Carter v. Carter Coal Company
Encyclopedia
Carter v. Carter Coal Company, 298 U.S. 238 (1936), is a United States Supreme Court
decision interpreting the Commerce Clause
of the United States Constitution
, which permits the United States Congress
to "regulate Commerce... among the several States." Specifically, it analyzes the extent of Congress’ power, according to the Commerce Clause, looking at whether or not they have the right to regulate manufacturing.
James W. Carter was a shareholder of the Carter Coal Company and did not feel that the company should join the government program. The board of directors for the company thought that the company could not afford to pay the tax and not receive anything back. Carter sued the coal mine claiming that coal mining was not interstate commerce and therefore could not be regulated by the federal government
.
have the power, according to the Commerce Clause
, to regulate the coal mining industry?
a) Just because a commodity
is manufactured or produced within a state and is intended for interstate commerce, does not mean that its “production or manufacturing is subject to federal regulation under the commerce clause.”
b) A commodity that is meant to be sold in interstate commerce is not considered to be part of interstate commerce “before the commencement of its movement from the state.”
c) “Mining is not interstate commerce.” It is a local business and is subject to local control and taxation.
d) "The word 'commerce
' is equivalent to the phrase 'intercourse for the purposes of trade'”: the process of mining coal does not fit within this definition.
e) The labor board has powers over production, not commerce. This confirms the idea that production is a purely local activity.
f) If the production of coal by a single person does not have a direct effect on interstate commerce, then the production of coal by many people can also not have a direct effect on interstate commerce.
g) The evils that Congress sought to control are “all local evils over which the federal government has no legislative control."
h) “The federal regulatory power ceases when interstate commerce ends; and, the power does not attach until interstate commercial intercourse begins.”
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
decision interpreting the Commerce Clause
Commerce Clause
The Commerce Clause is an enumerated power listed in the United States Constitution . The clause states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Courts and commentators have tended to...
of the United States Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...
, which permits the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
to "regulate Commerce... among the several States." Specifically, it analyzes the extent of Congress’ power, according to the Commerce Clause, looking at whether or not they have the right to regulate manufacturing.
Facts
The Bituminous Coal Conservation Act was passed in 1935 and replaced the previous codes set forth by the National Industry Recovery Act (NIRA). The new act established a commission, made up of coal miners, coal producers, and the public, to establish fair competition standards, production standards, wages, hours, and labor relations. All mines were required to pay a 15% tax on coal produced. The act was not mandatory, but mines that complied would be refunded 90% of the 15% tax.James W. Carter was a shareholder of the Carter Coal Company and did not feel that the company should join the government program. The board of directors for the company thought that the company could not afford to pay the tax and not receive anything back. Carter sued the coal mine claiming that coal mining was not interstate commerce and therefore could not be regulated by the federal government
Federal government
The federal government is the common government of a federation. The structure of federal governments varies from institution to institution. Based on a broad definition of a basic federal political system, there are two or more levels of government that exist within an established territory and...
.
Legal question
Does the United States CongressUnited States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
have the power, according to the Commerce Clause
Commerce Clause
The Commerce Clause is an enumerated power listed in the United States Constitution . The clause states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Courts and commentators have tended to...
, to regulate the coal mining industry?
Majority opinion
The Supreme Court ruled the Bituminous Coal Conservation Act unconstitutional by a 5-4 margin. The majority reasoned as follows:a) Just because a commodity
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
is manufactured or produced within a state and is intended for interstate commerce, does not mean that its “production or manufacturing is subject to federal regulation under the commerce clause.”
b) A commodity that is meant to be sold in interstate commerce is not considered to be part of interstate commerce “before the commencement of its movement from the state.”
c) “Mining is not interstate commerce.” It is a local business and is subject to local control and taxation.
d) "The word 'commerce
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
' is equivalent to the phrase 'intercourse for the purposes of trade'”: the process of mining coal does not fit within this definition.
e) The labor board has powers over production, not commerce. This confirms the idea that production is a purely local activity.
f) If the production of coal by a single person does not have a direct effect on interstate commerce, then the production of coal by many people can also not have a direct effect on interstate commerce.
g) The evils that Congress sought to control are “all local evils over which the federal government has no legislative control."
h) “The federal regulatory power ceases when interstate commerce ends; and, the power does not attach until interstate commercial intercourse begins.”