Taylor v. Brown, 10.

CourtU.S. Temporary Emergency Court of Appeals
Citation137 F.2d 654
Decision Date15 July 1943
Docket NumberNo. 10.,10.
PartiesTAYLOR v. BROWN, Price Adm'r.

COPYRIGHT MATERIAL OMITTED

Stanley W. Taylor, in propria persona, and C. M. Walter, of Oakland, Cal., and John C. Stirrat, of San Francisco, Cal., for complainant.

David Ginsburg, Gen. Counsel, Thomas I. Emerson, Associate Gen. Counsel, Nathaniel L. Nathanson, Asst. Gen. Counsel, and Sol M. Linowitz, Carl H. Fulda, Maurice Alexandre, and Betty L. Brown, Attys., all of the Office of Price Administration, all of Washington, D. C., for respondent.

Before VINSON, Chief Judge, and MARIS and MAGRUDER, Judges.

Writ of Certiorari Denied November 15, 1943. See 64 S.Ct. 194.

MARIS, Judge.

The complainant is the owner of certain real property in San Francisco, California, consisting of 53 rental units. His property is situated in the San Francisco Bay Defense-Rental Area with respect to which the Price Administrator established maximum rents, effective July 1, 1942, by Maximum Rent Regulation No. 28 issued June 30, 1942.1 The regulation froze rents in the area at the level of March 1, 1942. Without showing that he had been adversely affected by the regulation the complainant filed a protest against it with the Administrator setting up as grounds of protest the unconstitutionality of the regulation and of the Emergency Price Control Act of 19422 under which it was issued. The Administrator denied the protest upon the ground that he was compelled to accept the constitutionality of the act. Thereupon the complainant filed his complaint in this court and in it, again without averring that he had been adversely affected, attacked the regulation and the act upon a broad constitutional front. We are thus called upon to consider the constitutional validity of the act and regulation generally and without regard to their particular application to the complainant.

We entirely agree with the three-judge district court in Henderson v. Kimmel, D. C.Kan.1942, 47 F.Supp. 635, that it is no longer open to doubt that rent control is necessary to the effective prosecution of the war effort. As Circuit Judge Phillips well said in that case (page 642 of 47 F. Supp.): "It is necessary in order to prevent the disastrous effects of inflation, to protect the families of men in the armed service, to attract workers to vital defense areas, to bring about a fair distribution of essential labor among the several defense areas, and to insure defense workers of housing accommodations at rentals that are not exorbitant. In short, it is necessary to maintain civilian morale and insure the production of necessary armaments."

The experience of this and other countries has shown that inflation is one of the greatest dangers to the home front in time of war. As the Administrator has pointed out in his brief, rent control is of first importance in preventing inflation. In the average family budget rent is, after food, the largest single item. From 15% to 30% of the wage earner's income is ordinarily devoted to payment of rent. Studies indicate that wage earners with moderate incomes in large American cities usually spend 20% of their earnings for rent.3 In urban communities, three out of five families in 1940 were tenants and approximately $5,000,000,000 in rent was paid for nonfarm tenant-occupied dwelling units.4

Increases in rents have an immediate effect on wage earners. Other items are normally bought in small quantities and a small increase in the price of such commodities makes no great impression upon the wage earner. Rents are paid in lump sums, however, and wage earners are acutely aware of the fact that their living costs are increasing when rents are raised. Furthermore, in the case of most commodities, wage earners can reduce their purchases and thereby adjust their budgets to price increases; in the case of rental housing in war centers, however, workers generally have no choice, because the supply of housing is so severely limited. Accordingly, wage earners tend to demand wage increases to offset encroachments on their living standards resulting from higher rents. If such wage increases are not granted, labor friction and strikes may arise to impede the prosecution of the war. If wages are raised, the pressure for increased prices soon makes itself felt. Further demands for wage increases are thereby engendered. Thus an inflationary spiral initiated by rent increases gathers momentum. The vital importance of the rent control program to the war effort is thus apparent.5

We, therefore, pass to the question whether the act and the regulation are within the war power of Congress. That power is conferred by the following provisions of Art. 1, Sec. 8, of the Constitution:

"The Congress shall have Power To lay and collect Taxes, * * * to pay the Debts and provide for the common Defence and general Welfare of the United States; * * *

"To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

"To raise and support Armies * * *;

"To provide and maintain a Navy;

"To make Rules for the Government and Regulation of the land and naval Forces;

"To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions; * * *

"To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, * * *."

The power thus granted is of the widest scope. Its breadth was well described by Justice Sutherland in United States v. Macintosh, 1931, 283 U.S. 605, 622, 51 S.Ct. 570, 574, 75 L.Ed. 1302, as follows: "From its very nature the war power, when necessity calls for its exercise, tolerates no qualifications or limitations, unless found in the Constitution or in applicable principles of international law. In the words of John Quincy Adams, `This power is tremendous; it is strictly constitutional; but it breaks down every barrier so anxiously erected for the protection of liberty, property and of life.' To the end that war may not result in defeat, freedom of speech may, by act of Congress, be curtailed or denied so that the morale of the people and the spirit of the army may not be broken by seditious utterances; freedom of the press curtailed to preserve our military plans and movements from the knowledge of the enemy; deserters and spies put to death without indictment or trial by jury; ships and supplies requisitioned; property of alien enemies, theretofore under the protection of the Constitution, seized without process and converted to the public use without compensation and without due process of law in the ordinary sense of that term; prices of food and other necessities of life fixed or regulated; railways taken over and operated by the government; and other drastic powers, wholly inadmissible in time of peace, exercised to meet the emergencies of war." As was said by Chief Justice Hughes in Home Bldg. & L. Ass'n v. Blaisdell, 1934, 290 U.S. 398, 426, 54 S.Ct. 231, 235, 78 L.Ed. 413, 88 A.L.R. 1481: "It is a power to wage war successfully, and thus it permits the harnessing of the entire energies of the people in a supreme co-operative effort to preserve the nation." See also the Legal Tender Cases, 1870, 79 U.S. 457, 12 Wall. 457, 20 L.Ed. 287; Hirabayashi v. United States, June 21, 1943, 63 S.Ct. 1375, 87 L.Ed. ___.

We accordingly conclude that the power to fix maximum rents for housing accommodations is within the war power conferred upon Congress by the Constitution.

The complainant contends that the rent control provisions of the Emergency Price Control Act violate the Constitution in that they involve an improper delegation of legislative authority by Congress to the Administrator. We find no merit in this contention. Section 1(a) of the act6 declares it to be necessary to the effective prosecution of the present war and to be the purpose of the act

"to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; to eliminate and prevent profiteering, hoarding, manipulation, speculation, and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency; to assure that defense appropriations are not dissipated by excessive prices; to protect persons with relatively fixed and limited incomes, consumers, wage earners, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; to prevent hardships to persons engaged in business, to schools, universities, and other institutions, and to the Federal, State, and local governments, which would result from abnormal increases in prices; to assist in securing adequate production of commodities and facilities; to prevent a post emergency collapse of values; to stabilize agricultural prices in the manner provided in section 3; and to permit voluntary cooperation between the Government and producers, processors, and others to accomplish the aforesaid purposes."

Here is a full and detailed statement of the Congressional purpose. It is followed in Section 2(b)7 by the specification of standards to which the rent regulations of the Administrator are to conform. The regulations may be applied only to housing accommodations in defense-rental areas in which defense activities shall have resulted or threatened to result in increases in rents for housing accommodations inconsistent with the purposes of the act. The maximum rents established by the regulations are to be generally fair and equitable and such as will effectuate the purposes of the act. The Administrator is authorized to fix maximum rents at the level of April 1, 1941, unless he finds that some other date (not earlier than April 1, 1940) is more appropriate to eliminate increases in rents due to defense...

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