Source: https://www.law.cornell.edu/supremecourt/text/195/27
Timestamp: 2019-04-21 12:18:05+00:00

Document:
Where a manufacturer of oleomargarine uses as an ingredient butter artificially colored, he thereby gives to the manufactured product artificial [p28] coloration within the meaning of the Oleomargarine Act a amended in 1902, and the product is subject to taxation at the rate of ten cent per pound.
the following ingredients and none other, in these proportions: oleo oil, 20 pounds; natural lard, 30 pounds; creamery butter, 50 pounds; milk and cream, 30 pounds; common salt, 7 pounds.
Whilst butter made from pure milk and cream in the spring season was of a deep yellow color, such butter when made at all other seasons was of a pale yellow; that the taste of consumers of butter in the United States required all butter to possess the deep color naturally belonging to butter made in the spring season, and hence it had come to pass that substantially all butter manufactured for sale in the United States, not made in the spring season and not naturally of a deep yellow, was colored artificially so as to cause it to have the deep yellow of spring butter. It was alleged that this deep yellow coloration of natural butter was universally produced by the use of either Wells-Richardson's compound or some other coloring ingredient, which did not change the taste of the butter, none of which were injurious to health. Oleomargarine, it was alleged, derived its chief value as an article of food as a substitute for butter, and that growing out of the taste of the consumers, unless the oleomargarine, which was naturally white, could be colored yellow to present the appearance of butter artificially colored, there was no demand for it, and its manufacture and sale would be commercially impossible. It was then averred that to impose upon the colored oleomargarine a tax of ten cents per pound would burden it with such a charge as to render it impossible to make and sell it in competition with butter, and therefore the result of imposing a tax of ten cents a pound on oleomargarine when artificially colored would destroy the oleomargarine industry. From these averments it was charged that, if the law imposed the tax of ten cents upon the oleomargarine in question the statute was repugnant [p30] to the Constitution because it deprived the defendant of his property without due process of law; because the levy of such a burden was beyond the constitutional power of Congress, since it was an unwarranted interference by Congress "with the police powers reserved to the several States and to the people of the United States by the Constitution of the United States;" and further, that said acts of Congress were repugnant to the Constitution, since they finally lodged in an executive officer the power to determine what constituted artificial coloration of oleomargarine, and therefore invested such officer with judicial authority; and, finally, because the attempt by Congress to levy a tax at the rate of ten cents a pound arbitrarily discriminated against oleomargarine in favor of butter, to the extent of destroying the oleomargarine industry for the benefit of the butter industry, and was, therefore, violative of "those fundamental principles of equality and justice which are inherent in the Constitution of the United States."
That for the purposes of this act, the word "butter" shall be understood to mean the food product usually known as butter, and which is made exclusively from milk or cream, or both, with or without common salt, and with or without additional coloring matter.
That, for the purposes of this act, certain manufactured substances, certain extracts, and certain mixtures and compounds, including such mixtures and compounds with butter, shall be known and designated as "oleomargarine," namely: All substances heretofore known as oleomargarine, oleo, oleomargarine-oil, butterine, lardine, suine, and neutral; all mixtures and compounds of oleomargarine, oleo, oleomargarine-oil, butterine, lardine, suine, and neutral; all lard extracts and tallow extracts, and all mixtures and compounds of tallow, beef-fat, suet, lard, lard-oil, vegetable-oil and annotto, and other coloring matter, intestinal fat, and offal fat made in imitation or semblance of butter, or when so made, calculated or intended to be sold as butter or for butter.
That upon oleomargarine which shall be manufactured and sold, or removed for consumption or use, there shall be assessed and collected a tax of two cents per pound, to be paid by the manufacturer thereof; . . . The tax levied by this section shall be represented by coupon stamps and the provisions of existing laws governing the engraving, issue, sale, accountability, effacement, and destruction of stamps relating to tobacco and snuff, as far as applicable, are hereby made to apply to stamps provided for by this section.
An act to make oleomargarine and other imitation dairy products subject to the laws of any State or Territory or the District of Columbia into which they are transported, and to change the tax on oleomargarine, and to impose a tax, provide for the inspection and regulate the manufacture and sale of certain dairy products, and to amend an act entitled "An act defining butter, also imposing a tax upon and regulating the manufacture, sale, importation and exportation of oleomargarine," approved August second, eighteen hundred and eighty-six.
-- oleomargarine, butterine, imitation, process, renovated, or adulterated butter, or imitation cheese, or any substance in the semblance of butter or cheese, not the usual product of the dairy and not made exclusively of pure and unadulterated milk or cream, transported into any State or Territory [p45] or the District of Columbia, and remaining therein for use, consumption, sale or storage therein, shall, upon the arrival within the limits of such State or Territory or the District of Columbia, be subject to the operation and effect of the laws of such State or Territory or the District of Columbia . . . to the same extent and in the same manner as though such article or substances had been produced in such State or Territory or the District of Columbia, and shall not be exempt therefrom by reason of being introduced therein in original packages or otherwise.
Provided, When oleomargarine is free from artificial coloration that causes it to look like butter of any shade of yellow, said tax shall be one-fourth of one cent per pound. The tax levied by this section shall be represented by coupon stamps, and the provisions of existing laws governing the engraving, issue, sale, accountability, effacement and destruction of stamps relating to tobacco and snuff, as far as applicable, are hereby made to apply to stamps provided for by this section.
The District Court erred in sustaining the demurrer of the United States to the answer of plaintiff in error (defendant below).
(a) The act deprives the defendant of his property without due process of law.
(b) The act is an unwarranted encroachment upon and an interference with the police powers reserved to the several States and to the people of the United States.
(c) The act so arbitrarily discriminates against oleomargarine in favor of butter as to destroy the oleomargarine industry for the benefit of the butter industry in the United States, and is thus repugnant to those fundamental principles which are inherent in the Constitution of the United States.
The District Court erred in holding, if said act be not in contravention of the Constitution of the United States, that oleomargarine, which contains no artificial coloration than that imparted to it by the use of butter which itself contains coloring matter and which therefore causes said oleomargarine to look like butter of a shade of yellow, is subject to a tax of ten cents per pound instead of a tax of one-fourth of one cent per pound.
It is to be observed that, in the errors thus assigned, no reference is made to the contention in the answer that the acts of Congress were void because conferring upon administrative officers the power to finally decide what constituted artificial coloration, such contention therefore may be put out of view. The errors relied upon embrace not only the contention that the act of Congress imposing the tax is repugnant to the Constitution, but also that the penalty was wrongfully enforced, because the one-quarter of a cent per pound which had been [p47] paid on the oleomargarine was the only tax to which it was liable under the act of Congress when rightly construed. As the presence of the constitutional question imposes upon us the duty of considering also the construction of the statute, we shall invert the order in which the errors have been assigned, and come to consider first whether the act of Congress, as properly construed, required on the oleomargarine in question a tax of ten cents a pound, and second, if it did, whether such act is repugnant to the Constitution of the United States.
Provided, When oleomargarine is free from artificial coloration that causes it to look like butter of any shade of yellow, such tax shall be one-fourth of one cent per pound.
As it was admitted that the oleomargarine was of a shade of yellow causing it to look like butter, and as it was also admitted that this shade of yellow had been imparted by an artificial coloring matter used to color the butter which formed one of the ingredients from which the oleomargarine was manufactured, it results, if the text of the statute be applied, that the oleomargarine was not within the proviso, because it was not free from artificial coloring matter causing it to look like butter. This necessarily follows, since the right to enjoy the lower rate of tax is made by the proviso to depend upon whether, as a matter of fact, the oleomargarine was free from artificial coloring matter, and not upon the mere method adopted for imparting the artificial color. As the oleomargarine in question was, in fact, not free from artificial coloration, [p48] we think that a construction which would take it out of the general rule imposing the ten cent tax upon all oleomargarine and bring it within the exception embracing only oleomargarine free from artificial coloration would be not an interpretation of the statute, but a disregard of its unambiguous provisions.
Provided, when oleomargarine is free from coloration or ingredient that causes it to look like butter of any shade of yellow, said tax shall be one-fourth of one cent per pound.
By the amendment, the word ingredient was stricken out, thus leaving the proviso in the form in which it was enacted. The proposition is that the elimination of the word "ingredient" compels to the conclusion that, wherever artificial coloration in the finished product of oleomargarine was produced by artificial coloration used in an authorized ingredient, that such coloration was not artificial within the statute. But this disregards the fact that butter, both when artificially colored and when not so colored, was made an authorized ingredient of oleomargarine. If then the word "ingredient" had not been stricken out, it might have given rise to the contention that the imparting of a yellow color to the finished product of oleomargarine by the use in its manufacture of spring butter of a natural yellow color would have caused the product oleomargarine to be artificially colored within the statute. As the manufacturer of oleomargarine was permitted to use either butter not artificially colored or butter so colored, the effect of striking out the word "ingredient" operated simply to render it certain that the finished product, even although of a yellow color, would be within the proviso where the color was imparted by an authorized ingredient not artificially colored. This overthrows the contention that the finished product, when not free from artificial coloration, must be treated as free from such coloration because the color was derived from an artificially colored though authorized ingredient. We think, whilst the statute recognized the right of a manufacturer to use any or all of the authorized ingredients so as to make oleomargarine, and also authorized as one of the ingredients butter artificially colored, if the manufacturer elected to use such ingredient last mentioned, and thereby gave to [p50] his manufactured product artificial coloration, such product so colored, although being oleomargarine, was not within the exception created by the proviso, and therefore came under the general rule subjecting oleomargarine to the tax of ten cents a pound.
sells, vends or furnishes oleomargarine for the use and consumption of others, except to his own family table, without compensation, who shall add to or mix with such oleomargarine any artificial coloration, . . . shall also be held to be a manufacturer of oleomargarine. . . .
The act before us is, on its face, an act for levying taxes, and although it may operate in so doing to prevent deception in the sale of oleomargarine as and for butter, its primary object must be assumed to be the raising of revenue.
(b) The power to regulate the manufacture and sale of oleomargarine being solely reserved to the several States, it follows that the acts in question, enacted by Congress for the purpose of suppressing the manufacture and sale of oleomargarine, [p52] when artificially colored, are void because usurping the reserved power of the States, and therefore exerting an authority not delegated to Congress by the Constitution.
(e) Admitting that the power to tax, as delegated to Congress by the Constitution as originally adopted, was subject to no limitation except as expressed in that instrument, the amendments to the Constitution, it is urged, have imposed limitations on the taxing power not expressed in the original Constitution. Under this assumption, it is insisted that the acts in question are void because the burdens which they impose are repugnant to both the Fifth and Tenth Amendments. To the Fifth Amendment, because the amount of the tax is so out of proportion to the value of the property taxed as to destroy that property, and thus amount to a taking [p53] thereof without due process of law. To the Tenth Amendment, because the necessary operation and effect of the acts is to destroy the oleomargarine industry and thus exert a power not delegated to Congress, but reserved to the several States.
Whilst, as a result of our written constitution, it is axiomatic that the judicial department of the government is charged with the solemn duty of enforcing the Constitution, [p54] and therefore, in cases properly presented, of determining whether a given manifestation of authority has exceeded the power conferred by that instrument, no instance is afforded from the foundation of the government where an act which was within a power conferred was declared to be repugnant to the Constitution because it appeared to the judicial mind that the particular exertion of constitutional power was either unwise or unjust. To announce such a principle would amount to declaring that, in our constitutional system, the judiciary was not only charged with the duty of upholding the Constitution, but also with the responsibility of correcting every possible abuse arising from the exercise by the other departments of their conceded authority. So to hold would be to overthrow the entire distinction between the legislative, judicial and executive departments of the government upon which our system is founded, and would be a mere act of judicial usurpation.
It is believed to be one of the chief merits of the American system of written constitutional law that all the powers intrusted to the government, whether State or National, are divided into the three grand departments, the executive, the legislative, and the judicial. That the functions appropriate to each of these branches of government shall be vested in a separate body of public servants, and that the perfection of the system requires that the lines which separate and divide these departments shall be broadly and clearly defined. It is also essential to the successful working of this system that the persons intrusted with power in anyone of these branches shall not be permitted to encroach upon the powers confided to others, but that each shall by the law of its creation be limited to the exercise of the powers appropriate to its own department, and no other.
as in many other instances, as that, for example, of declaring war, the sole restraints on which they have relied, to secure them from its abuse. They are the restraints on which the people must often rely solely in all representative governments.
The decisions of this court from the beginning lend no support whatever to the assumption that the judiciary may restrain the exercise of lawful power on the assumption that a wrongful purpose or motive has caused the power to be exerted. As we have previously said, from the beginning, no case can be found announcing such a doctrine, and, on the contrary, the doctrine of a number of cases is inconsistent with its existence. As quite recently pointed out by this court in Knowlton v. Moore, 178 U.S. 41, 60, the often quoted statement of Chief Justice Marshall in McCulloch v. Maryland that the power to tax is the power to destroy affords no support whatever to the proposition that, where there is a lawful power to impose a tax, its imposition may be treated as without the power because of the destructive effect of the exertion of the authority. And this view was clearly pointed out by Mr. Chief Justice Marshall in the passage from Gibbons v. Ogden, 9 Wheat. 1, which was repeated in the passage from the opinion in Champion v. Ames, previously cited.
Congress may prescribe the basis, fix the rates, and require payment as it may deem proper. Within the limits of the Constitution, it is supreme in its action. No power of supervision or control is lodged in either of the other departments of the government.
With these exceptions, the exercise of the power is, in all respects, unfettered.
In Austin v. The Aldermen, 7 Wall. 694, it was again declared (p. 699) that "the right of taxation, where it exists, is necessarily unlimited in its nature. It carries with it inherently the power to embarrass and destroy."
The judicial department cannot prescribe to the legislative department limitations upon the exercise of its acknowledged powers. The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected.
In Knowlton v. Moore, 178 U.S. 41, the cases which have been referred to were approvingly cited, and the doctrine which they expressed was restated.
The power of Congress in this direction is unlimited. It does not come within the province of this court to consider why agreements to sell shall be subject to the stamp duty and agreements to buy not. It is enough that Congress, in this legislation, has imposed a stamp duty upon the one, and not upon the other.
This principle is pertinent only when there is no power to tax a particular subject, and has no relation to a case where such right exists. In other words, the power to destroy which may be the consequence of taxation is a reason why the right to tax should be confined to subjects which may be lawfully embraced therein, even although it happens that, in some particular instance, no great harm may be caused by the exercise of the taxing authority as to a subject which is beyond its scope. But this reasoning has no application to a lawful tax, for if it had, there would be an end of all taxation; that is to say, if a lawful tax can be defeated because the power which is manifested by its imposition may, when further exercised, be destructive, it would follow that every lawful tax would become unlawful, and therefore no taxation whatever could be levied.
The judicial department cannot prescribe to the legislative department limitations upon the exercise of its acknowledged powers. The power to tax may be exercised oppressively upon persons; but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected.
The right of Congress to tax within its delegated power being unrestrained, except as limited by the Constitution, it was within the authority conferred on Congress to select the objects upon which an excise should be laid. It therefore follows that, in exerting its power, no want of due process of law could possibly result because that body chose to impose an excise on artificially colored oleomargarine and not upon natural butter artificially colored. The judicial power may not usurp the functions of the legislative in order to control that branch of the government in the performance of its lawful duties. This was aptly pointed out in the extract heretofore made from the opinion in Treat v. White, 11 U.S. 264.
But it is urged that artificially colored oleomargarine and artificially colored natural butter are, in substance and in effect, one and the same thing, and from this it is deduced that to lay an excise tax only on oleomargarine artificially colored, and not on butter so colored, is violative of the due process clause of the Fifth Amendment, because, as there is no possible distinction between the two, the act of Congress was a mere arbitrary imposition of an excise on the one article and not on the other, although essentially of the same class. Conceding merely for [p62] the sake of argument that the due process clause of the Fifth Amendment would avoid an exertion of the taxing power which, without any basis for classification, arbitrarily taxed one article and excluded an article of the same class, such concession would be wholly inapposite to the case in hand. The distinction between natural butter artificially colored, and oleomargarine artificially colored so as to cause it to look like butter, has been pointed out in previous adjudications of this court. Capital City Dairy Co. v. Ohio, 183 U.S. 238, and authorities there cited. Indeed, in the cases referred to, the distinction between the two products was held to be so marked, and the aptitude of oleomargarine when artificially colored to deceive the public into believing it to be butter was decided to be so great, that it was held no violation of the due process clause of the Fourteenth Amendment was occasioned by state legislation absolutely forbidding the manufacture, within the State, of oleomargarine artificially colored. As it has been thus decided that the distinction between the two products is so great as to justify the absolute prohibition of the manufacture of oleomargarine artificially colored, there is no foundation for the proposition that the difference between the two was not sufficient, under the extremest view, to justify a classification, distinguishing between them.
4. Lastly, we come to consider the argument that, even though, as a general rule, a tax of the nature of the one in question would be within the power of Congress, in this case, the tax should be held not to be within such power because of its effect. This is based on the contention that, as the tax is so large as to destroy the business of manufacturing oleomargarine artificially colored to look like butter, it thus deprives the manufacturers of that article of their freedom to engage in a lawful pursuit, and hence, irrespective of the distribution of powers made by the Constitution, the taxing laws are void because they violate those fundamental rights which it is the duty of every free government to safeguard and which, therefore, should be held to be embraced by implied [p63] though nonetheless potential guaranties, or, in any event, to be within the protection of the due process clause of the Fifth Amendment.
Such concession, however, is not controlling in this case. This follows when the nature of oleomargarine, artificially colored to look like butter, is recalled. As we have said, it has been conclusively settled by this court that the tendency of that article to deceive the public into buying it for butter is such that the States may, in the exertion of their police powers, without violating the due process clause of the Fourteenth Amendment, absolutely prohibit the manufacture of the article. It hence results that, even although it be true that the effect of the tax in question is to repress the manufacture of artificially colored oleomargarine, it cannot be said that such repression destroys rights which no free government could destroy, and therefore no ground exists to sustain the proposition that the judiciary may invoke an implied prohibition upon the theory that to do so is essential to save such rights from destruction. And the same considerations dispose of the contention based upon the due process clause of the Fifth Amendment. That provision, as we have previously said, does not withdraw or expressly limit the grant of power to tax conferred upon Congress by the Constitution. From this it follows, as we have also previously declared, that the judiciary is without authority to avoid an act of Congress exerting the taxing power, even in a case where, to the judicial mind, [p64] it seems that Congress had, in putting such power in motion, abused its lawful authority by levying a tax which was unwise or oppressive, or the result of the enforcement of which might be to indirectly affect subjects not within the powers delegated to Congress.
BURNET, Commissioner of Internal Revenue, v. BROOKS et al.
CORNELIUS K. G. BILLINGS, Plff. in Err., v. UNITED STATES.
MILLER, Collector of Internal Revenue, v. STANDARD NUT MARGARINE CO. OF FLORIDA. ROSE, Collector of Internal Revenue, v. SAME.
AUGUST CLIFF, v. UNITED STATES.
HAMILTON, Collector of Internal Revenue, v. KENTUCKY DISTILLERIES & WAREHOUSE CO. DRYFOOS et al. v. EDWARDS, Collector of Internal Revenue.
WILLIAM J. MOXLEY, a Corporation Organized and Existing under the Laws of the State of Illinois, v. HENRY L. HERTZ, Collector of Internal Revenue for the First Collection District of Illinois.
STELLA P. FLINT, as General Guardian of the Property of Samuel N. Stone, Junior, a Minor, Appt., v. STONE TRACY COMPANY et al. WYCKOFF VAN DERHOEFF, Appt., v. CONEY ISLAND & BROOKLYN RAILROAD COMPANY et al. FRANCIS L. HINE, Appt., v. HOME LIFE INSURANCE COMPANY et al. FRED W. SMITH, Appt., v. NORTHERN TRUST COMPANY, A. C. Bartlett, William A. Fuller, et al. WILLIAM H. MINER, Appt., v. CORN EXCHANGE NATIONAL BANK OF CHICAGO, Charles H. Wacker, Martin A. Ryerson, et al. CEDAR STREET COMPANY, Appt., v. PARK REALTY COMPANY. LEWIS W. JARED, Appt., v. AMERICAN MULTIGRAPH COMPANY et al. JOSEPH E. GAY, Appt., v. BALTIC MINING COMPANY et al. PERCY BRUNDAGE, Appt., v. BROADWAY REALTY COMPANY et al. PAUL LACROIX, Appt., v. MOTOR TAXIMETER CAB COMPANY et al. ARTHUR LYMAN and Arthur T. Lyman, as Trustees under the Last Will and Testament of George Baty Blake, Deceased, Appts., v. INTERBOROUGH RAPID TRANSIT COMPANY et al. GEORGE WENDELL PHILLIPS, Appt., v. FIFTY ASSOCIATES et al. OSCAR MITCHELL, Appt., v. CLARK IRON COMPANY. WILLIAM H. FLUHRER, Albert W. Durand, and Howard H. Williams, Appts. v. NEW YORK LIFE INSURANCE COMPANY. KATHERINE CARY COOK, Harriet Huntington Cook, and Ellenor Richardson Cook, by Anna H. R. Cook, Their Guardian and Next Friend, Appts., v. BOSTON WHARF COMPANY et al.
BAILEY v. DREXEL FURNITURE CO. CHILD LABOR TAX CASE.
EVANS v. GORE, Acting Collector of Internal Revenue.
BROMLEY v. McCAUGHN, Collector of Internal Revenue.
BARCLAY & CO., Inc., v. EDWARDS, Collector of Internal Revenue.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.