NLRB v. Jones & Laughlin Steel Corp. (301 U.S. 1)

Transcript of Oral Argument on Wednesday, February 10, 1937

MR. MADDEN: May it please the Court, in January 1936, a charge was filed with the regional office of the National Labor Relations Board at Pittsburgh by the Amalgamated Association of Iron, Steel, and Tin Workers, Beaver Valley Local Lodge.

I shall hereafter call this lodge the union.

This charge alleged that the respondent herein, the Jones & Laughlin Steel Corporation, had violated section 8, subsections 1 and 3, of the National Labor Relations Act, in that it had interfered with restrained, and coerced its employees in their right to self-organization, and in that it had discharged a number of its employees because of the their union membership and activity.

The Board, after investigation, issued a complaint against the respondent alleging these same violations.

The respondent filed a special appearance and answer, in which it denied the reasons alleged by the Board for the dismissals, although it admitted the dismissals, and in which it raised a number of constitutional objections to the act and to the act’s application to this respondent.

The Board held the hearing and the respondent participated in that hearing only during the stage when evidence was being introduced as to the nature of the respondent's business.

When that evidence was completed the respondent made a motion to dismiss the complaint upon the ground that the evidence had shown that the Board has no jurisdiction and that the act had no application to the respondent.

That motion being denied, respondent withdrew and took no further part in the hearing.

The hearing continued, and the Board made a decision and order to the effect that the respondent had violated these sections of the act by interfering with, restraining, and coercing its employees, as charged in the complaint, and that as to 10 employees it had discharged them because of their union membership and activity.

The Board further found that, due to the nature of the respondent's business and of the other facts in the case, these unfair labor practices were unfair labor practices affecting commerce within the meaning of the National Labor Relations Act.

The Board then filed its petition, pursuant to section 10 (e) of the statue, with the Circuit Court of Appeals for the Fifth Circuit the circuit , the circuit in which the respondent does business asking that court to issue its order enforcing the order of the Board.

That court denied the Board's petition upon the ground that the statute was not applicable to this respondent in this situation.

The court later denied the Board's petition for a rehearing.

The Board petitioned this Court for Certiorari.

The questions presented in this case are whether the National Labor Relations Act is applicable or can be applicable to this respondent in this situation under the provisions of the commerce clause of the Constitution, whether the act is in violation of the fifth amendment as a deprivation of the respondent's liberty or property without due process of law, whether it is in violation of the seventh amendment.

as denying the respondent the right or trial by jury, and the first amendment as denying the respondent the right of free speech, and as to whether the respondent can bring into question other provisions of the act than those which have been applied to it, and if so, whether those other provisions are separable.

The respondent is the fourth largest company in the steel industry in the United States.

Its assets consist of some $180,000,000.

It is, according to its own statement, filed with the Securities and Exchange Commission, completely integrated, owning and operating iron–ore mines, transport boats, limestone and coal mines, a railroad, the mill at Aliquippa where the events in question in this case took place.

These things will be further described in the statement.

The plant of the respondent here in question is located at Aliquippa, Pa.

That is on the Ohio River about 12 miles below Pittsburgh.

The plant is the large plant, covers about 475 acres, and extends up and down the Ohio River about 5 miles.

It is one of the two plants of the respondent, the other one being of about the same size and being located at Pittsburgh.

The Aliquippa plant employs about 10,000 employees.

It is located at a strategic commercial location near the junction of the Ohio and the Monongahela Rivers and with access to the Pittsburgh & Lake Erie Railroad, which is a part of the New York Central Railroad System.

There is in the plant itself and wholly owned by the respondent a railroad consisting of some 43 miles of track age, together with the locomotives and cars, and having about 450 employees.

The respondent obtains its iron ore from mines owned by itself in Michigan and Minnesota.

Its other principal raw materials are limestone and coal for coking purpose.

The iron ore is brought from the mines by industrial railroads which depend almost entirely upon this ore business to the upper lake ports of the Great Lake.

It is from those ports transported by special ore carriers, some of which are owned by the respondent itself and some of which are apparently common carriers, to Ashtabula, Ohio, where the respondent maintains docks.

There the ore is unloaded, mostly directly in to railroad cars, for transportation to Aliquippa.

Sometimes, depending upon the needs of the situation, some ore is stored at the docks at Ashtabula.

The coal is obtained from the respondent’s coal mines, which are located up the Monongahela in Washington County, Pa.

, which are there operated by a wholly owned subsidiary of the respondent.

The coal is transported from those mines in the respondent’s own equipment, barges and towboats, to the river adjacent to the Aliquippa plant.

Respondent’s limestone is obtained from its quarries in West Virginia principally.

It also has quarries in Pennsylvania.

It is transported by rail to the respondent’s plant at Aliquippa.

In October 1935, which was a representative month, 6,222 carloads of materials came into the respondent’s Aliquippa plants.

Something more than 200 carloads per day.

Ninety-seven percent of the business done by the P. & L. E. Railroad at the Aliquippa station is attributable to this respondent.

The respondent is the largest of that railroad anywhere on its line.

The incoming shipments are unloaded by the respondent’s own employees and are handled continuously through this steel mill.

Outgoing shipments take place from practically every stage of the process.

In other words, semi finished materials and materials in other stages of finish down to the ultimate product are loaded out and shipped out at all stages.

Each department of the mill has its own shipping department.

Blast furnaces are the first step in the process, and there, by the mixture of iron ore, coke, and limestone, the pig iron is made.

The pig iron emerges and is never allowed to cool, but it is transferred immediately to the Bessemer converters or the open-hearth furnaces for the making of steel.

Out of these furnaces the steel comes in molten state is poured into ingot molds, but there is again never allowed to cool, but goes immediately into the soaking pit, where it is given a uniform temperature for the purposes of rolling, and from there it goes into the various rolling processes, the first process being either slabs or blooms, and some of those are shipped away, loaded on cars and shipped away to customers from that point.

The rest of it is further processed, some of it completely processed into pipe or wire or nails.

Practically all of its business is done on customers' orders, the respondent manufacturing practically nothing for stock.

Ordinarily customers' orders ere filled within a week after they are received.

Respondent itself states that 100 industries look to Jones & Laughlin for steel.

Part of its products are shipped out by rail, some 60 cars a day of steel and other products going out of the mill.

Respondent maintains warehouses in the large cities along the Ohio and Mississippi Rivers, also in Chicago, Detroit, and Long Island rail to the customers.

In two of these warehouses are fabricating shops for further processing of the materials.

Respondent’s sales are throughout the United States and many foreign countries, and are arranged through 20 sales offices maintained by the respondent in the principal cities throughout the United States.

These sales offices, as I understand it, arrange the orders, which then come into the plant, and the shipments are made from the plant or from the warehouses which I have mentioned.

Sales are made at a delivered price.

Here we have then a Nation-wide enterprise drawing materials from a number of States, transporting these materials to a considerable extent in its own equipment, processing them, again transporting and marketing the products, marketing the products through its own organization.

MR. JUSTICE SUTHERLAND: I may have misunderstood you, but I gathered from your statement that they are not engaged in transporting any but their own products?

MR. MADDEN: That is right, yes, Your Honor.

They are not engaged in transporting others.

MR. JUSTICE SUTHERLAND: These materials are to be employed in manufacture?

MR. MADDEN: To a considerable extent.

There will be some further statement about that.

Now, consider for a moment the steel industry as a whole, of which this respondent is a very considerable unit.

The whole industry shows on a larger scale substantially the same pattern.

Nearly all of the ore, 85 percent of the ore, which is used in the steel mills of this country, is obtained from Michigan and Minnesota.

Most of the steel is manufactured in Pennsylvania, Ohio, Indiana, and Illinois, some in Alabama.

None of those States except Pennsylvania and Alabama have supplies of coking coal.

So that there is this constant movement of ore from Michigan and Minnesota over the Great direction of the coal for coking purposes from the western Pennsylvania area to the mill, and again the movement of limestone of the same kind.

And out of all of the mills the same sort of current of commerce occurs in the products of the mill.

The entire steel industry involves an investment of some five billion dollars, and in 1934 used some 50,000,000 tons of material.

I may say that the respondent itself over a period of 10 years prior to 1930 averages 3½ million tons of iron ore per year.

The steel mills are located on the cheap water transportation of the Ohio River and of the Great Lakes.

Whatever migration of the steel industry there has been in recent years has been along the path of this current of commerce, moving away from the Pittsburgh area and closer to the sources of supply of the ore, along the Great Lakes.

The production line of the automobile industry now begins back in the steel mills, and we are in accord with any effort to keep it running more steadily through the years.

It seems to me that the pattern of commerce which we have here fits admirably the language which this Court used in the case of Stafford v. Wallace (235 U. S. 495), when it said: The application of the commerce clause of the Constitution in the swift case was the result of the natural development of interstate commerce under modern conditions.

It was the inevitable recognition of the great central fact that such streams of commerce from one part of the country to another which are ever flowing are in their very essence the commerce among the States and with foreign nations which historically it was one of the chief purposes of the Constitution to bring under national protection and control.

I observe that in this statement not only does this Court suggest that there is a right in the Congress of the United States to protect these great streams of commerce, but there is a duty, it having been one of the principal purposes for the creation of the Nation out of the group of separate States for it to do just these things.

The Beaver Valley Lodge of the Amalgamated, which we call the union, was chattered in 1934, immediately the respondent countered by opposition.

It set its company police upon the leaders of the union.

It followed them about.

It followed them even to neighboring towns when they went there to meet visiting organizers.

An employee of the company stationed himself at the house of the principal mover in the union activity, taking down the names of all who visited the house and questioning some of them as they came away.

The union officers, and higher officers of the union, national officers of the union, were vilified.

The employees were warned as to what would be the consequences of the growth of the union or of their union membership.

One employee as least was warned that he would not longer be able to let his rent remain in arrears if he joined the union, and that his credit in the local stores would be destroyed.

Over a comparatively short period 10 employees of the respondent were dismissed for what the Board found to be union activities.

In each, of course, the supervisor gave on the occasion of the dismissal some other reason for the dismissal.

His reasons are shockingly trivial, one man of many years standing having been dismissed for failure to close a door, another for leaving his keys lying on the desk near the crane.

The whole thing is in a rather familiar pattern.

At the first slight infraction of rules the dismissal comes, for reasons which, I think, Your Honor would agree no enlightened employer would really dismiss his employees.

The picture is very much the picture which the district court had in the Texas & New Orleans case, when the men involved there were dismissed, the company in each case giving reasons for the dismissal which the court simply did not believe were the true reasons for the dismissal.

The Board, as I said, ordered the respondent to-I should have said with reference to your question that these workers who were dismissed were engaged in various duty about the plant, some of them operating cranes which in general moved the materials forward from one department of the plant to the other, but which were also used to load materials out of the plant (if they were sold at that stage of the process), some inspecting motors, some driving tractors, one at least operating a nail machine.

The Board, as I said, ordered the respondent to cease and desist and reinstate these men, and that order is the subject of this litigation.

The statue and the Board’s order were based upon the commerce clause of the Constitution, and so the question arises what had the respondent’s conduct to do with commerce among the several Sates?

In the first place, Congress has found, and history and experience show beyond question, that the conduct which the respondent was found by the Board to be guilty of in this case does produce industrial strife.

There certainly can be no serious argument about that question.

If you do these things to your employees what is the expected reaction?

We submit that in the absence of a law such as this the employees have one of two choices: They can either lie down give up their ambition to protect themselves by unionization and collective bargaining; or, on the other hand, they can strike.

Now, this Court in American Steel Foundries V. Tri-city Central Trades Council (257 U. S. 184), which has been referred to many times in this case, has said that they have a right to have their union and that they have a right to organize for the purpose of protecting themselves, and if the employer does interfere with that right trouble may be expected.

These employees did not resort to either one of those alternatives.

They did not lie down and they did not strike.

They brought their case to an agency of the Government which they thought had jurisdiction to right their wrongs in an orderly fashion.

The problem for the Board then was not whether this kind of thing tended to produce industrial disturbance.

The Congress had settled that, and had settled it in accordance with all history and all experience.

The question for the Board was rather, Does this conduct of the respondent in this situation affect commerce within the meaning of the Constitution?

If is does, it affects it within the meaning of this statute and Board has a right to apply the statute to the situation.

I need not go into the language of the statute again on this point.

That has already been covered.

But we argue it was the evident intent of the congress; Congress had no apologies for this law; it thought that it was a good law; it thought that it would bring, or tend to bring industrial peace, and it wanted the application of the law to be as broad as it constitutionally can be made, and it used this language that has been referred to, that in situation affecting commerce the law shall be applicable.

Obviously, in the administration of the law the Board must look to the decisions and opinion of this Court with reference to the situations to which it could constitutionally apply the law, finding exact precedents where it could, drawing analogies which seemed to it to be fair.

That, then, has been the Board’s source of authority for the position which it took in this case.

Now, an examination of the precedents of this Court with reference to the power of the National Government in the relation to industrial strife, the difficulty with reference to the precedents is this, that in the past, except for the experience in the railway industry, the National Government’s dealing with industrial strife has been only on a penal or control basis; that is, on the basis of going in and attempting to do something about it after the strife had broken out.

This statute, of course, is obviously a preventive statute.

It is entirely possible that in this case it has prevented labor troubles by allowing the men to bring their case to the Board and this Court.

Counsel for the respondent say in effect the National Government being a government of limited powers, it cannot act until it has a specific situation to act upon.

Again and again in respondent’s brief this is no industrial strife.

There was no strike in our plant.

” We think that this idea would prevent the National Government completely from extending any sort of preventive remedy in the direction of industrial strife, and we think that this is a counsel of despair, which is neither reasonable, practicable, nor in accord with the precedents of this Court.

We have no doubt that to whatever extent the National Government could constitutionally deal with industrial strife after that strife had broken out, it has the power to prevent such strife if there is a reasonable likelihood of strife of the sort which it could deal with after such strife had broken out.

The history of the Packers and Stockyards Act is here as an example.

After many years of effort by the National Government to deal with particular conspiracies after the conspiracies had been made, the Government went into the preventive business and established somewhat meticulous regulations for the operation of all these stockyards and wiped out the whole difficulty in one act.

(a) Where such strife involves an intent to affect commerce.

(b) Where such strife has the necessary effect of substantially burdening commerce.

(c) Where such strife is an example of constantly recurring industrial strife which is a burden upon interstate commerce.

In this case there is a very considerable probability of a strike with intent to affect commerce.

The Solicitor General in going to deal with that situation, and I pass over it.

But the National Government’s power is not limited to cases of intentional strikes.

If that be true, that would be a most remarkable limitation upon the power of the Congress to deal effectively with the Nation’s commerce.

It would mean this, that if two sets of persons under exactly identical physical situations did exactly the same acts with exactly the same effects upon interstate commerce, the power of the National Government would reach to one set of those persons but would not reach at all to the others.

This Court has laid down no such doctrine.

On the contrary, in the first Coronado Coal case (259 U. S. 344), this Court said: Coal mining in not interstate commerce and obstruction of coal mining though it may prevent coal from going into interstate commerce, is not a restraint of that commerce unless the obstruction to mining in intended to restrain commerce in it or has necessarily such a direct, material and substantial effect to restrain it that the intent reasonable must be inferred.

Again, in Industrial Association v. United States (268 U. S. 64), the Court repeated with approval the same language, and again in United Leather Workers v. Herkert & Meisel Trunk Co. (265 U. S. 457) is the same language.

The respondent recognizes that “necessary effect” may be just as valid a reason for the application of the commerce power as “intent.

” On the page 91 of the respondent’s brief appears this language: If this were a proceeding against striking employees under the antitrust laws, the connection between strikes and stoppages of commerce might be legitimately urged as a reason for inferring an intent to restrain the movement of commerce, but here there is no actual or threatened strike such as the petitioner supposes to exist.

Suppose, when the circuit court of appeals decided that the Board had no jurisdiction and that this act had no application to this respondent, the workers involved in this case has said to themselves, “we thought we had three choices.

We thought we could either lie down or strike or resort to the view.

Now we have found that we have only two choices, and we choose to strike.”

This extract from the respondent’s brief which I have just read you indicates that this would be the respondent’s counter to such a strike; it would go into the Federal District Court for the Western District of Pennsylvania and file a bill in equity saying something like this: “A group of men down at our plant have entered into an agreement in restraint of commerce.

The consequences is an enormous disruption of the commerce of the Nation.

Orders cannot be filled, goods cannot be shipped, mines in Minnesota and Michigan cannot operate, boats on the Lakes are stopped, railroads have nothing to transport it.

Boats on the Lake are stopped.

Telegraph and telephone messages are coming in all the time from every State in the Union ‘Where is the steel that I ordered?

It should have been ready for shipment by this time.

A disruption of commerce which is almost inconceivable.

The petitioner there, or complainant, says, “We are entitled to an injunction against these people.

They have no right to enter into an agreement which thus disturbs the commerce of the Nation.

Our authority is the language of the Supreme Court in the Coronado case.

These men are well informed.

They must have known when they struck that this would be the effect upon commerce, and therefore the necessary intent will be inferred.

” Suppose the Court says, “On the authority of the Coronado case you seem to be entitled to your injunction, but, by the way, what caused this strike?

“Well,” these workers say, and the Labor Board found, that “the strike was caused by a rather small incident.

We discharged 10 men because they joined a union.

” The judge says, “Was that a violation of the National Labor Relations Act?

Counsel says, “It would have been, except that the National Labor Relations Act had no application to the case.

The case had nothing to do with interstate commerce.

And we have a situation which it seems to me is quite illogical, that the very thing which caused the strike, which caused it immediately and as a result of which it immediately came about, that things is held by the circuit court of appeals as having no sufficient relation to commerce so that the Federal Government can do anything about it.

Now, the consequence of such a ruling is this, that in no circumstances Can the National Government do anything about employer labor practices in these industries which ship goods in interstate commerce and as to which striking workers may be prosecuted or enjoined by the National Government under the operation of the Sherman Act.

This doctrine, then, of "necessary effect" as being the equivalent of “intent" is the doctrine of this Court.

It is plain then that this Court has not placed any spurious and crippling limitations upon the constitutional grant of power to Congress to regulate commerce.

I desire to return for the moment to a discussion of Stafford v.

Wallace (258 U. S. 495), which is an analogy the Board has resorted to in the decision of its cases.

Can there be any doubt that industrial strife in a stockyard which would stop the stream of commerce through that stockyard would be a proper subject for the cognizance of the National Government?

MR. JUSTICE VAN DEVANTER: Would you say that again, please?

MR. MADDEN: Can there be any doubt that labor trouble in a stockyard, which labor trouble stopped the flow of commerce through that stockyard, would constitutionally be a proper subject of control by the National Government?

MR. JUSTICE MCREYNOLDS: If the men in that stockyard were employed at something which may not interfere with interstate commerce, how far would you go?

MR. MADDEN: There is always, of course, in considering these problems, just as there has been when this Court considered the labor cases under the Sherman Act, not merely the constitutional question of the limitation but the question of the wisdom and practicability of it.

MR. JUSTICE MCREYNOLDS: I am asking you about the power.

Does Congress have the power to say to these men-

MR. MADDEN: I should Say that if they said to a man there, "You cannot quit your job," you would be in difficulties there with the thirteenth amendment to the Constitution.

I should say that if you said to a group of men there, "You cannot enter into an agreement to quit your jobs, although individually you may quit them," there you would face no problem of constitutional power at all, but merely a problem of the wisdom of its exercise.

Now I should say that it would be unwise to so exercise the power unless you had first done all that you could by way of prevention of the difficulty.

MR. JUSTICE MCREYNOLDS: We are not going to decide the wisdom of Congress.

Did Congress in the Stockyards case interfere with the interstate commerce clause because they did not pay sufficient wages and say that they must pay each one of them $10 a day?

MR. MADDEN: No; I should suppose not.

I could imagine that there might be a sufficient connection between the wages and the labor troubles, thereby stopping t he flow of commerce, but I see no such intimate connection whatever as there is between strikes and the flow of Commerce.

The statistics which we rely upon here show that a very large number of strikes are not based at all up on problems of wages and hours and substantive conditions, but are based upon the desires of the men first to organize themselves into unions, so that they can speak to their employer with some authority with reference to their conditions.

May I ask you about the time?

MR. CHIEF JUSTICE: You have used 40 minutes.

MR. MADDEN: It does seem to me that if the National Government really has the power to protect the flow of commerce through the stockyards, for example, by the meticulous regulation which it has imposed in the Packers and Stockyards Act, if t he overcharge for the use of the stockyards of the amount of a few cents or a few dollars is really of interest to the National Government, then I cannot conceive of how some other activity which would stop the f1ow of commerce completely, instead of levying a little additional financial charge up on it, but which would stop it completely- I cannot conceive why that would not be of equal interest to the National Government.

MR. JUSTICE SUTHERLAND: Is that, the basis of your argument, that it completely stops the flow of commerce?

MR. MADDEN: That is the basis of my particular argument.

MR. JUSTICE SUTHERLAND: In relation to this case?


No; that is not all that there is to be said for this case.

That is one of the arguments.

MR. JUSTICE SUTHERLAND: In other words, that is the basis of the argument you are making now?


If Your Honor will indulge me, I want to speak about that in connection with some language which this Court itself used in Stafford v. Wallace.

The object to he secured by the act-

That was the Packers and Stockyards Act, of course—Is the free and unburdened flow of livestock from the ranges and farms of the West and the South west through the great stockyards and slaughtering centers on the borders of that region, and thence in the form of meat, products to the consuming cities of the country in the Middle West and East, or, still as livestock, to the feeding places fattening farms in the Middle West or East * * *.

Now, if Your Honor please, it seems to me that the flow of commerce which is described in that language and which was the fact in those stockyards cases was a flow of commerce not only through the stockyards but through the meat factories, through the packing plants.

The consequence is that the analogy which we draw of the flow of raw materials into and through and the flow of finished products out of the steel mills seems to be a logical one.

MR. JUSTICE SUTHERLAND: So far as the cattle are concerned, how far could you go?

You say that that is analogous situation?

MR. MADDEN: That is right.

MR. JUSTICE SUTHERLAND: Taking it back, for instance, to the herder; suppose the herders raising cattle organized a union.

Could Congress regulate that?

MR. MADDEN: I should say not, Your Honor.

I should say that you have with reference to the commerce of the United States a problem somewhat similar-and certainly you have with reference to the extreme concept which this Court has used -- you have a problem somewhat similar to that which you have with reference to physical streams of water.

The water after it becomes a stream gets a wholly different sort of protection from what it gets when it is surface water or when it is percolating through the ground.

At that time it is practically any man's property and it has very little protection from destruction.

When it becomes a stream, however, it then comes under the scope of a different set of legal powers.

Now this process of drawing lines between intrastate and interstate activities, it may well be-it is not.

for us, of course, to cut the pattern for Your Honors - -but it may well be that an analogy something like that may be useful in determining the extent to which the National Government can go in the control of the things which affect the commerce of the Nation-how greatly affect, how immediately, how directly, If you will, and so forth.

Now it does seem to me that by your own authority the meant factory is in the stream of commerce.

The stream of commerce flows through it.

I can imagine no reason why the Government, which has not only the right but the duty to protect that, great flow of commerce, cannot protect there as well as well as it can just before it reaches that point or just after it reaches that point.

Indeed, it seems to me that the attempt of the National Government to protect its great streams of commerce is futile if there is somewhere along the stream a point where the hand of the Government is stayed and where stupid State regulation, or lock of regulation, may destroy the whole stream which the Government has so carefully conserved up to that point, and which it is going to pick lip again and conserve so carefully beyond that point.

I just cannot see why the Government, which undertakes to protect this things, should allow it to get out of control at some stage in the course of the stream and then perhaps permit it to be destroyed, which would be exactly what would happen, of course, to our enormous stream of raw materials coming into this steel mill and our finished products going out.

If labor trouble should stop this mill, there is no question but what transportation would stop, communication would stop, boats would be tied at their docks, interstate orders and shipments could not be made.

Now, why should the Government interest itself so meticulously in all of these things just before they enter the gates of this factory and then allow the whole work of conservation to be lost while they are inside it?

We no more assert that manufacturing is interstate commerce than did this Court in Stafford v. Wallace assert that meat packing or soap making or feeding bay to cows is interstate commerce.

We merely assert that the Government, which has the responsibility, cannot have the factory gates slammed in its face and have it said to it, “Inside here you have lost your control, and whatever happens to your great stream of commerce is none of the National Government’s business.

A grave problem for this Court, of course, is the preservation of our very useful American system of dual sovereignty but it does seem that where the United States has found its responsibilities, certainly one of its grave responsibilities is to faster and protect the Nation's commerce, that where it has found that responsibility the States must give way to whatever means it develops as necessary for the National Government to adequately protect those streams of commerce.

I would like to say just a world about some of the points made in respondent’s brief.

They cite a large number of State taxation cases.

It seems to us quite evident that those cases have no bearing whatever upon the matter.

Your own opinion in Stafford v. Wallace, compared with Minnesota v. Blasius (290 U. S. 1) indicates what I mean.

In Stafford v. Wallace you held that the National Government should regulate the stockyards.

In Minnesota v. Blasius you held that the State could tax animals in the stockyard.

It was perfectly evident that those animals, although they were in the flow of commerce, because by custom and history they would go on to other States, nevertheless, they were not in transit within the meaning of the other line of cases which would relive them from State taxation.

It seems to me that Arkadelphia Milling Co. V. St. Louis S. W. Ry. (249 U. S. 134), which the respondent relies upon, is simply another illustration of something which may or may not have been in the flow of commerce but which certainly was not in transit, and therefore beyond the State’s power to tax and the State’s power to regulate in a nondiscriminatory fashion.

MR. STANLEY REED: May it please the Court, in Virginia Ry. Co. v System Federation No. 40, Your Honors had before you the Railway Labor Act from the standpoint of the extent of congressional power over interstate commerce, the separability of the act, and its interpretation, and whether or not the provisions of that decree were made invalid by the fifth amendment.

In The Associated Press v. National Labor Relations Board almost the same questions arose, except that no questions of the interpretation of the statute were raised.

In the series of cases that we are now discussing we have a situation which requires that we give thought to the power of the Federal Government to regulate interstate commerce and to protect its flow, even though to do so It must reach into the industrial and manufacturing enterprises of the Nation.

In the brief for respondent in this case an effort is made to discuss not only the precise issues which we conceive to be presented to Your Honors at this time, but also the entire theory of collective bargaining, its effects upon industry, and the right of the Government to interfere in the rather intricate employer-employee relationship.

It seems to me that the same point of view was presented in The Associated Press case-that you were asked to consider not the particular instances that are before the Court in these cases, and not the particular sections of the act which we shall attempt to bring before this Court, but the broad field of labor relations.

Now, quite obviously, there are going to be many problems arising in the field of labor relations that will at some time be considered by this Court, but is does not seem to us that this act, phrased as it is, permits the entire theory of collective bargaining to be raised in these cases.

There are other provisions of the act that are criticized.

The section as to exclusive representation—that is not before that Court at this time.

It is our position that this act, which is a regulation and protection and control and encouragement of interstate commerce, is an undertaking to protect that commerce through dealing with those labor relations that directly affect that commerce.

Whether that is separable from collective bargaining I do not intend to argue at length.

I do, however, wish to make this comment—that collective bargaining is not the ultimate end of this act.

It is phrased, of course, as a regulation of commerce.

It is, from our point of view, a regulation of commerce.

It deals with labor relations as they directly affect commerce.

And in labor relations as they are known today at all men nothing is of more importance than the right of freedom of organization and the right to be free from dictation or coercion of organization and the right to select representatives to deal with employees, whether through coercive collective bargaining processes or otherwise.

We make this distinct point, therefore, that regardless of collective bargaining provisions and regardless of provisions as to exclusive representation, this act sufficiently manifests the intention of Congress—and the intent is the test of separability—that even though collective bargaining might be found to be contrary to the due process clause, certainly there is, nevertheless, sufficient virtue and sufficient good to be found in the provisions dealing with representatives and with freedom from coercion or interference in the choice of those representations or in the organization of unions to justify their separate enactment.

The legal principles, counsel for the respondent and ourselves would probably state in almost the same language.

We do not contend, of course, that this act is based upon any power except that derived from the commerce clause.

They certainly would not say that due process requires that everyone should be left absolutely free from the power of government to protect the general good.

It is in the application of those different theories that we find ourselves in disagreement.

The brief of responsible treats lightly the importance of firing 10 or 11 men out of 20,000 and ask how that could interface with or affect interstate commerce.

I thought I heard the same thought expressed in The Associated Press case.

It was quite reminiscent of the things that were said in the early days when the Government undertook the regulation and control of the railroad systems.

A doughty old commodore of transportation expressed his opinions of the interests of the public in language that no one has forgotten.

We had expressions of the intolerant attitudes of railroad operators with respect to the snooping activities of the Interstate Commerce Commission, when they came to investigate the railroads’ books in regard to political donations.

And now we have that same attitude expressed through the oppositions of these respondents to the action in this case- the right of an employer to protect his won business, to hire and fire as he think wise, free of the meddlesome interference of Government on behalf of his employees must allow the public and their employees, even though it does affect their own constitutional freedom and property and due process to a reasonable degree; provided, of course, that we exercise that interference for an aim that is legitimate and within the constitutional powers of the Government.

The statistics on strikes over a period of years show clearly the great problem which strikes create.

On the last page of the Associated Press brief and on the last page of the brief in this case Your Honors will find two different tables.

They point out that strikes brought about because of a desire to organize or because of interference with organization make a growing percentage of all the strikes in the country.

They point further to the fact that in some years almost a million and a half men are affected by these strikes, and, broadly speaking, an average of about 15 days each year is lost through strikes for each man affected.

Of course, the Court is thoroughly familiar with the seriousness of the strike situation.

We might expect that because we have a serious situation we would find that the Government has power to provide a remedy.

We need to go farther than that.

Consequently there has been a long-continued interest of the Federal Government there in the strike situation, and in the industrial situation as a whole, that reaches back to the Industrial Commission of the 1898 and comes on down to the National Industrial Recovery Act.

A typical result of those continuous investigations will be found on page 65 of our brief, where we refer to the report of the President’s Industrial Conference of 1918.

All of these matters were before Congress.

Not only were the Members of Congress as familiar as we are with the constant research and investigation into the strike situation, but they held prolonged hearings in which they discussed the problem of the strike, its affect upon the industry and commerce of the country, and the steps which might be taken to remedy the situation.

Now, we are to consider whether or not this act was within the power of Congress, whether its provisions apply to the respondents in this case, whether we can separate the collective-bargaining provisions, if necessary, and whether or not the provisions of this decree or order deprive the respondent of due process.

Many of those things have been commented upon before, and I do not intend to go into them in detail again.

MR. JUSTICE MCREYNOLDS: What does the order require, Mr. Solicitor?

MR. STANLEY REED: It requires, sir, if I may answer your question without quoting the order, that the employees who have been discharged should be restored to their places.

MR. JUSTICE MCREYNOLDS: The man who works on a crane should be put back on the crane where he was working?

MR. STANLEY REED: Correct, sir.

MR. JUSTICE MCREYNOLDS: That is the effect of the order?

MR. STANLEY REED: The effect is to make the main whole.

He is to be paid for the time he lost insofar as he lost any money.

It is to make the man whole because of the unfair labor practice which was found by the Board.

MR. JUSTICE MCREYNOLDS: I am trying to get at the effect of the order, if you will be good enough to tell me.

MR. STANLEY REED: The effect of the order is to restore him to the position that he was in before.

MR. JUSTICE MCREYNOLDS: What does that mean?

MR. STANLEY REED: That means that he goes back there on the crane, if you please, in that sense, and is therefore at that instant in the same position he was before.

MR. CHIEF JUSTICE: Employed at will?

MR. STANLEY REED: Employed at will.

MR. CHIEF JUSTICE: And can be discharged the next day?

Mr. REED Provided he is not discharged because of his union or labor activities.

MR. CHIEF JUSTICE: Exactly; but employed at will?

MR. STANLEY REED: Employed at will.

I think that answers the whole question.

The employer is also required of course, to cease and desist from interfering with organization of labor and to post notice to that effect.

We find the constitutional bases for the act in the sections that have been called to your attention.

The most important ones are in section 1.

I hardly think it necessary to do any more than to call attention to the fact that it is based particularly on that statement that the refusal by employers to accept the procedure of collective bargaining leads to strikes and other forms of industrial strife or unrest which have the intent or the necessary effect of burdening or obstructing commerce.

The last-paragraph of that same action states-

It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of interstate commerce.

As has been repeatedly said here, this act is based on the commerce clause and on this declaration of policy in the act.

Moreover, the act is limited in its application by section 10 (a) to conditions of industry or labor which directly affect commerce.

Congress could have approached the problem in either of two ways: It could have dealt with each strike situation after it arose, or it could have had a preventive bill which sought to stop strikes before they started.

The Sherman Act (26 Stat. 209, 15 U. S. C., sec. 1), of course, is one of the best examples of the prohibitory or punitive power of Congress.

The Federal Trade Commission Act (38 Stat.

717, 15 U. S. C., ch. 2) the Grain Futures Act (42 Stat. 998, 7 U. S. C., ch. 1), and the Packers and Stock Yards Act (42 Stat. 159, 7 U. S. C. Ch. 9), are examples of the preventive power of Congress.

It has never been thought by Congress, by the Executive, or by the Board, that this act applied to all strikes or to all the causes of any strikes.

It applies only to labor situations that develop and affect commerce.

The closest analogy to this act has already been referred to from the bench.

That is, of course, the Federal Trade Commission Act, in which practically the same language, of “in commerce” or “competition in commerce”, was used to outline the jurisdiction of the Commission.

Section 10 (a) of the present act deals with its application, and its application is precisely the same as the application of the Federal Trade Commission Act.

In Federal Trade Commission v.

Beech-Nut Packing Co., (257 U. S. 441) and Federal Trade Commission v. Raladam Co. (283 U. S. 643) this Court considered the jurisdiction of the Federal Trade Commission under the terms of that act and reached the conclusion, of course, that the act could properly extend to dealings with matters which affected commerce or which were in commerce.

This act has the same procedural provisions as the Federal Trade Commission Act.

A charge is made by employees who are affected.

That charge becomes a complaint on the part of the Board.

There is a hearing, there is a finding, and that finding cannot be enforced until a court determines that the action of the Board was within the terms of the act and that the acts of the employer were such as affected commerce insofar as their employees were concerned.

Now, the crucial question in this case comes just at this point: Is the application of this act-which we submit is thoroughly within the power of Congress—to this small group of employees in the Jones & Laughlin Co.

a condition of labor or of employment that does affect commerce?

The Board found from the evidence that it did.

Its order was entered on that basis, because, after an examination of this particular situation, it concluded that this labor situation directly affected commerce.

There were reasons for that conclusion, to which we must give consideration.

They have been stated already.

We think that these activities directly affected commerce, because commerce may be regulated and protected from strikes that have an intent to interfere with that commerce.

In our arguments in the lower court the court has frequently asked us at that point, “Well, is there evidence in this particular case that this was a strike with intent to interfere with interstate commerce?

And the answer, of course, is that there is no such evidence in this record.

The theory upon which Congress has control and may regulate strikes with intent to affect interstate commerce is quite clear and quite well known.

First Coronado Case (259 U. S. 44), Second Coronado Case (268 U. S. 295), Loewe v. Lawlor (208 U. S. 274), Duplex printing Co. v. Deering (254 U. S. 433), Bedford Cut Stone Co. v. Stone Cutters’ Ass’n. (274 U. S. 37).

We contend that Congress has an equal right to protect against strikes with the intent to interfere with interstate commerce even when the strike has not taken place, or when the intent has not actually developed; that is, that Congress has a right to protect interstate commerce not only from the attack that has already gathered force, bust also to go back into the causes that create strikes with intent.

It was that thought that was in the Court’s mind in Stafford v.

Wallace (258 U. S. 495), when you said (p. 520): The language of the law shows that what Congress had in mind primarily was to prevent such conspiracies by supervision of the agencies which would be likely to be employed in it.

If Congress could provide for punishment or restraint of such conspiracies after their formation through the antitrust law, as in the Swift Case, certainly it may provide regulations to prevent their information.

The reasonable fear bye Congress that such acts, usually lawful and affecting only intrastate commerce when considered alone, will probably and more or less constantly be used in conspiracies against interstate commerce or constitute a direct and undue burden on it, expressed in this remedial legislation, serves the same purpose as the intent charged in the Swift indictments.

We think that the same things in implicit in the Grain Futures Act and in Board of Trade v.

Olsen (262 U. S. 1), where you relied, in concluding that the statue was a valid control of commerce, upon the fact that dealing in futures was a means by which people had undertaken to create monopolies and conspiracies in restraint of interstate commerce, that caused those monopolies and conspiracies and thus to protect interstate commerce from injuries before they occurred.

Now we say that the Board, when a case such as this is presented to it, has a right to go into the question as to whether or not there is a strike with intent, or evidence of a conspiracy to interfere with interstate commerce, or evidence of conditions that would reasonably be thought to lead to a strike with intent.

We say that such an intent is very likely to be found in a wholly integrated organization such as we have in this case—one that begins in Minnesota and Michigan and rungs through the whole stream of commerce that has been detailed to the Court.

Many of the employees are actually engaged in transportation itself.

The boats of this organization run down the Ohio and the Mississippi.

It operates its own intraplant railroads and loads its cars by its own employees.

Situations such as that which developed in re Debs (158 U. S. 564), can easily develop in these cases.

Of course, the attitude of the steel industry toward employee organization and representation is well known to the Court, it is shown here in exhibit 44.

We do not rest our argument upon the question of intent, nor upon the ability of Congress either to protect the flow of interstate commerce from strikes with intent or to eliminate the causes that lead up to strikes with intent to interfere with interstate commerce.

But, we say that from the decisions of this Court, Congress might reasonably, and did, reach the conclusion that where there conditions the necessary effect of which was to bring about an interference with interstate commerce, then it had the right to protect that commerce from those conditions.

This Court said as much in the first Coronado Case, when you spoke of the “direct, material, and substantial effect” that was necessary before the Sherman Act took effect and you said that that act took effect if the obstruction was “intended to restrain commerce” or had “necessarily such a direct, material, and substantial effect to restrain it that the intent reasonably must be inferred.

That language is repeated in Industrial Association v.

United States (268 U. S. 64, 81), and you also spoke there of the—

absence of proof of an intention to restrain it or proof of such a direct and substantial effect upon it, that such intention reasonably must be inferred.

Now, may it please the Court, that is not a repetition of the argument of intent.

We are speaking now of the necessary result of certain labor and strike situations.

That necessary result, while it is couched in language that would indicate that it was based upon intent, must necessarily depend solely upon the effect, because to say that acts which have the necessary effect shall be construed to have an intent to interfere with interstate commerce is exactly the same things as to say that the necessary effect of such acts is to affect interstate commerce.

* * * it is not enough that the object of a combination or conspiracy be outside the purview of the act, if the means adopted to effectuate it directly and unduly obstruct the free flow of interstate commerce.

In the United States v. Patten (226 U. S. 525), it was held to be unnecessary to allege an intent in the indictment.

If an intent is necessary, it is obvious that the power of Congress is circumscribed by the state of mind of the people involved in the conspiracy or strike or labor difficulty which we contend directly affects interstate commerce.

Now, on the question whether or not the necessary effect of a strike or labor difficulty is to affect commerce, we think that the Board is entitled to take into consideration the mechanics of the particular industry against which the complaint has been made.

I spoke a moment ago of the direct, material, and substantial effect on commerce in the Coronado and in the Industrial Association cases.

There is also United States v. Reading co. (226 U. S. 324) in which you commented upon the fact that those who were in competition with the Reading Co. were practically all brought into the one agreement, as evidencing the necessary result of such an agreement upon interstate commerce.

Your Honors have been very generous in giving time to the two succeeding cases are quite similar to the case at bar.

I believe that it will make for better organization of the argument if I may be permitted to borrow some of the Government’s time from the succeeding case.

Counsel in both the Fruehauf case and Friedman-Harry Marks are here and have heard the arguments of these cases.

If that would be agreeable to the Court, it would, I believe, simplify and expedite the hearing.


How much time do you desire?

MR. STANLEY REED: We have an hour in each of the other two cases.

MR. CHIEF JUSTICE: You have 35 minutes left of your time in this case.

MR. STANLEY REED: I hope I won’t take too long a time.

I will condense the argument to the best of my ability, but I prefer not to be limited to the exact time.

MR. CHIEF JUSTICE: Whatever you take beyond the time allotted in this case will be debited to you in the others.

MR. STANLEY REED: That is my understanding.

I also have a new Government publication of the National Labor Relations Board which undertakes to summarize certain arguments.

I have discussed the matter with counsel on the other side, and if the Court will permit, we would like to furnish this to the Court as part of the record.

Before adjournment yesterday I had tried to state our position as to the separability of the respective clauses of this act, and to make it clear that the industrial cases must be considered from the stand point not so much of that the act covered, as of the right of the Board to determine whether or not particular situations were within or affected commerce.

I pointed out that Congress had the right to control strikes, and to control situations that led to strikes with intent to interfere with commerce, and that the same power which Congress had within the ambit of the commerce clause was granted to the Board in their consideration of situations which were presented to them.

I had spoken also of the strikes with the necessary effect of burdening and obstructing interstate commerce, and had undertaken to discuss the factors which entered into the determination of whether such strikes were within the control power, and if within the control power, were within the control power, and if within the control power, were within the preventive power of Congress.

I had commented upon one factor, the magnitude of the operation.

I had called the Court’s attention to their own statements in the first Coronado case and in United States v. Reading Company (226 U. S. 324).

I pass now to another factor, the size of the enterprise in its relation to the entire industry.

We conceive that to be of importance in considering whether or not these strikes wit intent or necessary effect do affect commerce, because where an enterprise is a large part of an industry it is quite obvious that industrial disturbances in that particular enterprise have a large effect whether or not they have a direct effect.

Here we have an enterprise which is a large factor in the business of making steel.

The facts have been presented to the Court, and I do not intend to go over them again.

We have also discussed here the problem of the stream of commerce, and we have suggested that as a factor in determining whether industrial disturbances in a particular enterprise which we conceive to be within the stream of commerce will have a necessary effect upon commerce.

The enterprise now before the Court is one of the most striking examples of an industrial stream of commerce.

The details are before you: The commingling of the limestone and iron ore and the coal, the constant flow through the particular plaints, the many people in the enterprise who are engaged in transportation activities; the close relation between the transportation facilities and the flow of material; and the movement of the steel down the Ohio and the Mississippi to be distributed to the various consumers throughout the country.

Whether or not that is a stream of commerce in the sense that the Phrase is used in Stafford v. Wallace (258 U. S. 495), I think is immaterial on this particular point.

What we are saying is that this stream of commerce—whether or not it is a stream of commerce which is so gigantic in size, and which reaches not only a particular locality, but also runs across State lines from the iron ore production, from the limestone production, from the coal production, to distribution throughout the country, must be an important factor when we come to determine whether or not industrial disturbances in this particular enterprise are likely to be or will probably interfere with commerce.

Of course, disturbances in such an enterprise to disturb commerce.

There is another factor that we wish to comment upon, and that is the recurrent nature of the strikes which have an effect upon interstate commerce, whether direct or not.

As phrased in Carter v. Carter Coal Co. (298 U. S. 238), there is no doubt of the magnitude of the effect upon interstate commerce.

The problem is whether the effect upon commerce is direct.

Just as Congress has the power to control strikes with intent and strikes the necessary effect of which is to interfere with commerce, so we contend that the recurring nature of industrial disturbances gives further power to Congress to act upon such situations.

The particular industry here is a striking example of recurring labor difficulties.

The great steel strike of 1919 and 1920 is still fresh in our minds with the stoppage of transportation; the stoppage of production of steel and iron; and the inability of the factories and industries which depended upon the steel industry for their raw material to draw from their usual source of supply.

It is our contention that.

Congress, because of the fact that there are, in particular industries, constantly recurring strikes and difficulties, has power to act to protect commerce from those recurring difficulties.

We point to instances where this Court has recognized such situations as being within the power of Congress.

In Hopkins v. United States (171 U. S. 578), and Anderson v. United States (171 U. S. 604), this Court declined to admit the application of the power of Congress through the Sherman Act to control the situations in the stockyards in those two cases.

They involved exchanges which had certain agreements among themselves as to commissions, as to handling the business, and as to who was to partake of the business in the stockyards.

Control of that was felt to be beyond the power of Congress.

Yet later, in Stafford v. Wallace (258 U. S. 495), the Court commented upon the fact that Congress had taken into consideration the recurring nature of the difficulties that occur in the stockyards and the likelihood that those difficulties would lead to conspiracies in restraint of trade or monopoly, indicating that they at least gave form and added to the reasonableness of the undertaking by Congress of the regulation of those causes which had led to conspiracies and monopolies in those cases.

There were similar recurrent natures in the Grain Futures Act (42 Stat. 998, 7 U. S. C. ch. 1).

Again this Court stated that disturbances which directly burden and obstruct commerce from time to time are within the power of Congress to act upon.

In United Leather Workers v. Herkert Trunk Co. (265 U. S. 457) you summed up the effect of those two acts—the Grain Futures Act and the Packers and Stockyards Act—upon the basis of the recurrent character of the difficulties which obstructed commerce.

Of course, we do not contend that the mere continuous recurrence of difficulties is sufficient to give Congress power to regulate a particular industry, nor do we say that mere recurrence, in and of itself, is sufficient to give Congress power to pass acts which undertake to eliminate the causes of those difficulties.

It is only when those recurring practices are of a type that would come within the control of congress, by repetition, by the danger of bringing about intent, by the danger of creating situations which will necessarily affect commerce, that the constantly recurring difficulties fall within the power of Congress.

You commented upon that in Stafford v. Wallace when you said: The reasonable fear by Congress that such acts, usually lawful and affecting only intrastate commerce when considered alone, will probably and more or less constantly be used in conspiracies against interstate commerce or constitute a direct and undue burden on it, expressed in this remedial legislation, serves the same purpose as the intent.

That principle would apply in cases like the Coronado cases, or Leowe v. Lawlor, or Duplex Printing Co. v. Deering.

It is our contention that there is no difference between recurrent local practices affecting transportation and recurrent local practices which affect commerce among the States.

By that I mean that insofar as recurrence is an argument for the exercise of the preventive power of Congress to protect interstate commerce, the fact that the recurrence of labor difficulties occurs in transportation does not place them any more under the control of Congress than if they had occurred in industry.

I think that idea was in the mind of the writer of the minority opinion in the Carter Case, where it was said, speaking of Texas & New Orleans R. Co. v. Brotherhood (281 U. S. 548), that “Congress thus has adequate authority to maintain the orderly conduct of interstate commerce and to provide for the peaceful settlement of disputes which threaten it.

We have become so used to the employment of the word “direct” in its relation to the power of Congress over interstate commerce that I think it might be useful to call the Court’s attention to the fact that in the first Coronado case you considered that the acts which were held to be within the power of Congress, because carried out with an intent to affect interstate commerce, were actually indirect obstructions to commerce.

Moreover, I desire to point out that we can see a difference between an indirect obstruction to commerce and a direct effect which acts materially upon commerce.

You said in the Coronado case: We have had occasion to consider the principles governing the validity of congressional restraint of such indirect obstructions to interstate commerce in swift & Co. United States (196 U. S. 375); United States v. Patten (226 U. S. 525); United States v. Ferger (250 U. S. 199); Railroad Commission of Wisconsin v. Chicago, Burlington & Quincy R. R. Co. (257 U. S. 563); and Stafford v. Wallace (258 U. S. 495).

And then you added: It is clear form these cases that if Congress deems certain recurring practices though not really part of interstate commerce, likely to obstruct, restrain, or burden it, it has the power to subject them to national supervision and restraint.

In the present case we say that the record makes it very clear that we have a situation where there is a reasonable probability that strikes will develop with the intent to interfere with commerce; that if they do develop they will have the necessary effect of burdening and obstructing commerce.

These facts, together with the recurring difficulties in the steel industry, the large size of respondent's operations, and its important place in the steel world, justify the finding on the part of the Board that the labor disturbances in this enterprise would affect commerce.

That brings me to what I conceive to be one of the two important and critical questions in this case; that is, whether or not labor disturbances in industries, such as we are discussing here, so directly affect commerce that Congress has power to provide for their amelioration, if not their elimination, .

We are faced with the decision of this Court in Carter v. Carter Coal Co. (298 U. S. 238), in which you said that wages and hours and lab or conditions in that industry were beyond the power of Congress because they had only an indirect effect upon interstate commerce, and that however great the magnitude of the effect might be, it was not sufficient to give congressional power unless the effect was direct.

We conceive that the Carter case turned upon the question of the purpose of that Bituminous Coal Act.

The Court said that "the primary contemplation of the act is stabilization of the industry through the regulation of labor and the regulation of prices.

" If that was the purpose of the Bituminous Coal Act, as stated by Your Honors, its aim was at a situation different from that which is sought to be cured by this act.

We do not seek to argue contrary to the Carter case.

For the purpose of this argument we feel that the Carter case may be taken, as stated by the Court, to be directed at the control of labor conditions and prices.

We submit that when you considered the Carter case you considered it from the standpoint of the power of Congress to reach in and control a wage or a labor condition as a part of the scheme of stabilizing the industry which was under taken by Congress.

Here we have an act with a different purpose, aimed at a different evil.

It is merely repetitious for me to say again that this act sought to control strikes which had the intent or the necessary effect of interfering with commerce, not the labor relations in and of themselves.

The act is not, in other words, directed at a regulation of wages or hours, but at the elimination of the causes of those types of industrial disturbances which this Court bas repeatedly said were within the power of Congress.

Therefore, to us, the Carter case is not a bar to the consideration by this Court of the merits of this particular act.

This act is aimed, within constitutional limits, at things that Congress has power to protect—the flow of interstate commerce and the carrying on of these great enterprises.

So there is a distinction between the Carter case, which was directed at the control of wages and hours, and this case, which is directed at the removal of obstructions, or the removal of causes of obstructions, to the movement of interstate commerce.

It is not necessary that the Carter case should be overruled if this act is upheld.

Nor is it necessary to think that if we can go this far in protecting commerce from obstructions because of the power to regulate strikes with intent or with the necessary effect of obstructing commerce, that we need open the door to go further in to control of wages or hours or conditions of labor.

It may well be that wages or hours or conditions of lab or, as such, are beyond the power of Congress, because to interfere with them would be a violation of the due-process clause; or we may say that wages and hours are so distinct and separate from interstate commerce that they do not haven direct effect upon it under any circumstances, while here the rights of labor which are protected fit directly into lab or conditions which result directly in interferences and obstructions to interstate commerce.

I now pass from the problem of directly affecting commerce to that of the due-process clause, insofar as this particular decree is concerned.

MR. JUSTICE SUTHERLAND: Before you pass to that point, what is the primary effect of a strike in a steel mill?

/text> Is it not to simply curtail production?

MR. STANLEY REED: Certainly; that is one of the effects.

MR. JUSTICE SUTHERLAND: Isn't that the primary effect, the immediate effect?

MR. STANLEY REED: Well, I should say it was the first effect.

I do not mean to split hairs.

Of course, that is one of the primary effects of it.

MR. JUSTICE SUTHERLAND: That is the primary effect, to curtail production, and then the curtailment of production in its turn has an effect upon interstate commerce; isn't that true?

MR. STANLEY REED: As I understand it, no.

The strike is not something that is a momentary change of, but instantaneously and at the same time that it stops production stops interstate commerce.

It is a single thing that happens, and that stoppage of work stops interstate commerce right at that instant.

MR. JUSTICE SUTHERLAND: It affects interstate commerce just as the cessation of work in a coal mine.

The primary effect of that, as suggested in the Carter case, was to curtail the production, and then the secondary effect which came from the curtailment of production was the effect upon interstate commerce.

MR. STANLEY REED: Well, if we were undertaking to defend this act on the ground that Congress had the power to regulate labor conditions as such, I would fully agree with what Your Honor has said, but our contention is that Congress is not undertaking to regulate labor conditions as such; that it is undertaking to protect interstate commerce from situations that develop from those labor conditions, and that the causes which lead to these strikes with in tent, and to strikes with the necessary effect, to interfere with interstate commerce are within the regulatory power of Congress.

MR. JUSTICE SUTHERLAND: If by some means you curtail the production of wheat, the immediate effect, of course, is to curtail the production of wheat, and that in its turn has an effect upon interstate commerce.

So would you say that Congress could step in to that field and regulate the production of wheat under the commerce clause or under some other power?

MR. STANLEY REED: I am sure that what I would say would not bar Congress on it, but it seems to me that there is a great distinction between whether Congress can regulate production as such and whether Congress can regulate conditions which might interfere with the transportation of agricultural products after produced.

I will say this: That although this act does not apply to agricultural production, probably, if Congress had undertaken to control situations that had for their purpose the stopping of such production, the same rule would apply.

Fortunately, we do not have to reach that far in this case.

The present decree directs that these parties cease and desist from interfering with the organization of their employees; that they cease and desist from discrimination in regard to their employees; that they restore to their places the men who have been discharged; and that they post notices.

I direct myself now at the question whether such orders are a denial of due process.

We take the position that insofar as the decree forbids interference with the organization of respondent's employees the question has been resolved in favor of the act by Texas & New Orleans R. Co. v, Brotherhood (281 U. S. 548).

That is controverted in respondent's brief.

It is their contention, as I understand it, that the Texas case did not decide that it was within the power of Congress under the due-process clause to interfere with employer-employee relationships; that the men were ordered reinstated in the Texas case as a punishment for a violation of a temporary injunction which had been entered against the employer, and that there has been no consideration, and certainly no conclusion by this Court, as to whether the order of reinstatement of a man discharged for any reason or without reason is within the power of Congress.

Our contention is that the Texas case decided that the order was not a denial of due process when the congressional interference with the right of discharge was part of a scheme of voluntary labor conciliation.

Our reason for that statement is this: The temporary injunction which was entered in the Texas case was in almost the exact language of the Railway Labor Act.

There was no prohibition against discharging an employee.

There was no reference to that situation.

It was simply an injunction against interference with the organization of the employees of railroads.

With that injunction in effect, the railroad then discharged employees, and it was called upon to purge itself of that contempt.

Those discharges would not have been a violation of the injunction unless they were also a violation of the act.

The injunction and the act being in similar language, and the railroad being punished for violation of the injunction, necessarily this Court concluded that the violation of the injunction was a violation of the act, and that a violation of the act by interfering with employees was consummated by the discharge of certain employees.

We do not contend that the Texas case determines whether it is a violation of due process to require a man to be reinstated by an employer who has violated an act such as the Railway Labor Act or this act.

It was not necessary under that decision for this Court to determine that the employer must restore the employee to his place, because of course that might have been only a method of purging the employer of his contempt.

We do say, however, that it is consistent with due process to require reinstatement of an employee by an employer who has violated a constitutional act and has interfered with the organization of his employees by discrimination against union employees in their discharge--we say that that, while not definitely and finally ruled upon by this Court, is within the duo-process clause.

That brings me to a consideration of the second series of cases which like the Carter case, I think are lit the heart of this particular controversy.

I refer, of course, to Adair v. United Stares (208 U. S. 161), and Coppage v, Kansas (236 U. S. 1).

We do not think that the Coppage or the Adair cases are necessarily overruled by the Texas case.

We realize that that case throws a grave doubt upon their validity, but the same problem that arises as to whether or not interstate commerce is directly affected by these acts comes up under this due process clause.

It arises because of the fact that in the Coppage and the Adair cases we had legislation which was directed not at a complete scheme, not at the protection of the rights of the employees, but was directed at the right of the employees to discharge or hire such employees as he pleased for any reason which he pleased.

I know, of course, that the Erdman Act (30 Stat. 424) which was involved in the Adair case had a somewhat broader scope than the purpose which I have just stated, but a careful examination of the Adair case will show that this Court considered only section 10 of that act, and that the opinion is written and the language is directed at the violation of due process in undertaking to interfere with the employer employee relationship as such.

In the Coppage case a different situation developed, and of course it was taken up under the fourteenth amendment.

But in the Coppage case itself this Court pointed out that it was not determining whether or not the coercive provisions of the Kansas act were applicable to the situation or not, and it says: We do not mean to say * * * that a State may not properly exert its police power to prevent coercion on the part of employers toward employees, or vice versa.

And in the Texas case there is implicit in the language of the Chief Justice the distinction which I am seeking to draw.

He said that the Coppage and the Adair cases were directed at the right of the employer to select its employees, while the Railway Labor Act—

is not aimed at this right of the employers but at the interference with the right of employees to have representatives of their own choosing.

As the carriers subject to the act have no constitutional right to interfere with the freedom of the employees in making their selection, they cannot complain of the statute on constitutional grounds.

Therefore, we submit that the Adair and the Coppage cases are not a bar to this act; that whatever interference to the employee-employer relationship there is in saying that a man cannot be discharged because of his association with a labor union or because of the undertaking of the employer to destroy that union is different from that in the Coppage and Adair cases.

It is our view that the interferences with the rights of employers which are implicit in this act are interferences which, under the doctrine of due process so frequently declared by this Court, are reasonable and proper in their character and are not capricious.

They are aimed at a situation which is within the power of Congress to control in protecting the commerce of the country from these recurring and huge dislocations arising from the various strikes that afflict the Nation.

We leave to the employer all the natural rights which he needs to regulate and operate his business.

He is not forbidden to discharge on employee.

He is forbidden to discharge him for only one thing—his labor relations.

The employer has great powers, of course.

The employee has been permitted, and I believe that this Court has approved, unionization und collective bargaining and ordinary labor activities.

The workman has been found to have rights-rights of organization to protect himself against the overwhelming material force of the employer.

To ask the employer to give -up but a trifle of the power which he has, to compel him to keep his hand s from the labor organizations of his workmen, is, in our view, not a deprivation of any liberty or property which is beyond a reason able interpretation of due process.

That covers the contention of the Government in this case.

We feel that through this act there has been an exercise of the power of Congress to regulate and protect interstate commerce from obstructions that have a direct and immediate effect upon it.

The word "direct" runs through all the cases in regard to the power of Congress under the commerce clause.

If it is possible to compress the entire philosophy of the power of Congress over commerce into one word, I presume that the word "direct" supplies the need as well as any that could be chosen.

And yet a word is some thing more than six letters of the alphabet.

It has connotations —connotations that bring to our mind the use of this power of Congress in many situations: To regulate the groin and the cotton exchanges, to regulate the movement of interstate commerce through the "throat" of the stockyards, and to enable Congress to stop water at the headwaters of the river to protect the river that bore the commerce that was within their protecting power.

Here we feel that this act is brought forward for the purpose of protecting, just as directly, that great commerce from the interruptions of labor activities and controversies which have caused losses of staggering amounts, which of course have an effect up on commerce enormous in its magnitude and in its difficulties, and which we believe are sufficiently within the connotation of the word "direct " to justify this Court in reversing the decision in this case.

MR. CHIEF JUSTICE: Proceed with the case on argument No. 419. National Labor Relations Board against Jones & Laughlin Steel Corporation.

MR. EARL F. REED: With the permission of the Court, the complaint in this case charged the respondent with having demoted 1 individual and discharged 12 for union activities, and the persuasive oratory of Government counsel has magnified this discharge of 12 persons into some national calamity to stop the streams of commerce.

I think we must get back to the facts of this case and then see the application of the statute.

First I want to discuss one statement made by Mr. Madden with respect to the objections raised by the respondent before the Board.

He stated that it objected under the first amendment.

That was not correct.

The objection, however, was made in addition to those which have been discussed, that the judicial power was vested in constitutional courts under the third article of the Constitution, and that the procedure of the Board was a deprivation of the rights of the respondent.

The picture of the manufacturing operations of the respondent given by the learned Chairman of the Board, Mr. Madden, in his presentation of his part of the Government's case was not quite as full as is required to understand the attempted comparison of the "stream of commerce" theory with that of the stockyards and the grain exchange.

The coal that comes into the plan t is stored.

There are large stocks on hand at all times and a supply that would run the mills for 2 or 3 months.

The ore that comes down from the mines by independent carriers is stored in stock piles, and there is at all times on hand enough ore to operate the mill for 8 or 9 months.

The limestone is also brought in and stored.

The manufacturing operations are in no sense a continuous process.

The coal is made into coke first, which is not sold, but the coke is used in the blast furnaces in the melting of pig iron.

The manufacturing process up to the production of pig iron is conducted entirely without any relation to any existing orders or chemical analyses or anything of that kind.

The first and distinct process in the manufacture is the production of pig iron.

From then on as it goes into the melting furnaces, there may be specifications that are applicable to a particular order.

But the manufacturing process as a whole is two distinct operations, and there is no similarity whatsoever to the product taken in at one end of the mill and that which is produced and sold.

There are some sales at various stages of semifinished material, which the evidence shows is practically all sold in the Pittsburgh district to other manufacturers; but in the long run, the great mass of the production of this company is pipe and nails and sheets and tin plate and the finished products of a steel mill.

The facts relating t o the discharge of the employees have, it seems to me, some bearing upon the decree entered in this case.

Although the discharge related to 13, evidence was produced only with respect to 10.

Two of them wore motor Inspectors, one of them was a tractor driver, three of them wore crane operators, one of them was a washer in the coke plant, and three were laborers.

As stated to you by Mr. Madden, the company, after putting in the defense that related to its process of manufacture and it s objection that it was not engaged in interstate commerce, withdrew from the hearing.

So that the balance of the testimony and the great bulk of the record was made in an ex-parte hearing.

And yet, in spite of that fact, the disclosure by the witnesses showed the various causes for which their discharges had been made.

A man named Volpe had been discharged because he had refused to work on Sunday.

He had been laid off on numerous occasions before because he had lifted badly loaded pipe which might have fallen and injured people.

A man named Phillips, a motor inspector, was discharged because he failed to answer two whistles, which was his duty when called to inspect a motor which was out of commission.

Those are the statements admitted by the men themselves in an ex-pa rte hearing.

Cox, a crane man, was discharged because he started his crane without testing the stop limits.

The rules were that before the operation of a crane was undertaken the limits should be tested to see whether or not the load might drop on the floor or strike the ceiling, and ho said and testified at length that he knew better than the foreman what was the proper way to test a crane, and admitted that he did not do it.

A man named Boyer, who was n nail manufacturer, was discharged because there was a large quantity of bad nails found in the buggy in which he put his product.

There was a dispute as to whether he put them there or his companion put them there, and the Board found that the discharge was not justified.

A man named Brandy, a coal washer, was discharged because on two separate occasions when samples of his work were taken and tested they were found to be defective, and he had been laid off on occasions before.

So that, without going through them all, I can say this, that each man admitted that there was some cause for his discharge, and each of them claimed that other persons who had committed similar offenses had not been so severely punished and that he believed, or he felt, that it was because of his membership in the union that he was being discharged.

The evidence referred to by Mr. Madden as to the intimidation by the company was not stated in its correct atmosphere.

None of these things occurred after this net was passed, end the only evidence in this case of any undue intimidation or any effort to influence the men were some assorted statements before this act ever passed, by the various foremen, that the union would not accomplish anything; or a man would not get anywhere in the union; and statements made that the police authorities of the city, which was on independent, municipality, had not fairly treated labor organizations, and the responsibility for every thing that happened in the community, for everything done by a police officer, was laid at the door of the company in this ex-parte hearing.

The secretary of labor of the Commonwealth of Pennsylvania was allowed to testify to statements made in affidavits filed with her long before this act passed, alleging that the company had not been fair to union people, and they did not even point out that that very subject matter had been heard by a prior labor board appointed under the joint resolution of Congress, and the company exonerated.

So that you go into the facts of this case with the finding here, even ex parte, that the conclusion that this was done because of union activities is based upon the flimsiest kind of evidence; and what the petition really amounts to is that Mr. Madden and his Labor Board did not agree with the superintendents of the company as to the sufficiency of the causes for which they discharged the employees.

Then, the record abounds with a mass of hypothetical testimony, hundreds of pages of it.

After this hearing in Pittsburgh they consolidated this hearing with that of two other companies, the Wheeling Steel Corporation and the Crucible, and they held hearings in Washington here for days, in which various persons came forward and gave a great deal of hypothetical testimony-labor persons who said they believe that organized labor and national unions were a good thing for labor.

The Board took judicial notice of theses written by professors in colleges about the advantages of union labor, of declarations made years ago-it was in evidence what Judge Gary had said in 1892 about the unions-and all it amounted to was a vast mass of opinion evidence that national unions would be a good thing for workers.

And it was not confined to the steel industry.

They went into the producing industries.

They offered colleges theses.

They offered public records.

They even offered The Steel Dictator, a book written by Harvey O'Connor, as evidence to show that the stoppage of business and commerce was in large part due to strikes.

It was on the basis of that testimony that the Board found that a labor dispute in the steel industry would interrupt commerce.

This company was not shut down in 1919 when the labor strife occurred.

It operated throughout.

It has had no labor disturbance since 1892, but all these other intervening labor disturbances were used to show that they had a tendency to interrupt commerce.

The decision of the Board was made; and before the company was notified, an application for its enforcement was made to the Fifth Circuit Court of Appeals in New Orleans, where the company had a warehouse, although the plant was in Pittsburgh, the laborers are in Pittsburgh, about 22,000 men work there, and the officers were there-and yet the Board goes to New Orleans for a petition for the enforcement of the act.

They had to go down there and say that we had not complied with it, but at the time of the application they could not say that we had not complied with it, because we had not even been notified about the order requiring the reinstatement of the men.

Now, it seems to me that there can be no doubt that the company is entitled to a review on the jurisdictional question.

It is suggested in the petitioner's brief that since the act makes its findings on matters of .

fact final, it has found that this disturbance had a tendency to interrupt interstate commerce, and therefore that is conclusive.

Under the decisions Growell v , Benson (285 U. S. 22) and St. Joseph Stock Yards Co. v, United States (298 U. S. 38) it seems to me there can be no doubt that the jurisdictional question of whether or not this company is engaged in interstate commerce is one that we are entitled to have reviewed.

I will pass that.

It is covered in the brief.

The National Labor Relations Act, we contend, is on its face a regulation of labor and not any effort to regulate commerce among the States or to remove obstructions to commerce among the States.

Mr. Davis the other day went over the act in quite some detail, and I do not intend to do that again.

I do want to point out one or two things about the act which I think were perhaps not sufficiently covered, which indicate that it is wholly an attempt of Congress to intrude itself into the industrial relations of what has been traditionally regarded as a State matter.

In the first place, in the legislative history of this type of legislation the first effort that Congress made to regulate labor matters at all was in the Railway Labor Act of 1888, which was reenacted and enlarged in 1926 and amended in 1934.

Then in 1932 carne the Norris-LaGuardia Act, which curtailed the power of the courts on certain labor matters, and the substance of the acts and what was attempted in the way of encouraging national organization of employees throughout this train of legislation is practically the same.

When the amendments to the Bankruptcy Act were passed in '33 and '34 they again attempted to endorse a national organization of employees, In that they prevented funds in bankruptcy matters and labor- organization matters being used in any way to contribute to the support of plant or local or so-called company unions.

Now it cannot be said that Congress in the Norris-LaGuardia Act vas trying to prevent the interruption of commerce by strikes, nor in the Bankruptcy -Act.

The real purpose of Congress, as shown by the attempt to hitch those matters onto the Norris-LaGuardia Act and the Bankruptcy Act, and again in the National Recovery Act, was that Congress was trying to regulate labor relations, and that is what they are trying to do here, and it is merely a matter of verbiage to try to hitch them onto them on the theory that it is really to remove obstructions to commerce.

An examination of the act itself reveals that.

The closed shop is made legal.

You cannot force a man not to belong to a union, but you may force a man to join a union; and then you may not contribute any support to a local or plant union, no matter if it has been in existence for many years, no matter if you have a contract with it that you are to pay a certain amount annually; and here is n form of organization of employees that has been successful in Europe, that has been existing in this country since 1904, and successfully in many places, and yet you are forbidden under this act to make any contribution to that.

Does that indicate an effort to remove the obstructions to commerce?

To my mind, it indicates an effort on the part of Congress to force national organization in industry.

It is a clear indication of the purpose of Congress to prevent local unions, prevent plant organizations, and compel employees to join national organizations.

The provisions about the majority rule are for the same purpose.

It is all right to say that a closed shop is not forced upon anybody, he must agree to it, but when the act says that no minority group can bargain at all, it amounts to the same thing, because the minority union in a plant is not going to exist very long if it cannot obtain anything for its members, if it cannot negotiate with the management.

Here the determination of the unit is entirely up to the Board.

Suppose the Board determines that the whole of the employees in the coal industry is the proper bargaining unit.

You may be situated in a plant in which not a man belongs to that union, but you are bound by the determination of the majority, because the Board has found that that is the proper unit.

The Board may have found that all of your employees are the proper unit, and not one of your electrician or mechanical men may belong to that unit.

They may have their own union.

Yet you are forbidden by this act to deal with that group, because they are a minority group.

Did that indicate a purpose on the part of Congress to free commerce from obstruction?

Nothing of the kind.

It indicates the congressional purpose to force national unions upon industry, and the act is sweeping in its language.

It purports to cover all industry, and it is exactly what was intended.

It won't do to say that collective bargaining is not involved in this case.

The theory is that the discharges discourage organization, that organization promotes collective bargaining, and that collective bargaining prevents industrial disturbances.

So that we do have to consider, and the Court has to consider, what is the main and primary purpose of this act.

Is it to remove obstructions to commerce, or is it to govern labor in industry?

It seems to me there can be no conclusion other than it is an attempt to enact sweeping, broad legislation over the labor matters of industry generally.

And that was the trend of testimony in the, case.

The testimony throughout and all this evidence that was offered in the joint hearing is along that very line.

The fact that the act is by its terms confined in its application to matters affecting commerce does not change the situation.

You cannot change the things which are not interstate commerce into things which are by the use of words.

If you say that it must be something affecting commerce, there is no limit.

It seems to me that anything affects commerce, and that the question then comes only as to the application in this particular case as to whether or not the connection is direct or remote.

The fact that we receive materials in interstate commerce or that we ship our products out interstates commerce cannot make a difference.

There is no use of my going over those cases.

That is true of every manufacturing industry.

The fact of the matter is that steel industry probably receives its products in a rawer form and gives a greater transformation to them when they are shipped out than almost any other industry.

There are hundreds of industries in the Pittsburgh district that take nothing but one shape of steel and turn out another, and their incoming product is much more similar to their outgoing product than it is in the steel industry.

I think the language of this Court in Heisler v. Thomas Colliery Co. (260 U. S. 245) as to what would be the effect of holding that the prior movement in interstate commerce or subsequent movement in interstate commerce both bring it within interstate commerce covers the situation better than any argument.

The reach and consequences of the contention repel its acceptance.

If the possibility, or, indeed, certainty of exportation of a product or a article from a State determines it to be in interstate commerce before the commencement of its movement from the State, it would seem to follow that is in such commerce from the instant of its growth or production, and in the case of coals, as they lie in the ground.

The result would be curious.

It could nationalize all industries, it would nationalize and withdraw from State jurisdiction and deliver to Federal commercial control the fruits of California and the South, the wheat of the West and its meats, the cotton of the South, the shoes of Massachusetts and woolen industries of other States, at the very inception of their production or growth, that is, the fruits unpicked, the cotton and wheat ungathered, hides and flesh of cattle yet “on the hoof,” wool yet unshorn, and coal yet unmined, because they are in varying percentages destined for and surely to be exported to States other than those of their production.

The Government argues that it is in the stream of commerce.

I shall not go into that except to point out this, that in Stafford v.

Wallace and in Board of Trade v. Olsen the evidence and the matters before Congress showed beyond any doubt that these were select focal points in which practically all of the commerce passed.

This mill is not in any way stationed in the stream of commerce.

This plant, into winch we take coal and coke and limestone and turn out steel, is not any mere temporary stoppage in a stream of commerce coming from the West to the East.

It is not comparable, and because Congress could regulate stockyards, it is a far cry to say that they could regulate the labor relations of an industry like the steel industry.

The Government argues that there is the possibility of an intention on the part of the strikers to obstruct interstate commerce.

It seems to me that that argument weakens the connection.

In the stockyards cases, in Swift & Co, v. United States (J 96 U. S. 375), the intent to obstruct interstate commerce was clear, proven.

The stockyards were regulated on the theory that they might be used as an instrumentality in monopoly.

But here the intention that the Government ascribes is an intention on the part of the strikers to interrupt interstate commerce, an intention on the part of a third party, an intervening agency.

They do not claim that in discharging 10 men we had any intention of creating a controversy that might obstruct interstate commerce, but the fact of these discharges might lead to dissatisfaction, which might lead to a dispute of more serious consequences, which might result in a walk-out, in which the strikers might have an intention to interrupt or change the stream of interstate commerce.

Now, if that reasoning applies, there is not any reason why Congress cannot regulate every activity relating to manufacture.

It is just as reasonable to say that, if we do not treat the men properly with respect to workmen's compensation law, if we do not have proper sanitary conditions, or hours of labor or of everything else, the net result of which may be that there will be a strike, in which there will be an intent on the part of the strikers to obstruct interstate commerce, such an act would apply.

Mr. Madden pointed out that one of the witnesses testified that he was told that he would have to pay his back rent if he joined the union.

I don't see any reason why, if this be sound, Congress cannot regulate our rent relations with our employees, because dissatisfaction on the part of employees who live in our houses may result in a dissatisfaction of some kind that may result in a labor dispute where the intent may be present to interrupt interstate commerce.

Now, if we ever get to the place where we are having such remote, indirect causes prevail to enable Congress to regulate manufacturing industries, there is no limit to it.

We raised the question before the Board, and we raise it in our brief, on the procedural sections of this statute, I do not intend to argue it at length.

It is covered in the brief.

I do want to make this observation, however, that the statute purports to give to this Board original and exclusive jurisdiction in these matters, and it is said that we objected before the Board and the circuit court that the Board was constituted an investigator and a prosecutor and a judge at the same time, and the answer was made that that was similar to the proceedings of the Federal Trade Commission, I want to point out, however, that the Federal Trade Commission does not render any decisions in private matters at all.

Its decrees are negative.

They are only when public rights are involved, and they leave the parties to the law to adjust their private differences.

The scope of the app ended order in this case is entirely different.

It seeks to adjudicate private rights, enter a money judgment for the back wages, and otherwise carry out the rights between individual parties.

We raised also before the Board, and now, the question of the violation of the fifth amendment by this decision.

The case of Adair v, United States (208 U, S. 161) decided flatly that a man had a right to hire whom he wished, and that a statute which forbade the discharge of an employee for union activities was unconstitutional.

The same substantive decision was made in Coppage v. Kansas (236 U. S. I), and now it is said that the Texas &: New Orleans decision modified or at least cast some doubt us to those decisions.

There is this to be observed about the Texas & New Orleans case.

It was a case in which the railroad had voluntarily entered into arbitration and the arbitration was proceeding before the Railroad Mediation Board.

The order made requiring the restoration of the employees was made and seemed to be made because they had been discharged after the voluntary mediation had begun, and the court pointed out that t here was no attempt to interfere with the normal hiring or firing of employees, but that the order was being made to require the railroad to purge itself of the contempt shown by the discharge and the efforts that were made after the mediation storied to create and bring into existence a new labor organization which would be more favorable to the company than the one with which it had begun the mediation.

Now, in this case the order is made flatly that we reinstate these 10 employees.

The Solicitor General says that if they were restored then it would be a hiring at will; that the minute they came back to work they would be working for us at a hiring at will, when they could be discharged for any reason or no reason.

It is difficult for me to see why, if they could have been discharged for no reason, their restoration could be ordered because the Labor Board did not agree with the sufficiency of the reason for which they were discharged.

MR. JUSTICE SUTHERLAND: I did not quite understand the Solicitor General to take that position.

I understood that his position was that he could not be discharged because he belonged to a labor union.

MR. EARL F. REED: I understood him to say in answer to the Justice's question that it would be a hiring at will, that if they came back their tenure would be at will, and I am assuming that a hiring at will entitles the employer to discharge for any cause or no cause.

That much I may be adding myself.

MR. JUSTICE SUTHERLAND: I understood him to make that exception.

MR. EARL F. REED: I should think that that exception would follow.

In other words, I certainly think that if this act is valid it means that when the 10 men come back they cannot be discharged except for a cause which would seem sufficient to the Labor Board.

Certainly it does not mean that they could be discharged right away, because the same complaint would be made again.

The fact that these men were intended to be taken back and kept is evidenced by this unusual provision in the order.

The Board ordered not only the restoration and the payment of the back pay, but that the company should post a notice that it "will not discharge or in any manner discriminate against members of or those desiring to become members of Beaver Valley Lodge No. 200, Amalgamated Association", and so forth.

MR. JUSTICE VAN DEVANTER: You mean that it could not discharge them for any reasons or that they could not be discharged because of that?

MR. EARL F. REED: will not discharge or in any manner discriminate against members of or those desiring to become members of Beaver Valley Lodge No.

200, Amalgamated Association of Iron, steel and Tin workers of North America, or persons assisting said organizations or otherwise in union activities.

The posting of that notice in the mill of the J ones & Laughlin Steel Corporation would have meant that all discipline and control over the men in that organization was gone.

The restoration of 10 men was a vastly more important thing than the wages involved.

If it were announced, if it were known, as it would be, to 22,000 employees that 10 men who had been discharged over a period of 6 months, who belonged to the union, had to be taken back and put back to work and had their positions, and could not be discharged except upon a hearing before the Labor Board, all freedom of contract, all right to manage your own business, is gone.

Those men, if that be the law, if they can come back into this organization and go back to work for us, have a civil-service status.

They stand differently from any other employee in our employ, because they cannot be discharged without a hearing.

Suppose their department shuts down.

I suppose we have to go back to the Labor Board and ask to reopen this decree and show that they would not have had work if they had been working.

Suppose they are tendered some other work that they do not want.

In one of these discharge cases the man thought he was not equal to handling the machine that he had and he asked for something else, and in another a man had been absent a great many times.

Under this decree this money judgment goes into effect and we pay them these back wages indefinitely, apparently.

Suppose we want to transfer him to another department.

Then I guess we have got to go to the Labor Board and show them that we have good ground for transferring that man and we want the thing modified so that we can put him in another department.

Suppose there is a question of promotion.

There is no reason for not applying it to promotions.

Daily they are making complaints that a man promoted is a nonunion man and therefore it was a discrimination.

I suppose every time we wanted to promote a man we would have to go bock to the Board and ask them to reopen this decree and let us promote the man.

Now, an employer has to have discretion.

He cannot always give a reason for a discharge.

There are times when sabotage occurs times when there is theft, and he cannot fasten the responsibility.

There are men who are just a disorganizing influence and have to be transferred.

There are men who have no promise of ability, who cannot either maintain or operate a machine, or who are a constant menace to their fellow employees.

Is the discretion of the management to be reviewed every time the man discharged happens to be a union man?

Here are 22,000 employees, and 10 of them over 6 months discharged that happen to be members of the union, and we are hauled into court and have to trial to show why we discharged those 10 men.

Is that an interference with the right of freedom of contract?

Is that an interference with the right to run our business as we think best?

It seems to me that the Government's argument comes down to an economic argument.

"It would be a good thing," says Mr. Madden, "If the Federal Government could control the lab or relations of industry.

" But that is not the law, and never has been.

He may think that the States are handling it "stupdily", as he says.

He may think that a centralized government in which the Federal Government controls all of the labor relations of industry is desired.

That is not the law and never has been.

For a century this Court has adhered to the simple, literal meaning which Marshall found in the commerce clause, that Congress has power to regulate commerce among the States.

It has given assurance to the States when their taxing statutes have arisen that their rights shall be as the Constitution fixes them.

The taxing authority or the police power of the States has been protected, and the rights of individuals to maintain their own property have been protected.

What the petitioner is asking is that the traditions and precedents of a century be cast aside and that we change the meaning of the Constitution by a judicial decree and say that things that for a century have not been the business of the Federal Government are now to be subject to regulation, because of the remote possibility that these discharges and things of this kind may obstruct commerce.

MR. CHIEF JUSTICE: That is all on your side.

Anything more on your side?

MR. STANLEY REED: That is all, Your Honor.