The Purpose and Powers of the Senate, Part LXXXI: A Judicial Diversion

            Having witnessed, as previously discussed, the growth of a slow but mounting tide of support within Congress over the course of the 1950s and 1960s in favor of civil rights reform, Mississippi Senator James Eastland and his fellow segregationists in Congress had ample reason to feel as though their customary influence was definitively on the wane. And so it made perfect sense for men like Eastland, J. Lister Hill, and Richard Russell to begin to cast about for any argument and every argument that had even the slightest chance of arresting the various legislative initiatives increasingly being sponsored by their more reform-minded colleagues. Such was doubtless the reason Eastland was willing to speak with such apparently willful obliviousness during his portions of the Senate debate cited herein. “It is no small matter [,]” he said in reference to Senator Holland’s proposed amendment, “when the framework of the U.S. Constitution is bent and torn to accommodate a transitory purpose, no matter how worthwhile the proponents of that purpose deem the goal they seek to achieve may be.” The implication of this claim, of course, was that the abolition of the poll tax was too “transitory” a purpose to justify amending the Constitution. Such matters, Eastland and his Southern cohorts asserted time and again, were best left to the states. Indeed, the Mississippian went on to say, the states were already in the process of abolishing the poll tax itself. “Legislation to abolish payment of a poll tax has been kicking around the Congress for the last 25 years,” he thus affirmed, “and during this period of congressional debate a number of States, through their own initiative, have proceeded by State action to repeal the poll tax requirement.” Would it not have been the better part of prudence, then – not to mention respect for the sovereignty of the states – to simply allow this process to take its course rather than go to the trouble of attempting the passage of a constitutional amendment?

If the history of the United States and its constitution are any indication at all, the answer to the question could not be otherwise than a flat “no.” It was most certainly the case that many key amendments to the Constitution had been deployed at various points in the history of the American republic in order to abolish or alter a practice or institution of profound social, legal, or political significance. The aforementioned 13^th Amendment and its abolition of slavery would seem to be the most prominent example, of course. But similarly significant were the 12^th Amendment’s reforms to the way the Electoral College functioned, the 17^th Amendment’s transformation of the Senate into a popularly elected body, the 19^th Amendment’s guarantee of female suffrage, and the 22^nd Amendment’s application of term limits to the office of President. As meaningful as the subjects of these various amendments had been to the political, social, and legal culture of the American republic at the time of their approval, however, certain other amendments had also been approved whose purposes were– to borrow a term from Eastland – arguably somewhat transitory. That is to say, unlike slavery or presidential term limits, certain of the amendments that had been duly approved and ratified by Congress and the states addressed issues which were of rather…subjective importance to the moral, institutional, and political health of the nation. Consider, by way of example, the aforementioned 16^th Amendment.

Approved by Congress in 1909 and ratified by the requisite number of states in 1913, the 16^th Amendment stated, quite simply, that, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” The members of the 61^st Congress had felt such an amendment to be necessary because the Supreme Court had struck down the most recent federal income tax legislation as unconstitutional by way of the Pollock v. Farmers' Loan & Trust Co. decision in 1895. Evidently, there were enough progressives among the Democrats and Republicans then seated in the House and the Senate who believed that tariffs were innately regressive to push past conservative resistance to the notion that those with the greatest wealth should also carry the greatest tax burden. But while the subsequent allocation of a federal income tax in 1913 certainly proved to be a significant event in the history of American political economy, the fact that there previously hadn’t been a national levy on incomes did not necessarily represent some manifest flaw or injustice that absolutely needed to be remedied if the United States was going to continue to function in line with its most essential principles and ideals. For one thing, there actually had been a federal income tax between 1861 and 1872. Intended to help finance the increasingly expansive military campaign undertaken by the Union during the American Civil War (1861-1865), the Revenue Acts of 1861 and 1862 and the succeeding Internal Revenue Act of 1864 established first a flat tax and then a progressive tax which cumulatively helped to raise multiple millions of dollars before being permitted to lapse in 1872. Considered a wartime measure first and foremost, these first forays into a federal levy on personal incomes were tolerated principally because those lawmakers who approved them and those citizens who were required to pay all understood that the nation’s future was at stake and that such measures were only temporary. And so, when its term of effectiveness expired, little more was said on the matter.

Little more, that is, until the early 1890s, when the pro-free-trade wing of the Democratic Party hit upon the idea of reviving the income tax as a means of offsetting the cost of lowering tariffs on foreign goods like iron ore, coal, lumber, and wool. The resulting Wilson-Gorman Tariff (1894), while a far cry from what its principal supporters hoped it would be – protectionists Democrats had laden it down with amendments – nevertheless did include a relatively modest 2% tax on incomes over $4,000. And while opposition to the reintroduction of a federal income tax for the first time in over twenty years met with fairly stiff opposition in the Senate, the resulting bill was ultimately approved by Congress. Whereupon, in an effort to comply with the terms of the same, the Farmers’ Loan & Trust Company informed its various shareholders that it intended to pay the applicable taxes on their behalf while also providing to the Department of Internal Revenue the names of all such persons as were liable for being taxed. One such individual by the name of Charles Pollock – who owned, all told, only ten shares in the Farmers’ Loan & Trust – objected to this measure, sued to prevent payment, had his case initially dismissed, and eventually appealed to the Supreme Court. The Court handed down its decision on April 8^th, 1895, the substance of which, as aforementioned, was that the income tax included in the terms of the Wilson-Gorman Tariff was, in fact, unconstitutional. As laid out by Chief Justice Melville Fuller (1833-1910) in the attending majority opinion, because taxes on incomes derived from personal property like real estate or capital stock directly affected the value of said property, such taxes were, in practice, direct rather than indirect. And because the Constitution held – see Article 1, Section 2 – that any and all direct taxes had to be apportioned according to population, the tax that had been levied under the terms of Wilson-Gorman was accordingly null and void.

The rest of the story is relatively straightforward. The Pollock decision was widely unpopular, the result of which was a slow but steady campaign on the part of populists and progressive in both parties to pass an amendment to the Constitution allowing all incomes to be taxed by the federal government without having to be apportioned by population. And in 1909, just such an amendment was approved by Congress, the ratification of which led directly to the passage of the Revenue Act of 1913 and the levying – for the third time – of a federal income tax in the United States. Income taxes have been a principal source of federal revenue ever since, though their exact application remains a subject of debate both between and within the nation’s dominant political parties. None of this should be taken to say, of course, that income taxes were indispensable or inevitable within the context of the American political economy. The United States did not have to levy a federal income tax in 1862, or 1895, or 1913. The members of Congress who ultimately approved of the relevant legislation in each case obviously believed that such a measure was important, or useful, or necessary, but it isn’t as though income taxes were – or are – an indisputable requirement of modern statehood. A number of countries – Monaco, Antigua, Kuwait, the Bahamas, etc. – still don’t collect taxes on incomes at all. Granted, the economies of these kinds of low-tax countries tend to be highly specialized around either the extraction and sale of a particularly valuable commodity or the cultivation of “tax haven” status, but these represent choices rather than inevitabilities. Successive generations of American lawmakers could have decided to increase federal revenues by means other than taxing individual incomes. The United States economy would surely not have developed as it did in reality if the result of such decisions was to reaffirm the validity of tariffs, to be sure, but this isn’t to say that the result would necessarily have been the wrong one. Things simply would have been…different.

Nor would it be accurate to say, having decided to pursue the levying of a federal income tax, that American lawmakers at the dawn of the 20^th century had to pursue a constitutional amendment. Granted, the precedent established by the Fuller Court in 1895 was ostensibly binding upon any and all actions that might have been taken by Congress in response. That is to say, unless Congress was willing to directly defy a Supreme Court ruling – the result of which, at least in the interim, would surely have been a constitutional crisis – the legislators serving therein would have had no choice but to abide by the aforementioned finding in Pollock. Supreme Court precedent, of course, is only precedential until it isn’t. The Court can overturn or invalidate its own rulings. In fact, Pollock v. Farmers' Loan & Trust Co. was itself one such instance. Fourteen years earlier, in Springer v. United States (1881), the Court had responded to a petition on the part of a Democratic Congressman from Illinois named William Springer (1836-1903) that the income tax imposed by the Internal Revenue Act of 1864 was unconstitutional by finding that the plaintiff was decidedly in error.

Springer’s contention was that since part of his income derived from the ownership of United States bonds, any levy upon said portion constituted direct rather than indirect taxation. And since direct taxation, according to the terms of the Constitution, could only be collected once apportioned among the states according to population, the Congressman avowed that he was not liable to pay under the terms of the 1864 act. As argued by Associate Justice Noah Haynes Swayne (1804-1884), however, this logic did not hold. His explanation was a lengthy one – delving, as it did, into the history and origins of the taxing power of Congress – but what it boiled down to was simple enough. According to the writings of James Madison (1751-1836) and Alexander Hamilton (1757-1804), two of the principal authors of the United States Constitution, direct taxes were only intended to apply to, “capitation or poll taxes, and taxes on lands and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate.” Since, as near as Swayne could tell, the tax in question was “not a tax on the "whole [...] personal estate" of the individual, but only on his income, gains, and profits during a year,” Springer’s argument was fundamentally without merit. Income taxes were indirect, regardless of the source of the income in question, the Internal Revenue Act of 1864 was constitutional, and Springer was liable to pay his share.

The fact that this seemingly binding precedent was overturned only fourteen years later by the Pollack ruling is, among other things, fairly revealing of how the United States Supreme Court actually functions. Consider, to begin with, the difference in composition between the group of justices that heard Springer and the group that heard Pollack. In 1881, Morrison Waite (1916-1888), a previously obscure Republican Party functionary, was serving as Chief Justice, which position he vacated only upon his death in 1888. Thereafter, until his own death in 1910, the Court was led by the aforementioned Melville Fuller. Among the Associate Justices that participated in the Springer case, three retired or died shortly thereafter – Nathan Clifford (1803-1881), Ward Hunt (1810-1886), and the aforementioned Justice Swayne – two died about a decade later – Joseph P. Bradley (1813-1892) and Samuel Freeman Miller (1816-1890) – and two were still serving on the Court – John Marshall Harlan (1833-1911) and Stephen Johnson Field (1816-1899). All of this is to say that, between 1881 and 1895, more than two-thirds of the Court had been altered while less than one third remained static, with the pivotal Chief Justice seat changing hands in 1888. Two-thirds on its own, of course, would have been a significant portion; more than enough to overrule the remaining justices who had voted in favor of the Springer ruling. And this is assuming that Field and Harlan would both adhere to their previous positions. In actual fact, Field did not, opting instead to join the majority in the Pollack case that declared a tax upon income derived from property to fall under the legal category of direct tax. This isn’t to say that Harlan was alone in his dissent, mind you. Associate Justices Edward Douglass White (1845-1921), Henry Billings Brown (1836-1913), and Howell E. Jackson (1832-1895) also declared themselves to be in opposition to the majority. But the intervening fourteen years had simply changed the Court too much to sustain a reaffirmation of the Springer finding.

The change in Chief Justice was arguably the most significant factor of all, however. Morrison Waite, while not necessarily possessed of any particular judicial philosophy, was at the very least well known for his ability to promote amity and cooperation among his fellow justices on the Court. If any particular jurisprudential personality were to be assigned to him, it would probably be that of someone who favored a fairly broad construction of federal regulatory power balanced with a fairly narrow reading of the rights and privileges of citizenship. Melville Fuller, on the other hand, was a laissez-faire capitalist who favored state power over federal power, corporate power over state power, and individual power overall. Indeed, he seemed to feel – if his various written opinions are any indication – that the Constitution existed primarily to protect the essential principle of private property. The significance of these differing philosophies is made clearest when one compares some of the assertions the two men made during their respective terms as the leading officer of the Court.

In his opinion in Munn v. Illinois (1876), for example – a case fundamentally having to do with government regulation of state commerce – Chief Justice Waite declared that while the social contract inherent to any written constitution, “does not confer power upon the whole people to control rights which are purely and exclusively private […] it does authorize the establishment of laws requiring each citizen to so conduct himself, and so use his own property, as not unnecessarily to injure another.” Accordingly, he then went on to say, “government regulates the conduct of its citizens one towards another, and the manner in which each shall use his own property, when such regulation becomes necessary for the public good.” To Waite’s thinking, it seemed, the essential purpose of government was to protect and promote the “public good” – by which term one can presumably take to mean the maximum benefit for the maximum number of people. In consequence, he held that it fell within the sphere of authority of government to regulate not only the behavior of individuals in an effort to further the public good, but also to determine how their individual property might best be used to that very same end.

Chief Justice Fuller, writing for the majority in the aforementioned Pollock v. Farmers' Loan & Trust Co., could not have disagreed more. Whereas his predecessor seemed to take a relatively broad view of the purpose of government and the significance of its various powers, Fuller was fixated upon a very narrow definition of personal property and the right of the individual to dispose of the same almost entirely unimpeded by external forces. To that end – and in the midst of a lengthy disquisition upon the difference between direct and indirect taxation and the manner in which the Constitution treated each of them – Fuller asserted that he could find no meaningful distinction between, “the products of the farm and the rents of real estate” and that class of objects “which includes the property from whence the income proceeds [.]” Indeed, he went on to declare, “We find it impossible to hold that a fundamental requisition deemed so important as to be enforced by two provisions, one affirmative and one negative, can be refined away by forced distinctions between that which gives value to property and the property itself.” A tax upon private property, therefore – be it real estate, or bonds, or other such objects of investment – was, to Fuller, fundamentally of the same substance as a tax upon incomes – in the form of rents or dividends – derived from said property. As the Chief Justice quoted the aforementioned Alexander Hamilton as having said, property was little more than a fiction if one could not benefit from its use. And, “In many cases […] the income or annuity is the property itself.”

Within the context of debates about both the validity and the utility of federal regulation of personal property, note the fundamental difference between how these two men approached the question at hand. What most concerned Waite was the aforementioned public good. There were times, he admitted, that the private interest was under no obligation to give way to the popular will. But at the same time, he held it equally to be true that private action and private property could reasonably be made subject to government regulation for the specific purpose of reducing harm to individuals or communities. In the case of Munn v. Illinois, this meant that he found it to be an acceptable use of state authority for the legislature of the Prairie State to establish price controls for the storage and transportation of agricultural goods. Private firms may have been deprived of potential income as a result of such policies, but Waite asserted that the benefit to the community at large of allowing farmers to bring their products to market at a reasonable rate outweighed any individual harm that might have been claimed by freighting and storage firms as a result. Fuller, by contrast, was far more interested in the specific definitions of direct and indirect taxes under the auspices of the Constitution and the nature of private property as it related to the same than any larger questions about the public good. To his thinking, it seemed, such considerations were quite beyond the remit of the federal courts. “We are not here concerned with the question whether an income tax be or be not desirable,” he wrote,

Nor whether such a tax would enable the government to diminish taxes on consumption and duties on imports, and to enter upon what may be believed to be a reform of its fiscal and commercial system. Questions of that character belong to the controversies of political parties, and cannot be settled by judicial decision.

What it did fall to the Court to determine, Fuller went on to say, was whether or not a tax upon incomes derived from property was a direct tax or an indirect tax. And if it was found to be the former, to declare it, “being unapportioned, in violation of the constitution [.]”

            Putting aside the somewhat awkward logic of Fuller’s declared position – his claim that the utility of income taxes was best determined by politicians while at the same time declaring a political decision to that end to be null and void, for example – the contrast between his approach to government regulation of private property and Chief Justice Waite’s is nevertheless quite illuminating. Waite seemed to believe that government was meant to play a fundamentally active role in the life of the nation, specifically for the purpose of ensuring that more citizens than not were able to live comfortable and productive lives. And if, at times, this required the restriction of certain private behaviors or the regulation of certain private resources, this was merely the price one paid to live in a society. Fuller, on the other hand, seemed to take it as a given that government should only ever concern itself with ensuring that the basic rules of a given society – having previously been set – were strictly adhered to. Specifically, he believed the right to private property to be wholly inviolate and accordingly regarded any state action that in any way devalued said property to be constitutionally insupportable. Precisely how and to what extent a tax upon the income derived from a piece of private property actually affected the innate value of said property, Fuller did not make a point of explaining. Presumably, he considered the otherwise untaxable nature of property-derived income to be a major contributor to the monetary value placed upon said asset by the marketplace at large. Knowing that this income could be taxed, potential buyers of the same would accordingly value it lower than might otherwise have been the case. In consequence, a person possessed of a piece of land previously worth, say, five thousand dollars, might be forced to sell for the much lower price of three thousand dollars once it became clear to an interested buyer that the accompanying income would be subject to federal taxation.

            Again, Chief Justice Fuller did not go into any such detail himself. The above only represents what one might reasonably surmise based on what little he did say on the matter in the cited opinion. Nevertheless, it would seem to represent a fairly plausible summary of what a jurist like Fuller believed deep down in his heart of judicial hearts. As far as he was concerned, one of the primary purposes of government – perhaps the primary purpose of government – was to protect the right of the individual to own private property and to enjoy the essential benefits thereof. Not only did this mean enforcing said ownership and punishing those who would act in violation thereof, but also refraining from any action that might negatively affect the value of privately-owned assets. But while this could not have been more divergent from the aforementioned views of Chief Justice Waite – someone who, it bears repeating, believed in the need for all involved parties to submit themselves to some degree to the needs of the public good – this did not necessarily mean that Melville Fuller was in error. Did he reverse a highly consequential Supreme Court ruling less than fifteen years after it was made? He most certainly did. Was he in error to do so? Well…yes and no. In hindsight – and certainly in the view of all those who supported the levying of a federal income tax at the time of the Pollock ruling in 1895 – Fuller had rather shortsightedly placed the narrow financial interests of property owners above the increasing need for the United States Government to expand its scope of action without unduly burdening those least able to contribute financially. But in doing so, Fuller hadn’t done anything more than what the Chief Justice of the Supreme Court always had done and always will do. That is, after having been appointed by a presumably sympathetic and supportive president – in this case, one Grover Cleveland (1837-1908) – and confirmed by the Senate, he proceeded to interpret federal statutes and the text of the Constitution alike through the particular lens of his own judicial philosophy. Some Chief Justices might have claimed to have done less, but few – if any – could be accused of doing much more.

            Such is the nature of the Supreme Court and its officers, of course. Once confirmed, every justice – and most notably, every Chief Justice – enjoys significant latitude to express and give substance to their personal understanding of American jurisprudence in general and the Constitution in particular through their contributions to oral arguments, their votes, and their written opinions. In theory, a Supreme Court Justice is entitled to do no more than render a determination upon what the law is and what it is not, whatever philosophy they might hold as to the purpose of the law notwithstanding. But in truth, every justice brings to every case placed before their attention the sum total of their beliefs, education, experiences, and predilections. They are not entitled to simply “make up” the law, of course. They cannot declare something to be true that has no basis whatsoever in statute law, case law, or the text of the Constitution. But the degree to which they can and do interpret the meaning of certain concepts, phrases, or even single words within the context of rendering a decision is, as aforementioned, quite substantial. The replacement of even a single justice can accordingly alter the character of the Court to no small extent, particularly if said justice represented a reliable “swing” vote or acted as the leader of an otherwise stable ideological faction therein. And the replacement of a Chief Justice can alter things even further. While the head of the federal judiciary is not entitled to a greater share of authority within conference – i.e., their vote weighs no more than that of a given Associate Justice – their institutional seniority grants them significant soft power that successive Chief Justices have utilized in order to shape the essential character of the Court during their respective tenures in office. By setting the agenda for the Court’s weekly meetings, for instance, the Chief Justice can exert a powerful influence over which cases are ultimately heard by the justices and which are denied. Likewise, being responsible for assigning authorship of the majority opinion whenever they find themself in the majority, the Chief Justice is able to determine how a given decision by the Court is both justified in legal terms and presented to the American public. As these determinations can in turn dramatically influence how a given precedent is subsequently interpreted and how the Court itself is publicly viewed, the Chief Justice can be said to hold unparalleled sway over how the Court’s various official actions impact American society as a whole.