Evening star., 1935-05-28
SUPREME COURT DECISION TOPPING n R. A. CODES

ment and movement OF the poultry"
while unquestionably II was In inter.
state commerce. The intrastste acts
Of the conspirators were included In
the injunction because that was found
to be necessary for the protection Of
interstate commerce against the at
tempted and illegal restraint. Id, DID.
297, 299, 300.
The instant case Is not OF that sort.
This Is not a prosecution for con-
spiracy to restrain or monopolize in
terstate commerce in violation of the
antitrust act. Defendants have been
convicted not upon direct charges of
injury to interstate commerce or Of
interference with persons engaged In
that commerce, but of violations of
certain provisions Of the live poultry
code and Of conspiracy to commit
these violations. Interstate commerce
Is brought in only upon the charge
that violations of these provisions-as
to hours and wages of employees and
local saleS-"affected" interstate COM
merce.
Affect Distinction
Principle Held to Be Clear.
In determining how far the Federal
Government may 60 In controlling In
trastate transactions upon the ground
that they affect" interstate commerce,
there is a necessary and well-estab-
lished distinction between direct and
indirect effects. The precise line can
be drawn only as individual cases
arise. but the distinction is clear In
principle. Direct effects are illus
trated by the railroad cases We have
cited. as e. g.. the effect of failure TO
use prescribed safety appliances on
railroads which are the highways of
both interstate and intrsstate COM
merce, injury to an employe engaged
In interstate transportation by the
negligence of an employe engaged in
an intrastate movement, the fixing of
rates for lntraState transportation
which unjustly discriminate against
interstate commerce. But where the
effect OF intrastate transa ctions upon
interstate commerce Is merely indi-
rect, such transactions remain within
the domain of State power. If the
commerce clause were construed to
reach all enterprises and transactions
which could be said to have an in
direct effect upon interstate commerce,
the Federal authority would embrace
practically all the activities OF the
people and the authority of the State
over its domestic concerns would exist
only by sufferance Of the Federal Gov
eminent. Indeed, on such a theory
even the development OF the States
commercial facilities would be subject
to Federal control. As We said in the
Minnesota Rate Cases, 23O U. S. 1852
40: In the intimacy of commercial
relations, much that Is done in the
superintendent of local matters NAV
have an indirect bearing upon inter-
state commerce. The development of
local resources and the extension of
local facilities may have a very ir1por-
tant effect upon communities less fa-
Vored and to an appreciable degree
after the course Of trade. The free
dom OF local trade may stimulate in
terstate commerce, while restrictive
measures within the police power of
the State enacted exclusively with re-
spect to internal business. as distin-
guished from interstate traffic. may In
their reflex or indirect influence d.
mlnish the latter and reduce the vol
ume OF articles transported into or
out of the State" See also Kidd VS.
Pearson, 128 U. S. /, 81; Heisler VS..
Thomas Colliery Co., 260 U. 8. 245,
25s, 26O.
The distinction between direct and
indirect aToPfc ho ala
nized in the application of the anti
trust act. Where combination or
conspiracy Is formed, with the intent
to restrain interstate commerce or to
monopolize any part of it, the viola
ton of the statute is clear. Coronado
Coal Co. VS.. United Mine Workers, 26s
U. S. 295, $40. But where that intent
is absent. and the objectives are linn
tied to intrastate activities. the fact
that there may be an indirect effect
upon interstate commerce does not
subject the parties to the Federal
statute, notwithstanding its broad pro-
vision. This principle has frequently
been applied in litigation growing out
Of labor disputes. United Mine Work
ers vs.. Coronado Coal Co., 259 u, S,
344. 4lo. All: United Leather Work
ers VS.. Herkert. 265 U. S. 457, 464-
4o7 Industrial Association VS.. United
States, 268 U. S. 81, 81; Levering d.
Garrieues Co. VS.. Morrin, 2s9 U. s.
l03, l07. 108. In the case last cited
We quoted with approval the RUS that
had been stated and applied in Indus
trial Association VS.. United States.
supra, after review of the decisions. as
follows: The alleged conspiracy and
the acts here complained of, spent
their intended and direct force upon
local situation-for building is as
essentially local as mining. manu-
featuring or growing crops-and if, by
resulting diminution of the COM
mercial demand, interstate trade was
curtailed either generally or in specific
instances, that was a fortuitous con-
sequence so remote and indirect as
plainly to cause it to fall outside the
reach of the Sherman act"
Complete Capitalization
OF Government Is Involved.
While these decisions related to the
application of the Federal statute, and
not to its constitutional validity, the
distinction between direct and In
direct effects of intrastate trans
actions upon interstate commerce
must be recognized as a fundamental
one, essential to the maintenance Of
our constitutional system. Otherwise.
as We have said, there would be vir-
tually no limit to the Federal power
and for all practical purposes We
should have a completely centralized
government. We must consider the
provisions here in question in the light
of this distinction.
The question of chief importance re-
lates to the provisions of the code as
to the hours and wages of those en-
ployed In defendants slaughter house
markets. 1t is plain that these re-
quirements are imposed in order to
govern the details of defendants
management of their local business,
The persons employed in slaughterinH
and selling in local trade are not en-
ployed in interstate commerce. Their
hours and wages have no direct rela-
tiOn tn Interstate coy,,voarra Tan