The View From 1776

Judicial Activism: Part VII

The second broadly defined period of judicial activism started in the years leading up to the Civil War, when the Supreme Court wrestled with Federal-state conflicts produced by the growth in commerce among the states and the changing nature of corporations and property rights.

The second, or middle, period of judicial activism was, on balance, a conservative one.  The Supreme Court more often than not restrained states and the Federal government when they sought to regulate corporations and to expand the scope of government activities.

This stands in stark contrast to the Supreme Court of the 20th century, when the educated public began looking upon socialism as the way of the future, and Justices responded, first with greater leniency toward government regulation, then, after 1937, with an aggressive thrust to push government toward welfare-state social justice. 

The first era ended when Chief Justice John Marshall died in 1835.  As noted in Judicial Activism: Part VI, without his 1803 decision in Marbury v. Madison, judicial activism would not have become possible.  By establishing the power of the Supreme Court to declare actions of Congress or of the President unconstitutional, Marshall opened the door for all of today’s mischief.

His death occurred the same year that Alexis de Tocqueville published “Democracy in America.”  In Chapter 6: Judicial Power In The United States, And Its Influence On Political Society,  Tocqueville noted, ironically in light of today’s woeful situation:

“The Americans have retained these three distinguishing characteristics of the judicial power: an American judge can pronounce a decision only when litigation has arisen, he is conversant only with special cases, and he cannot act until the cause has been duly brought before the court.  His position is therefore exactly the same as that of the magistrates of other nations, and yet he is invested with immense political power.  How does this come about?  If the sphere of his authority and his means of action are the same as those of other judges, whence does he derive a power which they do not possess?  The cause of this difference lies in the simple fact that the Americans have acknowledged the right of judges to found their decisions on the Constitution rather than on the laws.  In other words, they have permitted them not to apply such laws as may appear to them to be unconstitutional.

“.... If the judge had been empowered to contest the law on the ground of theoretical generalities, if he were able to take the initiative and to censure the legislator, he would play a prominent political part; and as the champion or the antagonist of a party, he would have brought the hostile passions of the nation into the conflict.”

Today the situation is the opposite of that described in the last sentence above.

In Chapter 16: Causes Which Mitigate The Tyranny Of The Majority In The United States, Tocqueville says of lawyers:

“I do not, then, assert that all the members of the legal profession are at all times the friends of order and the opponents of innovation, but merely that most of them are usually so.  In a community in which lawyers are allowed to occupy without opposition that high station which naturally belongs to them, their general spirit will be eminently conservative and anti-democratic.

“......Lawyers are attached to public order beyond every other consideration, and the best security of public order is authority…...... The English and the Americans have retained the law of precedents; that is to say, they continue to found their legal opinions and the decisions of their courts upon the opinions and decisions of their predecessors.  In the mind of an English or American lawyer a taste and a reverence for what is old is almost always united with a love of regular and lawful proceedings.”

It hardly need be said that our elite Ivy League law schools have, for many decades, been dedicated to inculcating in future judges precisely the opposite view.

John Marshall was succeed as Chief Justice by Roger B. Taney, who presided over the Court until 1864, a year before the end of the Civil War.  Legal principles laid out between 1836 and 1864 under Taney established the framework for the more turbulent period following the Civil War.

Taney is forever connected in the public mind with his notorious Dred Scott decision, which effectively nullified the Missouri Compromise and hastened the Civil War.  Scott, a Negro slave, sued for his freedom on the grounds that during travels with his master he had lived in states where slavery was illegal.  Justice Taney ruled that, as a slave, Scott was the property of his owner, and that the 5th Amendment prohibits deprivation of property without due process of law.  Simply living in a free state did not constitute due process sufficient to free a slave without financial compensation to his owner.

As had Marshall in the Marbury v. Madison case, Justice Taney went far beyond the issues of the immediate case, and volunteered the opinion that Congress had no authority to enact the Missouri Compromise, which prohibited slavery in the new Western territories.

Nonetheless, civil rights was not a cause in which the Supreme Court took an aggressive, leading role, as it was to do in the 1950s and 1960s.  The Supreme Court’s major preoccupation was the evolving nature of business in the United States and the related evolution in the nature of corporations.

The stage for this second broad era in the Supreme Court’s activist orientation had been set during Marshall’s tenure by the immense changes in geopolitical reality that occurred during the so-called Virginia presidential dynasty of Thomas Jefferson, James Madison, and James Monroe. 

Despite having come to office in opposition to the activist government projects of his Federalist predecessors, such as the First Bank of the United States, Jefferson in 1803 consummated the Louisiana Purchase encompassing a vast territory that considerably more than doubled the land area of the United States.  Most importantly, it opened the Port of New Orleans to world trade by American settlers moving into the Northwest Territories (present-day Ohio, Indiana, Michigan, Wisconsin, Illinois, and part of Minnesota).  The Mississippi River connection to New Orleans was vital, because a nearly unbroken chain of mountains ran between the original eastern seaboard states and the Northwest Territories, making overland east-west movement of farm produce and other products costly and impractical.

During the administration of President James K. Polk, from 1845 to 1849, the territory of the contiguous continental United States was completed with the acquisition of California and the southwestern states in the Mexican War and with the settlement of the Oregon Territory boundary with Canada. 

The movement of several hundred thousand Americans into the Mississippi Valley and the far West forced the states and the Federal government to consider expansion of their earlier activities.  In 1825, the Erie Canal, financed by the State of New York, connected New York City to the growing Midwest via the Great Lakes, rapidly turning New York City into the nation’s largest port.  By 1844 more than 3,000 miles of canals, built by state governments and private companies, interconnected parts of the Midwest with the East Coast.  By the 1850s railroads were already beginning to make many of the canals obsolete, and Chicago was on its way to becoming the world’s largest railroad hub and one of the greatest manufacturing cities.

Commercial projects on this scale obviously were a world apart from the sole proprietorship farms and businesses that were Jefferson’s ideal in 1800.  Unprecedented amounts of capital investment were required, most of it coming from England via bankers in New York City and Philadelphia.

The Taney era was the period during which many of the fundamental questions of the powers and rights of modern corporations were first addressed.  In the process, the meaning of the Constitution’s commerce clause was shaped.

Business corporations are creatures of the particular states in which they are chartered, which therefore retain the legal right to impose regulations upon them.  The nature of such regulations changed considerably while Taney was Chief Justice, simply because the nature of corporations changed greatly.

Historically, corporations were monopolies granted by royal prerogative for specific lines of endeavor, such as production and sale of salt.  One of the best known of the early corporate monopolies was the British East India Company, which held a monopoly on the sale of tea in the colonies, leading to the famous Boston Tea Party.

The early American colonies themselves were corporations chartered by the Stuart kings.  Those charters eventually became state constitutions.

The colonial corporations had officers, directors, and shareholders who financed voyages and early expenses of settlement.  The New England Puritans and Lord Calvert’s Maryland Catholics came here for religious purposes, but other colonies were viewed at the time as business ventures from which the shareholders expected to earn a profit.

Chief Justice Taney generally followed in the Marshall tradition of upholding private property rights against local interference.  But, unlike Marshall, Taney did not believe that the commerce clause was a dormant power intended only to impose restraints upon state regulatory actions.  The commerce clause, he believed, empowered Congress to regulate commerce among the states and empowered the Supreme Court to adjudicate conflicts between state and Federal regulations of commerce.  On the whole, however, Taney tended to limit expansionist ideas about regulatory powers to the minimum necessary for carrying out explicitly granted Constitutional functions.

His was a continuing effort to find a reasonable balance between state and Federal powers under the commerce clause, while dealing with new economic problems arising from technological innovation and greater size of business organizations.

Within limits, he upheld the states’ power to regulate property rights in the public interest.  Massachusetts was upheld, in the 1837 Charles River Bridge case, when it chartered a new bridge that competed with a bridge chartered earlier.  Harking back to the concept of corporate charters as royal monopoly grants, the Charles River Bridge Company argued that the State of Massachusetts had implicitly granted to it an exclusive right to build a bridge between Boston and Charlestown. 

Taney construed corporate and contract rights strictly and narrowly and ruled that Massachusetts had not implicitly granted a monopoly to the Charles River Bridge Company and therefore had not unconstitutionally deprived the company of its rights.  While rights of private property are sacred, he wrote, the general citizenry also have rights that must be weighed in the balance.  The effect upon commerce proved to be beneficial, as it opened business activity to the vitalizing force of competition.

One question coming before the Court was whether a corporation, a legal “person,” had the same rights as an individual to conduct business across state lines, without express authorization from each state in which it intended to operate.  One extreme legal view, which would have killed interstate commerce, was that no corporation could do any kind of business outside the state in which it was chartered.

This issue came into early focus in the instance of banks, which financed planting and processing of crops in one state, while financing buyers of the crops in other states, often as two ends of the same transaction. 

The Bank of Augusta case in 1839 came before the Court, only three years after Chief Justice Taney, then Secretary of the Treasury, had assisted President Andrew Jackson in killing the Second Bank of the United States on the grounds that it exercised too much unrestrained power in a democratic, Federal republic.  The frontier farmers represented by Andrew Jackson feared the big city bankers and corporations, but needed their services if they were to sell their crops and prosper. 

Taney straddled the fence by arguing that a corporation was not a citizen of a state and was therefore not entitled to the rights of individual citizens freely to move into other states.  As a creature of state law, it was entitled only to what each state law granted and had no independent Constitutional rights.  Nonetheless, a corporation could do business through its agents in other states wherever those other states permitted it to do so.  This had the effect of enhancing each state’s powers to regulate activity of corporations, both those it chartered and those chartered by other states.  At the same time it allowed for the necessary growth of corporations as the nation expanded.

In the 1843 case of Bronson v. Kinzie, the Court ruled unconstitutional a state’s interference with the execution of a mortgage.  But, in the 1847 License Cases, the Court ruled in favor of some varieties of state regulation.  Taney wrote in his opinion: “It appears to me to be very clear, that the mere grant of power to the general [Federal] government cannot, upon any just principles of construction, be construed as an absolute prohibition to the exercise of any power over the same subject by the states.”  This was the so-called concurrent powers doctrine.

In the same cases, in what appears today as sad naivet?, Justice Catron wrote: “... the states, within their harbors and inland waters, have done almost everything and Congress next to nothing.”  If the Court were to rule against state regulations, “We would by our decision expunge more state laws and city corporate regulations than Congress is likely to make in a century.” 

There is a close connection between states’ right to tax business and their right to regulate commerce within their borders.  Taxation, of course, can have a regulatory effect by making some activities less profitable than others.  Both taxation and regulation by states can collide with the Constitution’s commerce clause, which conferred exclusive jurisdiction to the Federal government over interstate and foreign commerce.

In the 1849 Passenger Cases, the Court limited the scope of the concurrent powers doctrine, ruling that New York and Massachusetts had strayed into territory reserved to Congress.  Both states, being flooded with immigrants from Ireland (because of the potato famine) and from Germany (because of the 1848 socialist revolutions), sought to curb the influx of impoverished immigrants who became charges upon the public welfare.  To that end, both states imposed per capita taxes on passenger ships discharging immigrants from foreign ports.  The taxes were levied upon the masters of each vessel, and they sought relief from the Supreme Court on the grounds that the states were unconstitutionally regulating foreign commerce. 

The majority of the court agreed and nullified the state taxes.  Justice Taney, however, dissented, writing: “The taxing power of the State is restrained only where the tax is directly or indirectly a duty on imports or tonnage….And if it is hereafter to be the law of this court, that the power to regulate commerce has abridged the taxing power of the States upon the vehicles or instruments of commerce, I cannot foresee to what it may lead….....”  Elsewhere, Taney had written: “In taking jurisdiction, as the law now stands, we must exercise a broad and undefinable discretion, without any certain and safe rule to guide….such a discretion appears to me more appropriately to belong to the Legislature than to the Judiciary.”

Needless to say, such judicial restraint is no longer in fashion among the liberal-socialists now occupying the bench.

Further defining the Constitution’s commerce clause, in the 1851 Cooley v. Board of Wardens of the Port of Philadelphia case, Justice Curtis delivered the opinion of the Court, in which he wrote: : “Now the power to regulate commerce, embraces a vast field, containing not only many, but extraordinarily various subjects, quite unlike in their nature; some imperatively demanding a single uniform rule, operating equally on the commerce of the United States in every port, and some, like the subject now in question, as imperatively demanding that diversity, which alone can meet the local necessities of navigation…. Whatever subjects of this power are in their nature national, or admit only of one uniform system, or plan of regulation may justly be said to be of such a nature as to require exclusive legislation by Congress.”

Many other cases could be cited, but the intent here is not to analyze the detailed evolution of Constitutional law, but simply to present a sense of the Supreme Court’s understanding of the powers of the Federal government and of the powers reserved by the Constitution to the states and to the people by the 9th and 10th Amendments of the Bill of Rights.

The picture of caution and probity evidenced in the foregoing case descriptions is a sharp contrast with that of the Court since 1937, after it began acceding to President Franklin Roosevelt’s New Deal, socialistic state planners.  The New Deal, for the first time in our history, sought to take centralized control of the entire economy, which necessarily meant making the Constitution’s commerce clause all-embracing and exclusively a Federal prerogative.  Since 1937, the liberal-socialistic thesis has been that every species of human activity has a “substantial effect” on interstate commerce, thus nothing is beyond the reach of Federal regulation.

In that vein, today’s Court all too often is given to sweeping pronouncements that completely foreclose diversity among the states and bypass the lengthy debates in Congress and state legislatures that eventually would create public consensus on controversial issues such as Roe v. Wade.

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