Document: 402 U.S. 146 91 S.Ct. 1357 28 L.Ed.2d 686 Alcides PEREZ, Petitioner,v.UNITED STATES. No. 600. Argued March 22, 1971. Decided April 26, Syllabus Petitioner was convicted of 'loan sharking' activities, i.e., unlawfully using extortionate means in collecting and attempting to collect an extension credit, violation Title II the Consumer Credit Protection Act, his conviction affirmed on appeal. He challenges constitutionality statute ground that Congress has no power control local activity loan sharking. Held: Act is within Congress' under Commerce Clause activities affecting interstate commerce findings are adequate support its conclusion sharks who use payments loans a class largely controlled by organized crime with substantially adverse effect commerce. Pp. 149—157. 426 F.2d 1073, affirmed. Albert J. Krieger, New York City, for petitioner. Sol. Gen. Erwin N. Griswold, respondent. Mr. Justice DOUGLAS delivered opinion Court. 1 The question this case whether 82 Stat. 159, 18 U.S.C. § 891 et seq. (1964 ed., Supp. V), as construed applied petitioner, permissible exercise powers Constitution. Petitioner's after trial jury sentence were Court Appeals, one judge dissenting. 1073. We granted petition writ certiorari because importance presented. 400 915, 175, 27 154. affirm judgment. 2 species commonly known sharks' which found large part 'organized crime.'1 'Extortionate credit transactions' defined those characterized or threat 'violence other criminal means' enforcement.2 There ample evidence showing petitioner shark' used violence method collection. loaned money Miranda, owner new butcher shop, making $1,000 advance be repaid installments $105 per week 14 weeks. After paying at rate six eight weeks, increased weekly payment $130. In two months Miranda asked additional $2,000 made, agreement being pay $205 week. few weeks $330. When objected, told him about customer refused ended up hospital. So paid. demands $500 paid, only advised end would need $1,000. made not suppliers; but, faced next week, he sold shop. pursued first threats Miranda's wife then telling could have castrated. did make more payments, said turning over collections people nice but put hospital if pay. Negotiations went on, finally saying $25 enough, should steal sell drugs necessary get loan, jail it better than going broken back legs. added, 'I sent you hospital, your family, any moment I want my people.' 3 arrest followed. wife, employee gave against testify call witnesses. attack starting motion dismiss indictment. 4 constitutional substantial one. 5 Two amendments bill became proposed House—one Congressman Poff Virginia, 114 Cong.Rec. 1605—1606 another McDade Pennsylvania. Id., 1609—1610. 6 House debates include long article from Times Magazine January 28, 1968, connection between crime. 1428—1431. gruesome stirring episodes related following prelude: 7 'The shark, then, indispensable 'moneymover' underworld. takes 'black' tainted derivation gambling narcotics rackets turns 'white' funneling into channels legitimate trade. so doing, exacts usurious interest doubles black-white time; and, special decrees, imposition impossible penalties, greases way underworld takeover entire businesses.' 1429. 8 objections grounds. Eckhardt Texs said: 9 'Should become law, amendment take stride Federal Government toward occupying field general law exercising police power; permit prosecution well State courts typically offense. 10 believe Alexander Hamilton, though federalist, astonished such deep entrenchment rights States performing their most fundamental function come conservative quarter House.' 1610. 11 Senator Proxmire presented Senate Conference Report approving essentially provision suggested McDade, saying: 12 'Once again these provisions raised serious questions Federal-State responsibilities. Nonetheless, problem, conferees agreed provision. Organized operates national scale. One principal sources revenue comes If we win battle must strike source give Department tools deal problem. problem simply cannot solved alone. bring play full resources Government.' 14490. 13 reaches, main, three categories problems. First, foreign deems misused, as, example, shipment stolen goods (18 §§ 2312—2315) persons been kidnaped 1201). Second, protection instrumentalities commerce, destruction aircraft 32), things thefts shipments 659). Third, It last category here concerned. Chief Marshall Gibbons v. Ogden, Wheat. 1, 195, L.Ed. 23, 15 genius character whole government seem be, action all external concerns nation, internal affect generally; completely particular State, do States, interfere, purpose executing some government. Internal may considered reserved itself.' 16 Decisions followed departed view; time United Darby, 312 100, 61 451, 85 609, Wickard Filburn, 317 111, 63 82, 87 122, broader view announced had restored. Stone wrote unanimous 1942 provide regulation price intrastate milk, sale which, competition affects structure federal latter. Wrightwood Dairy Co., 315 110, 62 523, 86 726. power, said, 'extends exertion it, them appropriate attainment end, effective execution regulate commerce.' 119, S.Ct., 526. 17 soon held wheat grown wholly home consumption constitutionally scope production because, never marketed interstate, supplied grower otherwise satisfied purchases open market.3 '* * (E)ven appellee's regarded still, whatever nature, reached exerts economic irrespective what might earlier 'direct' 'indirect." U.S., 125, 89. 19 decision sustaining prohibited employment workers 'for commerce' prescribed wages hours, properly regulated without proof sanction laid A 20 'Congress sometimes left determine Sherman Act. administrative board agency sought effect, Interstate National Labor Relations they statutory definition Trade Commission And itself present Safety Appliance Railway passing validity legislation mentioned reach power.' (Italics added.) 120—121, 460. 21 That particularly relevant involved prosecution, holding 'sufficiently definite meet demands.' 463. clearly member engages 'extortionate Congress4 description required definiteness. 22 'class activities' test employed Heart Atlanta Motel, Inc. 379 241, 348, 258, sustain requiring hotel motel accommodations Negro guests. declared "any in, hotel, motel, establishment provides lodging transient guests' se.' 247, 353. sustained. 23 '(O)ur increasingly mobile millions races traveling State; Negroes subject discrimination accommodations, having travel great distances secure same; often unable obtain upon friends overnight conditions acute require listing available guidebook. *.' 252—253, 355. 24 companion case, Katzenbach McClung, 294, 377, 290, ruled restaurant same Civil Rights 'if serves offers serve travelers portion food moved 298, 381. Apart flow restaurants, spoke restrictive exclusion restaurants Negroes. 25 '(T)here impressive array testimony direct highly This resulted, discriminatory practices prevent buying prepared served premises while trip, except isolated unkempt unsatisfactory unpleasant conditions. obviously discourages obstructs can hardly eating. Likewise, deterred professional, skilled, moving areas where occurred thereby caused industry reluctant establish there.' 300, 26 emphasis our position measure, acknowledged appropriately 'total incidence' practice 301, 382. Where 'to excise, trivial, individual instances' class. Maryland Wirtz, 392 183, 193, 88 2017, 2022, 1020, 1029. Extortionate transactions, purely intrastate, judgment analogous situation, Holmes, speaking Court, '(W)hen order evil embrace precise thing prevented so.' Westfall 274 256, 259, 47 629, 71 1036, 1037. officer state bank Reserve System issued fraudulent certificate deposit paid funds bank. argued there loss Bank. Holmes replied, 'But every fraud like before us weakens therefore System.' 629. setting tie-in 29 quite ground. Amendment House, already noted, ultimately adopted. As stated grew out 'profound study crime, ramifications implications' undertaken Congressmen 1966—1967. 14391. results included report, Urban Poor Crime, submitted August 29, 1967, revealed $350 million year America's poor through loan-sharking alone.' See 113 24460—24464. also relied Challenge Crime Free Society, President's Law Enforcement Administration (February 1967) sharking 'the second largest crime,' id., 189, obtains businesses. 190. 30 knew York's Report, An Investigation Loan Shark Racket (1965). report shows shark racket syndicates, either directly partnership independent operators; instances echelons, top 'bosses' providing 'lieutenants,' turn distribute 'operators' actual loans; bookmakers, dealers, racketeers; victims classes, rich poor, businessmen laborers; coerced commission acts repay obtained businesses, including securities brokerages banks exploited; '(e)ven transactions character, nevertheless commerce.'5 31 Shortly adopted Committee hearings members House. 14390. 32 essence reports summarized embodied formal congressional findings. They knowledge lucrative revenue, pockets people, coerces crimes property, causes racketeers generally 14391, 14392, 14395, 14396. 33 detail economic, financial, social Congress. infer particularized legislate. relate history answer impassioned plea traditionally activity. appears, instead, holds guns heads alike syphons numerous localities finance operations. 34 Affirmed. 35 STEWART, 36 surely enact laws protect prohibit misuse facilities demonstrably But man movement, facts conduct affected think Framers Constitution intended define prosecute enactment laws. 37 would, view, able least say rationally concluded attributes distinguish respect enough characteristics, setting. circumstance impact business distinguishing attribute, suffers almost activity, shoplifting streets. 38 Because am discern rational distinction escape beyond enact. local, Ninth Tenth Amendments. Section 201(a) contains Congress: '(1) international character. Its involve many billions dollars each year. responsible murders, willful injuries person corruption officials, terrorization countless citizens. income generated transactions. '(2) use, express implicit cause harm person, reputation, property enforcing repayment. Among factors rendered past efforts ineffective existence exclusionary rules stricter rights. '(3) carried extent Even V) part: '(6) understanding creditor debtor delay repayment failure result person. '(7) involves person.' followed: Beckman Mall, 597, 199, 488; Bender Wickard, 319 731, 1326, 1693; Haley, 358 644, 79 537, 567; Ohio, 385 9, 66, 8. n. 2, supra.

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