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That Living Constitution

Once more a Supreme Court majority has manned the breach and turned back the legislative hosts who would encroach upon the privacy of business. In the Tyson theater-ticket case two years ago the line of present policy was laid down quite clearly. The right to regulate the fees of ticket brokers was then denied to the New York legislature. In the present case, Ribnik vs. McBride, the power to limit the fees of an employment agent is denied to the legislature of New Jersey.

A few years ago, when the business of insuring against fire was brought within the category of those businesses which are so "affected with a public interest" as to make them regulable, it seemed that the Court might easily go on extending this classification to other employments hitherto regarded as private. The Tyson case reversed the trend. Ribnik vs. McBride confirms the reversal. Implied in these decisions are public policies more significant than appears on the surface. With our official theory - that competition exists in business, and that, by its nice balance of conflicting forces, it protects all interests - gradually going to pot, many theorists have discerned in the common law phrase "affected with a public interest" a way of protecting a public all too defenseless against powerful business organizations. If, as competition disappeared in one area after another of industry, public regulations - of the state, if not of the federal government, for another intricate legal tangle is involved here - could gently and gradually be inserted, the evolution of industrial technique might be faced with more equanimity.

The stiffer legal minds of the Supreme Court either still describe industry to themselves in the terms of Adam Smith, or they possess a faith in the benevolence of modern business which we cannot share. Neither the Tyson case nor the present one involved important regulations, but their dicta have consequences which reach across the whole field of industrial policy. They bar the way, as definitely and finally as the Supreme Court can, to encroachments by any governmental regulating power on the field of what has hitherto been regarded as private business. Controls concomitant with the evolution of business are made impossible. The letter, not the spirit of the COnstitution dominates these latest opinions. Professor McBain's recent characterization of the Constitution as a living instrument is made to seem somewhat idealistic; it would seem necessary to admit that at least a temporary setback to constitutional growth has been sustained. The injury will not be healed until some important change in personnel occurs.

The grain of grace is familiarly furnished, as in other cases, by the dissent of Justices Stone, Brandeis, and Holmes. The minority opinions of these three are coming to be legal classics. They may in time become the rule of law. But so long as legalists so downright as Justice Sutherland are dominant, progress is definitely blocked. The decision could not be clearer:

An employment agency is essentially a private business. True, it deals with the public, but so does the druggist, the butcher, the baker, the grocer...Of course, anything which substantially interferes with employment is a matter of public concern, but in the same sense that interference with the procurement of food and housing and fuel are of public concern. The public is deeply interested in all these things. The welfare of its constituent members depends upon them...but in none of them is the interest that "public interest" which the law contemplates as the basis for legislative price control. Under the decisions of this Court it is no longer fairly open to question that, at least in the absence of a grave emergency, the fixing of prices for food or clothing, of house rental or of wages to be paid, whether minimum or maximum, is beyond the legislative power.

Freedom of contract and the due-process clause of the Fourteenth Amendment have again been made to serve the cause of reaction. Contrariwise, however, the dissenting opinion of Justice  is much the clearest analysis ever made of that shadowy legal area within which economic compulsions are disputed. The majority makes no attempt to meet the theoretical objections to its position; its statement is pure and unreasoned dogma, its use of "public interest" an obvious statement of prejudice and dislike for bureaucratic meddling. Justice Stone's opinion cites a dozen instances in which regulations indistinguishable from those proposed by the New Jersey legislature have been upheld. He proceeds to a statement of the situations in which the Court may properly ask whether the public interest has been injured, and handles delicately but forcefully the difficult problems concerning the content of this injury. IN the present case he is led to a masterly analysis of the facts concerning employment and the strategic situation of the middlemen in this particular market which gives them a fortuitous advantage, dangerous to the interests of the worker. The facts write their own conclusion. This may almost invariably be expected, one gathers, from the great concern of legislative agencies with public welfare. The conclusion is barely avoided, indeed, that all of this is beyond the Court's ability to decide.

Comparison of these two opinions is inevitable; it is only possible to say that traditionalism, blind adherence to some outmoded faith, is writ large over one; and that in the other, the pragmatic view of human necessity which distinguishes the best legal scholarship of our time finds an adequate illustration.

Concerning the phrase "affected with a public interest," which has centered upon itself so long a history of controversy, Justice Stone says:

Price regulation is within the constitutional power of a state legislature when the business concerned is "affected with a public interest." That phrase is not to be found in the Constitution. Concededly it is incapable of any precise definition. It has and can have only such meaning as is given to it by the decisions of this Court.

There is no taint of mystical nonsense about this. It places the Court precisely where it belongs, gives it a responsibility which so often is evaded when that seems uncomfortable. But something even better follows: a clear statement that economic disadvantage may find a remedy in regulation.

As I read those decisions, such regulation is within a state's power whenever any combination of circumstances seriously curtails the regulative force of competition, so that buyers or sellers are placed at such a disadvantage in the bargaining struggle that a legislature might reasonably anticipate serious consequences to the community as a whole.

This has the effect of restoring the common law, after half a century of sophistication and interested evasion, to its true position in defense of those who are injured by the hard conditions of industrial existence. Under this rule the favored would no longer be protected alone, through permission to exploit weaker individuals and classes at will. If this rule should prevail, the unfortunate might hope, as they cannot now, for certain redress of injuries. See how it narrows and defines itself in this direction:

The price regulation may embrace business "which though not public in their inception may fairly be said to have risen to be such and have become subject in consequence to some governmental regulation." The use by the public generally of the specific thing or business is not the test. THe nature of the service rendered, the exorbitance of the charges and the arbitrary control to which the public may be subjected without regulation are elements to be considered in determining whether the public interest exists. The economic disadvantage of a class and the attempt to ameliorate its condition may alone be sufficient to give rise to the public interest and to justify the regulation of contracts with its members, and obviously circumstances may so change in point of time or so differ in space as to clothe a business with such an interest which at other times or in other places would be a matter purely of private concern.

For those who are interested in such changes as are involved in the abolition of child labor, in the reconstruction of the coal industry, in a program of relief for farmers, in securing adequate social insurance, in the greater coordination of industrial affairs by national planning, there remains ,apparently, some hope - but only so much as can conceivably be clustered about the possibility of minorities being transformed into majorities by the passage of time or the prescience of Presidents. The contrasting philosophies of these two opinions bring into sharpest outline the wide difference between that view of our industrial policy which says that if the rich and powerful are protected, their self-interest - if not their benevolence - will cause some of the prosperity to seep downward in the social scale, and that one which  thinks of government as the vigilant protector of vital interests which may be injured in our carelessly developing industrialism. The Supreme Court, no less than the rest of us, has ultimately to take sides here. Perhaps it is significant that the ablest and wisest of the justices choose consistently the democratic rather than the plutocratic theory of affairs.