U.S. Supreme Court United States v. Butler, 297 U.S. 1 (1936) United States v.
Butler No. 401 Argued December 9, 10,
1935 Decided January 6,
1936 297 U.S.
1 CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE FIRST
CIRCUIT Syllabus 1. Processors of farm products have a standing to question the
constitutionality of the "processing and floor-stock taxes" sought
to be laid upon them by the Agricultural Adjustment Act of May 12,
1933, 48 Stat. 31. Massachusetts v. Mellon, 262 U.
S. 447 , distinguished. P. 297 U. S. 57 .

															2. A tax, in the general understanding and in the strict
constitutional sense, is an exaction for the support of Government;
the term does not connote the expropriation of money from one group
to be expended for another, as a necessary means in a plan of
regulation, such as the plan for regulating agricultural production
set up in the Agricultural Adjustment Act. P. 297 U. S. 61 .

															3. In testing the validity of the "processing tax," it is
impossible to wrest it from its setting and treat it apart as a
mere excise for raising revenue. P. 297 U. S. 58 .

															4. From the conclusion that the exaction is not a true tax it
does not necessarily follow that the statute is void and the
exaction uncollectible if the regulation, of which the exaction is
a part, is within any of the powers granted to Congress. P. 297 U. S. 61 .

															5. The Constitution is the supreme law of the land, ordained and
established by the people, and all legislation must conform to the
principles it lays down. P. 297 U. S. 62 .

															6. It is a misconception to say that, in declaring an Act of
Congress unconstitutional, the Court assumes a power to overrule or
control the action of the people's representatives. P. 297 U. S. 62 . Page 297 U. S. 2 7. When an Act of Congress is appropriately challenged in a
Court, it is the duty of the court to compare it with the article
of the Constitution which is invoked and decide whether it conforms
to that article. P. 297 U. S. 62 .

															8. All that the court does or can do in such cases is to
announce its considered judgment upon the question; it can neither
approve nor condemn any legislative policy; it can merely ascertain
and declare whether the legislation is in accordance with, or in
contravention of, the provisions of the Constitution. P. 297 U. S. 62 .

															9. The question in such cases is not what powers the Federal
Government ought to have, but what powers have, in fact, been given
it by the people. P. 297 U. S. 63 .

															10. Ours is a dual form of government; in every State there are
two Governments -- the State and the United States; each State has
all governmental powers save such as the people, by the
Constitution, have conferred upon the United States, denied to the
States, or reserved to themselves. P. 297 U. S. 63 .

															11. The Government of the United States is a Government of
delegated powers; it has only such powers as are expressly
conferred upon it by the Constitution and such as are reasonably to
be implied from those expressly granted. P. 297 U. S. 63 .

															12. The Agricultural Adjustment Act does not purport to regulate
transactions in interstate or foreign commerce, and the Government
in this case does not attempt to sustain it under the commerce
clause of the Constitution. P. 297 U. S. 63 .

															13. In Article I, § 8, cl. 1 of the Constitution, which provides
that Congress shall have power

															"to lay and collect taxes, duties, imposts and excises, to pay
the debts and provide for the common defence and general welfare of
the United States,"

															the phrase "to provide for the general welfare" is not an
independent provision empowering Congress generally to provide for
the general welfare, but is a qualification defining and limiting
the power "to lay and collect taxes," etc. P. 297 U. S. 64 .

															14. The power to appropriate money from the Treasury
(Constitution, Art. I, § 9, cl. 7) is as broad as the power to tax,
and the power to lay taxes to provide for the general welfare of
the United States implies the power to appropriate public funds for
that purpose. P. 297 U. S. 65 .

															15. The power to tax and spend is a separate and distinct power;
its exercise is not confined to the fields committed to Congress by
the other enumerated grants of power, but it is limited by the
requirement that it shall be exercised to provide for the general
welfare of the United States. P. 297 U. S. 65 . Page 297 U. S. 3 16. The Court is not required in this case to ascertain the
scope of the phrase "general welfare of the United States," or to
determine whether an appropriation in aid of agriculture falls
within it. P. 297 U. S. 68 .

															17. The plan of the Agricultural Adjustment Act is to increase
the prices of certain farm products for the farmer by decreasing
the quantities produced; the decrease is to be attained by making
payments of money to farmers who, under agreements with the
Secretary of Agriculture, reduce their acreage and crops, and the
money for this purpose is exacted, as a tax, from those who first
process the commodities. Held: (1) The Act invades the reserved powers of the States. P. 297 U. S. 68 .

															(2) Regulation and control of agricultural production are beyond
the powers delegated to the Federal Government. P. 297 U. S. 68 .

															(3) The tax, the appropriation of the funds raised, and the
direction for their disbursement, are but parts of the plan -- the
means to an unconstitutional end. P. 297 U. S. 68 .

															(4) The power of taxation, which is expressly granted to
Congress, may be adopted as a means to carry into operation another
power also expressly granted, but not to effectuate an end which is
not within the scope of the Constitution. P. 297 U. S. 69 .

															(5) The regulation of the farmer's activities under the statute,
though in form subject to his own will, is, in fact, coercion
through economic pressure; his right of choice is illusory. P. 297 U. S. 70 .

															(6) Even if the farmer's consent were purely voluntary, the Act
would stand no better. At best, it is a scheme for purchasing with
federal funds submission to federal regulation of a subject
reserved to the States. P. 297 U. S. 72 .

															(7) The right to appropriate and spend money under contracts or
proper governmental purposes cannot justify contracts that are not
within federal power. P. 297 U. S. 72 .

															(8) Congress cannot invade state jurisdiction by purchasing the
action of individuals any more than by compelling it. P. 297 U. S. 73 .

															(9) There is an obvious difference between a statute stating the
conditions upon which moneys shall be expended and one effective
only upon the assumption of a contractual obligation to submit to a
regulation which otherwise could not be enforced. P. 297 U. S. 73 .

															(10) Owing to the supremacy of the United States, if the
contracts with farmers contemplated by the Agricultural Adjustment
Act were within the federal power to make, the States could not
declare them void or prevent compliance with their terms. P. 297 U. S. 74 .

															(11) Existence of a situation of national concern resulting from
similar and widespread local conditions cannot enable Congress Page 297 U. S. 4 to ignore the constitutional limitations upon its own powers and
usurp those reserved to the States. P. 297 U. S. 74 .

															(12) If the novel view of the General Welfare Clause now
advanced in support of the tax were accepted, that clause would not
only enable Congress to supplant the States in the regulation of
agriculture and of all other industries as well, but would furnish
the means whereby all of the other provisions of the Constitution,
sedulously framed to define and limit the power of the United
States and preserve the powers of the States, could be broken down,
the independence of the individual States obliterated, and the
United States converted into a central government exercising
uncontrolled police power throughout the Union superseding all
local control over local concerns. P. 297 U. S. 75 .

															(13) Congress, being without power to impose the contested
exaction, could not lawfully ratify the acts of an executive
officer in assessing it. P. 297 U. S. 78 .

															78 F.2d 1 affirmed.

															CERTIORARI, 296 U.S. 561, to review a decree which reversed an
order of the District Court ( Franklin Process Co. v. Hoosac
Mills Corp., 8 F.Supp. 552), directing the receivers of Hoosac
Mills, a cotton milling corporation, to pay claims of the United
States for processing and floor taxes on cotton, levied under §§ 9
and 16 of the Agricultural Adjustment Act of May 12, 1933. The
opinion of this Court begins on p. 297 U. S. 53 ,
post; the dissenting opinion on p. 297 U. S. 78 . Page 297 U. S. 53 MR. JUSTICE ROBERTS delivered the opinion of the Court.

															In this case, we must determine whether certain provisions of
the Agricultural Adjustment Act, 1933, [ Footnote 1 ] conflict with the Federal Constitution.

															Title I of the statute is captioned "Agricultural Adjustment."
Section 1 recites that an economic emergency has arisen, due to
disparity between the prices of agricultural and other commodities,
with consequent destruction of farmers' purchasing power and
breakdown in orderly exchange, which, in turn, have affected
transactions in agricultural commodities with a national public
interest and burdened and obstructed the normal currents of
commerce, calling for the enactment of legislation. Page 297 U. S. 54 Section 2 declares it to be the policy of Congress:

															"To establish and maintain such balance between the production
and consumption of agricultural commodities, and such marketing
conditions therefor, as will reestablish prices to farmers at a
level that will give agricultural commodities [ Footnote 2 ] 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 cotton and all other commodities
except tobacco, is designated as that between August, 1909, and
July, 1914.

															The further policies announced are an approach to the desired
equality by gradual correction of present inequalities "at as rapid
a rate as is deemed feasible in view of the current consumptive
demand in domestic and foreign markets," and the protection of
consumers' interest by readjusting farm production at such level as
will not increase the percentage of the consumers' retail
expenditures for agricultural commodities or products derived
therefrom, which is returned to the farmer, above the percentage
returned to him in the base period.

															Section 8 provides, amongst other things, that, "In order to
effectuate the declared policy," the Secretary of Agriculture shall
have power

															"(1) To provide for reduction in the acreage or reduction in the
production for market, or both, of any basic agricultural
commodity, through agreements with producers or by other voluntary
methods, and to provide for rental or benefit payments in
connection therewith or upon that part of the production of any
basic agricultural commodity required for domestic consumption, in
such amounts as the Secretary deems fair and reasonable, to Page 297 U. S. 55 be paid out of any moneys available for such payments. . .
."

															"(2) To enter into marketing agreements with processors,
associations of producers, and others engaged in the handling, in
the current of interstate or foreign commerce of any agricultural
commodity or product thereof, after due notice and opportunity for
hearing to interested parties. . . ."

															"(3) To issue licenses permitting processors, associations of
producers, and others to engage in the handling, in the current of
interstate or foreign commerce, of any agricultural commodity or
product thereof, or any competing commodity or product
thereof."

															It will be observed that the Secretary is not required, but is
permitted, if, in his uncontrolled judgment, the policy of the act
will so be promoted, to make agreements with individual farmers for
a reduction of acreage or production upon such terms as he may
think fair and reasonable.

															Section 9(a) enacts:

															"To obtain revenue for extraordinary expenses incurred by reason
of the national economic emergency, there shall be levied
processing taxes as hereinafter provided. When the Secretary of
Agriculture determines that rental on benefit payments are to be
made with respect to any basic agricultural commodity, he shall
proclaim such determination, and a processing tax shall be in
effect with respect to such commodity from the beginning of the
marketing year therefor next following the date of such
proclamation. The processing tax shall be levied, assessed, and
collected upon the first domestic processing of the commodity,
whether of domestic production or imported, and shall be paid by
the processor. . . ."

															The Secretary may from time to time, if he finds it necessary
for the effectuation of the policy of the act, readjust the amount
of the exaction to meet the requirements Page 297 U. S. 56 of subsection (b). The tax is to terminate at the end of any
marketing year if the rental or benefit payments are discontinued
by the Secretary with the expiration of that year.

															Section 9(b) fixes the tax "at such rate as equals the
difference between the current average farm price for the commodity
and the fair exchange value," with power in the Secretary, after
investigation, notice, and hearing, to readjust the tax so as to
prevent the accumulation of surplus stocks and depression of farm
prices.

															Section 9(c) directs that the fair exchange value of a commodity
shall be such a price as will give that commodity the same
purchasing power with respect to articles farmers buy as it had
during the base period and that the fair exchange value and the
current average farm price of a commodity shall be ascertained by
the Secretary from available statistics in his department.

															Section 12(a) appropriates $100,000,000 "to be available to the
Secretary of Agriculture for administrative expenses under this
title and for rental and benefit payments . . .", and § 12(b)
appropriates the proceeds derived from all taxes imposed under the
act

															"to be available to the Secretary of Agriculture for expansion
of markets and removal of surplus agricultural products. . .
administrative expenses, rental and benefit payments, and refunds
on taxes."

															Section 15(d) permits the Secretary, upon certain conditions, to
impose compensating taxes on commodities in competition with those
subject to the processing tax.

															By § 16, a floor tax is imposed upon the sale or other
disposition of any article processed wholly or in chief value from
any commodity with respect to which a processing tax is to be
levied in amount equivalent to that of the processing tax which
would be payable with respect to the commodity from which the
article is processed if the processing had occurred on the date
when the processing tax becomes effective. Page 297 U. S. 57 On July 14, 1933, the Secretary of Agriculture, with the
approval of the President, proclaimed that he had determined rental
and benefit payments should be made with respect to cotton; that
the marketing year for that commodity was to begin August 1, 1933,
and calculated and fixed the rates of processing and floor taxes on
cotton in accordance with the terms of the act.

															The United States presented a claim to the respondents as
receivers of the Hoosac Mills Corporation for processing and floor
taxes on cotton levied under § 9 and 16 of the act. The receivers
recommended that the claim be disallowed. The District Court found
the taxes valid, and ordered them paid. [ Footnote 3 ] Upon appeal, the Circuit Court of Appeals
reversed the order. [ Footnote
4 ] The judgment under review was entered prior to the adoption
of the amending act of August 24, 1935, [ Footnote 5 ] and we are therefore concerned only with
the original act. First. At the outset, the United States contends that
the respondents have no standing to question the validity of the
tax. The position is that the act is merely a revenue measure
levying an excise upon the activity of processing cotton -- a
proper subject for the imposition of such a tax -- the proceeds of
which go into the federal treasury, and thus become available for
appropriation for any purpose. It is said that what the respondents
are endeavoring to do is to challenge the intended use of the money
pursuant to Congressional appropriation when, by confession, that
money will have become the property of the Government and the
taxpayer will no longer have any interest in it. Massachusetts
v. Mellon, 262 U. S. 447 , is
claimed to foreclose litigation by the respondents or other
taxpayers, as such, looking to restraint of the expenditure of
government funds. That case might be an authority Page 297 U. S. 58 in the petitioners' favor if we were here concerned merely with
a suit by a taxpayer to restrain the expenditure of the public
moneys. It was there held that a taxpayer of the United States may
not question expenditures from its treasury on the ground that the
alleged unlawful diversion will deplete the public funds, and thus
increase the burden of future taxation. Obviously the asserted
interest of a taxpayer in the federal government's funds and the
supposed increase of the future burden of taxation is minute and
indeterminable. But here, the respondents, who are called upon to
pay moneys as taxes, resist the exaction as a step in an
unauthorized plan. This circumstance clearly distinguishes the
case. The Government, in substance and effect, asks us to separate
the Agricultural Adjustment Act into two statutes, the one levying
an excise on processors of certain commodities, the other
appropriating the public moneys independently of the first. Passing
the novel suggestion that two statutes enacted as parts of a single
scheme should be tested as if they were distinct and unrelated, we
think the legislation now before us is not susceptible of such
separation and treatment.

															The tax can only be sustained by ignoring the avowed purpose and
operation of the act and holding it a measure merely laying an
excise upon processors to raise revenue for the support of
government. Beyond cavil, the sole object of the legislation is to
restore the purchasing power of agricultural products to a parity
with that prevailing in an earlier day; to take money from the
processor and bestow it upon farmers [ Footnote 6 ] who will reduce their acreage for Page 297 U. S. 59 the accomplishment of the proposed end, and, meanwhile to aid
these farmers during the period required to bring the prices of
their crops to the desired level.

															The tax plays an indispensable part in the plan of regulation.
As stated by the Agricultural Adjustment Administrator, it is " the
heart of the law "; a means of " accomplishing one or both of two
things intended to help farmers attain parity prices and purchasing
power." [ Footnote 7 ] A tax
automatically goes into effect for a commodity when the Secretary
of Agriculture determines that rental or benefit payments are to be
made for reduction of production of that commodity. The tax is to
cease when rental or benefit payments cease. The rate is fixed with
the purpose of bringing about crop reduction and price-raising. It
is to equal the difference between the " current average farm price
" and " fair exchange value." It may be altered to such amount as
will prevent accumulation of surplus stocks. If the Secretary finds
the policy of the act will not be promoted by the levy of the tax
for a given commodity, he may exempt it. (§ 11.) The whole revenue
from the levy is appropriated in aid of crop control; none of it is
made available for general governmental use. The entire
agricultural adjustment program embodied in Title I of the act is
to become inoperative when, in the judgment of the President, the
national economic emergency ends, and as to any commodity, he may
terminate the provisions of the law if he finds them no longer
requisite to carrying out the declared policy with respect to such
commodity. (§ 13.)

															The statute not only avows an aim foreign to the procurement of
revenue for the support of government, but, by its operation, shows
the exaction laid upon processors to be the necessary means for the
intended control of agricultural production. Page 297 U. S. 60 In these aspects the tax, so-called, closely resembles that laid
by the Act of August 3, 1882, entitled "An Act to Regulate
Immigration," which came before this court in the Head Money
Cases, 112 U. S. 580 . The
statute directed that there should be levied, collected and paid a
duty of fifty cents for each alien passenger who should come by
vessel from a foreign port to one in the United States. Payment was
to be made to the collector of the port by the master, owner,
consignee or agent of the ship; the money was to be paid into the
Treasury, was to be called the immigrant fund, and to be used by
the Secretary of the Treasury to defray the expense of regulating
immigration, for the care of immigrants and relieving those in
distress, and for the expenses of effectuating the act.

															Various objections to the act were presented. In answering them
the court said (p. 595):

															"But the true answer to all these objections is that the power
exercised in this instance is not the taxing power. The burden
imposed on the ship owner by this statute is the mere incident of
the regulation of commerce -- of that branch of foreign commerce
which is involved in immigration. . . ."

															"It is true not much is said about protecting the ship owner.
But he is the man who reaps the profit from the transaction, . . .
The sum demanded of him is not, therefore, strictly speaking, a tax
or duty within the meaning of the Constitution. The money thus
raised, though paid into the Treasury, is appropriated in advance
to the uses of the statute, and does not go to the general support
of the government."

															While there, the exaction was sustained as an appropriate
element in a plan within the power of Congress "to regulate
commerce with foreign nations," no question was made of the
standing of the shipowner to raise the question Page 297 U. S. 61 of the validity of the scheme, and consequently of the exaction
which was an incident of it.

															It is inaccurate and misleading to speak of the exaction from
processors prescribed by the challenged act as a tax, or to say
that as a tax it is subject to no infirmity. A tax, in the general
understanding of the term, and as used in the Constitution,
signifies an exaction for the support of the Government. The word
has never been thought to connote the expropriation of money from
one group for the benefit of another. We may concede that the
latter sort of imposition is constitutional when imposed to
effectuate regulation of a matter in which both groups are
interested and in respect of which there is a power of legislative
regulation. But manifestly no justification for it can be found
unless as an integral part of such regulation. The exaction cannot
be wrested out of its setting, denominated an excise for raising
revenue, and legalized by ignoring its purpose as a mere
instrumentality for bringing about a desired end. To do this would
be to shut our eyes to what all others than we can see and
understand. Child Labor Tax Case, 259 U. S.
20 , 259 U. S.
37 .

															We conclude that the act is one regulating agricultural
production, that the tax is a mere incident of such regulation, and
that the respondents have standing to challenge the legality of the
exaction.

															It does not follow that, as the act is not an exertion of the
taxing power and the exaction not a true tax, the statute is void
or the exaction uncollectible. For, to paraphrase what was said in
the Head Money Cases (supra), p. 112 U. S. 596 ,
if this is an expedient regulation by Congress, of a subject within
one of its granted powers,

															"and the end to be attained is one falling within that power,
the act is not void because, within a loose and more extended sense
than was used in the Constitution,"

															the exaction is called a tax. Page 297 U. S. 62 Second. The Government asserts that, even if the
respondents may question the propriety of the appropriation
embodied in the statute, their attack must fail because Article I,
§ 8 of the Constitution authorizes the contemplated expenditure of
the funds raised by the tax. This contention presents the great and
the controlling question in the case. [ Footnote 8 ] We approach its decision with a sense of our
grave responsibility to render judgment in accordance with the
principles established for the governance of all three branches of
the Government.

															There should be no misunderstanding as to the function of this
court in such a case. It is sometimes said that the court assumes a
power to overrule or control the action of the people's
representatives. This is a misconception. 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 is 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 article of the
Constitution which is invoked beside the statute which is
challenged and to decide whether the latter squares with the
former. All the court does, or can do, is to announce its
considered judgment upon the question. Page 297 U. S. 63 The only power it has, if such it may be called, is the power of
judgment. This court neither approves nor condemns any legislative
policy. Its delicate and difficult office is to ascertain and
declare whether the legislation is in accordance with, or in
contravention of, the provisions of the Constitution; and, having
done that, its duty ends. [ Footnote
9 ]

															The question is not what power the Federal Government ought to
have, but what powers, in fact, have been given by the people. It
hardly seems necessary to reiterate that ours is a dual form of
government; that in every state there are two governments -- the
state and the United States. Each State has all governmental powers
save such as the people, by their Constitution, have conferred upon
the United States, denied to the States, or reserved to themselves.
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. In this respect, we differ
radically from nations where all legislative power, without
restriction or limitation, is vested in a parliament or other
legislative body subject to no restrictions except the discretion
of its members.

															Article I, § 8, of the Constitution vests sundry powers in the
Congress. But two of its clauses have any bearing upon the validity
of the statute under review.

															The third clause endows the Congress with power "to regulate
Commerce . . . among the several States." Despite a reference in
its first section to a burden upon, and an obstruction of the
normal currents of commerce, the act under review does not purport
to regulate transactions in interstate or foreign [ Footnote 10 ] commerce. Its stated
purpose Page 297 U. S. 64 is the control of agricultural production, a purely local
activity, in an effort to raise the prices paid the farmer. Indeed,
the Government does not attempt to uphold the validity of the act
on the basis of the commerce clause, which, for the purpose of the
present case, may be put aside as irrelevant.

															The clause thought to authorize the legislation -- the first --
confers upon the Congress power

															"to lay and collect Taxes, Duties, Imposts and Excises, to pay
the Debts and provide for the common Defence and general Welfare of
the United States. . . ."

															It is not contended that this provision grants power to regulate
agricultural production upon the theory that such legislation would
promote the general welfare. The Government concedes that the
phrase "to provide for the general welfare" qualifies the power "to
lay and collect taxes." The view that the clause grants power to
provide for the general welfare, independently of the taxing power,
has never been authoritatively accepted. Mr. Justice Story points
out that, if it were adopted,

															"it is obvious that, under color of the generality of the words,
to 'provide for the common defence and general welfare,' the
government of the United States is, in reality, a government of
general and unlimited powers, notwithstanding the subsequent
enumeration of specific powers. [ Footnote 11 ]"

															The true construction undoubtedly is that the only thing granted
is the power to tax for the purpose of providing funds for payment
of the nation's debts and making provision for the general
welfare.

															Nevertheless the Government asserts that warrant is found in
this clause for the adoption of the Agricultural Adjustment Act.
The argument is that Congress may appropriate and authorize the
spending of moneys for the "general welfare"; that the phrase
should be liberally Page 297 U. S. 65 construed to cover anything conducive to national welfare; that
decision as to what will promote such welfare rests with Congress
alone, and the courts may not review its determination, and finally
that the appropriation under attack was, in fact, for the general
welfare of the United States.

															The Congress is expressly empowered to lay taxes to provide for
the general welfare. Funds in the Treasury as a result of taxation
may be expended only through appropriation. (Art. I, § 9, cl. 7.)
They can never accomplish the objects for which they were collected
unless the power to appropriate is as broad as the power to tax.
The necessary implication from the terms of the grant is that the
public funds may be appropriated "to provide for the general
welfare of the United States." These words cannot be meaningless,
else they would not have been used. The conclusion must be that
they were intended to limit and define the granted power to raise
and to expend money. How shall they be construed to effectuate the
intent of the instrument?

															Since the foundation of the Nation, sharp differences of opinion
have persisted as to the true interpretation of the phrase. Madison
asserted it amounted to no more than a reference to the other
powers enumerated in the subsequent clauses of the same section;
that, as the United States is a government of limited and
enumerated powers, the grant of power to tax and spend for the
general national welfare must be confined to the enumerated
legislative fields committed to the Congress. In this view, the
phrase is mere tautology, for taxation and appropriation are, or
may be, necessary incidents of the exercise of any of the
enumerated legislative powers. Hamilton, on the other hand,
maintained the clause confers a power separate and distinct from
those later enumerated, is not restricted in meaning by the grant
of them, and Congress consequently has a substantive power to tax
and to appropriate, Page 297 U. S. 66 limited only by the requirement that it shall be exercised to
provide for the general welfare of the United States. Each
contention has had the support of those whose views are entitled to
weight. This court has noticed the question, but has never found it
necessary to decide which is the true construction. Mr. Justice
Story, in his Commentaries, espouses the Hamiltonian position.
[ Footnote 12 ] We shall not
review the writings of public men and commentators or discuss the
legislative practice. Study of all these leads us to conclude that
the reading advocated by Mr. Justice Story is the correct one.
While, therefore, the power to tax is not unlimited, its confines
are set in the clause which confers it, and not in those of § 8
which bestow and define the legislative powers of the Congress. It
results that the power of Congress to authorize expenditure of
public moneys for public purposes is not limited by the direct
grants of legislative power found in the Constitution.

															But the adoption of the broader construction leaves the power to
spend subject to limitations.

															As Story says:

															"The Constitution was, from its very origin, contemplated to be
the frame of a national government, of special and enumerated
powers, and not of general and unlimited powers. [ Footnote 13 ]"

															Again, he says:

															"A power to lay taxes for the common defence and general welfare
of the United States is not, in common sense, a general power. It
is limited to those objects. It cannot constitutionally transcend
them. [ Footnote 14 ]"

															That the qualifying phrase must be given effect all advocates of
broad construction admit. Hamilton, in his Page 297 U. S. 67 well known Report on Manufactures, states that the purpose must
be "general, and not local." [ Footnote 15 ] Monroe, an advocate of Hamilton's doctrine,
wrote:

															"Have Congress a right to raise and appropriate the money to any
and to every purpose according to their will and pleasure? They
certainly have not. [ Footnote
16 ]"

															Story says that, if the tax be not proposed for the common
defence or general welfare, but for other objects wholly
extraneous, it would be wholly indefensible upon constitutional
principles. [ Footnote 17 ]
And he makes it clear that the powers of taxation and appropriation
extend only to matters of national, as distinguished from local,
welfare.

															As elsewhere throughout the Constitution, the section in
question lays down principles which control the use of the power,
and does not attempt meticulous or detailed directions. Every
presumption is to be indulged in favor of faithful compliance by
Congress with the mandates of the fundamental law. Courts are
reluctant to adjudge any statute in contravention of them. But,
under our frame of government, no other place is provided where the
citizen may be heard to urge that the law fails to conform to the
limits set upon the use of a granted power. When such a contention
comes here, we naturally require a showing that by no reasonable
possibility can the challenged legislation fall within the wide
range of discretion permitted to the Congress. How great is the
extent of that range when the subject is the promotion of the
general welfare of the United States we hardly need remark. But,
despite the breadth of the legislative discretion, our duty to hear
and to render judgment remains. If the statute plainly violates the
stated principle of the Constitution, we must so declare. Page 297 U. S. 68 We are not now required to ascertain the scope of the phrase
"general welfare of the United States," or to determine whether an
appropriation in aid of agriculture falls within it. Wholly apart
from that question, another principle embedded in our Constitution
prohibits the enforcement of the Agricultural Adjustment Act. The
act invades the reserved rights of the states. It is a statutory
plan to regulate and control agricultural production, a matter
beyond the powers delegated to the federal government. The tax, the
appropriation of the funds raised, and the direction for their
disbursement are but parts of the plan. They are but means to an
unconstitutional end.

															From the accepted doctrine that the United States is a
government of delegated powers, it follows that those not expressly
granted, or reasonably to be implied from such as are conferred,
are reserved to the states, or to the people. To forestall any
suggestion to the contrary, the Tenth Amendment was adopted.
[ Footnote 18 ] The same
proposition, otherwise stated, is that powers not granted are
prohibited. None to regulate agricultural production is given, and
therefore legislation by Congress for that purpose is
forbidden.

															It is an established principle that the attainment of a
prohibited end may not be accomplished under the pretext of the
exertion of powers which are granted.

															"Should Congress, in the execution of its powers, adopt measures
which are prohibited by the constitution, or should Congress, under
the pretext of executing its powers, pass laws for the
accomplishment of objects not intrusted to the government, it would
become the painful duty of this tribunal, should a case requiring
such a decision Page 297 U. S. 69 come before it, to say that such an act was not the law of the
land." McCulloch v.
Maryland , 4 Wheat. 316, 17 U. S.
423 .

															"Congress cannot, under the pretext of executing delegated
power, pass laws for the accomplishment of objects not entrusted to
the Federal Government. And we accept as established doctrine that
any provision of an act of Congress ostensibly enacted under power
granted by the Constitution, not naturally and reasonably adapted
to the effective exercise of such power but solely to the
achievement of something plainly within power reserved to the
States, is invalid and cannot be enforced." Linder v. United States, 268 U. S.
5 , 268 U. S. 17 .

															These principles are as applicable to the power to lay taxes as
to any other federal power. Said the court, in McCulloch v.
Maryland, supra, 17 U. S.
421 :

															"Let the end be legitimate, let it be within the scope of the
constitution, and all means which are appropriate, which are
plainly adapted to that end, which are not prohibited, but consist
with the letter and spirit of the constitution, are
constitutional."

															The power of taxation, which is expressly granted, may, of
course, be adopted as a means to carry into operation another power
also expressly granted. But resort to the taxing power to
effectuate an end which is not legitimate, not within the scope of
the Constitution, is obviously inadmissible.

															"Congress is not empowered to tax for those purposes which are
within the exclusive province of the States." Gibbons v.
Ogden , 9 Wheat. 1, 22 U. S. 199 .

															"There are, indeed, certain virtual limitations, arising from
the principles of the Constitution itself. It would undoubtedly be
an abuse of the [taxing] power if so exercised as to impair the
separate existence and independent self-government of the States or
if exercised for ends Page 297 U. S. 70 inconsistent with the limited grants of power in the
Constitution." Veazie Bank v.
Fenno , 8 Wall. 533, 75 U. S.
541 .

															In the Child Labor Tax Case, 259 U. S.
20 , and in Hill v. Wallace, 259 U. S.
44 , this court had before it statutes which purported to
be taxing measures. But their purpose was found to be to regulate
the conduct of manufacturing and trading not in interstate
commerce, but in the states -- matters not within any power
conferred upon Congress by the Constitution -- and the levy of the
tax a means to force compliance. The court held this was not a
constitutional use, but an unconstitutional abuse, of the power to
tax. In Linder v. United States, supra, we held that the
power to tax could not justify the regulation of the practice of a
profession, under the pretext of raising revenue. In United
States v. Constantine, 296 U. S. 287 , we
declared that Congress could not, in the guise of a tax, impose
sanctions for violation of state law respecting the local sale of
liquor. These decisions demonstrate that Congress could not, under
the pretext of raising revenue, lay a tax on processors who refuse
to pay a certain price for cotton, and exempt those who agree so to
do, with the purpose of benefiting producers. Third. If the taxing power may not be used as the
instrument to enforce a regulation of matters of state concern with
respect to which the Congress has no authority to interfere, may
it, as in the present case, be employed to raise the money
necessary to purchase a compliance which the Congress is powerless
to command? The Government asserts that whatever might be said
against the validity of the plan if compulsory, it is
constitutionally sound because the end is accomplished by voluntary
cooperation. There are two sufficient answers to the contention.
The regulation is not, in fact, voluntary. The farmer, of course,
may refuse to comply, but the price of such refusal is the loss of
benefits. The amount offered is intended to be sufficient to exert
pressure on him to Page 297 U. S. 71 agree to the proposed regulation. [ Footnote 19 ] The power to confer or withhold unlimited
benefits is the power to coerce or destroy. If the cotton grower
elects not to accept the benefits, he will receive less for his
crops; those who receive payments will be able to undersell him.
The result may well be financial ruin. The coercive purpose and
intent of the statute is not obscured by the fact that it has not
been perfectly successful. It is pointed out that, because there
still remained a minority whom the rental and benefit payments were
insufficient to induce to surrender their independence of action,
the Congress has gone further and, in the Bankhead Cotton Act, used
the taxing power in a more directly minatory fashion to compel
submission. This progression only serves more fully to expose the
coercive purpose of the so-called tax imposed by the present act.
It is clear that the Department of Agriculture has properly
described the plan as one to keep a noncooperating minority in
line. This is coercion by economic pressure. The asserted power of
choice is illusory.

															In Frost Trucking Co. v. Railroad Comm'n, 271 U.
S. 583 , a state act was considered which provided for
supervision and regulation of transportation for hire by automobile
on the public highways. Certificates of convenience and necessity
were to be obtained by persons desiring to use the highways for
this purpose. The regulatory Page 297 U. S. 72 commission required that a private contract carrier should
secure such a certificate as a condition of its operation. The
effect of the commission's action was to transmute the private
carrier into a public carrier. In other words, the privilege of
using the highways as a private carrier for compensation was
conditioned upon his dedicating his property to the quasi -public use of public transportation. While holding
that the private carrier was not obliged to submit himself to the
condition, the commission denied him the privilege of using the
highways if he did not do so. The argument was, as here, that the
carrier had a free choice. This court said, in holding the act as
construed unconstitutional:

															"If so, constitutional guaranties, so carefully safeguarded
against direct assault, are open to destruction by the indirect but
no less effective process of requiring a surrender which, though in
form voluntary, in fact lacks none of the elements of compulsion.
Having regard to form alone, the act here is an offer to the
private carrier of a privilege, which the state may grant or deny,
upon a condition, which the carrier is free to accept or reject. In
reality, the carrier is given no choice, except a choice between
the rock and the whirlpool -- an option to forego a privilege which
may be vital to his livelihood or submit to a requirement which may
constitute an intolerable burden."

															(P. 593.)

															But if the plan were one for purely voluntary cooperation, it
would stand no better so far as federal power is concerned. At
best, it is a scheme for purchasing with federal funds submission
to federal regulation of a subject reserved to the states.

															It is said that Congress has the undoubted right to appropriate
money to executive officers for expenditure under contracts between
the government and individuals; that much of the total expenditures
is so made. But appropriations and expenditures under contracts for
proper Page 297 U. S. 73 governmental purposes cannot justify contracts which are not
within federal power. And contracts for the reduction of acreage
and the control of production are outside the range of that power.
An appropriation to be expended by the United States under
contracts calling for violation of a state law clearly would offend
the Constitution. Is a statute less objectionable which authorizes
expenditure of federal moneys to induce action in a field in which
the United States has no power to intermeddle? The Congress cannot
invade state jurisdiction to compel individual action; no more can
it purchase such action.

															We are referred to numerous types of federal appropriation which
have been made in the past, and it is asserted no question has been
raised as to their validity. We need not stop to examine or
consider them. As was said in Massachusetts v. Mellon,
supra, (p. 262 U. S.
487 ):

															". . . as an examination of the acts of Congress will disclose,
a large number of statutes appropriating or involving the
expenditure of moneys for nonfederal purposes have been enacted and
carried into effect."

															As the opinion points out, such expenditures have not been
challenged because no remedy was open for testing their
constitutionality in the courts.

															We are not here concerned with a conditional appropriation of
money, nor with a provision that, if certain conditions are not
complied with, the appropriation shall no longer be available. By
the Agricultural Adjustment Act, the amount of the tax is
appropriated to be expended only in payment under contracts whereby
the parties bind themselves to regulation by the Federal
Government. There is an obvious difference between a statute
stating the conditions upon which moneys shall be expended and one
effective only upon assumption of a contractual obligation to
submit to a regulation which otherwise could not be enforced. Many
examples pointing the distinction might be cited. We are referred
to appropriations in aid Page 297 U. S. 74 of education, and it is said that no one has doubted the power
of Congress to stipulate the sort of education for which money
shall be expended. But an appropriation to an educational
institution which, by its terms, is to become available only if the
beneficiary enters into a contract to teach doctrines subversive of
the Constitution is clearly bad. An affirmance of the authority of
Congress so to condition the expenditure of an appropriation would
tend to nullify all constitutional limitations upon legislative
power.

															But it is said that there is a wide difference in another
respect between compulsory regulation of the local affairs of a
state's citizens and the mere making of a contract relating to
their conduct: that, if any state objects, it may declare the
contract void, and thus prevent those under the state's
jurisdiction from complying with its terms. The argument is plainly
fallacious. The United States can make the contract only if the
federal power to tax and to appropriate reaches the subject matter
of the contract. If this does reach the subject matter, its
exertion cannot be displaced by state action. To say otherwise is
to deny the supremacy of the laws of the United States; to make
them subordinate to those of a State. This would reverse the
cardinal principle embodied in the Constitution, and substitute one
which declares that Congress may only effectively legislate as to
matters within federal competence when the States do not
dissent.

															Congress has no power to enforce its commands on the farmer to
the ends sought by the Agricultural Adjustment Act. It must follow
that it may not indirectly accomplish those ends by taxing and
spending to purchase compliance. The Constitution and the entire
plan of our government negative any such use of the power to tax
and to spend as the act undertakes to authorize. It does not help
to declare that local conditions throughout the nation have created
a situation of national concern, for this Page 297 U. S. 75 is but to say that, whenever there is a widespread similarity of
local conditions, Congress may ignore constitutional limitations
upon its own powers and usurp those reserved to the states. If, in
lieu of compulsory regulation of subjects within the states'
reserved jurisdiction, which is prohibited, the Congress could
invoke the taxing and spending power as a means to accomplish the
same end, clause 1 of § 8 of Article I would become the instrument
for total subversion of the governmental powers reserved to the
individual states.

															If the act before us is a proper exercise of the federal taxing
power, evidently the regulation of all industry throughout the
United States may be accomplished by similar exercises of the same
power. It would be possible to exact money from one branch of an
industry and pay it to another branch in every field of activity
which lies within the province of the states. The mere threat of
such a procedure might well induce the surrender of rights and the
compliance with federal regulation as the price of continuance in
business. A few instances will illustrate the thought.

															Let us suppose Congress should determine that the farmer, the
miner, or some other producer of raw materials is receiving too
much for his products, with consequent depression of the processing
industry and idleness of its employes. Though, by confession, there
is no power vested in Congress to compel by statute a lowering of
the prices of the raw material, the same result might be
accomplished, if the questioned act be valid, by taxing the
producer upon his output and appropriating the proceeds to the
processors, either with or without conditions imposed as the
consideration for payment of the subsidy.

															We have held in Schechter Poultry Corp. v. United
States, 295 U. S. 495 ,
that Congress has no power to regulate wages and hours of labor in
a local business. If the petitioner is right, this very end may be
accomplished by Page 297 U. S. 76 appropriating money to be paid to employers from the federal
treasury under contracts whereby they agree to comply with certain
standards fixed by federal law or by contract.

															Should Congress ascertain that sugar refiners are not receiving
a fair profit, and that this is detrimental to the entire industry,
and in turn has its repercussions in trade and commerce generally,
it might, in analogy to the present law, impose an excise of two
cents a pound on every sale of the commodity, and pass the funds
collected to such refiners, and such only, as will agree to
maintain a certain price.

															Assume that too many shoes are being manufactured throughout the
nation; that the market is saturated, the price depressed, the
factories running half-time, the employes suffering. Upon the
principle of the statute in question, Congress might authorize the
Secretary of Commerce to enter into contracts with shoe
manufacturers providing that each shall reduce his output, and that
the United States will pay him a fixed sum proportioned to such
reduction, the money to make the payments to be raised by a tax on
all retail shoe dealers or their customers.

															Suppose that there are too many garment workers in the large
cities; that this results in dislocation of the economic balance.
Upon the principle contended for, an excise might be laid on the
manufacture of all garments manufactured, and the proceeds paid to
those manufacturers who agree to remove their plants to cities
having not more than a hundred thousand population. Thus, through
the asserted power of taxation, the federal government, against the
will of individual states, might completely redistribute the
industrial population.

															A possible result of sustaining the claimed federal power would
be that every business group which thought itself underprivileged
might demand that a tax be laid on its vendors or vendees, the
proceeds to be appropriated to the redress of its deficiency of
income. Page 297 U. S. 77 These illustrations are given not to suggest that any of the
purposes mentioned are unworthy, but to demonstrate the scope of
the principle for which the Government contends; to test the
principle by its applications; to point out that, by the exercise
of the asserted power, Congress would, in effect, under the pretext
of exercising the taxing power, in reality accomplish prohibited
ends. It cannot be said that they envisage improbable legislation.
The supposed cases are no more improbable than would the present
act have been deemed a few years ago.

															Until recently, no suggestion of the existence of any such power
in the Federal Government has been advanced. The expressions of the
framers of the Constitution, the decisions of this court
interpreting that instrument, and the writings of great
commentators will be searched in vain for any suggestion that there
exists in the clause under discussion, or elsewhere in the
Constitution, the authority whereby every provision and every fair
implication from that instrument may be subverted, the independence
of the individual states obliterated, and the United States
converted into a central government exercising uncontrolled police
power in every state of the Union, superseding all local control or
regulation of the affairs or concerns of the states.

															Hamilton himself, the leading advocate of broad interpretation
of the power to tax and to appropriate for the general welfare,
never suggested that any power granted by the Constitution could be
used for the destruction of local self-government in the states.
Story countenances no such doctrine. It seems never to have
occurred to them, or to those who have agreed with them, that the
general welfare of the United States (which has aptly been termed "
an indestructible Union, composed of indestructible States") might
be served by obliterating the constituent members of the Union. But
to this fatal conclusion Page 297 U. S. 78 the doctrine contended for would inevitably lead. And its sole
premise is that, though the makers of the Constitution, in erecting
the federal government, intended sedulously to limit and define its
powers so as to reserve to the states and the people sovereign
power, to be wielded by the states and their citizens and not to be
invaded by the United States, they nevertheless, by a single
clause, gave power to the Congress to tear down the barriers, to
invade the states' jurisdiction, and to become a parliament of the
whole people, subject to no restrictions save such as are
self-imposed. The argument, when seen in its true character and in
the light of its inevitable results, must be rejected.

															Since, as we have pointed out, there was no power in the
Congress to impose the contested exaction, it could not lawfully
ratify or confirm what an executive officer had done in that
regard. Consequently the Act of 1935 does not affect the rights of
the parties.

															The judgment is Affirmed. [ Footnote 1 ]

															May 12, 1933, c. 25, 48 Stat. 31.

															[ Footnote 2 ]

															Section 11 denominates wheat, cotton, field corn, hogs, rice,
tobacco, and milk and its products, "basic agricultural
commodities," to which the act is to apply. Others have been added
by later legislation.

															[ Footnote 3 ] Franklin Process Co. v. Hoosac Mills
Corp., 8 F. Supp.
552 .

															[ Footnote 4 ] Butler v. United States, 78 F . (2d) 1.

															[ Footnote 5 ]

															49 Stat. 750, c. 641.

															[ Footnote 6 ]

															U.S. Department of Agriculture, Achieving A Balanced
Agriculture, p. 38:

															"Farmers should not forget that all the processing tax money
ends up in their own pockets. Even in those cases where they pay
part of the tax, they get it all back. Every dollar collected in
processing taxes goes to the farmer in benefit payments."

															U.S. Dept. of Agriculture, The Processing Tax, p. 1: " Proceeds
of processing taxes are passed to farmers as benefit payments."

															[ Footnote 7 ]

															U.S. Department of Agriculture, Agricultural Adjustment, p.
9.

															[ Footnote 8 ]

															Other questions were presented and argued by counsel, but we do
not consider or decide them. The respondents insist that the act in
numerous respects delegates legislative power to the executive
contrary to the principles announced in Panama Refining Co. v.
Ryan, 293 U. S. 388 , and Schechter Corp. v. United States, 295 U.
S. 495 ; that this unlawful delegation is not cured by
the amending act of August 24, 1935; that the exaction is in
violation of the due process clause of the Fifth Amendment, since
the legislation takes their property for a private use; that the
floor tax is a direct tax, and therefore void for lack of
apportionment amongst the states, as required by Article I, § 9,
and that the processing tax is wanting in uniformity, and so
violates Article I, § 8, clause one, of the Constitution.

															[ Footnote 9 ] Compare Adkins v. Children's Hospital, 261 U.
S. 525 , 261 U. S. 544 ; Massachusetts v. Mellon, 262 U. S. 447 , 262 U. S.
488 .

															[ Footnote 10 ]

															The enactment of protective tariff laws has its basis in the
power to regulate foreign commerce. See Board of Trustees of
the University of Illinois v. United States, 289 U. S.
48 , 289 U. S.
58 .

															[ Footnote 11 ]

															Story, Commentaries on the Constitution of the United States 5th
ed., Vol. I, § 907.

															[ Footnote 12 ]

															Loc. cit. Chapter XIV, passim. [ Footnote 13 ] Loc. cit., § 909.

															[ Footnote 14 ] Loc. cit., § 922.

															[ Footnote 15 ]

															Works, Vol. III, p. 250.

															[ Footnote 16 ]

															Richardson, Messages and Papers of the Presidents, Vol. II, p.
167.

															[ Footnote 17 ] Loc. cit., p. 673.

															[ Footnote 18 ]

															The Tenth Amendment declares:

															"The powers not delegated to the United States by the
Constitution, nor prohibited by it to the States, are reserved to
the States respectively or to the people."

															[ Footnote 19 ]

															U.S. Dept. of Agriculture, Agricultural Adjustment, p. 9.

															"Experience of cooperative associations and other groups has
shown that, without such Government support, the efforts of the
farmers to band together to control the amount of their product
sent to market are nearly always brought to nothing. Almost always,
under such circumstances, there has been a noncooperating minority,
which, refusing to go along with the rest, has stayed on the
outside and tried to benefit from the sacrifices the majority has
made. . . . It is to keep this noncooperating minority in line, or
at least prevent it from doing harm to the majority, that the power
of the Government has been marshaled behind the adjustment
programs."

															MR. JUSTICE STONE, dissenting.

															I think the judgment should be reversed.

															The present stress of widely held and strongly expressed
differences of opinion of the wisdom of the Agricultural Adjustment
Act makes it important, in the interest of clear thinking and sound
result, to emphasize at the outset certain propositions which
should have controlling influence in determining the validity of
the Act. They are:

															1. The power of courts to declare a statute unconstitutional is
subject to two guiding principles of decision which ought never to
be absent from judicial consciousness. One is that courts are
concerned only with the power to enact statutes, not with their
wisdom. The other is that, while unconstitutional exercise of
power Page 297 U. S. 79 by the executive and legislative branches of the government is
subject to judicial restraint, the only check upon our own exercise
of power is our own sense of self-restraint. For the removal of
unwise laws from the statute books appeal lies not to the courts,
but to the ballot and to the processes of democratic
government.

															2. The constitutional power of Congress to levy an excise tax
upon the processing of agricultural products is not questioned. The
present levy is held invalid not for any want of power in Congress
to lay such a tax to defray public expenditures, including those
for the general welfare, but because the use to which its proceeds
are put is disapproved.

															3. As the present depressed state of agriculture is nationwide
in its extent and effects, there is no basis for saying that the
expenditure of public money in aid of farmers is not within the
specifically granted power of Congress to levy taxes to " provide
for the . . . general welfare." The opinion of the Court does not
declare otherwise.

															4. No question of a variable tax fixed from time to time by fiat
of the Secretary of Agriculture, or of unauthorized delegation of
legislative power, is now presented. The schedule of rates imposed
by the Secretary in accordance with the original command of
Congress has since been specifically adopted and confirmed by Act
of Congress, which has declared that it shall be the lawful tax.
Act of August 24, 1935, 49 Stat. 750. That is the tax which the
government now seeks to collect. Any defects there may have been in
the manner of laying the tax by the Secretary have now been removed
by the exercise of the power of Congress to pass a curative statute
validating an intended, though defective, tax. United States v.
Heinszen & Co., 206 U. S. 370 ; Graham & Foster v. Goodcell, 282 U.
S. 409 ; cf. Milliken v. United States, 283 U. S. 15 . The
Agricultural Adjustment Act, as thus amended, declares Page 297 U. S. 80 that none of its provisions shall fail because others are
pronounced invalid.

															It is with these preliminary and hardly controverted matters in
mind that we should direct our attention to the pivot on which the
decision of the Court is made to turn. It is that a levy
unquestionably within the taxing power of Congress may be treated
as invalid because it is a step in a plan to regulate agricultural
production, and is thus a forbidden infringement of state power.
The levy is not any the less an exercise of taxing power because it
is intended to defray an expenditure for the general welfare,
rather than for some other support of government. Nor is the levy
and collection of the tax pointed to as effecting the regulation.
While all federal taxes inevitably have some influence on the
internal economy of the states, it is not contended that the levy
of a processing tax upon manufacturers using agricultural products
as raw material has any perceptible regulatory effect upon either
their production or manufacture. The tax is unlike the penalties
which were held invalid in the Child Labor Tax Case, 259 U. S. 20 , in Hill v. Wallace, 259 U. S. 44 , in Linder v. United States, 268 U. S. 5 , 268 U. S. 17 , and
in United States v. Constantine, 296 U.
S. 287 , because they were themselves the instruments of
regulation by virtue of their coercive effect on matters left to
the control of the states. Here regulation, if any there be, is
accomplished not by the tax, but by the method by which its
proceeds are expended, and would equally be accomplished by any
like use of public funds, regardless of their source.

															The method may be simply stated. Out of the available fund
payments are made to such farmers as are willing to curtail their
productive acreage, who, in fact, do so, and who, in advance, have
filed their written undertaking to do so with the Secretary of
Agriculture. In saying that this method of spending public moneys
is an invasion of the reserved powers of the states, the Court does
not assert Page 297 U. S. 81 that the expenditure of public funds to promote the general
welfare is not a substantive power specifically delegated to the
national government, as Hamilton and Story pronounced it to be. It
does not deny that the expenditure of funds for the benefit of
farmers and in aid of a program of curtailment of production of
agricultural products, and thus of a supposedly better ordered
national economy, is within the specifically granted power. But it
is declared that state power is nevertheless infringed by the
expenditure of the proceeds of the tax to compensate farmers for
the curtailment of their cotton acreage. Although the farmer is
placed under no legal compulsion to reduce acreage, it is said that
the mere offer of compensation for so doing is a species of
economic coercion which operates with the same legal force and
effect as though the curtailment were made mandatory by Act of
Congress. In any event, it is insisted that, even though not
coercive, the expenditure of public funds to induce the recipients
to curtail production is itself an infringement of state power,
since the federal government cannot invade the domain of the states
by the "purchase" of performance of acts which it has no power to
compel.

															Of the assertion that the payments to farmers are coercive it is
enough to say that no such contention is pressed by the taxpayer,
and no such consequences were to be anticipated or appear to have
resulted from the administration of the Act. The suggestion of
coercion finds no support in the record or in any data showing the
actual operation of the Act. Threat of loss, not hope of gain, is
the essence of economic coercion. Members of a long depressed
industry have undoubtedly been tempted to curtail acreage by the
hope of resulting better prices and by the proffered opportunity to
obtain needed ready money. But there is nothing to indicate that
those who accepted benefits were impelled by fear of lower prices
if they did not accept, or that, at any stage in the operation Page 297 U. S. 82 of the plan a farmer could say whether, apart from the certainty
of cash payments at specified times, the advantage would lie with
curtailment of production plus compensation, rather than with the
same or increased acreage plus the expected rise in prices which
actually occurred. Although the Agricultural Adjustment Act was put
into operation in June, 1933, the official reports of the
Department of Agriculture show that 6,343,000 acres of productive
cotton land, 14% of the total, did not participate in the plan in
1934, and 2,790,000 acres, 6% of the total, did not participate in
1935. Of the total number of farms growing cotton, estimated at
1,500,000, 33% in 1934 and 13% in 1935 did not participate.

															It is significant that, in the congressional hearings on the
bill that became the Bankhead Act, 48 Stat. 598, as amended by Act
of June 20, 1934, 48 Stat. 1184, which imposes a tax of 50% on all
cotton produced in excess of limits prescribed by the Secretary of
Agriculture, there was abundant testimony that the restriction of
cotton production attempted by the Agricultural Adjustment Act
could not be secured without the coercive provisions of the
Bankhead Act. See Hearing before Committee on Agriculture,
U.S. Senate, on S.1974, 73rd Cong., 2nd Sess.; Hearing before
Committee on Agriculture, U.S. House of Representatives, on H.R.
8402, 73rd Cong., 2nd Sess. The Senate and House Committees so
reported, Senate Report No. 283, 73rd Cong., 2nd Sess., p. 3; House
Report No. 867, 73rd Cong., 2nd Sess., p. 3. The Report of the
Department of Agriculture on the administration of the Agricultural
Adjustment Act (February 15, 1934 to December 31, 1934), p. 50,
points out that the Bankhead Act was passed in response to a strong
sentiment in favor of mandatory production control

															"that would prevent noncooperating farmers from increasing their
own plantings in order to capitalize upon the price advances that
had resulted from the reductions made by contract Page 297 U. S. 83 signers. * "

															The presumption of constitutionality of a statute is not to be
overturned by an assertion of its coercive effect which rests on
nothing more substantial than groundless speculation.

															It is upon the contention that state power is infringed by
purchased regulation of agricultural production that chief reliance
is placed. It is insisted that, while the Constitution gives to
Congress, in specific and unambiguous terms, the power to tax and
spend, the power is subject to limitations which do not find their
origin in any express provision of the Constitution and to which
other expressly delegated powers are not subject.

															The Constitution requires that public funds shall be spent for a
defined purpose, the promotion of the general welfare. Their
expenditure usually involves payment on terms which will insure use
by the selected recipients within the limits of the constitutional
purpose. Expenditures would fail of their purpose, and thus lose
their constitutional sanction, if the terms of payment were not
such that, by their influence on the action of the recipients, the
permitted end would be attained. The power of Congress to spend is
inseparable from persuasion to action over which Congress has no
legislative control. Congress may not command that the science of
agriculture be taught in state universities. But if it would aid
the teaching of that science by grants to state institutions, it is
appropriate, if not necessary, that the grant be on the condition,
incorporated in the Morrill Act, 12 Stat. 503, 26 Stat. 417, that
it be used for the intended purpose. Similarly, it would seem to be
compliance with the Constitution, not violation of it, for the
government to take and the university to give a contract that the
grant would be so used. It makes no difference Page 297 U. S. 84 that there is a promise to do an act which the condition is
calculated to induce. Condition and promise are alike valid, since
both are in furtherance of the national purpose for which the money
is appropriated.

															These effects upon individual action, which are but incidents of
the authorized expenditure of government money, are pronounced to
be themselves a limitation upon the granted power, and so the
time-honored principle of constitutional interpretation that the
granted power includes all those which are incident to it is
reversed. "Let the end be legitimate," said the great Chief
Justice,

															"let it be within the scope of the Constitution, and all means
which are appropriate, which are plainly adapted to that end, which
are not prohibited, but consist with the letter and spirit of the
Constitution, are constitutional." McCulloch v.
Maryland , 4 Wheat. 316, 17 U. S. 421 .
This cardinal guide to constitutional exposition must now be
rephrased so far as the spending power of the federal government is
concerned. Let the expenditure be to promote the general welfare,
still, if it is needful in order to insure its use for the intended
purpose to influence any action which Congress cannot command
because within the sphere of state government, the expenditure is
unconstitutional. And taxes otherwise lawfully levied are likewise
unconstitutional if they are appropriated to the expenditure whose
incident is condemned.

															Congress, through the Interstate Commerce Commission, has set
aside intrastate railroad rates. It has made and destroyed
intrastate industries by raising or lowering tariffs. These results
are said to be permissible because they are incidents of the
commerce power and the power to levy duties on imports. See
Minnesota Rate Cases, 230 U. S. 352 ; Shreveport Case, 234 U. S. 342 ; Board of Trustees of the University of Illinois v. United
States, 289 U. S. 48 . The
only conclusion to be drawn is that results Page 297 U. S. 85 become lawful when they are incidents of those powers, but
unlawful when incident to the similarly granted power to tax and
spend.

															Such a limitation is contradictory and destructive of the power
to appropriate for the public welfare, and is incapable of
practical application. The spending power of Congress is in
addition to the legislative power, and not subordinate to it. This
independent grant of the power of the purse, and its very nature,
involving in its exercise the duty to insure expenditure within the
granted power, presuppose freedom of selection among divers ends
and aims, and the capacity to impose such conditions as will render
the choice effective. It is a contradiction in terms to say that
there is power to spend for the national welfare while rejecting
any power to impose conditions reasonably adapted to the attainment
of the end which alone would justify the expenditure.

															The limitation now sanctioned must lead to absurd consequences.
The government may give seeds to farmers, but may not condition the
gift upon their being planted in places where they are most needed,
or even planted at all. The government may give money to the
unemployed, but may not ask that those who get it shall give labor
in return, or even use it to support their families. It may give
money to sufferers from earthquake, fire, tornado, pestilence or
flood, but may not impose conditions -- health precautions designed
to prevent the spread of disease, or induce the movement of
population to safer or more sanitary areas. All that, because it is
purchased regulation infringing state powers, must be left for the
states, who are unable or unwilling to supply the necessary relief.
The government may spend its money for vocational rehabilitation,
48 Stat. 389, but it may not, with the consent of all concerned,
supervise the process which it undertakes to aid. It may spend its
money for the suppression of the boll weevil, but may Page 297 U. S. 86 not compensate the farmers for suspending the growth of cotton
in the infected areas. It may aid state reforestation and forest
fire prevention agencies, 43 Stat. 653, but may not be permitted to
supervise their conduct. It may support rural schools, 39 Stat.
929, 45 Stat. 1151, 48 Stat. 792, but may not condition its grant
by the requirement that certain standards be maintained. It may
appropriate moneys to be expended by the Reconstruction Finance
Corporation "to aid in financing agriculture, commerce and
industry," and to facilitate "the exportation of agricultural and
other products." Do all its activities collapse because, in order
to effect the permissible purpose, in myriad ways the money is paid
out upon terms and conditions which influence action of the
recipients within the states, which Congress cannot command? The
answer would seem plain. If the expenditure is for a national
public purpose, that purpose will not be thwarted because payment
is on condition which will advance that purpose. The action which
Congress induces by payments of money to promote the general
welfare, but which it does not command or coerce, is but an
incident to a specifically granted power, but a permissible means
to a legitimate end. If appropriation in aid of a program of
curtailment of agricultural production is constitutional, and it is
not denied that it is, payment to farmers on condition that they
reduce their crop acreage is constitutional. It is not any the less
so because the farmer, at his own option, promises to fulfill the
condition.

															That the governmental power of the purse is a great one is not
now for the first time announced. Every student of the history of
government and economics is aware of its magnitude and of its
existence in every civilized government. Both were well understood
by the framers of the Constitution when they sanctioned the grant
of the spending power to the federal government, and both were
recognized by Hamilton and Story, whose views of the Page 297 U. S. 87 spending power as standing on a parity with the other powers
specifically granted have hitherto been generally accepted.

															The suggestion that it must now be curtailed by judicial fiat
because it may be abused by unwise use hardly rises to the dignity
of argument. So may judicial power be abused. "The power to tax is
the power to destroy," but we do not, for that reason, doubt its
existence, or hold that its efficacy is to be restricted by its
incidental or collateral effects upon the states. See Veazie
Bank v. Fenno , 8 Wall. 533; McCray v. United
States, 195 U. S. 27 ; compare Magnano Co. v. Hamilton, 292 U. S.
40 . The power to tax and spend is not without
constitutional restraints. One restriction is that the purpose must
be truly national. Another is that it may not be used to coerce
action left to state control. Another is the conscience and
patriotism of Congress and the Executive.

															"It must be remembered that legislators are the ultimate
guardians of the liberties and welfare of the people in quite as
great a degree as the courts."

															Justice Holmes, in Missouri, Kansas & Texas Ry. Co. v.
May, 194 U. S. 267 , 194 U. S.
270 .

															A tortured construction of the Constitution is not to be
justified by recourse to extreme examples of reckless congressional
spending which might occur if courts could not prevent --
expenditures which, even if they could be thought to effect any
national purpose, would be possible only by action of a legislature
lost to all sense of public responsibility. Such suppositions are
addressed to the mind accustomed to believe that it is the business
of courts to sit in judgment on the wisdom of legislative action.
Courts are not the only agency of government that must be assumed
to have capacity to govern. Congress and the courts both unhappily
may falter or be mistaken in the performance of their
constitutional duty. But interpretation of our great charter of
government which proceeds on any assumption that the responsibility
for the preservation of our institutions is the exclusive Page 297 U. S. 88 concern of any one of the three branches of government, or that
it alone can save them from destruction is far more likely, in the
long run, "to obliterate the constituent members" of "an
indestructible union of indestructible states" than the frank
recognition that language, even of a constitution, may mean what it
says: that the power to tax and spend includes the power to relieve
a nationwide economic maladjustment by conditional gifts of
money.

															MR. JUSTICE BRANDEIS and MR. JUSTICE CARDOZO join in this
opinion.

															* Whether coercion was the sole or the dominant purpose of the
Bankhead Act, or whether the act was designed also for revenue or
other legitimate ends there is no occasion to consider now.

Summary: In United States v. Butler (1936), the Supreme Court ruled that the "processing tax" imposed by the Agricultural Adjustment Act was not a true tax, but rather an unconstitutional regulation of agricultural production. The Court emphasized the distinction between a tax for the support of the government and the expropriation of money from one group to benefit another, which is outside the taxing power of Congress. The Court also reaffirmed the principle that the Constitution is the supreme law, and that the judiciary has a duty to declare Acts of Congress unconstitutional if they violate constitutional principles, regardless of legislative intent or policy goals. The decision highlighted the limited nature of federal power in a dual system of government, where powers not granted to the federal government are retained by the states or the people.