would have some authority to make rules and regulations governing that, but not to prohibit it.

Mr. ANDERSON. The New York Central Railroad Co., I think, has a stockyard at Buffalo which it operates as a part of its business as a common carrier. Under your construction of the powers of the Congress we would have to require the railroad company to divest itself of the ownership of those stockyards.

Mr. LIGHTFOOT. No; not in so far as they might use those stockyards for the unloading of cattle. It is just like a depot for the unloading of dead freight. I think they could be required to furnish such facilities. I think the Interstate Commerce Commission could require, where there are packing plants established, that the railroads establish the necessary stockyards in which to unload the cattle that they transport. But I do not think that you would have the right to require them to go ahead and operate a public market. I believe that is wholly beyond the jurisdiction of the Congress.

Mr. ANDERSON. Mr. Lightfoot, suppose you take the reverse of that proposition. I do not want to argue with you, but merely want your opinion on substantially the same question raised by Mr. McLaughlin of Michigan, except that I want to get a little closer to the question you are discussing: Whether we would have the right to require the railroad company to divest itself of stockyards, which are in addition to an unloading place a market place.

Mr. LIGHTFOOT. Well, in so far as they might attempt to do things beyond the scope of transportation, I think it is a matter subject to regulation by law. We must bear in mind that the commerce clause of the Constitution does not give the Congress the right to destroy or to prohibit transportation of commodities in this country unless they be something like explosives or something to endanger the lives or the health of the people. They only have the power to regulate.

Under section 25 you are undertaking, or at least it is suggested here that you undertake, to prohibit the transportation in interstate commerce of foodstuffs other than those that come from the live animals which we manufacture-because it is only the interstate business that you are undertaking to regulate. You could not say to any packing company: You can not manufacture vegetables for sale in the State in which you are situated. In other words, if that were possible it would be the exercise of power by the Congress to prohibit an intrastate business, which I do not think the Congress has any power whatever to do. The only thing you could do

Mr. ANDERSON (interposing). Just a minute: Is the fact of the prohibition of the transportation of an article entering into interstate commerce the prohibition of intrastate commerce? To prohibit an article from entering into interstate commerce does not prohibit the manufacture for sale in a State, does not prohibit a State from making any regulation in respect to it that the State desires to make, but only says it shall not enter interstate commerce. I am not contending that the Congress has a right, without reason or purpose, to say that a certain article should not enter into interstate commerce. On the other hand, I am not willing to admit with you that the Congress has not the right to prohibit articles from entering into interstate commerce, or that it is prohibited from laying down the conditions under which they shall enter it.

Mr. LIGHTFOOT. Do you think the Congress can prohibit any article that is not injurious to the public health or that does not endanger the public health or affect the general welfare from entering interstate commerce?

Mr. ANDERSON. I do not think it could go that far on the basis of the Supreme Court decision at hand.

Mr. LIGHTFOOT. Well, I do not understand that there is any power to prohibit any legal and lawful business. You only have the power to regulate. Now then, this section 25 says we shall not manufacture in commerce. What is meant by the words, "manufacture in commerce"? I do not understand. It seems to have been a mistaken idea that manufacture could be an element of interstate commerce. The only way I see that you could manufacture in commerce would be to set up a factory on a moving train that was going from one State to another and manufacture an article in the course of transit; the Supreme Court of our country has held that manufacture is not interstate commerce, that commerce begins when the article begins to move in commerce, and, therefore, the operation of manufacture is not a part of commerce. Under our system of manufacture I do not see how any goods can be manufactured in com

merce.

Now then, all right. But to admit that they could, and that you are undertaking to exercise this power, we are prohibited from the manufacture of these lines under this section. And I say you can not prohibit us from manufacturing these lines for our intrastate business. If your power extended to prohibition against manufacture you might prohibit us from manufacturing and shipping into another State any goods under the guise of regulating interstate

commerce.

Mr. ANDERSON. Supposing the manufacture or sale or the transportation of an article in commerce and while I say manufacture in commerce that perhaps is not the term I ought to use, and so let us say sale in commerce, or the acquiring of property for manufacture, let us say that was the result of a conspiracy or intention or purpose on the part of the persons acquiring the property or making the sale to lessen competition or to restrain trade-in that case would you still say there is no power in Congress to prohibit it?

Mr. LIGHTFOOT. You would not be able to prohibit manufacture in my opinion. You can say to me: You can not ship that stuff in interstate commerce after you have made it, if it is in violation of the Sherman Act we will say. You might prohibit me from transporting it in commerce but you certainly could not prohibit me from manufacturing it. That is, the Federal Government could not. A State government might be able to come in and apply its power and regulate that matter.

Mr. ANDERSON. The question is, if your contention is correct, how far we can go in prohibiting contracts or arrangements or agreements which have the effect of lessening competition in commerce or restraining trade in commerce through prohibiting an article which is the subject of such contract or arrangement to enter interstate

commerce.

Mr. LIGHTFOOT. Well, I think that is a very serious question, as to whether you could prohibit it at all. I think you could punish the man who shipped it, or you could regulate it and put as many re

strictions around it as possible just short of prohibiting its movement in commerce; and you might make it so troublesome or unprofitable, or do many other things that would discourage transportation. But whether you have the power to prohibit at all the transportation of goods between the States is a very serious question. And the very reason or the purpose in the Federal Constitution of the power to regulate that matter was to prohibit the States from placing embargoes upon the movement of commodities from one State to another.

It was concurred in at the beginning of our country in the establishment of the Federal Government, with the idea that some States might enact laws that would restrict the free movement of commerce between the States; might levy duties against it or place embargoes or something else, and therefore the States came together and delegated this power to the Federal Government to regulate. but not to prohibit and not to destroy.

That is exactly what this section 25 does. So far as the packing companies are concerned it destroys and prohibits the entities from engaging in that kind of business and transporting their products between the States. I think that is clearly beyond the power of the Congress to enact any such law.

Mr. WILSON. Does it not also prohibit the purchase as well as the manufacture?

Mr. LIGHTFOOT. Yes, sir; not only the purchase but the storage and sale. And that is beyond the power of the Congress. But if it was not my contention is, if it were even within your power to do it, that it is too far-reaching and dangerous a power to vest in any commission or group of men-the power to make rules and regulations and leave to their discretion as to how far one should be permitted to go in handling commodities of this kind. It is a power that could be subjected to the greatest abuses and could be used virtually to destroy any of these concerns.

Mr. VOIGT. What do you think of this proposition: Suppose that this bill provided that the proposed commission should have the power to make rules and regulations prescribing the manner in which side lines handled by the packers could be packed and distinguished in interstate commerce? What I mean is this: Here is a packer who is also selling groceries or cheese, and this commission is given power by this law to provide that when the packer sells cheese, groceries, or butter he must wrap that product and put certain distinguishing marks on it so as to show that the seller of that butter or cheese or groceries, or the shipper in interstate commerce is also engaged in the packing business.

Mr. LIGHTFOOT. Well, I do not believe that that would be within the power of the Congress, because that is an element in the matter of manufacture. You see transportation has not started at that time. You are preparing your product in the factory then, and you

see

Mr. VOIGT (interposing). No; I do not mean that those peculiar marks should be attached in the manufacture but should be attached to the product while in interstate commerce.

Mr. LIGHTFOOT. You mean after they take it to the depot to ship it and tender it to the transportation company that they would have to stamp on that package the name of the owner?

Mr. VOIGT. Well, that it could not be shipped in interstate commerce unless identified by the package itself as being shipped by the man who was also a packer.

Mr. LIGHTFOOT. Well, I do not think that is in the power of the Congress because that would not be regulation; that would be prohibition. You would be saying to me: You can not ship it at all unless you put a certain stamp on the package. Well, now, the act of stamping or designating that article is not a part of transportation. I do not think that you could prohibit it at all. But you could probably put some penalty on it or regulate it in some way that would achieve the same end by making it to their interest so that they might do that.

Mr. MCLAUGHLIN of Michigan. I had not thought that the Congress would provide that it should be done in the manufacture of these commodities, but I have thought that the Congress by law could forbid these things entering commerce unless marked so-and-so or shipped in such-and-such packages.

Mr. LIGHTFOOT. It may be that the Congress would have certain powers to make rules governing these matters. For instance, if it was essential to the public health or to the public welfare in any way that some distinguishing mark should be placed upon a package to identify its contents or to show the elements contained in it for the protection of the public health or the general welfare, that the Congress could make any reasonable rules and regulations to that extent. But merely to say that you can not ship in commerce cheese unless it has the owner's name on the outside of the package, why, I have not thought that the Congress could prohibit it from being shipped in commerce, or to go that far in its attempt to regulate.

Mr. MCLAUGHLIN of Michigan. I think you can go a long ways in the matter of telling how stuff can enter interstate commerce. Mr. LIGHTFOOT. But I do not see any objection to any rule of that kind.

Mr. MCLAUGHLIN of Michigan. I see there is force in what you say, that there is a limit to the power of the Government. Perhaps the Congress has not the power to say how goods shall be manufactured, has no power at all over manufacture, yet after it is manufactured and seeks the domain of interstate commerce the authority of the Congress attaches right there if it has the authority to regulate what may or may not be done with it.

Mr. LIGHTFOOT. Well, I think there is some power there, and those powers have been stretched from the very beginning of the adoption of that provision in the Constitution. I think about where the line in the rule is whether or not this regulation prohibits interstate

commerce.

Mr. MCLAUGHLIN of Michigan. To prohibit the transportation of a commodity unless so and so is done.

Mr. LIGHTFOOT. I could not imagine that they could go ahead and prescribe rules and regulations under that power; that if they could not apply that directly that they could accomplish indirectly what they could not do directly. That would be the situation if that is true. I am not prepared to say, as a curbstone opinion, whether or not Congress would have the right to prescribe the regulation that you suggest, Mr. Voigt, or whether they would not. It may be that you would be able to go that far and to say that one can not trans

port in interstate commerce any commodity unless it has the name of the owner on the package. The Congress might be able to do that. I could not say offhand here.

Mr. MCLAUGHLIN of Michigan. But that is a little beyond the matter you were particularly discussing.

Mr. LIGHTFOOT. Yes; it was.

Mr. MCLAUGHLIN of Michigan. You were discussing the question whether or not the Congress has the power to regulate or to prohibit or to have anything to do with the manufacture of the thing.

Mr. LIGHTFOOT. Yes, sir; and I do not think that it can prohibit us from selling a commodity in interstate commerce for the same reason, or the purchase of the commodity. The right to purchase is the right to contract, and that is guaranteed in the constitution: that is a right that is given to every individual by the constitutions of the States and also by the Constitution of the Nation. And to say that I can not go out and buy something, that I can not buy foodstuffs outside of the live-meat animals, I think would be transcending any power that the Congress has to regulate interstate commerce. And to say that I can not sell my stuff would be going beyond the powers of the Congress. You can say that we can not transport it maybe unless certain conditions have been complied with; you may pass rules and regulations, as has been suggested. that might prevent its moving from State to State; but I do not see how you could pass any law that would be valid that would prohibit me from selling it or from storing it.

That I think, gentlemen of the committee, covers pretty fully what I care to say at this time in connection with section 15. I would like to take up, the first thing after lunch, this section 12 of the Gronna bill, and section 7, which undertakes to delegate to the proposed commission powers to make rules and regulations having the force and effect of law in relation to contracts.

The CHAIRMAN. I would like to ask you a question right there: Do you contend that the provisions of this bill, if it is enacted into law, would give the proposed commission the power to fix prices on live stock?

Mr. LIGHTFOOT. Not directly; but I say it contains powers which could be exercised in coercing the packers into doing all they could to accomplish that end. They might have to do it in the protection of their business.

The CHAIRMAN. You mean in the end it amounts to the same thing, do you not?

Mr. LIGHTFOOT. Yes, sir. And that is what I meant by the statement in the very beginning of my remarks, and I am again calling it to your attention. I do not know whether it is in the minds of these people or not but at least it is susceptible of this construction. They first said out at San Francisco that they were not satisfied with the stockyards, how they were managed; that they were not satisfied with prices, that there ought to be a stabalization of prices. that the fluctuations in prices they could not understand. They said some of the feeders of cattle had lost money by reason of the fluctuations. The report of the convention was intended to call attention to that situation, and there was the covert suggestion in their report that there might be a congressional investigation. Reading between the lines, it would look like they thought the packers