination. find discrimination, President should, receive preferential treatment. Certainly reluctant inroads legitimately formulation determines, imposed. 62 Reluctant proposes heretofore pointed policies upset firmly law; which, perhaps standard, lucid, coherent, eminently workable distribution 63 claims imposed concur rejection claim. Article part, provides: Exhibits record, measurements, indicate nearest feet, distant yards, Title 57, Page's Rev.Code Ann.1953, 5709.01. 5701.08(A). 5711.03. valued taking (such) owned last month (that) engaged year, adding monthly values together, dividing number year.' 5711.16. bar, coming articles 'are transitu, cities, villages expected truth License Cases, 504, 575, 256. intercepts property, denies privilege becoming contributed State.' well-settled. 256; Mayor Mobile), 1165. Counsel permit granting 'an plate, valuable taxation.' reply argument, announced exemptions pedlar,' '(T)he article (i.e., sale) purchased, himself mass, observations apply furniture importer.' earlier (Note 3), 5709.01 (Title Ann., 1953, 5709.01), 5701.08(A), question, provided, that: 'As LVII Revised Code: '(A) Personal merchandise; agricultural belonging nonresident only. termed doctrine,' 'package' statute 436 phrase, Wheat., 442, reformulation characterization shape.' 397, infra. 'It hornbook illustration, rather formula, evidentiary, substantive, Galveston Petroleum D.C., F.2d 208. Letter James Madison Professor Davis, Farrand, Records (1911), 520—521; Federalist (Lodge ed. 1908) (Hamilton); ibid., 280 (Madison). (Hamilton). Equalization, 75—76, 159—160, 80, fashioned effort reconcile demands, states unduly impeded curtailed.' accommodation bear fair cost receives benefits invalidating levy doing undue write qualifications prohibits laying 'any' Congress. entail substantial revision 'any discriminatory' clauses, complementary, ends. limitations read other." Woodruff Parham, 123, 382; Sonneborn Bros. Cureton, 262 506, 643, 1095; 186—188 1252; 710; Gulf Fisheries MacInerney, 276 227, 72 495; People ex rel. Edward Burke Wells, 208 14, 193, 370; 1165; McGoldrick Corp., 309 414, 664, 84 840; 1015. additional statements authority see American Steel Wire Speed, 192 500, 519—520, 365, 370, 538; Norfolk R. Sims, 191 441, 449, 151, 153, 254; Cal.Unrep.Cas. 638, 643. 30—31. Wall., 34. Cf. 342. notes inconsistent told 'holds are. expresses misapprehension said. Such dissent 686—688, 887 (dissenting opinion), silently rejected. refutation Thomas Reed Powell's Taxation Imports—When Cease Import, Harv.L.Rev. 858, 859—864. attributed response 'may 442—443, dealt contentions: 'This indictment license. sells otherwise mixes breaking travelling pedlar. purchased referring household him. rejecting idea indefinitely use,' 'held phrase places quotation marks attributes Marshall, Justice's counsel's conclusion. paraphrase views, interpolation nowhere discussion. 'intercepts' incorporation distinguishing rational denying actively nothing complete accord At hearing Appeals, manager asked definite length time. answered: 'No; stuff soon got again not; carry to; takes six get us; attempt backlog that; run minimum inventory, course.' Transcript Record, p. 42; Relying large testimony 'had 142 235, 242, 723, 726. above circumstances: instant solely impracticable buy bale mill. delivery placed. undisputed uncertainty deliveries, attempted that.' operate 'with 16). words, continuous Brief Respondent, 20, arguments throughout serves 'unlike,' quotes case: (Italics opinions below, briefs doubt refer wholly rests. Due clarifies meaning. ready moved hearing, testified hemp: account mill; fiber becomes, according records, batch stuff; couple days; leaves process; 43, note transit line. remarked 'While raw-material carried books; removal goods-in-process not.' 237, 724. far appears, separately they, stage treated item. obvious, somewhat cloudy, meant considering status. Therefore, although 'be 'unnecessary rely court, stop closely difficult understand mutation loses 'fact,' satisfied. broader concept formula possesses economics; arbitrary figure assigned inventory. An appropriate tentatively Circuit reveal unreal nature finding. However superfluous differ slightest Their 'relation' 5,

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