Carter v. Carter Coal Co Helvering v. Carter Tway Coal Co v. Glenn Tway Coal Co v. Clark

• Decision Date: 18 May 1936
• Docket Number: 651,649,650,Nos. 636,s. 636
• Citation: 80 L.Ed. 1160,56 S.Ct. 855,298 U.S. 238
• Parties: CARTER v. CARTER COAL CO. et al. HELVERING et al. v. CARTER et al. R. C. TWAY COAL CO. et al. v. GLENN. R. C. TWAY COAL CO. et al. v. CLARK
• Court: U.S. Supreme Court

298 U.S. 238

56 S.Ct. 855

80 L.Ed. 1160

CARTER

v CARTER COAL CO. et al.

HELVERING et al.

v. CARTER et al.

R. C. TWAY COAL CO. et al.

v. GLENN.

R. C. TWAY COAL CO. et al.

v. CLARK.

Nos. 636, 651, 649, 650.

Argued and Submitted March 11, 12, 1936.

Decided May 18, 1936.

Beneficent aims however great or well directed can never serve in lieu of constitutional power.

[Syllabus from pages 239-254 intentionally omitted]

Page 255

Messrs. Frederick H. Wood and William D. Whitney, both of New York City, and Richard H. Wilmer, of Washington, D.C., for petitioner Carter.

[Argument of Counsel from Pages 256-268 intentionally omitted]

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Mr. Charles I. Dawson, of Louisville, Ky., for Tway Coal Co.

Messrs. Stanley F. Reed, Sol. Gen., of Washington, D.C., Homer S. Cummings, Atty. Gen., John Dickinson, Asst. Atty. Gen., Charles H. Weston, F. B. Critchlow, A. H. Feller, Robert L. Stern, and Charles Harwood, all of Washington, D.C., for the United States.

[Argument of Counsel from Pages 269-276 intentionally omitted]

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Mr. Karl J. Hardy, of Washington, D.C., for respondents Carter Coal co. et al.

Mr. Joseph Selligman, of Louisville, Ky., for respondent Clark.

[Argument of Counsel from Page 277 intentionally omitted]

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Mr. Justice SUTHERLAND delivered the opinion of the Court.

The purposes of the 'Bituminous Coal Conservation Act of 1935,' involved in these suits, as declared by the title, are to stabilize the bituminous coal-mining industry and promote its interstate commerce; to provide for co-operative marketing of bituminous coal; to levy a tax on such coal and provide for a drawback under certain conditions; to declare the production, distribution, and use of such coal to be affected with a national public interest; to conserve the national resources of such coal; to provide for the general welfare, and for other purposes. C. 824, 49 Stat. 991 (15 U.S.C.A. §§ 801—827). The constitutional validity of the act is challenged in each of the suits.

Nos. 636 and 651 are cross-writs of certiorari in a stockholder's suit, brought in the Supreme Court of the District of Columbia by Carter against the Carter Coal Company and some of its officers, Guy T. Helvering (Commissioner of Internal Revenue of the United

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States), and certain other officers of the United States, to enjoin the coal company and its officers named from filing an acceptance of the code provided for in said act, from paying any tax imposed upon the coal company under the authority of the act, and from complying with its provisions or the provisions f the code. The bill sought to enjoin the Commissioner of Internal Revenue and the other federal officials named from proceeding under the act in particulars specified, the details of which it is unnecessary to state.

No. 649 is a suit brought in a federal District Court in Kentucky by petitioners against respondent collector of internal revenue for the district of Kentucky, to enjoin him from collecting or attempting to collect the taxes sought to be imposed upon them by the act, on the ground of its unconstitutionality.

No. 650 is a stockholder's suit brought in the same court against the coal company and some of its officers, to secure a mandatory injunction against their refusal to accept and operate under the provisions of the Bituminous Coal Code prepared in pursuance of the act.

By the terms of the act, every producer of bituminous coal within the United States is brought within its provisions.

Section 1 (15 U.S.C.A. § 801) is a detailed assertion of circumstances thought to justify the act. It declares that the mining and distribution of bituminous coal throughout the United States by the producer are affected with a national public interest; and that the service of such coal in relation to industrial activities, transportation facilities, health and comfort of the people, conservation by controlled production and economical mining and marketing, maintenance of just and rational relations between the public, owners, producers, and employees, the right of the public to constant and adequate supplies of coal at reasonable prices, and the general welfare of the Nation,

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require that the bituminous coal industry should be regulated as the act provides.

Section 1 (15 U.S.C.A. § 802), among other things, further declares that the production and distribution by producers of such coal bear upon and directly affect interstate commerce, and render regulation of production and distribution imperative for the protection of such commerce; that certain features connected with the production, distribution, and marketing have led to waste of the national coal resources, disorganization of interstate commerce in such coal, and burdening and obstructing interstate commerce therein; that practices prevailing in the production of such coal directly affect interstate commerce and require regulation for the protection of that commerce; and that the right of mine workers to organize and collectively bargain for wages, hours of labor, and conditions of employment should be guaranteed in order to prevent constant wage cutting and disparate labor costs detrimental to fair interstate competition, and in order to avoid obstructions to interstate commerce that recur in industrial disputes over labor relations at the mines. These declarations constitute not enactments of law, but legislative averments by way of inducement to the enactment which follows.

The substantive legislation begins with section 2 (15 U.S.C.A. § 803), which establishes in the Department of the Interior a National Bituminous Coal Commission, to be appointed and constituted as the section then specifically provides. Upon this commission is conferred the power to hear evidence and find facts upon which its orders and actions may be predicated.

Section 3 (15 U.S.C.A. § 804) provides:

'There is hereby imposed upon the sale or other disposal of all bituminous coal produced within the United States an excise tax of 15 per centum on the sale price at the mine, or in the case of captive coal the fair market

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value of such coal at the mine, such tax, subject to the later provisions of this section, to be payable to the United States by the producers of such coal, and to be payable monthly for each calendar month, on or before the first business day of the second succeeding month, and under such regulations, and in such manner, as shall be prescribed by the Commissioner of Internal Revenue: Provided, That in the case of captive coal produced as aforesaid, the Commissioner of Internal Revenu shall fix a price therefor at the current market price for the comparable kind, quality, and size of coals in the locality where the same is produced: Provided further, That any such coal producer who has filed with the National Bituminous Coal Commission his acceptance of the code provided for in section 4 of this Act (sections 805, 806, 807 and 808 of this chapter), and who acts in compliance with the provisions of such code, shall be entitled to a drawback in the form of a credit upon the amount of such tax payable hereunder, equivalent to 90 per centum of the amount of such tax, to be allowed and deducted therefrom at the time settlement therefor is required, in such manner as shall be prescribed by the Commissioner of Internal Revenue. Such right or benefit of drawback shall apply to all coal sold or disposed of from and after the day of the producer's filing with the Commission his acceptance of said code in such form of agreement as the Commission may prescribe. No producer shall by reason of his acceptance of the code provided for in section 4 (sections 805, 806, 807 and 808 of this chapter) or of the drawback of taxes provided in section 3 of this Act (this section) be held to be precluded or estopped from contesting the constitutionality of any provision of said code, or its validity as applicable to such producer.'

Section 4 (15 U.S.C.A. § 805 et seq.) provides that the commission shall formulate the elaborate provisions contained therein into a working agreement to be known as the Bituminous Coal Code. These provisions require the organization of twenty-three

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coal districts, each with a district board the membership of which is to be determined in a manner pointed out by the act. Minimum prices for coal are to be established by each of these boards, which is authorized to make such classification of coals and price variation as to mines and consuming market areas as it may deem proper. 'In order to sustain the stabilization of wages, working conditions, and maximum hours of labor, said prices shall be established so as to yield a return per net ton for each district in a minimum price area, as such districts are identified and such area is defined in the subjoined table designated 'Minimum-price area table,' equal as nearly as may be to the weighted average of the total costs, per net ton, determined as hereinafter provided, of the tonnage of such minimum price area. The computation of the total costs shall include the cost of labor, supplies, power, taxes, insurance, workmen's compensation, royalties, depreciation, and depletion (as determined by the Bureau of Internal Revenue in the computation of the Federal income tax) and all other direct expenses of production, coal operators' association dues, district board assessments for Board operating expenses only levied under the code, and reasonable costs of selling and the cost of administration.' (15 U.S.C.A. § 807(a). The district board must determine and adjust the total cost of the ascertainable tonnage produced in the district so as to give effect to any changes in wage rates, hours of employment, or other factors substantially affecting costs, which may have been established since January 1, 1934.

Without repeating the long and involved provisions with regard to the fixing of minimum prices, it is enough to say that the act confers the power to fix...