The Theory of Social Revolutions - Brooks Adams
It was here that Marshall faltered. He felt that the public would not
support him if he held that states could not alter town and county
charters, so he arbitrarily split corporations in halves, protecting
only those which handled exclusively private funds, and abandoning
"instruments of government," as he called them, to the mercy of
legislative assemblies.
Toward 1832 it became convenient for middle class Englishmen to
confiscate most of the property which the aristocracy had invested in
parliamentary boroughs, and this social revolution was effected without
straining the judicial system, because of the supremacy of Parliament.
In America, at about the same time, it became, in like manner,
convenient to confiscate numerous equally well-vested rights, because,
to have compensated the owners would have entailed a considerable
sacrifice which neither the public nor the promoters of new enterprises
were willing to make. The same end was reached in America as in England,
in spite of Chief Justice Marshall and the Dartmouth College Case, only
in America it was attained by a legal somerset which has disordered the
course of justice ever since.
In 1697 King William III incorporated Trinity Church in the City of New
York, confirming to the society the possession of a parcel of land,
adjoining the church, to be used as a churchyard for the burial of the
dead. In 1823 the government of New York prohibited interments within
the city limits, thus closing the churchyard for the purposes for which
it had been granted. As compensation was refused, it appeared to be a
clear case of confiscation, and Trinity resisted. In the teeth of recent
precedents the Supreme Court of New York decided that, under the _Police
Power_, the legislature of New York might authorize this sort of
appropriation of private property for sanitary purposes, without paying
the owners for any loss they might thereby sustain.[20]
The court thus simply dispensed the legislature from obedience to the
law, saying in effect, "although the Constitution forbids impairing
contracts, and although this is a contract which you have impaired, yet,
in our discretion, we suspend the operation of the Constitution, in this
instance, by calling your act an exercise of a power unknown to the
framers of the Constitution." I cannot doubt that Marshall would have
flouted this theory had he lived to pass upon it, but Marshall died in
1835, and the Charles River Bridge Case, in which this question was
first presented to the Supreme Court of the United States, did not come
up until 1837. Then Joseph Story, who remained as the representative of
Marshall's philosophy upon the bench, vehemently protested against the
latitudinarianism of Chief Justice Taney and his associates, but without
producing the slightest effect.
In 1785 the Massachusetts legislature chartered the Charles River Bridge
Company to build a bridge between Boston and Charlestown, authorizing
it, by way of consideration, to collect tolls for forty years. In 1792
the franchise was extended to seventy years, when the bridge was to
revert to the Commonwealth. In 1828 the legislature chartered the Warren
Bridge Company, expressly to build a bridge parallel to and practically
adjoining the Charles River Bridge, the Warren Bridge to become a free
bridge after six years. The purpose, of course, was to accelerate
movement by ruining the Charles River Bridge Company. The Charles River
Bridge Company sought to restrain the building of the Warren Bridge as a
breach of contract by the State, but failed to obtain relief in the
state courts, and before the cause could be argued at Washington the
Warren Bridge had become free and had destroyed the value of the Charles
River Bridge, though its franchise had still twenty years to run. As
Story pointed out, no one denied that the charter of the Charles River
Bridge Company was a contract, and, as he insisted, it is only common
sense as well as common justice and elementary law, that contracts of
this character should be reasonably interpreted so far as quiet
enjoyment of the consideration granted is concerned; but all this
availed nothing. The gist of the opposing argument is contained in a
single sentence in the opinion of the Chief Justice who spoke for the
majority of the court: "The millions of property which have been
invested in railroads and canals, upon lines of travel which had been
before occupied by turnpike corporations, will be put in jeopardy" if
this doctrine is to prevail.[21]
The effect of the adoption by the Supreme Court of the United States of
the New York theory of the Police Power was to vest in the judiciary, by
the use of this catch-word, an almost unparalleled prerogative. They
assumed a supreme function which can only be compared to the Dispensing
Power claimed by the Stuarts, or to the authority which, according to
the Council of Constance, inheres in the Church, to "grant indulgences
for reasonable causes." I suppose nothing in modern judicial history has
ever resembled this assumption; and yet, when we examine it, we find it
to be not only the logical, but the inevitable, effect of those
mechanical causes which constrain mankind to move along the lines of
least resistance.
Marshall, in a series of decisions, laid down a general principle which
had been proved to be sound when applied by ordinary courts, dealing
with ordinary social forces, and operating under the corrective power of
either a legislature or a praetor, but which had a different aspect
under the American constitutional system. He held that the fundamental
law, embodied in the Constitution, commanded that all contracts should
be sacred. Therefore he, as a judge, had but two questions to resolve:
First, whether, in the case before him, a contract had been proved to
exist. Second, admitting that a contract had been proved, whether it had
also been shown to have been impaired.
Within ten years after these decisions it had been found in practice
that public opinion would not sustain so rigid an administration of the
law. No legislature could intervene, and a pressure was brought to bear
which the judges could not withstand; therefore, the Court yielded,
declaring that if impairing a contract were, on the whole, for the
public welfare, the Constitution, as Marshall interpreted it, should be
suspended in favor of the legislation which impaired it. They called
this suspension the operation of the "Police Power." It followed, as the
"Police Power" could only come into operation at the discretion of the
Court, that, therefore, within the limits of judicial discretion,
confiscation, however arbitrary and to whatever extent, might go on. In
the energetic language of the Supreme Court of Maine: "This duty and
consequent power override all statute or contract exemptions. The state
cannot free any person or corporation from subjection to this power.
All personal, as well as property rights must be held subject to the
Police Power of the state."[22]
Once the theory of the Police Power was established it became desirable
to define the limits of judicial discretion, but that proved to be
impossible. It could not be determined in advance by abstract reasoning.
Hence, as each litigation arose, the judges could follow no rule but the
rule of common sense, and the Police Power, translated into plain
English, presently came to signify whatever, at the moment, the judges
happened to think reasonable. Consequently, they began guessing at the
drift of public opinion, as it percolated to them through the medium of
their education and prejudices. Sometimes they guessed right and
sometimes wrong, and when they guessed wrong they were cast aside, as
appeared dramatically enough in the temperance agitation.
Up to about the middle of the last century the lawfulness of the liquor
business had been unquestioned in the United States, and money had been
invested as freely in it as in any other legitimate enterprise; but, as
the temperance agitation swept over the country, in obedience to the
impulsion given by science to the study of hygiene, dealing in liquor
came to be condemned as a crime. Presently legislatures began to pass
statutes to confiscate, more or less completely, this kind of property,
and sufferers brought their cases before the courts to have the
constitutionality of the acts tested, under the provisions which existed
in all state constitutions, forbidding the taking, by the public, of
private property without compensation, or without due process of law.
Such a provision existed hi the constitution of the State of New York,
adopted in 1846, and it was to invoke the protection of this clause that
one Wynehamer, who had been indicted in 1855, carried his case to the
Court of Appeals in the year 1856. In that cause Mr. Justice Comstock,
who was one of the ablest jurists New York ever produced, gave an
opinion which is a model of judicial' reasoning. He showed conclusively
the absurdity of constitutional restrictions, if due process of law may
be held to mean the enactment of the very statute drawn to work
confiscation.[23] This decision, which represented the profoundest
convictions of men of the calibre of Comstock and Denio, deserves to
rank with Marshall's effort in the Dartmouth College Case. In both
instances the tribunal exerted itself to carry out Hamilton's principle
of judicial duty by exercising its _judgment_ and not its _will_. In
other words, the judges propounded a general rule and then simply
determined whether the set of facts presented to them fell within that
rule. They resolutely declined to legislate by entering upon a
consideration of the soundness or reasonableness of the policy which
underlay the action of the legislature. In the one case as in the other
the effort was unavailing, as Jefferson prophesied that it would be. I
have told of Marshall's overthrow in the Charles River Bridge Case, and
in 1887, after controversies of this category had begun to come before
the Supreme Court of the United States under the Fourteenth Amendment,
Mr. Justice Harlan swept Mr. Justice Comstock aside by quietly ignoring
an argument which was unanswerable.[24] The same series of phenomena
have appeared in regard to laws confiscating property invested in
lotteries, when opinion turned against lotteries, or in occupations
supposed to be unsanitary, as in the celebrated case of the taxing out
of existence of the rendering establishment which had been erected as a
public benefit to relieve the City of Chicago of its offal.[25] In fine,
whenever pressure has reached a given intensity, on one pretext or
another, courts have enforced or dispensed with constitutional
limitations with quite as much facility as have legislatures, and for
the same reasons. The only difference has been that the pressure which
has operated most directly upon courts has not always been the pressure
which has swayed legislatures, though sometimes both influences have
combined. For example, during the Civil War, the courts sanctioned
everything the popular majority demanded under the pretext of the War
Power, as in peace they have sanctioned confiscations for certain
popular purposes, under the name of the Police Power. But then, courts
have always been sensitive to financial influences, and if they have
been flexible in permitting popular confiscation when the path of least
resistance has lain that way, they have gone quite as far in the
reverse direction when the amount of capital threatened has been large
enough to be with them a countervailing force.
As the federal Constitution originally contained no restriction upon the
states touching the confiscation of the property of their own citizens,
provided contracts were not impaired, it was only in 1868, by the
passage of the Fourteenth Amendment, that the Supreme Court of the
United States acquired the possibility of becoming the censor of state
legislation in such matters. Nor did the Supreme Court accept this
burden very willingly or in haste. For a number of years it labored to
confine its function to defining the limits of the Police Power,
guarding itself from the responsibility of passing upon the
"reasonableness" with which that power was used. It was only by somewhat
slow degrees, as the value of the threatened property grew to be vast,
that the Court was deflected from this conservative course into
effective legislation. The first prayers for relief came from the
Southern states, who were still groaning under reconstruction
governments; but as the Southern whites were then rather poor, their
complaints were neglected. The first very famous cause of this category
is known as the Slaughter House Cases. In 1869 the Carpet Bag government
of Louisiana conceived the plan of confiscating most of the property of
the butchers who slaughtered for New Orleans, within a district about as
large as the State of Rhode Island. The Fourteenth Amendment forbade
states to deprive any person of life, liberty, or property, without due
process of law, and the butchers of New Orleans prayed for protection,
alleging that the manner in which their property had been taken was
utterly lawless. But the Supreme Court declined to interfere, explaining
that the Fourteenth Amendment had been contrived to protect the
emancipated slaves, and not to make the federal judiciary "a perpetual
censor upon all legislation of the states, on the civil rights of their
own citizens, with authority to nullify such as it did not approve."[26]
Although, even at that relatively early day, this conservatism met with
strong opposition within the Court itself, the pressure of vested wealth
did not gather enough momentum to overcome the inertia of the bench for
nearly another generation. It was the concentration of capital in
monopoly, and the consequent effort by the public to regulate monopoly
prices, which created the stress which changed the legal equilibrium.
The modern American monopoly seems first to have generated that amount
of friction, which habitually finds vent in a great litigation, about
the year 1870; but only some years later did the states enter upon a
determined policy of regulating monopoly prices by law, with the
establishment by the Illinois legislature of a tariff for the Chicago
elevators. The elevator companies resisted, on the ground that
regulation of prices in private business was equivalent to confiscation,
and so in 1876 the Supreme Court was dragged into this fiercest of
controversies, thereby becoming subject to a stress to which no
judiciary can safely be exposed. Obviously two questions were presented
for adjudication: The first, which by courtesy might be termed legal,
was whether the fixing of prices by statute was a prerogative which a
state legislature might constitutionally exercise at all; the second,
which was purely political, was whether, admitting that, in the
abstract, such a power could be exercised by the state, Illinois had,
in this particular case, behaved _reasonably_. The Supreme Court made a
conscientious effort to adhere to the theory of Hamilton, that it
should, in emergencies like this, use its _judgment_ only, and not its
_will_; that it should lay down a rule, not vote on the wisdom of a
policy. So the judges decided that, from time immemorial, the fixing of
prices in certain trades and occupations had been a legislative
function, which they supposed might be classified as a branch of the
Police Power, but they declared that with this expression of opinion
their jurisdiction ended. When it came to asking them to criticise the
propriety of legislation, it was, in substance, proposing that they
should substitute their _will_ for the _will_ of the representatives of
the people, which was impossible. I well remember the stir made by the
case of Munn _v_. Illinois.[27]
Both in and out of the legal profession, those in harmony with the great
vested interests complained that the Court had shirked its duty. But
these complaints soon ceased, for a movement was in progress which
swept, for the moment, all before it. The great aggregations of capital,
which had been accumulating ever since the Charles River Bridge Case,
not long after Munn _v._ Illinois attained to a point at which they
began to grasp many important prerogatives of sovereignty, and to
impose, what was tantamount to, arbitrary taxation upon a large scale.
The crucial trial of strength came on the contest for control of the
railways, and in that contest concentrated capital prevailed. The
Supreme Court reversed its attitude, and undertook to do that which it
had solemnly protested it could not do. It began to censor legislation
in the interest of the strongest force for the time being, that force
being actually financial. By the year 1800 the railway interest had
expanded prodigiously. Between 1876 and 1890 the investment in railways
had far more than doubled, and, during the last five years of this
period, the increment had been at an average of about $450,000,000
annually. At this point the majority of the court yielded, as ordinary
political chambers always must yield, to extraordinary pressure. Mr.
Justice Bradley, however, was not an ordinary man. He was, on the
contrary, one of the ablest and strongest lawyers who sat on the federal
bench during the last half of the nineteenth century; and Bradley, like
Story before him, remonstrated against turning the bench of magistrates,
to which he belonged, from a tribunal which should propound general
rules applicable to all material facts, into a jury to find verdicts on
the reasonableness of the votes of representative assemblies. The
legislature of Minnesota, in 1887, passed a statute to regulate railway
rates, and provided that the findings of the commission which it erected
to fix those rates should be final. The Chicago, Milwaukee & St. Paul
Railway contended that this statute was unconstitutional, because it was
unreasonable, and the majority of the Court sustained their
contention.[28] Justices Bradley, Gray, and Lamar dissented, and Bradley
on this occasion delivered an opinion, from which I shall quote a
paragraph or two, since the argument appears to me conclusive, not only
from the point of view of law, but of political expediency and of common
sense:--
"I cannot agree to the decision of the court in this case. It
practically overrules Munn _v._ Illinois.... The governing principle of
those cases was that the regulation and settlement of the fares of
railroads and other public accommodations is a legislative prerogative,
and not a judicial one. This is a principle which I regard as of great
importance....
"But it is said that all charges should be reasonable, and that none but
reasonable charges can be exacted; and it is urged that what is a
reasonable charge is a judicial question. On the contrary, it is
preeminently a legislative one, involving considerations of policy as
well as of remuneration.... By the decision now made we declare, in
effect, that the judiciary, and not the legislature, is the final
arbiter in the regulation of fares and freights of railroads.... It is
an assumption of authority on the part of the judiciary which, ... it
has no right to make. The assertion of jurisdiction by this court makes
it the duty of every court of general jurisdiction, state or federal, to
entertain complaints [of this nature], for all courts are bound by the
Constitution of the United States, the same as we are."
There is little to add to these words. When the Supreme Court thus
undertook to determine the reasonableness of legislation it assumed,
under a somewhat thin disguise, the position of an upper chamber, which,
though it could not originate, could absolutely veto most statutes
touching the use or protection of property, for the administration of
modern American society now hinges on this doctrine of judicial
dispensation under the Police Power. Whether it be a regulation of rates
and prices, of hours of labor, of height of buildings, of municipal
distribution of charity, of flooding a cranberry bog, or of prescribing
to sleeping-car porters duties regarding the lowering of upper
berths,--in questions great and small, the courts vote upon the
reasonableness of the use of the Police Power, like any old-fashioned
town meeting. There is no rule of law involved. There is only opinion or
prejudice, or pecuniary interest. The judges admit frankly that this is
so. They avow that they try to weigh public opinion, as well as they
can, and then vote. In 1911 Mr. Justice Holmes first explained that the
Police Power extended to all great public needs, and then went on to
observe that this Police Power, or extraordinary prerogative, might be
put forth by legislatures "in aid of what is sanctioned by usage, or
held by ... preponderant opinion to be ... necessary to the public
welfare."[29]
A representative chamber reaches its conclusions touching "preponderant
opinion" by a simple process, but the influences which sway courts are
obscurer,--often, probably, beyond the sphere of the consciousness of
the judges themselves. Nor is this the worst; for, as I have already
explained, the very constitution of a court, if it be a court calculated
to do its legitimate work upon a lofty level, precludes it from keeping
pace with the movement in science and the arts. Necessarily it lags some
years behind. And this tendency, which is a benefit in the dispensation
of justice as between private litigants, becomes a menace when courts
are involved in politics. A long line of sinister precedents crowd
unbidden upon the mind. The Court of King's Bench, when it held Hampden
to be liable for the Ship Money, draped the scaffold for Charles I. The
Parliament of Paris, when it denounced Turgot's edict touching the
corvee, threw wide the gate by which the aristocracy of France passed to
the guillotine. The ruling of the Superior Court of the Province of
Massachusetts Bay, in the case of the Writs of Assistance, presaged the
American Revolution; and the Dred Scott decision was the prelude to the
Civil War.
The capital essential of justice is that, under like conditions, all
should fare alike. The magistrate should be no respecter of persons. The
vice of our system of judicial dispensation is that it discriminates
among suitors in proportion to their power of resistance. This is so
because, under adequate pressure, our courts yield along the path of
least resistance. I should not suppose that any man could calmly turn
over the pages of the recent volumes of the reports of the Supreme Court
of the United States and not rise from the perusal convinced that the
rich and the poor, the strong and the weak, do not receive a common
measure of justice before that judgment seat. Disregarding the
discrimination which is always apparent against those who are unpopular,
or who suffer under special opprobrium, as do liquor dealers, owners of
lotteries, and the like,[30] I will take, nearly at random, a couple of
examples of rate regulation, where tenderness has been shown property in
something approaching to a mathematical ratio to the amount involved.
In April, 1894, a record was produced before the Supreme Court which
showed that the State of North Dakota had in 1891 established rates for
elevating and storing grain, which rates the defendant, named Brass, who
owned a small elevator, alleged to be, to him in particular, _utterly_
ruinous, and to be in general unreasonable. He averred that he used his
elevator for the storage of his own grain, that it cost about $3000,
that he had no monopoly, as there were many hundred such elevators in
the state, and, as land fit for the purpose of building elevators was
plenty and cheap, that any man could build an elevator in the town in
which he lived, as well as he; that the rates he charged were
reasonable, and that, were he compelled to receive grain generally at
the rates fixed by the statute, he could not store his own grain. All
these facts were admitted by demurrer, and Brass contended that if any
man's property were ever to be held to be appropriated by the public
without compensation, and under no form of law at all save a predatory
statute, it should be his; but the Supreme Court voted the Dakota
statute to be a reasonable exercise of the Police Power,[31] and
dismissed Brass to his fate.
The converse case is a very famous one known as Smyth _v._ Ames,[32]
decided four years later, in 1898. In that case it appeared that the
State of Nebraska had, in 1893, reduced freight rates within the state
about twenty-nine per cent, in order to bring them into some sort of
relation to the rates charged in the adjoining State of Iowa, which were
calculated to be forty per cent lower than the Nebraska rates. Several
of the most opulent and powerful corporations of the Union were affected
by this law, among others the exceedingly prosperous and influential
Chicago, Burlington & Quincy Railway. No one pretended that, were the
law to be enforced, the total revenues of the Burlington would be
seriously impaired, nor was it even clear that, were the estimate of
reduction, revenue, and cost confined altogether to the commerce carried
on within the limits of the State of Nebraska, leaving interstate
commerce out of consideration, a loss would be suffered during the
following year. Trade might increase with cheaper rates, or economies
might be made by the company, or both causes and many others of
increased earnings might combine. Corporation counsel, however, argued
that, were the principle of the statute admitted, and should all the
states through which the line passed do the like, ultimately a point
might be reached at which the railway would be unable to maintain, even
approximately, its dividend of eight per cent, and that the creation of
such a possibility was conceding the power of confiscation, and,
therefore, an unreasonable exercise of the Police Power, by the State of
Nebraska. With this argument the Supreme Court concurred. They held the
Nebraska statute to be unreasonable. Very possibly it may have been
unsound legislation, yet it is noteworthy that within three years after
this decision Mr. Hill bought the Chicago, Burlington & Quincy, at the
rate of $200 for every share of stock of the par value of $100, thus
fixing forever, on the community tributary to the road, the burden of
paying a revenue on just double the value of all the stock which it had
been found necessary to issue to build the highway. Even at this price
Mr. Hill is supposed to have made a brilliant bargain.