Section 2. Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice President of the United States, Representatives in Congress, the Executive and Judicial officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty-one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens shall bear to the whole number of male citizens twenty-one years of age in such State.
In General
The effect of this section in relation to Negroes was indicated in Elk v. Wilkins.[1217] "Slavery having been abolished, and the persons formerly held as slaves made citizens, this clause fixing the apportionment of representatives has abrogated so much of * * * [Article I, § 2, cl. 3] of the * * * original Constitution as counted only three-fifths of such persons."
"Indians Not Taxed"
Although one authority on the legal status of the American Indian observed that this "* * * phrase [was] never * * * more explicitly defined, but probably * * * [meant] * * * Indians resident on reservations, that is, on land not taxed by the States,"[1218] the United States Attorney General, in 1940, commented as follows upon the difficulty of arriving at any satisfactory construction of these words: "Whether the phrase 'Indians not taxed' refers (1) to Indians not actually paying taxes or only to those who are not subject to taxation and (2) to Indians not taxed or subject to taxation by any taxing authority or only to those not taxed or subject to taxation by the States in which they reside * * * [presents] questions * * * [which have] been discussed in a number of court decisions but the issue has never been squarely raised in any of the decided cases. Some of the cases and some statements appearing in the debates in the Constitutional Convention lend support to the view that since all Indians are now subject to the Federal income-tax laws [Superintendent v. Commissioner, 295 U.S. 418 (1935)] there are no longer any Indians not taxed within the meaning of the constitutional phrase. On the other hand, other decided cases and other statements appearing in the debates in the Convention equally support the contrary view. * * *, the answer to * * * [these questions] is not free from doubt."[1219]
As to the latest construction which Congress has given to this phrase in apportioning seats in the House of Representatives, it is pertinent to note that the Apportionment Act of 1929, at last amended in 1941,[1220] excludes "Indians not taxed" from the computation of the total population of each State. However, in reliance on the above-mentioned decision that all Indians are now subject to federal income taxation, the Director of the Census included all Indians in the 1940 tabulation of total population in each State, and Congress took no action to alter the effects which such inclusion had upon the number of seats distributed to the several States.[1221]
Right to Vote
The right to vote intended to be protected refers to the right to vote as established by the laws and constitution of the State; subject, however, to the limitation that the Constitution, in article I, section 2, adopts as qualifications for voting for members of Congress those qualifications established by the States for voting for the most numerous branch of their legislatures.
To the latter extent the right to vote for members of Congress has been declared to be fundamentally based upon the Constitution and as never having been intended to be left within the exclusive control of the States.[1222]
Reduction of State's Representation
"Questions relating to the apportionment of representatives among the several States are political in their nature and reside exclusively within the determination of Congress * * *" Consequently, a United States District Court was obliged to dismiss an action for damages against the Virginia Secretary of State for the latter's refusal to certify the plaintiff as candidate for the office of Congressman at large, inasmuch as the plaintiff's case rested on the theory that the apportionment act of Congress and the Redistricting Act of Virginia, by failing to take into account the disenfranchisement of 60% of the voters occasioned by the poll tax, were both invalid, and that Virginia accordingly was entitled to only four instead of nine Congressmen, which four were to be elected at large.[1223] "It is well known that the elective franchise has been limited or denied to citizens in various States of the union in past years, but no serious attempt has been made by Congress to enforce the mandate of the second section of the Fourteenth Amendment, and it is noteworthy that there are no instances in which the courts have attempted to revise the apportionment of Representatives by Congress."[1224]
Section 3. No Person shall be a Senator or Representative in Congress, or elector of President and Vice President, or hold any office, civil or military, under the United States, or under any State, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may by a vote of two-thirds of each House, remove such disability.
In General
The right to remove disabilities imposed by this section was exercised by Congress at different times on behalf of enumerated individuals—notably by act of December 14, 1869 (16 Stat. 607). In 1872, the disabilities were removed, by a blanket act, from all persons "except Senators and Representatives of the Thirty-sixth and Thirty-seventh Congresses, officers in the judicial military, and naval service of the United States, heads of departments, and foreign ministers of the United States" (17 Stat. 142). Twenty-six years later, on June 6, 1898 (30 Stat. 432), Congress enacted briefly that "the disability imposed by section 3 * * * incurred heretofore [prior to June 6, 1898], is hereby removed."[1225]
Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
Although section four "was undoubtedly inspired by the desire to put beyond question the obligations of the Government issued during the Civil War, its language indicates a broader connotation. * * * 'the validity of the public debt' * * * [embraces] whatever concerns the integrity of the public obligations," and applies to government bonds issued after as well as before adoption of the Amendment.[1226]
Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.
Scope of the Provision
"* * * until some State law has been passed, or some State action through its officers or agents has been taken, adverse to the rights of citizens sought to be protected by the Fourteenth Amendment, no legislation of the United States under said amendment, nor any proceeding under such legislation, can be called into activity: * * * The legislation which Congress is authorized to adopt in this behalf is not general legislation upon the rights of the citizen, but corrective legislation, that is, such as may be necessary and proper for counteracting such laws as the States may adopt or enforce, and which, by the amendment, they are prohibited from making or enforcing, or such acts and proceedings as the States may commit or take, and which, by the amendment, they are prohibited from committing or taking."[1227]
Conversely, Congress may enforce the provisions of the amendment whenever they are disregarded by either the legislative, the executive, or the judicial department of the State. The mode of the enforcement is left to its discretion. It may secure the right, that is, enforce its recognition, by removing the case from a State court, in which it is denied, into a federal court where it will be acknowledged.[1228] Similarly, Congress may provide that "no citizen, possessing all other qualifications which are or may be prescribed by law shall be disqualified for service as grand or petit juror in any court of the United States, or of any State, on account of race, color, or previous condition of servitude; and any officer or other person charged with any duty in the selection or summoning of jurors who shall exclude or fail to summon any citizen for the cause aforesaid shall, on conviction thereof, be deemed guilty of a misdemeanor, * * *"[1229] However, the Supreme Court declined to sustain Congress when, under the guise of enforcing the Fourteenth Amendment by appropriate legislation, it enacted a statute which was not limited to take effect only in case a State should abridge the privileges of United States citizens, but applied no matter how well the State might have performed its duty, and would subject to punishment private individuals who conspired to deprive anyone of the equal protection of the laws.[1230]
Whether its powers of enforcement enable Congress constitutionally to punish State officers who abuse their authority and act in violation of their State's laws is a question on which the Justices only recently have divided. Five Justices ruled in Screws v. United States[1231] that section 20 of the Criminal Code[1232] which provides "whoever, under the color of any law, statute, ordinance, * * *, willfully subjects, * * *, any inhabitant of any State, * * * to the deprivation of any rights, * * * protected by the Constitution and laws of the United States, * * *" could be the basis of a prosecution of Screws, a Georgia sheriff, and others, on charges of having, in the course of arresting a Negro, brutally beaten him to death and deprive him of "the right not to be deprived of life without due process of law."[1233] Holding that, "abuse of State power" does not create "immunity to federal power" these five Justices concluded that Ex parte Virginia[1234] and United States v. Classic[1235] had rejected for all time the defense that action by state officers in excess of their powers did not constitute state action "under color of law" and therefore was punishable, if at all, only as a crime against the State.[1236] The conviction of Screws was, however, reversed on the ground that the jury should have been instructed to say whether the accused had had the "specific intent" to deprive their victim of his constitutional rights, since in the absence of such a finding § 20 failed for indefiniteness.[1237] But this construction of the word "willfully" appears subsequently to have been abandoned, or at least considerably watered down. In Williams v. United States,[1238] decided in April 1951, the Court ruled, by a bare majority, that a conviction under § 20 was not subject to objection on the ground of the vagueness of the statute where the indictment made it clear that the constitutional right violated by the defendant was immunity from the use of force and violence to obtain a confession, and this meaning was also made clear by the trial judge's charge to the jury.[1239] To the same effect is the later case of Koehler v. United States[1240] in which the Court denied certiorari in a case closely resembling that of Screws, although the trial judge, while charging the jury that it must find specific intent, nevertheless went on to say:"'The color of the act determines the complexion of the intent. The intent to injure or defraud is presumed when the unlawful act, which results in loss or injury, is proved to have been knowingly committed. It is a well settled rule, which the law applies to both criminal and civil cases, that the intent is presumed and inferred from the result of the action.'"[1241]
Notes
[2] Scott v. Sandford, 19 How. 393 (1897).
[3] Ibid. 404-406, 417-418, 419-420.
[4] By the Civil Rights Act of April 9, 1866 (14 Stat. 27), enacted two years prior to the Fourteenth Amendment, "All persons born in the United States and not subject to any foreign power, excluding Indians not taxed, are hereby declared to be citizens of the United States; * * *"
[5] 169 U.S. 649 (1898).—Thus, a person who was born in the United States of Swedish parents then naturalized here did not lose her citizenship and was therefore not subject to deportation because of her removal to Sweden during her minority, it appearing that her parents resumed their citizenship in that country, but that she returned here on attaining majority with intention to retain and maintain her citizenship.—Perkins v. Elg, 307 U.S. 325 (1939).
[6] 169 U.S. 682.
[7] In re Look Tin Sing, 21 F. 905 (1884).
[8] Lam Mow v. Nagle, 24 F. (2d) 316 (1928).
[9] United States v. Gordon, Fed. Cas. No. 15,231 (1861). The term, United States, is defined in the recently enacted Immigration and Nationality Act as follows: "The term, 'United States', except as otherwise specifically herein provided, when used in a geographical sense, means the continental United States, Alaska, Hawaii, Puerto Rico, Guam, and the Virgin Islands of the United States." 66 Stat. 165, § 101 (38). Whether the expression is used in the same sense in Amendment XIV may be questionable.
[10] Slaughter-House Cases, 16 Wall. 36, 74 (1873).
[11] Arver v. United States (Selective Draft Law Cases), 245 U.S. 366, 377, 388-389 (1918).
[12] Insurance Co. v. New Orleans, Fed. Cas. No. 7,052 (1870).—Not being citizens of the United States, corporations accordingly have been declared unable "to claim the protection of that clause of the Fourteenth Amendment which secures the privileges and immunities of citizens of the United States against abridgment or impairment by the law of a State."—Orient Ins. Co. v. Daggs, 172 U.S. 557, 561 (1899). This conclusion was in harmony with the earlier holding in Paul v. Virginia, 8 Wall. 168 (1869) to the effect that corporations were not within the scope of the privileges and immunities clause of state citizenship set out in article 4, section 2. See also Selover, Bates & Co. v. Walsh, 226 U.S. 112, 126 (1912); Berea College v. Kentucky, 211 U.S. 45 (1908); Liberty Warehouse Co. v. Burley Tobacco Growers' Co-op. Marketing Asso., 276 U.S. 71, 89 (1928); Grosjean v. American Press Co., 297 U.S. 233, 244 (1936).
[13] 16 Wall. 36, 71, 77-79 (1873).
[14] Ibid. 78-79.
[15] Ibid. 79, citing Crandall v. Nevada, 6 Wall. 35 (1868). Decided before ratification of the Fourteenth Amendment.
[16] 211 U.S. 78, 97.
[17] Crandall v. Nevada, 6 Wall. 35 (1868). This case has been cited as supporting the claim that "the right to pass freely from State to State" is "among the rights and privileges of National citizenship" (Twining v. New Jersey, 211 U.S. 78, 97 (1908)); but it was pointed out in United States v. Wheeler, 254 U.S. 281, 299 (1920), that the statute involved in the Crandall Case was held to burden directly the performance by the United States of its governmental functions. In Williams v. Fears, 179 U.S. 270, 274 (1900), a law taxing the business of hiring persons to labor outside the State was upheld on the ground that it affected freedom of egress from the State "only incidentally and remotely."
[18] United States v. Cruikshank, 92 U.S. 542 (1876).
[19] Ex parte Yarbrough, 110 U.S. 651 (1884); Wiley v. Sinkler, 179 U.S. 58 (1900).
[20] United States v. Waddell, 112 U.S. 76 (1884).
[21] Logan v. United States, 144 U.S. 263 (1892).
[22] Re Quarles, 158 U.S. 532 (1895).
[23] Crutcher v. Kentucky, 141 U.S. 47, 57 (1891).
[24] 307 U.S. 496.
[25] Concurring in the result, Justice Stone contended that the case should have been disposed of by reliance upon the due process, rather than the privileges and immunities, clause, inasmuch as the record disclosed that the complainants had not invoked the latter clause and the evidence failed to indicate that any of the complainants were in fact citizens or that any relation between citizens and the Federal Government was involved.—Ibid. 525-527.
[26] 314 U.S. 160, 177-183 (1941).
[27] Justices Douglas, Black, Murphy and Jackson.
[28] 6 Wall. 35 (1868).
[29] 279 U.S. 245, 251 (1929).
[30] 296 U.S. 404.
[31] See Madden v. Kentucky, 309 U.S. 83, 93.
[32] 296 U.S. 404, 444, 445-446.
[33] 332 U.S. 633, 645, 640.
[34] Ibid. 640.
[35] Holden v. Hardy, 169 U.S. 366, 380 (1898).
[36] Williams v. Fears, 179 U.S. 270, 274 (1900).
[37] Wilmington Star Min. Co. v. Fulton, 205 U.S. 60, 74 (1907).
[38] Heim v. McCall, 239 U.S. 175 (1915); Crane v. New York, 239 U.S. 195 (1915).
[39] Missouri P.R. Co. v. Castle, 224 U.S. 541 (1912).
[40] Western U. Teleg. Co. v. Commercial Milling Co., 218 U.S. 406 (1910).
[41] Bradwell v. Illinois, 16 Wall. 130, 139 (1873); Re Lockwood, 154 U.S. 116 (1894).
[42] Kirtland v. Hotchkiss, 100 U.S. 491, 499 (1879).
[43] Bartemeyer v. Iowa, 18 Wall. 129 (1874); Mugler v. Kansas, 123 U.S. 623 (1887); Crowley v. Christensen, 137 U.S. 86, 91 (1890); Giozza v. Tiernan, 148 U.S. 657 (1893).
[44] Ex parte Kemmler, 136 U.S. 436 (1890).
[45] Minor v. Happersett, 21 Wall. 162 (1875).
[46] Pope v. Williams, 193 U.S. 621 (1904).
[47] Ferry v. Spokane, P. & S.R. Co., 258 U.S. 314 (1922).
[48] Walker v. Sauvinet, 92 U.S. 90 (1876).
[49] Presser v. Illinois, 116 U.S. 252, 267 (1886).
[50] Maxwell v. Dow, 176 U.S. 581, 596, 597-598 (1900).
[51] Twining v. New Jersey, 211 U.S. 78, 91-98 (1908). Reaffirmed in Adamson v. California, 332 U.S. 46, 51-53 (1947).
[52] New York ex rel. Bryant v. Zimmerman, 278 U.S. 63, 71 (1928).
[53] Palko v. Connecticut, 302 U.S. 319 (1937).
[54] Breedlove v. Suttles, 302 U.S. 277 (1937).
[55] Madden v. Kentucky, 309 U.S. 83, 92-93 (1940); overruling Colgate v. Harvey, 296 U.S. 404, 430 (1935).
[56] Snowden v. Hughes, 321 U.S. 1 (1944).
[57] MacDougall v. Green, 335 U.S. 281 (1948)
[58] Hibben v. Smith, 191 U.S. 310, 325 (1903).
[59] Carroll v. Greenwich Ins. Co., 199 U.S. 401, 410 (1905). See also French v. Barber Asphalt Paving Co., 181 U.S. 324, 328 (1901).
[61] 16 Wall. 36 (1873).
[62] Ibid. 80-81.
[63] 94 U.S. 113 (1877).
[64] Ibid. 134.
[65] 96 U.S. 97 (1878).
[66] Ibid. 103-104.
[67] 110 U.S. 516 (1884).
[68] Ibid. 528, 532, 536.
[69] 94 U.S. 113, 141-148 (1877).
[70] 123 U.S. 623, 661.
[71] 16 Wall. 36, 113-114, 116, 122 (1873).
[72] Savings & Loan Association v. Topeka, 20 Wall. 655, 663 (1875).—"There are * * * rights in every free government beyond the control of the State. * * * There are limitations on [governmental power] which grow out of the essential nature of all free governments. Implied reservations of individual rights, without which the social compact could not exist, * * *"
[73] "Rights to life, liberty, and the pursuit of happiness are equivalent to the rights of life, liberty, and property. These are the fundamental rights which can only be taken away by due process of law, and which can only be interfered with, or the enjoyment of which can only be modified, by lawful regulations necessary or proper for the mutual good of all; * * * This right to choose one's calling is an essential part of that liberty which it is the object of government to protect; and a calling, when chosen, is a man's property and right. * * * A law which prohibits a large class of citizens from adopting a lawful employment, or from following a lawful employment previously adopted, does deprive them of liberty as well as property, without due process of law."—Slaughter-House Cases, 16 Wall. 36, 116, 122 (Justice Bradley).
[74] 143 U.S. 517, 551.
[75] See Fletcher v. Peck, 6 Cr. 87, 128 (1810).
[76] 94 U.S. 113, 123, 132 (1877).
[77] Ibid. 132.
[78] 123 U.S. 623 (1887).
[79] Ibid. 662.—"We cannot shut out of view the fact, within the knowledge of all, that the public health, the public morals, and the public safety, may be endangered by the general use of intoxicating drinks; nor the fact, * * *, that * * * pauperism, and crime * * * are, in some degree, at least, traceable to this evil."
[80] 127 U.S. 678 (1888).
[81] Ibid. 685.
[82] 169 U.S. 366 (1898).
[83] 198 U.S. 45 (1905).
[84] 127 U.S. 678 (1888).
[85] 123 U.S. 623 (1887).
[86] 169 U.S. 366, 398.
[87] 198 U.S. 45, 58-59 (1905).
[88] 198 U.S. 45, 71-74.
[89] 198 U.S. 45, 75-76.
[90] 243 U.S. 426 (1917.)
[91] 208 U.S. 412 (1908).
[92] Ibid.
[93] Adkins v. Children's Hospital, 261 U.S. 525 (1923); Stettler v. O'Hara, 243 U.S. 629 (1917); Morehead v. New York ex rel. Tipaldo, 298 U.S. 587 (1936); overruled by West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937).
[94] West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937). Thus the National Labor Relations Act was declared not to "interfere with the normal exercise of the right of the employer to select its employees or to discharge them." However, restraint of the employer for the purpose of preventing an unjust interference with the correlative right of his employees to organize was declared not to be arbitrary.—National Labor Relations Board v. Jones & Laughlin, 301 U.S. 1, 44, 45-46 (1937).
[95] See especially Howard Jay Graham, "The 'Conspiracy Theory' of the Fourteenth Amendment", Selected Essays on Constitutional Law, I, 236-267 (1938).
[96] 94 U.S. 113.—In a case arising under the Fifth Amendment, decided almost at the same time, the Court explicitly declared the United States "equally with the States * * * are prohibited from depriving persons or corporations of property without due process of law." Sinking Fund Cases, 99 U.S. 700, 718-719 (1878).
[97] Smyth v. Ames, 169 U.S. 466, 522, 526 (1898); Kentucky Finance Corp. v. Paramount Auto Exch. Corp., 262 U.S. 544, 550 (1923); Liggett (Louis K.) Co. v. Baldridge, 278 U.S. 105 (1928).
[98] Northwestern Nat. L. Ins. Co. v. Riggs, 203 U.S. 243, 255 (1906); Western Turf Assoc. v. Greenberg, 204 U.S. 359, 363 (1907); Pierce v. Society of the Sisters, 268 U.S. 510, 535 (1925). Earlier, in 1904, in Northern Securities Co. v. United States, (193 U.S. 197, 362), a case interpreting the federal antitrust law, Justice Brewer, in a concurring opinion, had declared that "a corporation, * * *, is not endowed with the inalienable rights of a natural person."
[99] Grosjean v. American Press Co., 297 U.S. 233, 244 (1936).
[100] Yick Wo v. Hopkins, 118 U.S. 356 (1886); Terrace v. Thompson, 263 U.S. 197, 216 (1923).
[101] Columbus & G.R. Co. v. Miller, 283 U.S. 96 (1931); Pennie v. Reis, 132 U.S. 464 (1889); Taylor v. Beckham (No. 1), 178 U.S. 548 (1900); Straus v. Foxworth, 231 U.S. 162 (1913); Tyler v. Judges of the Court of Registration, 179 U.S. 405, 410 (1900).
[102] Pawhuska v. Pawhuska Oil Co., 250 U.S. 394 (1919); Trenton v. New Jersey, 262 U.S. 182 (1923); Williams v. Baltimore, 289 U.S. 36 (1933).
[103] Boynton v. Hutchinson Gas Co., 291 U.S. 656 (1934); South Carolina Highway Dept. v. Barnwell Bros., 303 U.S. 177 (1938).
The converse is not true, however; and "the interest of a State official in vindicating the Constitution * * * gives him no legal standing to attack the constitutionality of a State statute in order to avoid compliance with it.—Smith v. Indiana, 191 U.S. 138 (1903); Braxton County Ct. v. West Virginia, 208 U.S. 192 (1908); Marshall v. Dye, 231 U.S. 250 (1913); Stewart v. Kansas City, 239 U.S. 14 (1915). See also Coleman v. Miller, 307 U.S. 433, 437-446 (1939)."
[104] Bacon v. Walker, 204 U.S. 311 (1907); Chicago, B. & Q.R. Co. v. Illinois ex rel. Grimwood, 200 U.S. 561, 592 (1906); California Reduction Co. v. Sanitary Reduction Works, 199 U.S. 306, 318 (1905); Eubank v. Richmond, 226 U.S. 137 (1912); Schmidinger v. Chicago, 226 U.S. 578 (1913); Sligh v. Kirkwood, 237 U.S. 52, 58-59 (1915); Nebbia v. New York, 291 U.S. 502 (1934); Nashville C. & St. L.R. Co. v. Walters, 294 U.S. 405 (1935).
[105] Hadacheck v. Sebastian, 239 U.S. 394 (1915); Hall v. Geiger-Jones Co., 242 U.S. 539 (1917); Sligh v. Kirkwood, 237 U.S. 52, 58-59 (1915); Eubank v. Richmond, 226 U.S. 137, 142 (1912); Erie R. Co. v. Williams, 233 U.S. 685, 699 (1914); Panhandle Eastern Pipe Line Co. v. State Highway Commission, 294 U.S. 613, 622 (1935); Hudson County Water Co. v. McCarter, 209 U.S. 349 (1908).
[106] Atlantic Coast Line R. Co. v. Goldsboro, 232 U.S. 548, 558 (1914).
[107] Treigle v. Acme Homestead Asso., 297 U.S. 189, 197 (1933); Liggett (Louis K.) Co. v. Baldridge, 278 U.S. 105, 111-112 (1928).
[108] Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). See also Welch v. Swasey, 214 U.S. 91, 107 (1909).
[109] Noble State Bank v. Haskell, 219 U.S. 104, 110 (1911).
[110] Erie R. Co. v. Williams, 233 U.S. 685, 700 (1914).
[111] New Orleans Public Service Co. v. New Orleans, 281 U.S. 682, 687 (1930).
[112] Abie State Bank v. Bryan, 282 U.S. 765, 770 (1931).
[113] Meyer v. Nebraska, 262 U.S. 300, 399 (1923).
[114] Jacobson v. Massachusetts, 197 U.S. 11 (1905); Zucht v. King, 260 U.S. 174 (1922).
[115] Buck v. Bell, 274 U.S. 200 (1927).
[116] Minnesota v. Probate Court, 309 U.S. 270 (1940).
[117] Lanzetta v. New Jersey, 306 U.S. 451 (1939).
[118] 262 U.S. 390 (1923).
[119] 268 U.S. 510 (1925).
[120] Ibid. 534. Even this statement was a dictum. Inasmuch as only corporations and no parents were party litigants, the Court in fact disposed of the case on the ground that the corporations were being deprived of their "property" without due process of law.
[121] Waugh v. Mississippi University, 237 U.S. 589, 596-597 (1915).
[123] 16 Wall. 36 (1873).
[124] 165 U.S. 578, 589.—Herein liberty of contract was defined as follows: "The liberty mentioned in that [Fourteenth] Amendment means not only the right of the citizen to be free from the mere physical restraint of his person, as by incarceration, but the term is deemed to embrace the right of the citizen to be free in the enjoyment of all his faculties; to be free to use them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or avocation, and for that purpose to enter into all contracts which may be proper, necessary and essential to his carrying out to a successful conclusion the purposes above mentioned."
[125] 236 U.S. 1, 14 (1915).
[126] Chicago, B. & Q.R. Co. v. McGuire, 219 U.S. 549, 567, 570 (1911); Wolff Packing Co. v. Court of Industrial Relations, 262 U.S. 522, 534 (1923).
[127] Holden v. Hardy, 169 U.S. 366 (1898).
[128] Miller v. Wilson, 236 U.S. 373 (1915); Bosley v. McLaughlin, 236 U.S. 385 (1915). See also Muller v. Oregon, 208 U.S. 412 (1908); Riley v. Massachusetts, 232 U.S. 671 (1914); Hawley v. Walker, 232 U.S. 718 (1914).
[129] Bunting v. Oregon, 243 U.S. 426 (1917).
[130] Atkin v. Kansas, 191 U.S. 207 (1903).
[131] Consolidated Coal Co. v. Illinois, 185 U.S. 203 (1902).
[132] Wilmington Star Min. Co. v. Fulton, 205 U.S. 60 (1907).
[133] Barrett v. Indiana, 299 U.S. 26 (1913).
[134] Plymouth Coal Co. v. Pennsylvania, 232 U.S. 531 (1914).
[135] Booth v. Indiana, 237 U.S. 391 (1915).
[136] Sturges & B. Mfg. Co. v. Beauchamp, 231 U.S. 320 (1914).
[137] Knoxville Iron Co. v. Harbison, 183 U.S. 13 (1901); Dayton Coal & I. Co. v. Barton, 183 U.S. 23 (1901); Keokee Consol. Coke Co. v. Taylor, 234 U.S. 224 (1914).
[138] Erie R. Co. v. Williams, 233 U.S. 685 (1914).
[139] St. Louis, I.M. & S.R. Co. v. Paul, 173 U.S. 404 (1899).
[140] Rail & River Coal Co. v. Yaple, 236 U.S. 338 (1915). See also McClean v. Arkansas, 211 U.S. 539 (1909).
[141] West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937), overruling Adkins v. Children's Hospital, 261 U.S. 255 (1923) (a Fifth Amendment case); Morehead v. New York ex rel. Tipaldo, 298 U.S. 587 (1936).
[142] Day-Brite Lighting, Inc. v. Missouri, 342 U.S. 421, 423 (1952).
[143] Ibid., 424-425.
[144] New York C.R. Co. v. White, 243 U.S. 188, 200 (1917).
[145] Arizona Copper Co. v. Hammer (Arizona Employers' Liability Cases), 250 U.S. 400, 419-420 (1919).
[146] In determining what occupations may be brought under the designation of "hazardous," the legislature may carry the idea to the "vanishing point."—Ward & Gow v. Krinsky, 259 U.S. 503, 520 (1922).
[147] New York C.R. v. White, 243 U.S. 188 (1917); Mountain Timber Co. v. Washington, 243 U.S. 219 (1917).
[148] Arizona Copper Co. v. Hammer (Arizona Employers' Liability Cases), 250 U.S. 400, 419-420 (1919).
[149] Hawkins v. Bleakly, 243 U.S. 210 (1917).
[150] Chicago, B. & Q.R. Co. v. McGuire, 219 U.S. 549 (1911).
[151] Alaska Packers Asso. v. Industrial Commission, 294 U.S. 532 (1935).
[152] Thornton v. Duffy, 254 U.S. 361 (1920).
[153] Booth Fisheries Co. v. Industrial Commission, 271 U.S. 208 (1920).
[154] Staten Island R.T.R. Co. v. Phoenix Indemnity Co., 281 U.S. 98 (1930).
[155] Sheehan Co. v. Shuler, 265 U.S. 371 (1924); New York State R. Co. v. Shuler, 265 U.S. 379 (1924).
[156] New York C.R. Co. v. Bianc, 250 U.S. 596 (1919).—Attorneys are not deprived of property or their liberty of contract by restriction imposed by the State on the fees which they may charge in cases arising under the workmen's compensation law.—Yeiser v. Dysart, 267 U.S. 540 (1925).
[157] Justice Black in Lincoln Union v. Northwestern Co., 335 U.S. 525, 535 (1949). See also pp. 141, 977-979, 985.
In his concurring opinion, contained in the companion case of American Federation of Labor v. American Sash Co., 335 U.S. 538, 543-544 (1949), Justice Frankfurter summarized as follows the now obsolete doctrines employed by the Court to strike down State laws fostering unionization. "* * * unionization encountered the shibboleths of a premachine age and these were reflected in juridical assumptions that survived the facts on which they were based. Adam Smith was treated as though his generalizations had been imparted to him on Sinai and not as a thinker who addressed himself to the elimination of restrictions which had become fetters upon initiative and enterprise in his day. Basic human rights expressed by the constitutional conception of 'liberty' were equated with theories of laissez faire. The result was that economic views of confined validity were treated by lawyers and judges as though the Framers had enshrined them in the Constitution. * * * The attitude which regarded any legislative encroachment upon the existing economic order as infected with unconstitutionality led to disrespect for legislative attempts to strengthen the wage-earners' bargaining power. With that attitude as a premise, Adair v. United States, 208 U.S. 161 (1908), and Coppage v. Kansas, 236 U.S. 1 (1915), followed logically enough; not even Truax v. Corrigan, 257 U.S. 312 (1921), could be considered unexpected."
On grounds of unconstitutional impairment of freedom of contract, or more particularly, of the unrestricted right of the employer to hire and fire, a federal and a State statute attempting to outlaw "yellow dog" contracts whereby, as a condition of obtaining employment, a worker had to agree not to join or to remain a member of a union, were voided in Adair v. United States and Coppage v. Kansas, respectively. In Truax v. Corrigan, a majority of the Court held that an Arizona statute which operated, in effect, to make remediless [by forbidding the use of injunction] injury to an employer's business by striking employees and others, through concerted action in picketing, displaying banners advertising the strike, denouncing the employer as unfair to union labor, appealing to customers to withdraw their patronage, and circulating handbills containing abusive and libelous charges against employers, employees, and patrons, and intimidations of injury to future patrons, deprives the owner of the business and the premises of his property without due process of law.
In Wolff Packing Co. v. Industrial Court, 262 U.S. 522 (1923); 267 U.S. 552 (1925) and in Dorchy v. Kansas, 264 U.S. 286 (1924), the Court had also ruled that a statute compelling employers and employees to submit their controversies over wages and hours of labor to State arbitration was unconstitutional as part of a system compelling employers and employees to continue in business on terms not of their own making.
[158] 301 U.S. 468 (1937).
[159] Prudential Ins. Co. v. Cheek, 259 U.S. 530 (1922). In conjunction with its approval of this statute, the Court also sanctioned judicial enforcement by a State court of a local rule of policy which rendered illegal an agreement of several insurance companies having a monopoly of a line of business in a city that none would employ within two years any man who had been discharged from, or left, the service of any of the others.
[160] Chicago, R.I. & P.R. Co. v. Perry, 259 U.S. 548 (1922).
[161] Dorchy v. Kansas, 272 U.S. 306 (1926).
[162] 301 U.S. 468, 479 (1937).
[164] Cases disposing of the contention that restraints on picketing amount to a denial of freedom of speech and constitute therefore a deprivation of liberty without due process of law have been set forth under Amendment I.
[165] 326 U.S. 88 (1945).
[166] Ibid. 94. Justice Frankfurter, concurring, declared that "the insistence by individuals on their private prejudices * * *, in relations like those now before us, ought not to have a higher constitutional sanction than the determination of a State to extend the area of nondiscrimination beyond that which the Constitution itself exacts." Ibid. 98.
[167] 335 U.S. 525 (1949).
[168] 335 U.S. 538 (1949).
[169] 335 U.S. 525, 534, 537. In a lengthy opinion, in which he registered his concurrence with both decisions, Justice Frankfurter set forth extensive statistical data calculated to prove that labor unions not only were possessed of considerable economic power but by virtue of such power were no longer dependent on the closed shop for survival. He would therefore leave to the legislatures the determination "whether it is preferable in the public interest that trade unions should be subjected to State intervention or left to the free play of social forces, whether experience has disclosed 'union unfair labor practices,' and, if so, whether legislative correction is more appropriate than self-discipline and pressure of public opinion—* * *." 335 U.S. 538, 549-550.
[170] 336 U.S. 245 (1949).
[171] Ibid. 253.
[172] 336 U.S. 490 (1949). Other recent cases regulating picketing are treated under Amendment I, see p. 781.
[173] 94 U.S. 113 (1877).
[174] Chicago, M. & St. P.R. Co. v. Minnesota, 134 U.S. 418 (1890).
[175] Wolff Packing Co. v. Court of Industrial Relations, 262 U.S. 522, 535-536 (1923).
[176] Munn v. Illinois, 94 U.S. 113 (1877); Budd v. New York, 143 U.S. 517, 546 (1802); Brass v. North Dakota ex rel. Stoeser, 153 U.S. 391 (1894).
[177] Cotting v. Godard, 183 U.S. 79 (1901).
[178] Townsend v. Yeomans, 301 U.S. 441 (1937).
[179] German Alliance Ins. Co. v. Lewis, 233 U.S. 389 (1914); Aetna Ins. Co. v. Hyde, 275 U.S. 440 (1928).
[180] O'Gorman & Young v. Hartford F. Ins. Co., 282 U.S. 251 (1931).
[181] Williams v. Standard Oil Co., 278 U.S. 235 (1929).
[182] Tyson & Bros.—United Theatre Ticket Offices v. Banton, 273 U.S. 418 (1927).
[183] New State Ice Co. v. Liebmann, 285 U.S. 262 (1932).
[184] Nebbia v. New York, 291 U.S. 502, 531-532, 535-537, 539 (1934). In reaching this conclusion the Court might be said to have elevated to the status of prevailing doctrine the views advanced in previous decisions by dissenting Justices. Thus, Justice Stone, dissenting in Ribnik v. McBride, 277 U.S. 350, 350-360 (1928) had declared: "Price regulation is within the State's power whenever any combination of circumstances seriously curtails the regulative force of competition so that buyers or sellers are placed at such a disadvantage in the bargaining struggle that a legislature might reasonably anticipate serious consequences to the community as a whole." In his dissenting opinion in New State Ice Co. v. Liebmann, 285 U.S. 202, 302-303 (1932), Justice Brandeis had also observed that: "The notion of a distinct category of business 'affected with a public interest' employing property 'devoted to a public use' rests upon historical error. In my opinion the true principle is that the State's power extends to every regulation of any business reasonably required and appropriate for the public protection. I find in the due process clause no other limitation upon the character or the scope of regulation permissible."
[185] Justice McReynolds, speaking for the dissenting Justices, labelled the controls imposed by the challenged statute as a "fanciful scheme to protect the farmer against undue exactions by prescribing the price at which milk disposed of by him at will may be resold." Intimating that the New York statute was as efficacious as a safety regulation which required "householders to pour oil on their roofs as a means of curbing the spread of a neighborhood fire," Justice McReynolds insisted that "this Court must have regard to the wisdom of the enactment," and must determine "whether the means proposed have reasonable relation to something within legislative power."—291 U.S. 502, 556, 558 (1934).
[186] 313 U.S. 236, 246 (1941).
[187] 277 U.S. 350 (1928).
[188] 94 U.S. 113 (1877). See also Peik v. Chicago & N.W.R. Co., 94 U.S. 164 (1877).
[189] Rate-making is deemed to be one species of price fixing. Power Comm'n v. Pipeline Co., 315 U.S. 575, 603 (1942).
[190] Nebbia v. New York, 291 U.S. 502 (1934).
[191] 96 U.S. 97 (1878). See also Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226 (1897).
[192] 116 U.S. 307 (1886).
[193] Dow v. Beidelman, 125 U.S. 680 (1888).
[194] 134 U.S. 418, 458 (1890).
[195] 143 U.S. 517 (1892).
[196] 154 U.S. 362, 397 (1894).
[197] Ibid 397. Insofar as judicial intervention resulting in the invalidation of legislatively imposed rates has involved carriers, it should be noted that the successful complainant invariably has been the carrier, not the shipper.
[198] 169 U.S. 466 (1898).—Of course the validity of rates prescribed by a State for services wholly within its limits, must be determined wholly without reference to the interstate business done by a public utility. Domestic business should not be made to bear the losses on interstate business, and vice versa. Thus a State has no power to require the hauling of logs at a loss or at rates that are unreasonable, even if a railroad receives adequate revenues from the intrastate long haul and the interstate lumber haul taken together. On the other hand, in determining whether intrastate passenger railway rates are confiscatory, all parts of the system within the State (including sleeping, parlor, and dining cars) should be embraced in the computation; and the unremunerative parts should not be excluded because built primarily for interstate traffic or not required to supply local transportation needs.—See: Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 434-435 (1913); Chicago, M. & St. P.R. Co. v. Public Utilities Commission, 274 U.S. 344 (1927); Groesbeck v. Duluth, S.S. & A.R. Co., 250 U.S. 607 (1919). The maxim that a legislature cannot delegate legislative power is qualified to permit creation of administrative boards to apply to the myriad details of rate schedules the regulatory police power of the State. To prevent the conferring upon an administrative agency of authority to fix rates for public service from being a mere delegation of legislative power, and therefore void, the legislature must enjoin upon it a certain course of procedure and certain rules of decision in the performance of its functions, with which the agency must substantially comply to validate its action. Wichita Railroad & L. Co. v. Public Utilities Commission, 260 U.S. 48 (1922).
[199] Reagan v. Farmers' Loan & Trust Company, 154 U.S. 362, 397 (1894).
[200] Interstate Commerce Commission v. Illinois C.R. Co., 215 U.S. 452, 470 (1910).
[201] 231 U.S. 298, 310-313 (1913).
[202] Des Moines Gas Co. v. Des Moines, 238 U.S. 153 (1915).
[203] Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 452 (1913).
[204] Knoxville v. Water Company, 212 U.S. 1 (1909).
[205] Smith v. Illinois Bell Teleph. Co., 270 U.S. 587 (1926).
[206] Willcox v. Consolidated Gas Co., 212 U.S. 19 (1909).
[207] 174 U.S. 739, 750, 754 (1899). See also Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352, 433 (1913).
[208] San Diego Land & Town Co. v. Jasper, 189 U.S. 439, 441, 442 (1903). See also Van Dyke v. Geary, 244 U.S. 39 (1917); Georgia Ry. v. R.R. Comm., 262 U.S. 625, 634 (1923).
[209] For its current position, see Crowell v. Benson, 285 U.S. 22 (1932).
[210] 222 U.S. 541, 547-548 (1912). See also Interstate Comm. Comm. v. Illinois C.R., 215 U.S. 452, 470 (1910).
[211] 253 U.S. 287, 293-294 (1920).
[212] Ibid. 289. In injunctive proceedings, evidence is freshly introduced whereas in the cases received on appeal from State courts, the evidence is found within the record.
[213] 231 U.S. 298 (1913).
[214] 253 U.S. 287, 291, 295 (1920).
[215] 94 U.S. 113 (1877).
[216] 315 U.S. 575, 586.
[217] 320 U.S. 591, 602.—Although this and the previously cited decision arose out of controversies involving the Natural Gas Act of 1938 (52 Stat. 821), the principles laid down therein are believed to be applicable to the review of rate orders of State commissions, except insofar as the latter operate in obedience to laws containing unique standards or procedures.
[218] 253 U.S. 287 (1920).
[219] In Federal Power Commission v. Nat. Gas Pipeline Co., 315 U.S. 575, 599, Justices Black, Douglas, and Murphy, in a concurring opinion, proposed to travel the road all the way back to Munn v. Illinois, and deprive courts of the power to void rates simply because they deem the latter to be unreasonable. In a concurring opinion, written earlier in 1939 in Driscoll v. Edison Co., 307 U.S. 104, 122, Justice Frankfurter temporarily adopted a similar position; for therein he declared that "the only relevant function of law * * * [in rate controversies] is to secure observance of those procedural safeguards in the exercise of legislative powers, which are the historic foundations of due process." However, in his dissent in the Hope Gas Case (320 U.S. 591, 625), he disassociated himself from this proposal, and asserted that "it was decided [more than fifty years ago] that the final say under the Constitution lies with the judiciary."
[220] Federal Power Commission v. Hope Gas Co., 320 U.S. 591, 602 (1944).
[221] Federal Power Comm. v. Hope Gas Co., 320 U.S. 591, 603 (1944), citing Chicago & Grand Trunk Ry. Co. v. Wellman, 143 U.S. 339, 345-346 (1892); Missouri ex rel. Southwestern Bell Teleph. Co. v. Public Service Commission, 262 U.S. 276, 291 (1923).
[222] For this reason there is presented below a survey of the formulas, utilization of which was hitherto deemed essential if due process requirements were to be satisfied.
(1) Fair Value.—On the premise that a utility is entitled to demand a rate schedule that will yield a "fair return upon the value" of the property which it employs for public convenience, the Court in 1898, in Smyth v. Ames (169 U.S. 466, 546-547), held that determination of such value necessitated consideration of at least such factors as "the original cost of construction, the amount expended in permanent improvements, the amount and market value of * * * [the utility's] bonds and stock, the present as compared with the original cost of construction, [replacement cost], the probable earning capacity of the property under particular rates prescribed by statute, and the sum required to meet operating expenses."
(2) Reproduction Cost.—Prior to the demise in 1944 of the Smyth v. Ames fair value formula, two of the components thereof were accorded special emphasis, with the second quickly surpassing the first in terms of the measure of importance attributed to it. These were: (1) the actual cost of the property ("the original cost of construction together with the amount expended in permanent improvements") and (2) reproduction cost ("the present as compared with the original cost of construction"). If prices did not fluctuate through the years, the controversy which arose over the application of reproduction cost in preference to original cost would have been reduced to a war of words; for results obtained by reliance upon either would have been identical. The instability in the price structure, however, presented the courts with a dilemma. If rate-making is attempted at a time of declining prices, valuation on the basis of present or reproduction cost will advantage the consumer or user, and disadvantage the utility. On the other hand, if the original cost of construction is employed, the benefits are redistributed, with the consumer becoming the loser. Similarly, when rates are fixed at a time of rising prices, reliance upon reproduction cost to the exclusion of original cost will produce results satisfactory to the utility and undesirable to the public, and vice versa.
Notwithstanding the admonition of Smyth v. Ames that original cost, no less than reproduction cost, was to be considered in determining value, the Court, in the years which intervened between 1898 and 1944, wavered only slightly in its preference for the reproduction cost formula, and moderated its application thereof only in part whenever periods of rising or sustained high prices appeared to require such deviation in behalf of consumer interests. As examples of the varied application by the Court of the reproduction cost formula, the following cases are significant: San Diego Land and Town Co. v. National City, 174 U.S. 739, 757 (1899); San Diego Land & Town Co. v. Jasper, 189 U.S. 439, 443 (1903); Willcox v. Consolidated Gas Co., 212 U.S. 19, 52 (1909); Minnesota Rate Cases, 230 U.S. 352 (1913); Galveston Electric Co. v. Galveston, 258 U.S. 388, 392 (1922); Missouri ex rel. Southwestern Bell Teleph. Co. v. Public Service Commission, 262 U.S. 276 (1923); Bluefield Waterworks & Improv. Co. v. Pub. Serv. Comm., 262 U.S. 679 (1923); Georgia R. & Power Co. v. Railroad Comm., 262 U.S. 625, 630 (1923); McCardle v. Indianapolis Water Co., 272 U.S. 400 (1926); St. Louis & O'Fallon Ry. v. United States, 279 U.S. 461 (1929).
(3) Prudent Investment (versus Reproduction Cost).—This method of valuation, which was championed by Justice Brandeis in a separate opinion filed in Southwestern Bell Teleph. Co. v. Pub. Serv. Comm. (262 U.S. 276, 291-292, 302, 306-307 (1923)), was defined by him as follows: "The compensation which the Constitution guarantees an opportunity to earn is the reasonable cost of conducting the business. Cost includes not only operating expenses, but also capital charges. Capital charges cover the allowance, by way of interest, for the use of the capital, * * *; the allowance for the risk incurred; and enough more to attract capital. * * * Where the financing has been proper, the cost to the utility of the capital, required to construct, equip and operate its plant, should measure the rate of return which the Constitution guarantees opportunity to earn." Advantages to be derived from "adoption of the amount prudently invested as the rate base and the amount of the capital charge as the measure of the rate of return" would, according to Justice Brandeis, be nothing less than the attainment of a "basis for decision which is certain and stable. The rate base would be ascertained as a fact, not determined as a matter of opinion. It would not fluctuate with the market price of labor, or materials, or money. * * *"
As a method of valuation, the prudent investment theory was not accorded any acceptance until the depression of the 1930's. The sharp decline in prices which occurred during this period doubtless contributed to the loss of affection for reproduction cost; and in Los Angeles Gas Co. v. R.R. Comm'n., 289 U.S. 287 (1933) and R.R. Comm'n. v. Pacific Gas Co., 302 U.S. 388, 399, 405 (1938) the Court upheld respectively a valuation from which reproduction cost had been excluded and another in which historical cost served as the rate base. Later, in 1942, when in Power Comm'n. v. Nat. Gas Pipeline Co., 315 U.S. 575, the Court further emphasized its abandonment of the reproduction cost factor, there developed momentarily the prospect that prudent investment might be substituted. This possibility was quickly negatived, however, by the Hope Gas Case (320 U.S. 591 (1944)) which dispensed with the necessity of relying upon any formula for the purpose of fixing valid rates.
(4) Depreciation.—No less indispensable to the determination of the fair value mentioned in Smyth v. Ames was the amount of depreciation to be allowed as a deduction from the measure of cost employed, whether the latter be actual cost, reproduction cost, or any other form of cost determination. Although not mentioned in Smyth v. Ames, the Court gave this item consideration in Knoxville v. Knoxville Water Co., 212 U.S. 1, 9-10 (1909); but notwithstanding its early recognition as an allowable item of deduction in determining value, depreciation continued to be the subject of controversy arising out of the difficulty of ascertaining it and of computing annual allowances to cover the same. Indicative of such controversy has been the disagreement as to whether annual allowances granted shall be in such amount as will permit the replacement of equipment at current costs; i.e., present value, or at original cost. In the Hope Gas Case, 320 U.S. 591, 606 (1944), the Court reversed United R. & Electric Co. v. West, 280 U.S. 234, 253-254 (1930), insofar as the latter holding rejected original cost as the basis of annual depreciation allowances.
(5) Going Concern Value and Good Will.—Whether or not intangibles were to be included in valuation was not passed upon in Smyth v. Ames; but shortly thereafter, in Des Moines Gas Co. v. Des Moines, 238 U.S. 153, 165 (1915), the Court declared it to be self-evident "that there is an element of value in an assembled and established plant, doing business and earning money, over one not thus advanced, * * * [and that] this element of value is a property right, and should be considered in determining the value of the property, upon which the owner has a right to make a fair return * * *." Generally described as going concern value, this element has never been precisely defined by the Court, and the latter has accordingly been plagued by the difficulty of determining its worth. In its latest pronouncement on the subject, uttered in Power Comm'n. v. Nat. Gas Pipeline Co., 315 U.S. 575, 589 (1942), the Court denied that there is any "constitutional requirement that going concern value, even when it is an appropriate element to be included in a rate base, must be separately stated and appraised as such * * * valuations for rate purposes of a business assembled as a whole * * * [have often been] sustained without separate appraisal of the going concern element. * * * When that has been done, the burden rests on the regulated company to show that this item has neither been adequately covered in the rate base nor recouped from prior earnings of the business." Franchise value and good will, on the other hand, have been consistently excluded from valuation; the latter presumably because a utility invariably enjoys a monopoly and consumers have no choice in the matter of patronizing it. The latter proposition has been developed in the following cases: Willcox v. Consolidated Gas Co., 212 U.S. 19 (1909); Des Moines Gas Co. v. Des Moines, 238 U.S. 153, 163-164 (1915); Galveston Electric Co. v. Galveston, 258 U.S. 388 (1922); Los Angeles Gas & E. Corp. v. Railroad Commission, 289 U.S. 287, 313 (1933).
(6) Salvage Value.—It is not constitutional error to disregard theoretical reproduction cost for a plant which "no responsible person would think of reproducing." Accordingly, where, due to adverse conditions, a street-surface railroad has lost all value except for scrap or salvage, it was permissible for a commission, as the Court held in Market St. R. Co. v. Comm'n., 324 U.S. 548, 562, 564 (1945), to use as a rate base the price at which the utility offered to sell its property to a citizen. Moreover, the Commission's order was not invalid even though under the prescribed rate the utility would operate at a loss; for the due process cannot be invoked to protect a public utility against business hazards, such as the loss of, or failure to obtain, patronage. On the other hand, in the case of a water company whose franchise has expired (Denver v. Denver Union Water Co., 246 U.S. 178 (1918)), but where there is no other source of supply, its plant should be valued as actually in use rather than at what the property would bring for some other use in case the city should build its own plant.
(7) Past Losses And Gains.—"The Constitution [does not] require that the losses of * * * [a] business in one year shall be restored from future earnings by the device of capitalizing the losses and adding them to the rate base on which a fair return and depreciation allowance is to be earned." Power Comm'n. v. Nat. Gas Pipeline Co., 315 U.S. 575, 590 (1942). Nor can past losses be used to enhance the value of the property to support a claim that rates for the future are confiscatory (Galveston Electric Co. v. Galveston, 258 U.S. 388 (1922)), any more than profits of the past can be used to sustain confiscatory rates for the future (Newton v. Consolidated Gas Co., 258 U.S. 165, 175 (1922); Public Utility Commissioners v. New York Teleg. Co., 271 U.S. 23, 31-32 (1926)).
[223] Atlantic Coast Line R. Co. v. North Carolina Corp. Commission, 206 U.S. 1, 19 (1907), citing Chicago, B.& Q.R. Co. v. Iowa, 94 U.S. 155 (1877). See also Prentis v. Atlantic Coast Line Co., 211 U.S. 210 (1908); Denver & R.G.R. Co. v. Denver, 250 U.S. 241 (1919).
[224] Chicago & G.T.R. Co. v. Wellman, 143 U.S. 339, 344 (1892); Mississippi R. Commission v. Mobile & O.R. Co., 244 U.S. 388, 391 (1917). See also Missouri P.R. Co. v. Nebraska, 217 U.S. 196 (1910); Nashville, C. & St. L.R. Co. v. Walters, 294 U.S. 405, 415 (1935).
[225] Cleveland Electric Ry. Co. v. Cleveland, 204 U.S. 116 (1907).
[226] Detroit United Railway Co. v. Detroit, 255 U.S. 171 (1921). See also Denver v. New York Trust Co., 229 U.S. 123 (1913).
[227] Los Angeles v. Los Angeles Gas & Electric Corp., 251 U.S. 32 (1919).
[228] Newburyport Water Co. v. Newburyport, 193 U.S. 561 (1904). See also Skaneateles Waterworks Co. v. Skaneateles, 184 U.S. 354 (1902); Helena Waterworks Co. v. Helena, 195 U.S. 383 (1904); Madera Waterworks v. Madera, 228 U.S. 454 (1913).
[229] Western Union Teleg. Co. v. Richmond, 224 U.S. 160 (1912).
[230] Pierce Oil Corp. v. Phoenix Ref Co., 259 U.S. 125 (1922).
[231] Atlantic Coast Line R. Co. v. Goldsboro, 232 U.S. 548, 558 (1914). See also Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 255 (1897); Chicago, B. & Q.R. Co. v. Illinois ex rel. Grimwood, 200 U.S. 561, 591-592 (1906); New Orleans Public Service, Inc. v. New Orleans, 281 U.S. 682 (1930).
[232] Consumers' Co. v. Hatch, 224 U.S. 148 (1912).
[233] Panhandle Eastern Pipe Line Co. v. State Highway Commission, 294 U.S. 613 (1935).
[234] New Orleans Gas Light Co. v. Drainage Commission, 197 U.S. 453 (1905).
[235] Norfolk & S. Turnpike Co. v. Virginia, 225 U.S. 264 (1912).
[236] International Bridge Co. v. New York, 254 U.S. 126 (1920).
[237] Chicago, B. & Q.R. Co. v. Nebraska, 170 U.S. 57 (1898).
[238] Chicago, B. & Q.R. Co. v. Illinois ex rel. Grimwood, 200 U.S. 561 (1906); Chicago & A.R. Co. v. Tranbarger, 238 U.S. 67 (1915); Lake Shore & M.S.R. Co. v. Clough, 242 U.S. 375 (1917).
[239] Pacific Gas & Electric Co. v. Police Ct., 251 U.S. 22 (1919).
[240] Chicago, St. P., M. & O.R. Co. v. Holmberg, 282 U.S. 162 (1930).
[241] Nashville, C. & St. L.R. Co. v. Walters, 294 U.S. 405 (1935). See also Lehigh Valley R. Co. v. Public Utility Comrs., 278 U.S. 24 (1928).
[242] United Fuel Gas Co. v. Railroad Commission, 278 U.S. 300, 308-309 (1929). See also New York ex rel. Woodhaven Gas Light Co. v. Public Service Commission, 269 U.S. 244 (1925); New York ex rel. New York & O. Gas Co. v. McCall, 245 U.S. 345 (1917).
[243] Missouri P.R. Co. v. Kansas ex rel. Taylor, 216 U.S. 262 (1910); Chesapeake & O.R. Co. v. Public Service Commission, 242 U.S. 603 (1917); Ft. Smith Light & Traction Co. v. Bourland, 267 U.S. 330 (1925).
[244] Chesapeake & O.R. Co. v. Public Service Commission, 242 U.S. 603, 607 (1917); Brooks-Scanlon Co. v. Railroad Commission, 251 U.S. 396 (1920); Railroad Commission v. Eastern Texas R. Co., 264 U.S. 79 (1924); Broad River Power Co. v. South Carolina ex rel. Daniel, 281 U.S. 537 (1930).
[245] Atchison, T. & S.F.R. Co. v. Railroad Commission, 283 U.S. 380, 394-395 (1931).
[246] Minneapolis & St. L.R. Co. v. Minnesota ex rel. Railroad & W. Commission, 193 U.S. 53 (1904).
[247] Gladson v. Minnesota, 166 U.S. 427 (1897).
[248] Missouri P.R. Co. v. Kansas ex rel. Taylor, 216 U.S. 262 (1910).
[249] Chesapeake & O.R. Co. v. Public Service Commission, 242 U.S. 603 (1917).
[250] Lake Erie & W.R. Co. v. State Public Utilities Commission ex rel. Cameron, 249 U.S. 422 (1919); Western & A.R. Co. v. Georgia Public Service Commission, 267 U.S. 493 (1925).
[251] Alton R. Co. v. Illinois Comm'n, 305 U.S. 548 (1939).
[252] Missouri P.R. Co. v. Nebraska, 217 U.S. 196 (1910).
[253] Chesapeake & O.R. Co. v. Public Service Commission, 242 U.S. 603, 607 (1917).
[254] Great Northern R. Co. v. Minnesota ex rel. Railroad & Warehouse Commission, 238 U.S. 340 (1915); Great Northern R. Co. v. Cahill, 253 U.S. 71 (1920).
[255] Chicago, M. & St. P.R. Co. v. Wisconsin, 238 U.S. 491 (1915).
[256] Washington ex rel. Oregon R. & N. Co. v. Fairchild, 224 U.S. 510, 528-529 (1912). See also Michigan C.R. Co. v. Michigan Railroad Commission, 236 U.S. 615 (1915); Seaboard Air Line R. Co. v. Railroad Commission, 240 U.S. 324, 327 (1916).
[257] Louisville & N.R. Co. v. Central Stockyards Co., 212 U.S. 132 (1909).
[258] Michigan C.R. Co. v. Michigan Railroad Commission, 236 U.S. 615 (1915).
[259] Chicago, M. & St. P.R. Co. v. Iowa, 233 U.S. 334 (1914).
[260] Chicago, M. & St. P.R. Co. v. Minneapolis C. & C. Asso., 247 U.S. 490 (1918). Nor are railroads denied due process when they are forbidden to exact a greater charge for a shorter distance than for a longer distance. Louisville & N.R. Co. v. Kentucky, 183 U.S. 503, 512 (1902); Missouri P.R. Co. v. McGrew Coal Co., 244 U.S. 191 (1917).
[261] Wadley Southern R. Co. v. Georgia, 235 U.S. 651 (1915).
[262] Richmond, F. & P.R. Co. v. Richmond, 96 U.S. 521 (1878).
[263] Atlantic Coast Line R. Co. v. Goldsboro, 232 U.S. 548 (1914).
[264] Great Northern R. Co. v. Minnesota ex rel. Clara City, 246 U.S. 434 (1918).
[265] Denver & R.G.R. Co. v. Denver, 250 U.S. 241 (1919).
[266] Nashville, C. & St. L.R. Co. v. White, 278 U.S. 456 (1929).
[267] Nashville, C. & St. L.R. Co. v. Alabama, 128 U.S. 96 (1888).
[268] Chicago, R.I. & P.R. Co. v. Arkansas, 219 U.S. 453 (1911); St. Louis, I.M. & S.R. Co. v. Arkansas, 240 U.S. 518 (1916); Missouri P.R. Co. v. Norwood, 283 U.S. 249 (1931).
[269] Atlantic Coast Line R. Co. v. Georgia, 234 U.S. 280 (1914).
[270] Erie R. Co. v. Solomon, 237 U.S. 427 (1915).
[271] New York, N.H. & H.R. Co. v. New York, 165 U.S. 628 (1897).
[272] Chicago & N.W.R. Co. v. Nye Schneider Fowler Co., 260 U.S. 35 (1922). See also Yazoo & M.V.R. Co. v. Jackson Vinegar Co., 226 U.S. 217 (1912); Cf. Adams Express Co. v. Croninger, 226 U.S. 491 (1913).
[273] Atlantic Coast Line R. Co. v. Glenn, 239 U.S. 388 (1915).
[274] St. Louis & S.F.R. Co. v. Mathews, 165 U.S. 1 (1897).
[275] Chicago & N.W.R. Co. v. Nye Schneider Fowler Co., 260 U.S. 35 (1922).
[276] Kansas City Southern R. Co. v. Anderson, 233 U.S. 325 (1914).
[277] St. Louis, I.M. & S.R. Co. v. Wynne, 224 U.S. 354 (1912).
[278] Chicago, M. & St. P.R. Co. v. Polt, 232 U.S. 165 (1914).
[279] Missouri P.R. Co. v. Tucker, 230 U.S. 340 (1913).
[280] St. Louis, I.M. & S.R. Co. v. Williams, 251 U.S. 63, 67 (1919).
[281] Missouri P.R. Co. v. Humes, 115 U.S. 512 (1885); Minneapolis & St. L.R. Co. v. Beckwith, 129 U.S. 26 (1889).
[282] Chicago, B. & Q.R. Co. v. Cram, 228 U.S. 70 (1913).
[283] Southwestern Teleg. & Teleph. Co. v. Danaher, 238 U.S. 482 (1915).
[284] New Orleans Debenture Redemption Co. v. Louisiana, 180 U.S. 320 (1901).
[285] Lake Shore & M.S.R. Co. v. Smith, 173 U.S. 684, 698 (1899).
[286] National Council v. State Council, 203 U.S. 151 (1906).
[287] Munday v. Wisconsin Trust Co., 252 U.S. 499 (1920).
[288] State Farm Ins. Co. v. Duel, 324 U.S. 154 (1945).
[289] Asbury Hospital v. Cass County, 326 U.S. 207 (1945).
[290] Nebbia v. New York, 291 U.S. 502, 527-528 (1934).
[291] Smiley v. Kansas, 196 U.S. 447 (1905). See Waters-Pierce Oil Co. v. Texas, 212 U.S. 86 (1909); National Cotton Oil Co. v. Texas, 197 U.S. 115 (1905), also upholding antitrust laws.
[292] International Harvester Co. v. Missouri, 234 U.S. 199 (1914). See also American Seeding Machine Co. v. Kentucky, 236 U.S. 660 (1915).
[293] Grenada Lumber Co. v. Mississippi, 217 U.S. 433 (1910).
[294] Aikens v. Wisconsin, 195 U.S. 194 (1904).
[295] Central Lumber Co. v. South Dakota, 226 U.S. 157 (1912).
[296] Fairmont Creamery Co. v. Minnesota, 274 U.S. 1 (1927).
[297] Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U.S. 183 (1936); The Pep Boys v. Pyroil Sales Co., 299 U.S. 198 (1936).
[298] Schmidinger v. Chicago, 226 U.S. 578, 588 (1913), citing McLean v. Arkansas, 211 U.S. 539, 550 (1909).
[299] Merchants Exch. v. Missouri ex rel. Barker, 248 U.S. 365 (1919).
[300] Hauge v. Chicago, 299 U.S. 387 (1937).
[301] Lemieux v. Young, 211 U.S. 489 (1909); Kidd, D. & P. Co. v. Musselman Grocer Co., 217 U.S. 461 (1910).
[302] Pacific States Box & Basket Co. v. White, 296 U.S. 176 (1935).
[303] Schmidinger v. Chicago, 226 U.S. 578 (1913).
[304] Burns Baking Co. v. Bryan, 264 U.S. 504 (1924).
[305] Petersen Baking Co. v. Bryan, 290 U.S. 570 (1934).
[306] Armour & Co. v. North Dakota, 240 U.S. 510 (1916).
[307] Heath & M. Mfg. Co. v. Worst, 207 U.S. 338 (1907); Corn Products Ref. Co. v. Eddy, 249 U.S. 427 (1919); National Fertilizer Asso. v. Bradley, 301 U.S. 178 (1937).
[308] Advance-Rumely Thresher Co. v. Jackson, 287 U.S. 283 (1932).
[309] Hall v. Geiger-Jones Co., 242 U.S. 539 (1917); Caldwell v. Sioux Falls Stock Yards Co., 242 U.S. 559 (1917); Merrick v. Halsey & Co., 242 U.S. 568 (1917).
[310] Booth v. Illinois, 184 U.S. 425 (1902).
[311] Otis v. Parker, 187 U.S. 606 (1903).
[312] Brodnax v. Missouri, 219 U.S. 285 (1911).
[313] House v. Mayes, 219 U.S. 270 (1911).
[314] Rast v. Van Deman & L. Co., 240 U.S. 342 (1916); Tanner v. Little, 240 U.S. 369 (1916); Pitney v. Washington, 240 U.S. 387 (1916).
[315] Noble State Bank v. Haskell, 219 U.S. 104 (1911); Shallenberger v. First State Bank, 219 U.S. 114 (1911); Assaria State Bank v. Dolley, 219 U.S. 121 (1911); Abie State Bank v. Bryan, 282 U.S. 765 (1931).
[316] Provident Inst. for Savings v. Malone, 221 U.S. 660 (1911); Anderson National Bank v. Luckett, 321 U.S. 233 (1944).
When a bank conservator appointed pursuant to a new statute has all the functions of a receiver under the old law, one of which is the enforcement on behalf of depositors of stockholders' liability, which liability the conservator can enforce as cheaply as could a receiver appointed under the pre-existing statute, it cannot be said that the new statute, in suspending the right of a depositor to have a receiver appointed, arbitrarily deprives a depositor of his remedy or destroys his property without due process of law. The depositor has no property right in any particularly form of remedy.—Gibbes v. Zimmerman, 290 U.S. 326 (1933).
[317] Doty v. Love, 295 U.S. 64 (1935).
[318] Farmers & M. Bank v. Federal Reserve Bank, 262 U.S. 649 (1923).
[319] Griffith v. Connecticut, 218 U.S. 563 (1910).
[320] Mutual Loan Co. v. Martell, 222 U.S. 225 (1911).
[321] La Tourette v. McMaster, 248 U.S. 465 (1919); Stipcich v. Metropolitan L. Ins. Co., 277 U.S. 311, 320 (1928).
[322] German Alliance Ins. Co. v. Lewis, 233 U.S. 389 (1914).
[323] O'Gorman and Young v. Hartford Insur. Co., 282 U.S. 251 (1931).
[324] Nutting v. Massachusetts, 185 U.S. 553, 556 (1902), distinguishing Allgeyer v. Louisiana, 165 U.S. 578 (1897). See also Hooper v. California, 155 U.S. 648 (1895).
[325] Daniel v. Family Ins. Co., 336 U.S. 220 (1949).
[326] Osborn v. Ozlin, 310 U.S. 53, 68-69 (1940). Dissenting from the conclusion, Justice Roberts declared that the plain effect of the Virginia law is to compel a nonresident to pay a Virginia resident for services which the latter does not in fact render.
[327] California Auto. Assn. v. Maloney, 341 U.S. 105 (1951).
[328] Allgeyer v. Louisiana, 165 U.S. 578 (1897).
[329] New York L. Ins. Co. v. Dodge, 246 U.S. 357 (1918).
[330] National Union F. Ins. Co. v. Wanberg, 260 U.S. 71 (1922).
[331] Hartford Acci. & Indem. Co. v. Nelson (N.O.) Mfg. Co., 291 U.S. 352 (1934).
[332] Merchants Mut. Auto Liability Ins. Co. v. Smart, 267 U.S. 126 (1925).
[333] Orient Ins. Co. v. Daggs, 172 U.S. 557 (1899).
[334] Hoopeston Canning Co. v. Cullen, 318 U.S. 313 (1943).
[335] German Alliance Ins. Co. v. Hale, 219 U.S. 307 (1911). See also Carroll v. Greenwich Ins. Co., 199 U.S. 401 (1905).
[336] Life & C. Ins. Co. v. McCray, 291 U.S. 566 (1934).
[337] Northwestern Nat. L. Ins. Co. v. Riggs, 203 U.S. 243 (1906).
[338] Whitfield ex rel. Hadley v. Aetna L. Ins. Co., 205 U.S. 489 (1907).
[339] Polk v. Mutual Reserve Fund Life Association, 207 U.S. 310 (1907).