The

It is believed that a large fraction of Germany's share is in rubber balloons, although this is an item supplied principally by the United States. Among the leading rubber toys are such items as soldiers, dolls, balls, and balloons. import classification covering rubber toys probably includes various rubber items which may also be considered as sporting goods.

"A good, although limited, market exists for toys of an educational nature such as those for the construction of engineering structures, miniature laboratory sets, microscope sets, etc. Because of the limited market for the better type of toy, the individual dealer cannot undertake to purchase a large number of units. The higher-priced toy, which almost invariably comes from the United States, is handicapped, too, by the seasonal nature of the business."

CONCLUSION

The extension of the Trade Agreements Act, for the reasons stated, will weaken our constitutional form of government, and by perpetuating it we betray the faith of our founding fathers.

Specifically, the toy industry which had to contend with the machinations in trade of the governments of Germany and Japan bears witness to a loss of its resistance against future attacks by the same countries as a result of the Mexican Treaty.

We oppose continuance of the Trade Agreements Act which makes these things possible.

Respectfully submitted.

TOY MANUFACTURERS OF THE U. S. A., INC.,

By JAMES L. FRI, Managing Director and Secretary.

BRIEF SUBMITTED BY THE WOOL HAT MANUFACTURERS ASSOCIATION OF AMERICA IN OPPOSITION TO HOUSE JOINT RESOLUTION 111, OR ANY OTHER PROPOSAL TO EXTEND THE OPERATIVE EFFECT OF THE TRADE AGREEMENTS ACT OF 1934

THE WAYS AND MEANS COMMITTEE,

House of Representatives, Washington, D. C.

SIRS: The Wool Hat Manufacturers Association of America, comprising practically all the companies engaged in producing wool felt hat bodies out of which women's hats are made, request that its opposition be recorded to any further extension of the Trade Agreements Act of June 12, 1934.

We base our familiarity with the operation of the trade agreements program on the many years the products of our industry were sold in the United States in competition with imported merchandise both before 1934 and since.

The act has now been sufficiently long in operation for the Congress to determine to what extent, if any, it has accomplished its expressed purposes:

1. Whether it has helped relieve unemployment.

2. Whether it has increased importation into the United States.

3. Wheher it has helped cure our national depression.

4. Whether it promoted good will among nations.

The factors such as war and the many national emergency measures since, possibly cloud the picture too much to obtain clear answers to those questions. In our opinion, the trade agreements plan remains as originally a theory, either viewed nationally or for future post-war planning.

But whether practicable or not and whether or not its operation has helped our domestic economy or our foreign relations, we believe is irrelevant.

We oppose the act on an entirely different ground-one effecting the foundations of our democracy.

THE TRADE AGREEMENTS ACT OF JUNE 12, 1934, IS UNCONSTITUTIONAL These are the reasons:

1. The act involves raising of revenue. The Constitution requires that all revenue measures must originate in the House of Hepresentatives. In point of fact, tariff rates were adopted secretly (in the State Department) during treaty negotiations, not by the House of Representatives but by the executive branch of Government.

2. In the Constitution and in our constitutional form of Government is found the doctrine of the "separation of powers" of the executive, legislative, and judicial branches of the Federal Government. One branch is not permitted to encroach on the other. By the Trade Agreements Act of 1934, Congress abdicated its exclusive constitutional powers over customs duties and the regulation of foreign commerce in favor of the executive branch. By the same provisions, the executive branch has used these powers for purposes which, we believe, are utterly extraneous to those alleged in the preamble to the law. Commerce, as such, does not exist during the war period. Congress, of course, never intended confusion of trade policy with foreign policy, the policies of two distinct branches of Government.

3. The power delegated to the Executive to change tariff rates up to 50 percent is the delegation of discretion, unfettered except beyond the range specified. The Constitution requires that Congress must exercise its own discretion. Cases in support of this view will more fully appear from a discussion of the law hereinafter set forth.

4. The Constitution makes mandatory the concurrence of the Senate in all treaties. Treaties are those agreements with foreign powers which involve the exercise of legislative power to motivate them. The trade agreements entered into under the act of June 12, 1934, involve legislative power-namely, to levy duties and regulate commerce. All treaties, whether called agreements, pacts, or by any other name, require the concurrence of the Senate. No consent has been had nor has any been sought. The agreements, therefore, are void.

THE TRADE AGREEMENTS ACT IS AN EXAMPLE OF ADMINISTRATIVE FINALITY It is seldom in our history that a wrong may continue without a judicial remedy. In the instance of the act of June 12, 1934, we have an enactment unconstitutional on the four grounds mentioned, yet there is no remedy afforded by any legal tribunal. The wrongs may be corrected only by the Congress, possibly when it is too late.

Under the Tariff Act of 1930, which the act of 1934 amends, there are two methods by which a decision of the Secretary of the Treasury or the collector may be made the subject of attack. One is the customary procedure by protest after the payment of duties under section 514 of the Tariff Act of 1930. The other is known as the manufacturer's protest under sections 333 and 516 (b) of the same act.

There was little danger of an importer availing himself of the judicial remedy afforded by the statute, since in nearly every instance of over a thousand changes of tariffs the change made was a reduction downward. The attempts to raise questions of constitutionality were thus cut off and executive finality permitted to stand until Congress repealed the law.

The remedy by way of manufacturer's protest under sections 333 and 516 (b) was specifically taken away by section 2 (a) of the law itself. While losses could be proven and in instances were heavy almost to the point of extinction, such as the losses suffered by the Florida fruit and vegetable growers through reduction of rates on imports from Cuba. In that case there was no remedy at law to afford relief to our own citizens engaged in agricultural pursuits.

George S. Fletcher, one of a large group of Florida fruit and vegetable growers, challenged the constitutionality of the Reciprocal Tariff Act on the ground that the delegation of power by Congress to the President to enter trade agreements with foreign nations is unconstitutional, and, further, that the treaties were not ratified by the Senate. As a consequence, he contended that the increased rates in the treaty with Cuba were void and of no effect. The case was dismissed in the United States Customs Court at New York in a decision reported in Treasury Decision 48684 of December 2, 1936. The Court of Customs and Patent Appeals sustained the trial court in an appeal taken (suit 4088) in Washington on the ground that the courts were without jurisdiction in opinion reported in 25 C. C. P. A., 195.

The courts also refused to pass on the constitutionality of a portion of the Reciprocal Tariff Act in George C. Wisler v. United States (Treas. Dec. 49170). Wisler, an importer of steel files from Germany, contended that the proviso to section 350 (a) of the Trade Agreements Act under which the President suspended the application of the reduced rates on files in the Swedish Treaty

was invalid on the ground that by permitting the higher rate to apply it discriminated against Germany in the commerce with the United States and constituted an unlawful delegation of legislative power to the Executive.

THE RECIPROCAL TRADE AGREEMENTS ACT IS A USURPATION OF CONGRESSIONAL FUNCTION

Separation of Powers.

Customs duties and the regulation of foreign commerce are two functions which under no pretense or color of right belong to any branch of government, save only the legislative branch.

The fact nevertheless is that Congress today has deprived itself of its constitutional power over customs duties and foreign commerce.

In the Constitution are provisions in separate articles for the three great departments of government, executive, legislative, and judicial.

Legislation looks to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power. Holmes, J., in Prentiss v. Atlantic Coast Line (211 U. S. 210, 226 (1908)). The doctrine of the separation of powers of the executive, legislative, and judicial branches of the Federal Government is fundamental in the American theory of constitutional government. See The Federalist (Nos. 47 to 51). One branch is not to encroach upon the other. Essential functions of the legislature are not to be usurped by the executive or the judiciary. Similarly, the legislature is not to interfere with the other coordinated departments of government except where an intermingling of action is contemplated by the Constitution itself.

In this way dangerous concentration of power is avoided and respective powers are assigned to the department best suited to exercise them.

After a bill becomes law, it is the President's duty to see that it is enforced. He cannot veto it by inaction and there is no power in the President to repeal an act of Congress. Of course, in enacting legislation, Congress may provide either that its operation shall be suspended or that it shall go into effect upon the occurrence of certain events, the existence of which shall be ascertained by the President.

But in the reciprocal trade agreements program no pretense whatever, no legalistic justification for supplementing, overlapping or usurping legislative power, exists. The law on the subject has long since been settled.

The power to regulate commerce conferred by the Constitution upon Congress is that which previously existed in the State, South Carolina v. Georgia (93 U. S. 4, 10 (1876)). It is complete in itself, may be exercised to the utmost extent, and acknowledges no limitations. Gibbons v. Ogden (9 Wheat. 1, 197 (1824)); University of Illinois v. United States (289 U. S. 48 (1933)).

It is now a settled principle of our democracy and constitutional form of government that in its sphere the legislature is supreme and the full exercise of its exclusive powers cannot be divested. Any attempt is not avoidable but absolute, since done without power. As a consequence, there is nothing to

support usurpation--not even emergency.

Emergency legislation may not be arbitrary or oppressive. Treigle v. Acme Homestead Assn. (297 U. S. 189 (1936)). For illustration, a statute bringing about impairment of the obligation of contract is void. W. B. Worthen Co. v. Kavanaugh (295 U. S. 56 (1935)).

The conditions to which power is addressed are always to be considered when the exercise of power is challenged. Extraordinary conditions may call for extraordinary remedies. But the argument necessarily stops short of an attempt to justify action which lies outside the sphere of constitutional authority. Extraordinary conditions do not create or enlarge constitutional powers. A. L. Schechter Poultry Corp. v. U. S. (295 U. S. 490, 528 (1935)), citing Ex Parte Milligan (4 Well 2, 120, 121 (1886)); Home Bldg. & L. Asso. v. Balisdell (290 U. S. 398, 426 (1934)). The Constitution established a national government with powers deemed to be adequate, as they have proved to be both in war and peace, but these powers of the National Government are limited by the constitutional grants. Those who act under these grants are not at liberty to transcend the imposed limits because they believe that more or different power is necessary. Such assertions of extra constitutional authority were anticipated and precluded by the explicit terms of the tenth amendment.

THE ACT IS AN UNLAWFUL DELEGATION OF LEGISLATIVE POWER

The act in question amends the Tariff Act of 1930.

The power in Congress to lay duties, although embraced in the taxing power (Constitution: art. I, sec. 8, cl. 1), may and is exercised as a regulation of foreign commerce (Constitution: art. I, sec. 8, cl. 3).

It is now settled law that this power is exclusive and plenary (Board of Trustees of the University of Illinois v. United States, 289 U. S. 48).

In Schechter Poultry Corp. v. United Staees (295 U. S. 495, 537 (1935)), the Supreme Court of the United States held:

"Congress cannot delegate legislative power to the President to exercise an unfettered discretion to make whatever laws he thinks may be needed or advisable for the rehabilitation and expansion of trade or industry." (See also United States v. Chemical Foundation (272 U. S. 1 (1926)); Panama Refining Co. v. Ryan (293, U. S. 388 (1935)).

In the Poultry Corporation case, a finding that the general purposes of a statute would be promoted by the President's exercise of legislative power was held to be not a finding of fact but a mere expression of an opinion, leaving him free to exercise his discretion as he saw fit.

The principles to determine the constitutionality of legislative grants of power were fully developed and established by the Supreme Court in Hampton & Co. v. United States (276 U. S. 394), and Field v. Clark (143 U. S. 649).

A summary of legislation dealing with past delegations of legislative authority appears in Norwegian Nitrogen Co. v. United States (288 U. S. 294), at pages 308-309.

The leading case on the subject is Field v. Clark, supra. Section 3 of the Tariff Act of October 1, 1890, authorized the President if he were satisfied that any foreign government was imposing duties on certain products of the United States which "he may deem to be reciprocally unequal or unreasonable," he should have power to suspend the provisions of the act relating to the free induction of certain commodities into the United States, in which case certain tariffs prescribed in the act of Congress should become applicable. The President's action, the court found, was to be determined upon the basis of findings with respect to the commercial regulations of other countries, and nothing involving the expediency of the legislation was left to his determination. The taxes to come into operation were preordained by the legislature. The President, therefore, was a mere agent to the lawmaking department to ascertain the event upon which its expressed will was to take effect.

It has been said by the Supreme Court of the United States in the majority opinion holding the so-called Agricultural Adjustment Administration law unconstitutional in United States v. Butler:

"The Constitution is the supreme law of the land ordained and established by the people. All legislation must conform to the principles it lays down. When an act of Congress if appropriately challenged in the courts as not conforming to the constitutional mandate the judicial branch of the Government has only one duty to lay the articles of the Constitution which are invoked beside the statute which is challenged and to decide whether the latter squares with the former.

"The question is not what power the Federal Government ought to have but what powers in fact have been given by the people.

The Federal Union is a Government of delegated powers. It has only such as are expressly conferred upon it and such as are reasonably to be implied from those granted."

Congress cannot delegate to another department of the Government powers which are strictly and exclusively legislative Wayman v. Southard (10 Wheat. 1, 6 U. S. (L. ed.) 253); Union Bridge Co. v. United States (203 U. S. 364–365). Thus the principle that Congress cannot delegate such power to the President is universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution.

At the hearings on Thursday, April 26, 1934, when the bill (H. R. 8687) was before the Committee on Finance of the Senate, the following took place (pp. 8-9):

"Senator REED. The bill pending before us would give the President power, in his discretion, to modify a tariff to the extent of 50 percent in either direction. "Secretary HULL. Well, it is a judicial discretion, which is of course very different from any capricious discretion. It is a judicial discretion involving

the same authority to make changes that were written into section 317 of the Fordney Act and carried forward by general consent of this commitee and of the Senate as section 338 of the Smoot-Hawley Act, which gives the President authority not only to exercise his own discretion but to make his own findings of fact on which he would rest that discretion.

"Senator REED. Mr. Secretary, do you remember when the flexible tariff provision was under consideration in 1929 and you were then a Member of the House? "Secretary HULL. Yes; there was not any panic then.

"Senator REED. There was not any panic, but you said at that time that that was too much power for a bad man to have or for a good man to want."

Again, at the hearings (p. 31):

"Secretary WALLACE. Senator, I wonder if you happen to know how many hearings are being held in government nowadays?

"Senator REED. I don't know, Mr. Secretary, and I am wondering, therefore, if it is wise to give these wide powers to human beings who are physically unable to keep up with the work of their departments. I am not blaming you in the least, but I don't believe that the genius exists who could have personal knowledge of all that is going on in the Department of Agriculture today. With all our dissension in Congress, at least, we are compelled to hear interesting people personally, before we act, but I gathered that you did not hear either the paper people or the jute people before you put those taxes on.

"You had to delegate that authority to somebody else, so, when we gave you the taxing power, really, we were delegating it so some unnamed person in your Department. Now, that is the way this would work out, if we gave this power to the President, isn't it?

"Secretary WALLACE. Oh, undoubtedly the President would have to delegate it to competent people.

"Senator REED. Yes.

"Secretary WALLACE. That is what executive government consists in. "Senator REED. Yes.

"Secretary WALLACE. It happens to be a slightly different thing in the legislative branch.

"Senator REED. So that instead of Congress, which is elected and which is accountable to the people who elected it, putting these taxes on, this would be put on, not even by the President but by some official to whom the President delegated it?

"Secretary WALLACE. Why, undoubtedly."

Again at the same hearings (p. 31):

"Senator REED. Mr. Secretary, is it your idea that the administration would lay down some sort of a formula for the revision of tariff duties or a formula for the foundation of the proposed trade agreement?

"Secretary WALLACE. I don't see how the administration could lay down a formula. The thing is too complex for that."

Again at the same hearings (p. 67):

"Mr. SAYRE. Yes, sir. I was really hoping that Senator Reed was going to ask me some questions about the difference between H .R. 8687 and these other acts, insofar as these aspects are concerned. That is to say, with respect to these other acts, I have heard it said on many sides that, for instance, in the act of 1890, you are discussing specified duties, and you are discussing specified action, the President after the exercise of considerable discretion, must do certain specified things; whereas, under H. R. 8687, the President is empowered not only to exercise discretion as to whether to act or not, but, having exercised that discretion, he still has a discretion as to how far to raise or lower duties; and it seems to me interesting to compare some of the preceding acts with H. R. 8687, with respect to that feature.

"Senator REED. I think that is true, Dr. Sayre, but long experience in the Senate has taught me that there is nothing more futile than protracted arguments on the constitutionality of proposed laws. In all sincerity and nonpartisanship we may differ and the only effect on the country is to bore it to death. I am truly concerned with the constitutionality of this bill, but I think it is a waste of time for me to argue it at this stage of the proceedings."

The Congress may make the extension of an act depend upon the proclamation of the President, showing the ascertainment by him of the fact that the edicts of certain nations had been revoked or so modified that they did not violate the neutral commerce of the United States. The same principle would apply in a