Green v. Frazier

Decision Date01 June 1920
Docket NumberNo. 811,811
Citation64 L.Ed. 878,253 U.S. 233,40 S.Ct. 499
PartiesGREEN et al. v. FRAZIER, Governor, et al
CourtU.S. Supreme Court

Mr. Thomas C. Daggett, of St. Paul, Minn., for plaintiffs in error.

Mr. Frederick A. Pike, of St. Paul, Minn., for certain defendants in error.

Mr. Justice DAY delivered the opinion of the Court.

This is an action by taxpayers of the state of North Dakota against Lynn J. Frazier, Governor, John N Hagan, Commissioner of Agriculture and Labor, William Langer, Attorney General, and Obert Olson, State Treasurer, and the Industrial Commission of that state, to enjoin the enforcement of certain state legislation. The defendants Lynn J. Frazier, as Governor, William Langer, as Attorney General, and John Hagan, as Commissioner of Agriculture and Labor, constitute the Industrial Commission, created by the Act of February 25, 1919, of the Sixteenth Legislative Assembly of the state of North Dakota (Laws 1919, c. 151).

The laws involved were attacked on various grounds, state and federal. The Supreme Court of North Dakota sustained the constitutionality of the legislation. So far as the decision rests on state grounds it is conclusive, and we need not stop to inquire concerning it. Davis v. Hildebrant, 241 U. S. 565, 36 Sup. Ct. 708, 60 L. Ed. 1172. The only ground of attack involving the validity of the legislation which requires our consideration concerns the alleged deprivation of rights secured to the plaintiffs by the Fourteenth Amendment to the federal Constitution. It is contended that taxation under the laws in question has the effect of depriving plaintiffs of property without due process of law.

The legislation involved consists of a series of acts passed under the authority of the state Constitution, which are: (1) An act creating an Industrial Commission of North Dakota, which is authorized to conduct and manage on behalf of that state certain utilities, industries, enterprises, and business projects, to be established by law. The act gives authority to the commission to manage, operate, control, and govern all utilities, enterprises, and business projects owned, undertaken, administered, or operated by the state of North Dakota, except those carried on in penal, charitable, or educational institutions. To that end certain powers and authority are given to the commission, among others: The right of eminent domain; to fix the buying price of things bought and the selling price of things sold, incidental to the utilities, industries, enterprises, and business projects, and to fix rates and charges for services rendered, having in mind the accumulation of a fund with which to replace in the general funds of the state the amount received by the commission under appropriations made by the act; to procure the necessary funds for such utilities, industries, enterprises, and business projects by negotiating the bonds of the state in such amounts and in such manner as may be provided by law. $200,000 of the funds of the state are appropriated to carry out the provisions of the act. (2) The Bank of North Dakota Act (Laws 1919, c. 147), which establishes a bank under the name of 'The Bank of North Dakota,' operated by the state. The Industrial Commission is placed in control of the operation and management of the bank, and is given the right of eminent domain to acquire necessary property. Public funds are to be deposited in the bank, and the deposits are guaranteed by the state of North Dakota. Authority is given to transfer funds to other departments, institutions, utilities, industries, enterprises, or business projects, and to make loans to counties, cities, or political subdivisions of the state, or to state or national banks, on such terms as the commission may provide. Loans to individuals, associations, and private corporations are authorized, when secured by duly recorded first mortgages on lands in the state of North Dakota. An appropriation of $100,000 is made immediately available to carry out the provisions of the act. (3) An act (Laws 1919, c. 148) providing for the issuing of bonds of the state in the sum of $2,000,000, the proceeds of which are to constitute the capital of the Bank of North Dakota. The earnings of the bank are to be paid to the state treasurer. Tax levies are authorized sufficient to pay the interest on the bonds annually. The bonds shall mature in periods of five years, and the board of equalization is authorized to levy a tax in an amount equal to one-fifth of the amount of their principal. The state treasurer is required to establish a bank bond payment fund into which shall be paid moneys received from taxation, from appropriations and from bank earnings. $10,000 is appropriated for the purpose of carrying the act into effect. (4) An act (Laws 1919, c. 154) providing for the issuing of bonds in the sum of not exceeding $10,000,000, to be known as 'Bonds of North Dakota, Real Estate Series.' These bonds are to be issued for the purpose of raising money to procure funds for the Bank of North Dakota to replace such funds as may have been employed by it from time to time in making loans upon first mortgages upon real estate. The faith and credit of the state of North Dakota are pledged for the payment of the bonds. Moneys derived from the sale of the bonds are to be placed by the Industrial Commission in the funds of the bank, and nothing in the act is to be construed to prevent the purchase of the bonds with any funds in the Bank of North Dakota. It is further provided that the state board of equalization shall, if it appears that the funds in the hands of the state treasurer are insufficient to pay either principal or interest, accruing within a period of one year thereafter, make a necessary tax levy to meet the indicated deficiency. Provision is made for the repeated exercise of the powers granted by the act, for the purposes stated. An appropriation of $10,000 is made for carrying into effect the provisions of this act. (5) An act (Laws 1919, c. 152) declaring the purpose of the state of North Dakota to engage in the business of manufacturing and marketing farm products, and to establish a warehouse, elevator, and flour mill system under the name of 'North Dakota Mill & Elevator Association,' to be operated by the state. The purpose is declared that the state shall engage in the business of manufacturing farm products and for that purpose shall establish a system of warehouses, elevators, flu r mills, factories, plants, machinery and equipment, owned, controlled, and operated by it under the name of the 'North Dakota Mill & Elevator Association.' The Industrial Commission is placed in control of the association, with full power, and it is authorized to acquire by purchase, lease, or right of eminent domain, all necessary property or properties, etc.; to buy, manufacture, store, mortgage, pledge, sell, and exchange all kinds of raw and manufactured farm products, and by-products, and to operate exchanges, bureaus, markets and agencies within and without the state, and in foreign countries. Provision is made for the bringing of a civil action against the state of North Dakota on account of causes of action arising out of the business. An appropriation is made out of state funds, together with the funds procured from the sale of state bonds, to be designated as the capital of the association. (6) An act (Laws 1919, c. 153) providing for the issuing of bonds of the state of North Dakota in a sum not exceeding $5,000,000, to be known as 'Bonds of North Dakota, Mill & Elevator Series,' providing for a tax and making other provisions for the payment of the bonds, and appropriations for the payment of interest and principal thereof. The bonds are to be issued and sold for the purpose of carrying on the business of the Mill & Elevator Association. The faith and credit of the state of North Dakota are pledged for the payment of the bonds, both principal and interest. These bonds may be purchased with funds in the Bank of North Dakota. Taxes are provided for sufficient to pay the bonds, principal and interest, taking into account the earnings of the association. The sum of $10,000 is appropriated from the general funds of the state to carry the provisions of the act into effect. (7) The Home Building Act (Laws 1919, c. 150) declares the purpose of the state to engage in the enterprise of providing homes for its residents and to that end to establish a business system operated by it under the name of the 'Home Building Association of North Dakota,' and defines its duties and the extent of its powers. The Industrial Commission is placed in control of the 'Home Building Association,'...

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