Government in the United States, National, State and Local

Pure Food.– Congress has also provided for the inspection of foods imported from abroad. Whenever a vessel is found to have on board impure or adulterated foods or teas, it is forbidden to land the cargo or is allowed to land it only after certain conditions are complied with such as the change of labels to correspond with the actual contents of packages. In this way an attempt is made to protect the American consumer against impure and unwholesome food products shipped here from foreign ports.

Interstate Commerce has been interpreted to include the carriage of passengers from one state to another; the transportation of commodities of whatsoever character, including lottery tickets, obscene literature, and any other objects which may be the subject of transportation; and the transmission of ideas or information by telegraph or telephone from a point in one state to a point in another. In short, interstate commerce means not only transportation and traffic in articles but intercourse and communication by the modern devices for transmitting thought; and the power to prescribe the conditions under which such intercourse may be carried on across state lines belongs to Congress.43 Congress controls also the coasting trade between parts of the same state and the traffic on all rivers which flow into the ocean or the Great Lakes and thus constitute highways of interstate or foreign commerce.

Power Retained by the States.– Nevertheless it is often difficult in a particular case to draw the line between acts which regulate interstate commerce and acts which merely affect it without regulating it. The Supreme Court in a long line of decisions has held that the states not only have complete power of control over all commerce originating and ending within their limits but that they may also enact legislation for the protection of the public health, safety, good order, and morals of their people even when such legislation affects commerce among the states, the only restriction being that such legislation must be reasonable and must not amount to a direct interference with interstate traffic. The right of the states in this respect is known as the police power– a power which is very extensive and of which they cannot be deprived by Congress. Thus they may enact reasonable quarantine laws forbidding the entrance into their territory of diseased persons from other states or the importation of diseased live stock. Likewise they may limit the speed of interstate trains running through their towns, may require railroads to provide gates at crossings, safety appliances for cars, and the like.

The Original Package Doctrine.– A state, however, prior to 1920, could not without the consent of Congress prohibit the importation of liquor in original packages into its territory from other states, although it might be a prohibition state.44 But Congress itself, by an act passed in 1913, prohibited the transportation of intoxicating liquors into states having prohibition laws.

Likewise, the states cannot impose taxes on passengers passing through their territory bound for points in other states, or require interstate trains to stop at county seats, or impose taxes on telegraph messages sent to points in other states, or on bills of lading of freight destined to points in other states, or on goods intended for exportation, and so on.

Regulation of Interstate Railway Traffic.– For a long time Congress took no action toward regulating railway traffic among the states, thus leaving the railroads free to carry on their business as they pleased, regardless of the interest of the public whom they served. But with the enormous development of the railway system of the country gross evils began to creep in, in the form of excessive rates, discriminations, combinations for the suppression of competition, inadequate provision for the safety of passengers, etc., in consequence of which a widespread demand grew up for legislation bringing the railroads under governmental control. The outcome of this agitation was the interstate commerce act of 1887, the provisions of which have been amended and extended by several subsequent acts, notably the Elkins act of 1903, the railway rate law of 1906, and the interstate commerce law of 1910.

Interstate Commerce Commission.– The law of 1887 created an interstate commerce commission which now consists of eleven members appointed by the President and paid a salary of $12,000 a year each, which commission has general supervision of the execution of the several acts mentioned above. It hears complaints against the railroads, makes investigations upon petition, and to this end may summon witnesses and compel the production of papers and records, and conduct hearings. If, after an investigation, it finds that the law is being violated by a railroad company, it may request the proper federal authorities to institute a prosecution of the offending company, and the law requires that such a prosecution shall be made. For a long time the commission had no power to fix rates, but only the negative right to say that a given rate was unjust and unreasonable. But by the act of 1906 it was given the power, after a full hearing, to determine and prescribe just and reasonable maximum rates and charges, as well as to prescribe regulations for the conduct of railway traffic.

The Laws Now in Force prescribe that all railway rates and charges for carrying freight and passengers must be just and reasonable; that no rebates, drawbacks, or special rates shall be granted to particular shippers; that no discriminations shall be made as to rates or service to certain persons or places; that no free passes, with certain specified exceptions, shall be granted; that no greater charges shall be made for a "short haul" than for a "long haul"; that no railroads shall be allowed to transport commodities which they are engaged in producing, with certain exceptions; that competing railways shall not be allowed to pool their freight or earnings; that schedules showing rates, fares, and charges shall be published and kept open for inspection and cannot be changed except after thirty days' notice to the commission; that all railroads shall keep their accounts according to a uniform system prescribed by the commission; and that they shall make annually to the commission a full and complete report of their business and earnings.

An important extension of the interstate commerce act was made in 1906, when express and sleeping car companies, pipe lines used for transporting oil from one state to another, and telegraph, telephone, and cable companies engaged in sending messages from one state to another or to foreign countries, were brought under the operation of the law and their business subjected to the same conditions and restrictions as those applying to railroads. By an act of 1912 railroads were prohibited from owning, controlling, or having any interest in competing water carriers, and by an act of 1913 provision was made for preparing a valuation of all railroads in the United States.

Congress has also enacted laws requiring interstate railroads to equip their cars with automatic couplers and other safety appliances, fixing the liability of railway employers for injuries sustained by railway employees, encouraging the arbitration of railway strikes, and establishing an eight-hour work day on railways (1916). An act excluding the products of child labor from interstate commerce (1916) was declared unconstitutional by the Supreme Court.

In pursuance of acts of Congress passed in 1916 and 1918, the President in 1918 took over the control of railroads, telegraphs, and telephones for the duration of the war.

Federal Anti-trust Legislation.– The commerce clause of the Constitution has also furnished the authority for some important congressional legislation against what are popularly known as "trusts," that is, combinations of corporations or business associations formed to avoid the wastes of competition and to secure economy of management. But the control of the supply of a commodity means the elimination of competition and usually the maintenance of high rates to the injury of consumers. For a long time the greater part of the business of the country was conducted by individuals, companies, or corporations, and the advantages of competition were preserved to the public, but in the course of the economic development of the country, corporations began to consolidate for the reasons stated, with the result that the supply of many commodities came to be controlled by single combinations. At first the states undertook to deal with the problem by passing anti-"trust" laws, but the business of so many of the more powerful organizations was interstate in character that state legislation was inadequate to deal with them.

The Sherman Anti-"trust" Law.– Finally, in obedience to a widespread popular demand, Congress took action in 1890 by passing what is popularly known as the Sherman anti-"trust" act to protect trade and commerce among the states against unlawful restraint and monopolies. This act declared that every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the states or with foreign nations was illegal, and it prescribed appropriate penalties for violations thereof. This law, however, applies only to "trusts" which are in restraint of trade among the states or with foreign nations. It has no application to those whose activities are confined entirely within the boundaries of a single state; with such "trusts" the states alone have the power to deal.

In pursuance of the act of 1890, prosecutions have been instituted in the federal courts against a large number of "trusts," and some of them have been broken up, but the larger number have escaped. In 1911, for example, the Supreme Court decided that the Standard Oil and tobacco "trusts" were illegal, and their dissolution was decreed.

The Clayton Anti-"trust" Act.– In 1914 Congress passed another important act directed against combinations in restraint of trade. In brief, it prohibits price discriminations among purchasers, exclusive trade agreements between manufacturers and retailers, the holding of the stock of one corporation by another, and interlocking directorates. Like the other anti-"trust" acts it applies, of course, only to persons or corporations engaged in interstate commerce or trade. To enforce the act a federal trade commission was created. It consists of five members appointed by the President, at a salary of $10,000 each.

Federal Pure Food Legislation.– The commerce clause of the Constitution is also the source of some important legislation designed to protect the public against impure, unwholesome, and adulterated foods produced in the United States. We have already called attention to the legislation of Congress against the importation of impure foods, and teas from abroad. Still more recently Congress passed an interstate pure food law prohibiting the transportation among the states and territories of any food products which are adulterated or which contain foreign substances not indicated in the labels. The law also provides for the fixing of a standard of pure foods and other products transported from one state to another or intended for interstate transportation, and provides that they must come up to the standard prescribed.

The Meat Inspection Law.– To protect the public against unwholesome meat products, Congress enacted in 1891 a law which was strengthened in important particulars in 1906, providing for the inspection of slaughtering houses whose products are intended for interstate commerce. The law requires the registration of all establishments engaged in slaughtering animals the products of which are to be shipped into other states or are intended for export. Each is given a number, and federal inspectors are assigned to inspect the animals intended for slaughter, to inspect their carcasses in certain cases, and to see that the business of slaughtering is conducted under clean and wholesome conditions. Animals found suffering with certain diseases are not allowed to be slaughtered for food purposes, and meat discovered to be unwholesome must be rejected. Supervision is also exercised over the processes of packing and canning, and there are detailed regulations in regard to labeling.

References. Andrews, Manual of the Constitution, pp. 89-95. Beard, American Government, ch. xix. Cooley, Principles of Constitutional Law, pp. 66-88. Hart, Actual Government, ch. xxiv. Hinsdale, American Government, secs. 374-380. Johnson, Railway Transportation, ch. xxvi.

Illustrative Material.– Annual reports of the Interstate Commerce Commission, of the Department of Agriculture, of the Attorney-General, of the Commissioner of Navigation, of the Commissioner of Immigration, and of the Public Health and Marine Hospital Service.

Research Questions

1. What were the reasons for giving Congress control over foreign and interstate commerce?

2. Why did the delegates from the Southern states oppose giving this power to Congress?

3. What is meant by the "original package" doctrine?

4. Why should a railroad company be prohibited from granting rebates? For charging more for a "short haul" than for a "long haul"? From transporting the products of its own mines and manufactories? From pooling its freight or earnings?

5. What are the arguments for and against granting government subsidies for the upbuilding of the merchant marine?

6. What have been the principal reasons for the decline of the American carrying trade?

7. What is the amount of money annually appropriated for improving the rivers and harbors of the country?

8. How has the commerce clause of the Constitution been the source of important extensions of the power of the national government? Mention some important recent acts of Congress that have been passed in pursuance of this clause.

9. Should Congress, in your judgment, impose greater restrictions upon immigration than it now imposes?

10. Do you think Congress should have power to regulate the business of life insurance? To regulate marriage and divorce?

11. Is the policy of governmental regulation of railroads preferable to governmental ownership? Give your reasons.

CHAPTER XIV

OTHER IMPORTANT POWERS OF CONGRESS

THE POST OFFICE, COPYRIGHTS, PATENTS, THE ARMY, THENAVY, ETC

The Postal Service.– The beginnings of the postal service in the United States date back to the action of the Continental Congress in creating a post office department in 1775, and appointing Benjamin Franklin as its head. Under Franklin's direction postal routes were established throughout the colonies and the mails were carried over them at intervals of one or two weeks. In 1776 there were twenty-eight post offices located in the more important towns. The Constitution gave Congress power to establish post offices and post roads, and when the new government was established, the postal service was reorganized and extended. In 1790, however, there were only seventy-five post offices in the thirteen states, and less than 2,000 miles of post roads. The total revenues were only $37,000, and the expenditures only $32,000. Now there are more than 60,000 offices and over 25,000 different routes, with an aggregate mileage of about 450,000 miles. A recent postmaster-general has well said: "The postal establishment of the United States is the greatest business concern in the world. It handles more pieces, employs more men, spends more money, brings more revenue, uses more agencies, reaches more homes, involves more details, and touches more interests than any other human organization, public or private, governmental or corporate." Some idea of the magnitude of the service may be gained from the fact that during the year 1919 about twenty billion pieces of mail were handled, more than $1,000,000,000 worth of domestic money orders were issued, and more than 120,000,000 articles were registered. The receipts for the year 1919 aggregated $364,847,126, and the expenditures $362,497,635.

The Postal Deficit.– For many years the postal service was operated at a loss, the principal causes of the deficit being due to the loss sustained by the government on the transportation of second-class matter and through the rural free delivery service. During the fiscal year 1917 the loss on the former account aggregated $72,000,000 and on the latter about half that amount. There is also a heavy loss on mail carried free under the Congressional frank. Thus in 1917 more than 60,000,000 pounds of such mail was carried, the postage on which would have cost more than $20,000,000. Nevertheless by rigorous economy the deficit was made to disappear in 1911 for the first time in thirty years. In 1917 there was a surplus of more than $9,000,000.

Mail Matter.– Congress has power to decide what matter shall be admitted to the mails and what shall be excluded. In addition to books and printed matter generally it allows parcels of merchandise weighing not more than seventy pounds to be carried through the mails; also seeds, bulbs, roots, samples of flour, dried fruits, cut flowers, geological and botanical specimens, soap, nuts, live queen bees, dried insects, etc. On the other hand, the following matter is denied admission to the mails: parcels weighing over seventy pounds; poisons, explosives, live animals, liquors and other objects unsuitable for transportation in the mails; obscene matter and articles adapted or designed for immoral purposes; all matter relating to lotteries and schemes for swindling the public, and, by acts of 1917, advertisements of intoxicating liquor intended for distribution in prohibition states and printed matter advocating treason, insurrection, resistance to the laws, disloyalty, etc.

"Fraud Orders."– The mails are so frequently used by dishonest concerns for circulating advertising matter designed to defraud the public, that a law has been passed authorizing the postmaster-general to withhold the privileges of the postal service from persons using it for such purposes. In pursuance of this authority, he frequently issues "fraud orders," instructing the local postmaster not to deliver mail to specified fraudulent concerns. It was reported in 1913 that in two years such concerns had swindled the people out of $129,000,000.

Classification of Mail Matter.– Mail is classified into four different classes: first, letters and postal cards; second, newspapers and other periodical publications; third, printed matter not admitted to the second class; and fourth, merchandise not comprehended in the other three classes.

The Rates of Postage on the different classes have varied in amount from time to time. In the early history of the post-office department the rates for transporting letters were regulated on the basis of the distance carried, and according to the number of sheets in the letter, the amount ranging from six to twenty-five cents. Since 1863, however, there has been a uniform rate on letters irrespective of distance. In 1883 the rate was fixed at two cents; in 1917, three cents; in 1919, two cents. Before 1847, when the adhesive postage stamps were introduced, payment of postage was made in cash and the amount indorsed on the envelope. Postal cards were introduced in 1872.

On the transportation of first-class mail the government realizes a profit estimated at $60,000,000 per year, notwithstanding the long distance much of it is carried. There is also a substantial profit derived from foreign mail.

Second-Class Matter mailed by the publishers is carried at the rate of 1½ cents a pound, with an added charge (depending on distance) for advertising matter;45 but newspapers are carried free to any office within the county of publication except in cities having free delivery service. The government has sustained heavy losses in carrying second-class matter. In the year 1917 more than 1,200,000,000 pounds was transported at a loss of over six cents per pound. It constituted over 60 per cent of all domestic mail, but yielded less than five per cent of the postal revenues, the loss being greater than the profits realized on all other classes of mail combined.

Should the Second-Class Rate be Increased?– For some years there was considerable agitation in favor of increasing the rate paid by publishers, especially on magazines which are overloaded with advertising matter and on other publications which are devoted largely to advertising purposes. Successive postmasters-general urged a readjustment of the rates, but until 1917 Congress took no action further than to appoint a commission to investigate and report on the subject. The two suggestions most considered were, that a higher rate should be imposed on magazines than on newspapers in view of the fact that the average distance of transportation is greater in the case of magazines than in the case of newspapers, and that a higher rate be imposed on advertising matter than on purely reading matter.

Against these arguments it was contended that the educational benefits derived from the extensive circulation of second-class matter are very great, and that for this reason the government can well afford to contribute something toward the dissemination of advertising information among the masses of the people. Moreover, it was argued that the circulation of second-class matter is responsible for a large amount of first-class matter and thus the government makes up in the increased profits on first-class matter what it loses on second-class matter. Thus it was said that fifty pages of advertising matter in a popular magazine might lead to the writing of 50,000 letters. Consequently a reduction in the volume of second-class matter would inevitably be followed by a corresponding reduction in first-class matter.

Finally in 1917 Congress passed a law providing for a graduated increase in the rates on the advertising portions of newspapers and magazines, the amount depending on the distance carried.

Free Delivery Service.– The extension of rural free delivery service has been the most rapid and remarkable of all the undertakings of the post office department. It began as an experiment in 1897, when less than $15,000 was appropriated to test the advantage of free delivery in country districts, and it has been extended until it now constitutes one of the largest branches of the postal service, the annual expenditures on account of the service exceeding $50,000,000. This is the largest item of expenditure by the post office department on any of its services except the transportation of mail on the railroads, which foots up nearly $55,000,000. There are more than 40,000 rural free delivery routes in operation, and nearly three billion pieces of mail are annually delivered to 27,000,000 people along these routes. An investigation made in 1909 showed that the postage on the average amount of mail collected on a rural route was $14.92 per month, while the average cost of the service was $72.17. The average cost of the service on a rural route, therefore, exceeded the average revenue derived from postage by $687 per year. On that basis the total loss on the operation of the service was estimated to be about $28,000,000. But while the loss to the government in money has been great, the advantage to the country districts served has been notable. Besides the convenience to the country residents it has brought them into closer relation with the centers of population, made country life more attractive and less monotonous, increased farm values, and encouraged the improvement of country roads, since the department insists upon the maintenance of the highways in good condition as a prerequisite to the introduction and continuance of the service.

Free Delivery in Cities.– Free delivery of mail in the larger towns and cities was first introduced during the Civil War, and the service has been extended to include all places of not less than 10,000 inhabitants or where the postal receipts are not less than $10,000 per year. In 1885, provision was made by which immediate delivery ("special delivery") of a letter upon its arrival at a city post office could be secured by payment of ten cents.

Registry Service.– In 1855, Congress established the registry service, by which upon the payment of extra postage – the extra rate is now ten cents per letter or parcel – special care is taken of letters or parcels registered. Thus the safe delivery of a valuable letter or parcel is practically assured, and by a recent law the post office department has provided a system of insurance against the loss of parcels mail – the maximum amount allowed in case of loss being one hundred dollars.