THE STANDARDS OF THE BILL PROPOSING THE EMERGENCY PRICE CONTROL ACT OF 1941 ARE SUFFICIENTLY DEFINITE TO MEET ALL CONSTITUTIONAL REQUIREMENTS The proposed Emergency Price Control Act of 1941 authorizes the President to stabilize prices and rents by the establishment of price and rent ceilings. To guide the discretion of the President in exercising the authority granted, the policy of Congress is set forth at length and numerous standards are specified. The proposed bill bears the title: "A bill to further the national defense and security by checking speculative and excessive price rises, price dislocations, and inflationary tendencies, and for other purposes.' Section 1 (a) states that— "It is hereby declared that it is in the interest of the national defense and security and that the purposes of this Act are (1) to preserve the value of the national currency and to protect the Federal Reserve System and the national banking and commercial and consumer credit structure against the consequences of price and credit inflation; (2) to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; (3) to prevent economic disturbances, labor disputes, burdens upon interstate and foreign commerce, interference with the effective use of the Nation's resources for defense, and impairment of national unity and morale, which would result from unwarranted increases in prices, rents, and the cost of living; (4) 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; (5) to prevent prospects of price rises from encouraging the accumulation and withholding of materials needed for national defense, and from impeding long-term commitments for production; (6) to assure that defense appropriations are not dissipated by excessive prices; (7) to obtain the maximum necessary production without undue profits to low-cost producers, (8) to protect persons with relatively fixed and limited incomes, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; (9) to prevent a post-emergency collapse of values, and the reappearance of price and cost disparities for farmers and other primary producers: and (10) to provide procedures for administration and review which will fairly protect the interests of those subject to this Act, without endangering the dominant public interest in the accomplishment of the foregoing purposes Section 3 (a) provides that- "Whenever in the judgment of the President the price or prices of a commodity have risen or threaten to rise to an extent or in a manner inconsistent with the purposes of this Act, he shall by regulation or order establish such ceiling or ceilings as in his judgment will be generally fair and equitable to buyers and sellers of such commodity and will effectuate the purposes of this act. So far as practicable, in establishing any ceiling for any specified commodity, the President shall ascertain and give due consideration to the prices prevailing for the commodity on or about June 30, 1941, and shall make adjustments for such relevant factors in respect thereof as he may determine and deem to be of general applicability, including the following: Speculative fluctuations, general increases or decreases in costs of production and transportation, and general increases or decreases in profits earned by sellers of the commodity, during and subsequent to the year ending June 30, 1941. Every regulation or order establishing any ceiling under this subsection shall be accompanied by a statement of the considerations involved in the issuance of such regulation or order. It is the purpose of this memorandum to show that these standards are sufficiently definite to meet all constitutional requirements. The argument may conveniently be taken up in the form of the following considerations: (1) The standards set forth in the bill are fully as definite as those enunciated in comparable legislation which has been upheld by the Supreme Court, even in the absence of a national emergency, against attack on the ground of invalid delegation of legislative powers. (2) In any event the standards set forth in the bill are well within the broader delegation which may properly be permitted during a national defense emergency. A. THE STANDARDS SET FORTH IN THE BILL ARE FULLY AS DEFINITE AS THOSE ENUNCIATED IN COMPARABLE LEGISLATION WHICH HAS BEEN UPHELD BY THE SUPREME COURT, EVEN IN THE ABSENCE OF A NATIONAL EMERGENCY, AGAINST ATTACK ON THE GROUND OF INVALID DELEGATION OF LEGISLATIVE POWERS The rule prohibiting the delegation of legislative power to executive has been stated by the Supreme Court in the following words: "The Constitution provides that 'All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives' (art. I, sec. 1). And the Congress is authorized "To make all laws which shall be necessary and proper for carrying into execution' its general powers (art. I, sec. 8, par. 18). The Congress is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested. We have repeatedly recognized the necessity of adapting legislation to complex conditions involving a host of details with which the National Legislature cannot deal directly. We pointed out in the Panama Refining Co. case that the Constitution has never been regarded as denying to Congress the necessary resources of flexibility and practicality, which will enable it to perform its function in laying down policies and establishing standards, while leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the legislature is to apply. But we said that the constant recognition of the necessity and validity of such provisions, and the wide range of administrative authority which has been developed by means of them, cannot be allowed to obscure the limitations of the authority to delegate, if our constitutional system is to be maintained (Id., 293 U. S. 388, p. 421)." (Schechter Corp. v. United States, 295 U. S. 495, 529-530.) Thus the Constitution, while requiring the Congress to exercise the "essential legislative function" of establishing the basic policy of the legislation, permits the delegation to the executive of broad powers to make concrete application of that policy to varying situations. Indeed, as the Supreme Court points out, only through such procedure can legislative control be effectively applied to numerous complex social and economic problems with which the legislature is constantly confronted today. This is nowhere better illustrated than in the case of price-fixing legislation. The legislature can, and must, establish the basic standard by which prices are to be determined. But as a practical matter it cannot, and as a constitutional matter it need not, apply that standard to the multitudinous and complex situations in which the powers conferred by the statute are to be invoked. The constitutional requirements are met if the legislature clearly sets forth the policy and establishes the standards for its application under varying factual conditions. The proposed bill meets these requirements. The policy of Congress is plainly stated. And the occasions when the powers conferred by the act are to be invoked, together with specific standards to guide their application, are carefully set forth. That the scope of executive power conferred by the bill lies well within the traditional rules of delegation is perhaps best illustrated by a somewhat detailed analysis of several recent cases raising closely similar issues. In United States v. Rock Royal Cooperative (307 U. S. 533) and in H. P. Hood & Sons v. United States (307 U. S. 588) the Supreme Court sustained the Agricultural Marketing Act of 1937 (7 U. S. C., secs. 601-659), against the specific contention that the act constituted an invalid delegation of legislative power. The policy of the act was set forth in section 2: "It is hereby declared to be the policy of Congress "(1) Through the exercise of the powers conferred upon the Secretary of Agriculture under this chapter, to establish and maintain such orderly marketing conditions for agricultural commodities in interstate commerce as will establish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base period. The base period in the case of all agricultural commodities except tobacco and potatoes shall be the prewar period, August 1909-July 1914. * * * "(2) To protect the interest of the consumer by (a) approaching the level of prices which it is declared to be the policy of Congress to establish in subsection (1) of this section by gradual correction of the current level at as rapid a rate as the THE STANDARDS OF THE BILL PROPOSING THE EMERGENCY PRICE CONTROL ACT OF 1941 ARE SUFFICIENTLY DEFINITE TO MEET ALL CONSTITUTIONAL REQUIREMENTS The proposed Emergency Price Control Act of 1941 authorizes the President stabilize prices and rents by the establishment of price and rent ceilings. I guide the discretion of the President in exercising the authority granted, the policy of Congress is set forth at length and numerous standards are specified The proposed bill bears the title: "A bill to further the national defense and security by checking speculative and excessive price rises, pr.ce dislocations, and inflationary tendencies, and for other purposes." Section 1 a states that— "It is hereby declared that it is in the interest of the national defense and security and that the purposes of this Act are (1) to preserve the value of the national currency and to protect the Federal Reserve System and the nations. banking and commercial and consumer credit structure against the consequences of price and credit inflation; (2) to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; (3) to prevent economic disturbances, labor disputes, burdens upon interstate and foreign commerce, interference with the effective use of the Nation's resources for defense, and impairment of national unity and morale, which would result from unwarranted increases in prices, rents, and the cost of living; (4) 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; (5) to prevent prospects of price rises from encouraging the accumulation and withholding of materials needed for national defense, and from impeding long-term commitments for production; (6) to assure that defense appropriations are not dissipated by excessive prices; (7) to obtain the maximum necessary production without undue profits to low-cost producers. (8) to protect persons with relatively fixed and limited incomes, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; (9) to prevent a post-emergency collapse of values, and the reappearance of price and cost disparities for farmers and other primary producers: and (10) to provide procedures for administration and review which will fairly protect the interests of those subject to this Act, without endangering the dominant public interest in the accomplishment of the foregoing purposes" Section 3 (a) provides that "Whenever in the judgment of the President the price or prices of a commodity have risen or threaten to rise to an extent or in a manner inconsistent with the purposes of this Act, he shall by regulation or order establish such ceiling or ceilings as in his judgment will be generally fair and equitable to buyers and sellers of such commodity and will effectuate the purposes of this act. So far as practicable, in establishing any ceiling for any specified commodity, the President shall ascertain and give due consideration to the prices prevailing for the commodity on or about June 30, 1941, and shall make adjustments for such relevant factors in respect thereof as he may determine and deem to be of general applicability, including the following: Speculative fluctuations, general increases or decreases in costs of production and transportation, and general increases or decreases in profits earned by sellers of the commodity, during and subsequent to the year ending June 30, 1941. Every regulation or order establishing any ceiling under this subsection shall be accompanied by a statement of the considerations involved in the issuance of such regulation or order. It is the purpose of this memorandum to show that these standards are sufficiently definite to meet all constitutional requirements. The argument may conveniently be taken up in the form of the following considerations: (1) The standards set forth in the bill are fully as definite as those enunciated in comparable legislation which has been upheld by the Supreme Court, even in the absence of a national emergency, against attack on the ground of invalid delegation of legislative powers. (2) In any event the standards set forth in the bill are well within the broader delegation which may properly be permitted during a national defense emergency. A. THE STANDARDS SET FORTH IN THE BILL ARE FULLY AS DEFINITE AS THOSE ENUNCIATED IN COMPARABLE LEGISLATION WHICH HAS BEEN UPHELD BY THE SUPREME COURT, EVEN IN THE ABSENCE OF A NATIONAL EMERGENCY, AGAINST ATTACK ON THE GROUND OF INVALID DELEGATION OF LEGISLATIVE POWERS The rule prohibiting the delegation of legislative power to executive has been stated by the Supreme Court in the following words: "The Constitution provides that 'All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives' (art. I, sec. 1). And the Congress is authorized "To make all laws which shall be necessary and proper for carrying into execution' its general powers (art. I, sec. 8, par. 18). The Congress is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested. We have repeatedly recognized the necessity of adapting legislation to complex conditions involving a host of details with which the National Legislature cannot deal directly. We pointed out in the Panama Refining Co. case that the Constitution has never been regarded as denying to Congress the necessary resources of flexibility and practicality, which will enable it to perform its function in laying down policies and establishing standards, while leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the legislature is to apply. But we said that the constant recognition of the necessity and validity of such provisions, and the wide range of administrative authority which has been developed by means of them, cannot be allowed to obscure the limitations of the authority to delegate, if our constitutional system is to be maintained (Id., 293 U. S. 388, p. 421)." (Schechter Corp. v. United States, 295 U. S. 495, 529-530.) Thus the Constitution, while requiring the Congress to exercise the "essential legislative function" of establishing the basic policy of the legislation, permits the delegation to the executive of broad powers to make concrete application of that policy to varying situations. Indeed, as the Supreme Court points out, only through such procedure can legislative control be effectively applied to numerous complex social and economic problems with which the legislature is constantly confronted today. This is nowhere better illustrated than in the case of price-fixing legislation. The legislature can, and must, establish the basic standard by which prices are to be determined. But as a practical matter it cannot, and as a constitutional matter it need not, apply that standard to the multitudinous and complex situations in which the powers conferred by the statute are to be invoked. The constitutional requirements are met if the legislature clearly sets forth the policy and establishes the standards for its application under varying factual conditions. The proposed bill meets these requirements. The policy of Congress is plainly stated. And the occasions when the powers conferred by the act are to be invoked, together with specific standards to guide their application, are carefully set forth. That the scope of executive power conferred by the bill lies well within the traditional rules of delegation is perhaps best illustrated by a somewhat detailed analysis of several recent cases raising closely similar issues. In United States v. Rock Royal Cooperative (307 U. S. 533) and in H. P. Hood & Sons v. United States (307 U. S. 588) the Supreme Court sustained the Agricultural Marketing Act of 1937 (7 U. S. C., secs. 601-659), against the specific contention that the act constituted an invalid delegation of legislative power. The policy of the act was set forth in section 2: "It is hereby declared to be the policy of Congress "(1) Through the exercise of the powers conferred upon the Secretary of Agriculture under this chapter, to establish and maintain such orderly marketing conditions for agricultural commodities in interstate commerce as will establish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base period. The base period in the case of all agricultural commodities except tobacco and potatoes shall be the prewar period, August 1909-July 1914. * * * "(2) To protect the interest of the consumer by (a) approaching the level of prices which it is declared to be the policy of Congress to establish in subsection (1) of this section by gradual correction of the current level at as rapid a rate as the THE STANDARDS OF THE BILL PROPOSING THE EMERGENCY PRICE CONTROL ACT OF 1941 ARE SUFFICIENTLY DEFINITE TO MEET ALL CONSTITUTIONAL REQUIREMENTS "" The proposed Emergency Price Control Act of 1941 authorizes the President to stabilize prices and rents by the establishment of price and rent ceilings. To guide the discretion of the President in exercising the authority granted, the policy of Congress is set forth at length and numerous standards are specified. The proposed bill bears the title: "A bill to further the national defense and security by checking speculative and excessive price rises, price dislocations, and inflationary tendencies, and for other purposes.' Section 1 (a) states that— "It is hereby declared that it is in the interest of the national defense and security and that the purposes of this Act are (1) to preserve the value of the national currency and to protect the Federal Reserve System and the national banking and commercial and consumer credit structure against the consequences of price and credit inflation; (2) to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; (3) to prevent economic disturbances, labor disputes, burdens upon interstate and foreign commerce, interference with the effective use of the Nation's resources for defense, and impairment of national unity and morale, which would result from unwarranted increases in prices, rents, and the cost of living; (4) 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; (5) to prevent prospects of price rises from encouraging the accumulation and withholding of materials needed for national defense, and from impeding long-term commitments for production; (6) to assure that defense appropriations are not dissipated by excessive prices; (7) to obtain the maximum necessary production without undue profits to low-cost producers, (8) to protect persons with relatively fixed and limited incomes, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; (9) to prevent a post-emergency collapse of values, and the reappearance of price and cost disparities for farmers and other primary producers: and (10) to provide procedures for administration and review which will fairly protect the interests of those subject to this Act, without endangering the dominant public interest in the accomplishment of the foregoing purposes 77 Section 3 (a) provides that "Whenever in the judgment of the President the price or prices of a commodity have risen or threaten to rise to an extent or in a manner inconsistent with the purposes of this Act, he shall by regulation or order establish such ceiling or ceilings as in his judgment will be generally fair and equitable to buyers and sellers of such commodity and will effectuate the purposes of this act. So far as practicable, in establishing any ceiling for any specified commodity, the President shall ascertain and give due consideration to the prices prevailing for the commodity on or about June 30, 1941, and shall make adjustments for such relevant factors in respect thereof as he may determine and deem to be of general applicability, including the following: Speculative fluctuations, general increases or decreases in costs of production and transportation, and general increases or decreases in profits earned by sellers of the commodity, during and subsequent to the year ending June 30, 1941. Every regulation or order establishing any ceiling under this subsection shall be accompanied by a statement of the considerations involved in the issuance of such regulation or order. It is the purpose of this memorandum to show that these standards are sufficiently definite to meet all constitutional requirements. The argument may conveniently be taken up in the form of the following considerations: (1) The standards set forth in the bill are fully as definite as those enunciated in comparable legislation which has been upheld by the Supreme Court, even in the absence of a national emergency, against attack on the ground of invalid delegation of legislative powers. |