United States v. National Garment Co.

• Decision Date: 09 March 1935
• Docket Number: No. 11203.,11203.
• Citation: 10 F. Supp. 104
• Parties: UNITED STATES v. NATIONAL GARMENT CO. et al.
• Court: U.S. District Court — Eastern District of Missouri

10 F. Supp. 104

UNITED STATES v. NATIONAL GARMENT CO. et al.

No. 11203.

District Court, E. D. Missouri, E. D.

March 9, 1935.

Irwin Sale, Asst. U. S. Atty., of St. Louis, Mo., and James J. Caffrey, Asst. Atty., N. R. A. Division, Washington, D. C. (Harry C. Blanton, U. S. Atty., of Sikeston, Mo., on the brief), for the United States.

Victor Packman, of St. Louis, Mo., for defendants.

FARIS, Circuit Judge.

This is an action to restrain defendants from violating the Code of Fair Competition for the Underwear and Allied Products Manufacturing Industry, issued and promulgated September 18, 1933, and the several amendments thereto. Jurisdiction is bottomed on section 3 (c) of title 1, of the National Industrial Recovery Act of June 16, 1933 (48 Stat. 195, 196), 15 USCA § 703 (c), as also on the general jurisdiction in equity inherent in this court. It came on for hearing upon the bill of complaint; an order of this court to show cause why a temporary injunction should not issue against defendants, and the return of the defendants to said order. All such evidence as counsel, respectively, were advised to offer was heard, and the matter was submitted on briefs, which are before the court.

The evidence adduced tended to prove that defendant National Garment Company is a corporation organized and existing under the laws of the state of Missouri and domiciled as to its offices in the city of St. Louis, in said state; while defendant National Underwear Corporation is likewise a corporation, organized and existing under the laws of the state of Illinois, but domiciled in the city of St. Louis, wherein both its offices and its factory are located. The factory of the National Garment Company is located at the town of Chaffee, in the state of Missouri. Both companies have the same offices and officers and keep, in effect, the same set of books only differentiating, by an initial letter, the origin of the goods sold. Defendant National Garment Company owns 95 per cent. of the capital stock of the Underwear Corporation, while the remaining 5 per cent. is owned by the president of the Underwear Company (who is also president of the Garment Company) and a few others. Obviously, the Underwear Company is a subsidiary of the Garment Company of the most intimate sort.

Defendants buy their raw materials, largely knitted rayon, partly in Missouri, but largely in other states of the Union, and while they manufacture only in Missouri, they sell to jobbers only, both in Missouri and in other states, from which they receive orders. But as already said, for the major part, both their purchases of materials and sales of their products are from or in other states; although they are in competition with other manufacturers, who largely sell only in Missouri.

The factual complaint of plaintiff is bottomed on the alleged violation by defendants of sections 3 (a) and 4 (a) of part 2 of said code, which prescribe maximum weekly working hours and a minimum wage of 40 hours and 32½ cents per hour, respectively, for that defendants, on numerous occasions and as to divers employees, not learners or apprentices, worked their said employees more than 40 hours a week and paid them less than 32½ cents per hour for such work. Defendants have never elected to be bound by, nor have they recognized the provisions of, said code, except occasionally they made reports. This case does not involve any controversy, as to the binding effect of said code on the applicants for it, if any, nor on parties signatory, nor on those who have elected to accept its provisions, if such there are.

Upon the answer or return and motion to dismiss therein contained, and upon the evidence, there is, I think, no question that defendants have violated the provisions of the said code in the behalves set out in the bill of complaint. But in defense they raise a number of questions going to the constitutionality of the act, so far as concerns the power herein sought to be exercised; to the alleged lack of language in the act to warrant the provisions of section 3 (a) and 4 (a) of the code, supra; and to the power of the Congress to delegate to the Executive Department the right to make and promulgate the provisions made by the said code, which purport to fix the hours of labor and the wages to be paid therefor, in the industry here, which defense includes the constitutionality of the act, on which such delegation is bottomed.

The justification for this code in the matters herein complained of (that is, whether any language of the act warrants the power exercised) must be found, if it exists, in the language of subsection (a) of section 3, of the act (15 USCA § 703 (a). For a rather careful reading of the act discloses no other language which can fairly be construed to at all warrant the regulation fixing hours and wages. This language, omitting irrelevant parts and skeletonizing it for ease of understanding, and conceding, arguendo, compliance with antecedent requisites, reads thus: "The President may approve a code or codes of fair competition for the trade or industry, or subdivision thereof represented by the applicant, or applicants if the President finds * * * that such code or codes * * * will tend to effectuate the policy of this title; * * * provided further, * * * the President may as a condition of his approval of any such code, impose such conditions * * * for the protection of consumers, competitors, employees and others * * * as the President in his discretion deems necessary to effectuate the policy herein declared."

That policy is declared in section 1 tit. 1 of the act (15 USCA § 701), in this language: "A national emergency productive of widespread unemployment and disorganization of industry, which burdens interstate and foreign commerce, affects the public welfare, and undermines the standards of living of the American people, is hereby declared to exist. It is hereby declared to be the policy of Congress to remove obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof; and to provide for the general welfare by promoting the organization of industry for the purpose of cooperative action among trade groups, to induce and maintain united action of labor and management under adequate governmental sanctions and supervision, to eliminate unfair competitive practices, to promote the fullest possible utilization of the present productive capacity of industries, to avoid undue restriction of production (except as may be temporarily required), to increase the consumption of industrial and agricultural products by increasing purchasing power, to reduce and relieve unemployment, to improve standards of labor, and otherwise to rehabilitate industry and to conserve natural resources." (Italics supplied.)

In passing it will be observed as a fact that the Congress twice refers to interstate and foreign commerce as a thing to be affected by the act, as it does again in section 4 (a) thereof (15 USCA § 704 (a). As a matter of law, also in passing, it must be kept in mind that not even the Congress has the power to declare a policy in the teeth of the Constitution, or to make a declared policy any legal excuse for overriding the Constitution. The Congress may, of course, set forth in language called a policy, as other legislative bodies formerly often did, and occasionally now do, in a series of whereases, the reasons and the alleged necessity for the enaction of the law which follows. But neither a policy nor a whereas can add one jot or tittle of force or power to a legislative act when the organic law forbids, or (in case of the Federal Constitution) furnishes no warrant for the passage of the act. If it could, then obviously the Federal Constitution would no longer serve to delimit congressional action. If the word policy, as used, connotes a fixed and irrevocable course of legislation or action, binding in the future, it would be mere rhetoric, for nothing is better settled than that one legislative body cannot, irrevocably, and unchangeably bind succeeding Legislatures.

Also, nothing is better settled than that a court has no power to inquire into or question the motive or reason moving the Congress to pass a statute. Hammer v. Dagenhart, 247 U. S. 251, loc. cit. 274, 38 S. Ct. 529, 62 L. Ed. 1101, 3 A. L. R. 649, Ann. Cas. 1918E, 724. So it follows that a court may not call in question a legislative statement of a policy so long as the law, passed to carry into effect or promote the expressed policy, is constitutionally valid. Here the Congress enacted section 3 (a) and the other provisions of the act as statutory means designed and calculated, as it deemed, to remedy the ills it set forth in the policy it declared. In effect, the Congress declared that certain enumerated ills, largely affecting interstate and foreign commerce, existed, and that it purposed by the manner and means set forth in the succeeding sections of the act to ameliorate or correct these ills.

If then the means provided are within the field of permissive legislation as defined and limited by the constitutional grant of power, the President was given by the quoted language of section 3 (a) of the act power to adopt and promulgate a code containing the provisions found in part 2 and sections 3 (a) and 4 (a) of said code. For the power was delegated in terms limited only to whatever should be in the presidential discretion deemed meet to effectuate the things set out in the first section of the act, to wit, the policy.

True, the Congress in section 3 of the act (15 USCA § 703) dealt with and prescribed "a code * * * of fair competition." But by the proviso quoted it went farther, and broadened, I think, what is in law generally understood to be included in the phrase, "fair competition." This general understanding of the phrase is well discussed (not including of course, the broader term "unfair trade practices," which is not mentioned in ...