"If ye love wealth better than liberty, the tranquillity of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen." Samuel Adams, 1776.

The purpose of this chapter is to set forth briefly and as simply as possible the reasons for believing that a vital change in the relations of the Federal Government to local affairs has taken place since Roosevelt's presidency, and that this change is based chiefly upon the construction put upon the commerce clause of the Constitution. This is not based on theory, but an accomplished fact; not whether the Federal Government should regulate all local intrastate business, but the fact that, with the Supreme Court's acquiescence, it has done so.

In order to view this change in its proper perspective, we needed to review the historic background proceeding this change, which was the chief design of this book: First, the setting and the circumstances in which Roosevelt submitted his New Deal legislation, and the discussion which took place in attempting to validate these acts under the commerce clause and general welfare clauses of the Constitution; second, the meaning attributed to the commerce clause by the Supreme Court in the long period of years following the adoption of the Constitution; third, the Supreme Court's invalidation of Roosevelt's "New Deal" legislation; fourth, the violent controversy over Roosevelt's attempt to pack the Supreme Court; and finally, the surrender of the Supreme Court in 1937, by acquiescence and the Court's adoption of an expanded interpretation of the commerce clause in 1937.

This chapter explains how the sovereign people of this nation have traded their sovereignty for security and protection from the cradle to the grave, and how we have asked the Federal Government to regulate all our activities for our own protection. Ever since the Roosevelt presidency, federal regulatory acts have increased ten-fold. At the present time we find that our national government is now dictating to all businesses such matters as hours of labor, wages, prices, output of production, retirement pensions, environmental safety, and soon health care. These regulations increase daily.

It should now be well established in your mind, after reading the previous chapters of this work, that the Federal Government has only such powers as are expressly conferred upon it by the Constitution, and Congress has the express power to regulate interstate commerce; not only the power to regulate matters clearly interstate in character, but also the implied power to regulate matters otherwise of only local concern, if they affect or burden interstate commerce. So long as the Federal Government is acting within its proper sphere, however, it is supreme. Its activities cannot be limited or interfered with by the states. Accordingly:

"When Congress acts within the limits of its Congressional authority, it is not the province of the judicial branch of government to question its motives."Footnote1

The power of the states to regulate their purely internal affairs cannot be interfered with by the Congress unless this power has been surrendered to the Federal Government by the states. The maintenance of this balance is essential to the preservation of our dual system of government and is one of the safeguards of traditional American liberty. If the states and the people were to willingly acquiesce their sovereign power, there would soon be such an encroachment upon the reserved powers of the states and the people that this power would be entirely whittled away and we would awake to find ourselves to all intents and purposes wholly under a central government and impotent in local affairs. That this danger was foreseen by the framers of the Constitution, and that they deliberately sought to guard against it, is nowhere stated more forcefully than in the following passage from an opinion of the Supreme Court in a case in which it rejected the contention that there are legislative powers effecting the nation as a whole which belong to, although they are not expressed in, the grant of powers. In reiterating that the Federal Government is one of enumerated powers, and that this proposition, although clear from the Constitution itself, was reasserted by the Tenth Amendment, the Supreme Court declared:

"This Amendment, which was seemingly adopted with prescience of just such contention as the present, disclosed the widespread fear that the National Government might, under the pressure of a supposed general welfare, attempt to exercise powers which had not been granted. With equal determination the framers intended that no such assumption should ever find justification in the organic act, and that if in the future further powers seemed necessary they should be granted by the people in the manner they had provided for amending that act."Footnote2

It is probably conceded that the only basis upon which the extension of federal regulatory power can dictate over business activity is through the commerce clause of the Federal Constitution. If the subject matter sought to be regulated is not within the commerce clause, the national government has not satisfactorily explained its exercise of powers which are otherwise reserved to the states or to the people.

The possibilities of such an extension of the federal authority were never more graphically indicated than by Roosevelt's New Deal legislation, all of which were sought to be sustained as logical extensions of granted federal powers; and to reduce the states to mere administrative districts in a central government.

Roosevelt's principal argument to sustain these laws, was a plea that the national emergency and changed economic conditions which existed in the 1930's justified a wide extension of federal power. But initially the Supreme Court properly ruled that the limits of constitutional authority apply under all circumstances and conditions. If an act was unconstitutional, neither an emergency nor a widely-felt economic necessity can justify it.Footnote3

That an action by Congress is economically or otherwise highly desirable is immaterial in a condition of federal power. Thus in holding invalid the Railroad Retirement Act, an act having purposes similar to those of Title II of the Social Security Act, the Supreme Court said:

"though we should think the measure embodies a valuable social plan and be in entire sympathy with its purpose and intended results, if the provisions go beyond the boundaries of constitutional power we must so declare."Footnote4

Similarly, in holding invalid a tax, the purpose of which was to prevent the employment of child labor in manufacturing and mining industries, the Court said that it could not avoid this duty:

"even though it require us to refuse to give effect to legislation designed to promote the highest good."Footnote5

In invalidating the National Industrial Recovery Act codes by unanimous action, the Supreme Court held that neither the existence of a "national crisis" demanding "a broad and intensive cooperative effort by those engaged in trade and industry," nor the existence of a "serious economic situation" could justify federal action beyond the scope of its delegated powers.Footnote6

In order to sustain the various provisions of Roosevelt's New Deal legislation, it was therefore necessary to find an express or implied grant of federal power of which each of the provisions is an exercise.

The only power under which these acts could be sustained was under the power of Congress to regulate interstate commerce among the several States. If these acts could not be justified as an exercise under the commerce clause of the Constitution only an amendment to the Constitution by the people could validate these New Deal acts.

History records no such amendment to the Constitution during the 1930's, but today it seems that Congress can and does regulate private business activity in all of the states of the Union. A question therefore must be asked. Where did Congress get this power to regulate our working environment, our social environment and very soon our health environment? As Abraham Lincoln said:

"I have said, very many times that no man believed more than I in the principle of self-government; that it lies at the bottom of all my ideas of just government, from beginning to end. I believe each individual is naturally entitled to do as he pleases with himself and the fruit of his labor, so far as it in no wise interferes with any other's rights - that each community, as a State, has a right to do exactly as it pleases with all the concerns within that State that interfere with the rights of no other State, and that the general government, upon principle, has no right to interfere with anything other than that general class of things that does concern the whole."Footnote7

In the First Employers' Liability cases,Footnote8 the Supreme Court said:

"Though the power of Congress may be exercised as to the relation of master and servant in matters of interstate commerce, that power cannot be lawfully extended to include the regulation of master and servant as to things which are not interstate commerce."

In the First Employers' Liability case, the Supreme Court reaffirmed the principle, that, Congress has no authority to regulate the employer-employee (master-servant) relationship involved in intrastate commerce, being it is outside the scope of the authority of Congress. This was true in 1908 when this case was decided. It was true in the 1930's during the Roosevelt presidency. It is true today. Congress cannot impose any federal regulation upon the employer or employee, who's relationship is purely intrastate in nature. Congress for instance, could not compel the proprietor and employees of every corner grocery store and filling station to contribute to the payment of federal retirement plans, like those contained in the Social Security Act, nor could Congress mandate federal health care upon the employer or employees solely engaged in intrastate commerce. Nevertheless, Congress seems willing and able to force their will upon the people and mandate compliance to their regulations. How is this possible? Under what constitutional grant of power does Congress claim this authority? Why does it seem impossible to release ourselves from the bonds of Congress and their massive regulations?

The answer is simple. Congress is exercising their regulatory power under the presumption that you are engaged in interstate commerce and Congress has jurisdiction over not only the master and servant relation involving interstate commerce but in all activities of interstate commerce.

It is submitted, that Congress acquired this jurisdiction over you by way of a federal license. It is submitted that you acquired a federal license to engage in the privilege of interstate commerce, and this license is prima facie evidence of your willingness to engage in this privilege, which grants to Congress exclusive jurisdiction over all your business activities. "But I don't have a license to engage in interstate commerce," you may be saying. "I certainly would remember getting such a license," you exclaim. It is submitted that the social security account number is a license to engage in the privilege of interstate commerce!

In this chapter we will briefly examine this "great secret." A secret which has been hidden from the American people for over fifty years. We shall explain the various proposals developed by the Roosevelt administration and used by later administrations to bring you under the jurisdiction and control of Congress. Little is known of this "great secret." The vast majority of Congress I suppose are ignorant and not even aware of the connection between the social security number and its connection with the interstate commerce clause of the Constitution, but those who really are in control in this country, know this "great secret," use it to their advantage, and have tried for over fifty years to prevent this "great secret" from being exposed to the masses.

As explained in the book's introduction, its purpose is to open your eyes, to give you an idea of what is really going on in this country by looking at the past. You must have milk before your meat. Dulocracy in America, Volume II, brings you up to present day and explores in depth this "great secret" and how it has developed into more than a mere license to engage in privileged activity in interstate commerce. Volume II shows by clear and conclusive evidence how this federal license developed into a bigger system, a system where you pledge your future performance and the future performance of your children into a welfare scheme under a federal bankruptcy, whereby all you have and all you produce is pledged as surety for a non-existing national debt.

Let's now explain how this federal license to engage in interstate commerce evolved.

During the presidential campaign of 1936, one of the chief issues consisted of the enlarged demands upon Congress by the people for remedial legislation in times of economic stress. The state and federal courts found Roosevelt's New Deal legislation lacking of constitutional authority. Many opposed to this legislation warned that Roosevelt, through his advocacy and approval of such measures as the National Industrial Recovery Act, the Agricultural Adjustment Act, the Railroad Retirement Act, the Social Security Act and others, had undertaken to destroy the fundamental conception of the American government. After the Supreme Court invalidated several key New Deal laws as beyond the federal government's power to regulate intrastate commerce, the question was raised as to whether or not further amendment of the Constitution of the United States was necessary in order to carry through measures for the relief of labor and industry. The courts had declared during this period, Congress has power under the commerce clause of the Constitution to regulate all matters national and local affecting interstate commerce, but their authority ended when activities became intrastate in nature.

After the many decisions of the Supreme Court invalidating all the work Roosevelt had done, he demanded that this situation be worked out, that a substitute means for effecting the purpose of the New Deal legislation be found. Some of the proposals submitted, suggested an amendment to the Constitution empowering Congress to regulate hours and conditions of labor and to establish minimum wages in any employment, and to regulate production, industry, business, trade, and commerce both interstate and intrastate.

One such amendment submitted to Congress read as follows:

Section 1. The Congress shall have the power to regulate hours and conditions of labor and to establish minimum wages in any employment and to regulate production, industry, business, trade and commerce to prevent unfair methods and practices therein.

Section 2. The due process of law clauses of the Fifth and Fourteenth Amendments shall be construed to impose no limitations upon legislation by the Congress or by the several States with respect to any of the subjects referred to in Section 1, except as to the methods or procedure for the enforcement of such legislation.

Section 3. Nothing in these articles shall be construed to impair that regulatory power of the several States with respect to any of the subjects referred to in Section 1, except to the extent that the exercise of such power by a State is in conflict with legislation enacted by the Congress pursuant to this article.

This amendment was rejected by Roosevelt as being too time consuming, after all, Roosevelt had a schedule to keep. Any proposal Roosevelt demanded for centralized and coordinated control of all state industrial and commercial activities by Congress, had to be within the constitutional bounds set down by the Supreme Court, and such a program must involve state cooperation, and provide for voluntary participation by the individual citizens of the states. After a careful and thorough study, it was agreed that the foundation upon which any proposal would rest, would be with the power of Congress to regulate interstate commerce.

Soon several proposals were developed and submitted to Roosevelt which contained all his requirements. These proposals or plans called for the use of entirely new legal techniques and the establishment of new administrative agencies, or at least a drastic reorganization of present governmental agencies in conformity with the new legal requirements.

Under these proposals, it was decided that Roosevelt could accomplish his goal of centralized control of all business by adopting one or more of the following methods:

(1) A compulsory federal incorporation act.

(2) An act providing that each state shall have power to exclude from the privilege of doing an interstate business within its borders any state corporation which was not formed under an act embodying the uniform principles drafted and approved by the Interstate Commission.

(3) An act prohibiting the conduct of interstate commerce by corporations or "persons" except under federal license.

It was unanimously agreed by all involved in this "great secret" that in order to achieve the required results, any proposal if adopted would have to have the backing of the states in order for it to be effective, therefore all the proposals submitted to Roosevelt called for interstate compacts between the states with supplementary federal legislation relating to interstate commerce. To induce the states to accept and relinquish power to the Federal Government, the Federal Government would offer federal-in-aid grants to any state participating in this new "federalism."

In order to enter into these compacts and receive this federal money the states would be required to perform the following:

(1) The legislature of each state desiring to avail itself of the opportunity to join the compact (and receive these federal grants) would authorize the appointment of a commission to represent the state in a national Interstate Commission on Corporation Law. Each state would be required to adopt an Uniform Business Corporation Act.

(2) Congress would pass an act approving a compact and authorizing the appointment of a commission to represent the Federal Government and the territories and the District of Columbia in this Interstate Commission.

(3) The Interstate Commission would draft model statutory provisions covering:

(a) Those features which are essential for the adequate protection of the interest of investors and creditors.

(b) The admission and regulation of foreign corporation, and a more satisfactory definition of what constitutes "doing business."

(4) The compact would provide that each state ratifying it shall forthwith by enactment adopt the uniform provisions drafted and approved by the Interstate Commission, and that the appropriate administrative agencies of each state shall thereafter supervise and enforce the operation of these provisions.

Let's now examine several of the proposals submitted to Roosevelt.

In order to find the best method whereby Roosevelt could bring the states into conformity with the interstate commerce clause, he sought and got help from the National Conference of Commissioners on Uniform State Laws. He asked the Commissioners to enlarge the scope of their work and to consider model acts whereby the several States of the Union, through concerted action and with the approval of Congress, would attain some objectives which the Federal Government itself, under the limitations of the Constitution, could not have accomplished. For example, upon the question of laws relating to hours, conditions, and compensation of labor, it was proposed that a group of states, facing similar problems of supply and demand, could establish uniform laws that would have no application in other sections of the country. The Federal Government, limited as it was by the Constitution as declared by the Supreme Court in the Schechter case, the Butler case, and the other New Deal cases, was powerless to act in matters which strictly affect intrastate business and could not provide the legislation or regulations; but the several states affected by these conditions could provide the necessary legislation and by compact between themselves, with the approval of Congress, could mutually enforce such laws.

The Constitution in Article I, Section 10, paragraph 3, provides: "No state shall, without the Consent of Congress, ... enter into any Agreement or Compact with another State." Until 1935, advantage had not been taken of this provision permitting interstate compacts, except as a means of settling public disputes between states; for example, as a means of establishing boundaries, determining water rights, and providing for the building and maintenance of interstate bridges.

At its meeting held in Los Angeles in July, 1935, the National Conference of Commissioners on Uniform State Laws adopted the following resolution:

RESOLVED, that this Committee report to the Executive committee that in order to promote and expedite the use of the provision of the Constitution of the United States permitting negotiation of Compacts and Agreements among the states, and to further the adoption of Uniform State Legislation, the Committee on Compacts and Agreements be directed to draft a uniform act creating a State Commission on Interstate Cooperation for the negotiation of Compacts and Agreements among states, and for the consideration and adoption of Uniform State Legislation.

Another national organization, the American Legislators' Association, sponsored a similar movement and promoted the enactment of a model law for the creation of machinery leading to interstate cooperation. The following significant paragraphs are taken from the joint resolution adopted by the Ohio Legislature:

WHEREAS, There is constant confusion and there are frequent competitions and conflicts between the states of the union in their laws and their administrative practices concerning taxation, labor, commerce, agriculture, liquor traffic, motor vehicles, crime prevention, public welfare, and many other subjects of government with which this state is vitally concerned, and

WHEREAS, It is desirable for the people of this state that such disharmony and chaos shall not continue, but that the governments shall strive together in accordance with enlightened standards and mutually acceptable policies; and

WHEREAS, The necessity for official cooperation between the state governments is recognized by the compact provision in section 10 of article 1 of the constitution of the United States; and

WHEREAS, The president of the United States has recently declared that 'both the congress and the executive departments of the national government are constantly confronted with problems whose solutions require coordinated effort on the part of the states and of the federal government,' and that 'it is apparent to all students of government that there is urgent need for better machinery of cooperation between federal, state, and local governments in many fields'; and now, therefore be it Resolved, etc.Footnote9

This new undertaking on the part of the National Conference on Uniform State Laws was thought to furnish a new "out" in the controversy over whether measures for social and economic relief must be provided by the Federal Government or by the several States themselves by independent and unrelated legislative action. This new venture by state compacts meant the application of an old principle for a new purpose.

At the Forty-sixth Annual Conference of the National Conference of Commissioners on Uniform State Laws, held in Boston, August 17-22, 1936, the conference adopted an amendment to its constitution, recommended by the executive committee, whereby the objectives of the conference was enlarged to include model acts on "(a) subjects suitable for interstate compacts, and (b) subjects in which uniformity will make more effective the exercise of state powers and promote interstate cooperation." This amendment meant that in the future the National Conference on Uniform State Laws would consider model laws to become valid by interstate cooperation under the sanction and approval of Congress.

While working on this plan, the Commission on Uniform State Laws submitted a report to Roosevelt informing him that in their opinion Congress had the power to regulate the interstate and international commerce of state corporations, and there appeared to be no constitutional reason why Congress could not enact regulations applicable only to the commerce of corporation.

With the problem of state co-operation now solved, the next hurdle to deal with, was to find a way to get all corporations under the exclusive control and jurisdiction of Congress. The idea of a Federal Incorporation Act seemed like a workable solution to Roosevelt. The idea of a federal incorporation act for companies engaged in interstate commerce was not new and the Roosevelt administration reasoned it was well established that Congress had the authority to organize corporations as a means of exercising any of the functions conferred upon it by the Constitution, and may grant them such powers as may be appropriate for that purpose. This Federal Incorporation Act proposal would depend upon the extent of the proposed regulation and whether the purpose of the legislation was to regulate interstate commerce itself, or merely to regulate the corporate units which engage in that commerce. There was little doubt in Roosevelt's mind that Congress could authorize the incorporation of privately owned companies for the purpose of engaging in interstate and foreign commerce. It must be remembered that a corporation is a creature of the state, whereas the individual is the creator of the state. In considering the constitutionality of the government's regulation of corporations, it was concluded at the outset that in dealing with corporations the government was managing its own creatures.

Although federal incorporation was mentioned by Hamilton as early as 1791,Footnote10 it was not until the period between 1904 and 1920 that the measure received serious attention. During this period a federal incorporation act was advocated by President Taft, and was discussed by Presidents Theodore Roosevelt and Woodrow Wilson.

In 1904 a plan was suggested of regulating state corporations engaged in interstate or international commerce by prohibiting them from engaging in such commerce, except upon obtaining from some government official a license to be issued only upon compliance with prescribed regulations with respect to the issue of their stocks and bonds, the conduct of their business and the management of their internal affairs. Against the constitutionality of such legislation it was argued that (1) the right of corporations, as well as of partnerships and individuals, to engage in interstate and international commerce is not derived from the national government and does not exist merely by grace or license of that government; (2) the Constitution does not confer upon Congress power to prohibit interstate or international commerce, but only confers power to regulate it; that the power of regulation extends only to acts done in carrying on commerce and to matters connected directly with the transaction of commerce; (3) the organization, powers, and internal affairs of trading corporations are not directly connected with the transaction of commerce, but bears only a remote relation thereto.

Strong arguments, however where advanced in support of the constitutionality of such legislation. No state can confer a legal right or franchise to act in a corporate capacity in other states, and Congress alone is vested by the Constitution with the power to legislate for the regulation of interstate and international commerce, and may be of such a character as to render the commercial operations of the corporation a menace to the security and welfare of the people of all the states. Furthermore, if interstate and international commerce cannot be carried on in an orderly manner and with safety to the public by a multitude of corporations organized under the diverse and varying legislation of different states and subjects in each state to special regulations and restrictions, it seemed justifiable (to those promoting this theory), under the power to regulate interstate and international commerce, to require all corporations engaging in such commerce to comply with any appropriate regulations for the protection of the public and also to confer upon all corporations complying with the prescribed regulations a legal right or franchise to carry on their interstate and international commerce throughout the United States, free from restrictions imposed by the several States.

On January 7, 1910, President William Taft gave an address wherein he supported the idea of creating a federal incorporation law. In this address President Taft states:

"I therefore recommend the enactment by Congress of a general law providing for the formation of corporations to engage in trade and commerce among the States and with foreign nations, protecting them from undue interference by the States and regulating their activities, so as to prevent the recurrence, under national auspices, of those abuses which have arisen under state control. Such a law should provide for the issue of stock of such corporations to an amount equal only to the cash paid in on the stock; and if the stock be issued for property, than at a fair valuation, ascertained under approval and supervision of federal authority after a full and complete disclosure of all the facts pertaining to the value of such property and the interest therein of the persons to whom it is proposed to issue stock in payment of such property. It should subject the real and personal property only of such corporations to the same taxation as is imposed by the States within which it may be situated upon other similar property located therein, and it should require such corporations to file full and complete reports of their operations with the Department of Commerce and Labor at regular intervals. Corporations organized under this act should be prohibited from acquiring and holding stock in other corporations (except for special reasons upon approval by the proper federal authority).

"There are those who doubt the constitutionality of such federal incorporation. The regulation of interstate and foreign commerce is certainly conferred in the fullest measure upon Congress, and if for the purpose of securing in the most thorough manner that kind of regulation Congress shall insist that it may provide and authorize certain agencies to carry on that commerce, it would seem to be within its power. This has been distinctly affirmed with respect to railroad companies doing an interstate business and interstate bridges. The power of incorporation has been exercised by Congress and upheld by the Supreme Court in this regard. Why, then, with respect to any other form of interstate commerce, like the sale of goods across state boundaries and into foreign commerce, may the same power not be asserted? Indeed, it is the very fact that they carry on interstate commerce that makes these great industrial concerns subject to federal prosecution and control.

"Even those who are willing to concede that the Supreme Court may sustain such federal incorporation are inclined to oppose it on the ground of its tendency to the enlargement of the federal power at the expense of the power of the States. It is as sufficient answer to this argument to say that no other method can be suggested which offers federal protection on the one hand and close federal supervision on the other of those great organizations that are in fact federal because they are as wide as the country and are entirely unlimited in their business by state lines. Nor is the centralization of federal power under this act likely to be excessive. Only the largest corporation would avail themselves of such a law, because the burden of complete federal supervision and control that must certainly be imposed to accomplish the purpose of the incorporation would not be accepted by the ordinary business concern.

"A federal compulsory license tax, urged as a substitute for a federal incorporation law, is unnecessary except to reach that kind of corporation which, by virtue of the considerations already advanced, will take advantage voluntarily of an incorporation law, while the other state corporations doing an interstate business do not need the supervision or the regulation of a federal license and would only be unnecessarily burdened thereby."

The proposal for federal incorporation never became law. After 1920 public interest in federal incorporation apparently waned. However, on August 5, 1935, Senator O'Mahoney resurrected the idea of federal incorporation by introducing Senate Bill 10, which provided for federal incorporation of all corporations engaged in interstate commerce.

One obviously important purpose of the bill was to facilitate wages and hours regulations by enlarging the scope of collective bargaining. Additional teeth was put into the National Labor Relations Act by requiring licensees to comply with the provisions of that act.

Under the federal incorporation bill submitted by O'Mahoney, a corporation was required to have its chief place of business in the state of its incorporation. A corporation would have no power to hold the stock of any other corporation, unless it had such power on the date of the enactment of this act and unless the latter corporation is a subsidiary of the former. A corporation would have no power outside its own state which it does not have within it. A corporation must make a full accounting to its subsidiary annually, and vice versa. A corporation would have nonvoting stock. A corporation holding stock cannot vote it, but stockholders of the corporation may vote their pro rata share. Officers and directors of a corporation must own stock in the corporation.

Every officer and director of a corporation subject to the act would be a trustee of the stockholders of such corporation. Each officer or director would be liable in damages for any money or property that may be paid to a corporation in which he may be a director or officer, or in which he may own more than five pre centum of the corporate stock or other securities. Such officer or director would take no profit other than his salary, nor would he take any bonus except by vote of the stockholders.

The O'Mahoney federal incorporation act was not compulsory, but could be taken advantage of, if at all, by voluntary action.

In order to convince corporations to voluntarily accept some form of federal incorporation or licensing requirement, it was advanced by the National Conference of Commissioners that Congress could enact a law empowering the states to exclude from the privilege of doing an interstate business any state corporation which had not been formed under a federal incorporation act and the uniformed principles drafted and approved by the Interstate Commission. The Commission reported to Roosevelt that such an act would be valid.

That Congress has power to enact such a statute seems to be indicated by the Supreme Court's decision in Clark Distilling Co. v. Western Maryland Ry.Footnote11 The facts in this case were: West Virginia had passed an act which, among other things, prohibited carriers from bringing into the state intoxicating liquors intended for personal use, and prohibited the receipt and possession of such liquors when so introduced for personal use. Shortly afterwards, Congress passed the Webb-Kenyon Act, which was entitled: "An Act divesting intoxicating liquors of their interstate character in certain cases." It prohibited the shipment or transportation of intoxicating liquors from one state to another when such liquors were intended to be received, possessed, sold, or in any manner used in violation of any law of the latter state.

Chief Justice White, in writing the opinion of the Supreme Court, said that:

"The sole claim is that the act was not within the power given to Congress to regulate because it submitted liquors to the control to the States by subjecting interstate commerce in such liquors to present and future state prohibitions, and hence, in the nature of things, was wanting in uniformity."

Answering this claim, he said:

"The argument as to delegation to the States rests upon a mere misconception. It is true the regulation which the Webb-Kenyon Act contains permits state prohibitions to apply to movements of liquor from one State into another, but the will which causes the prohibitions to be applicable is that of Congress, since the application of state prohibitions would cease the instant the Act of Congress ceased to apply. So far as uniformity is concerned, there is no question that the act uniformly applies to the conditions which call its provisions into play - that its provisions apply to all the States, - so that the question really is a complaint as to the want of uniform existence of things to which the act applies and not to an absence of uniformity in the act itself. But aside from this it is obvious that the argument seeks to engraft upon the Constitution a restriction not found in it, that is, that the power to regulate conferred upon Congress obtains subject to the requirement that regulations enacted shall be uniform throughout the United States."Footnote12

There was one serious drawback with this proposal. The Commission determined this legislation, if adopted into law, could be attacked by individuals who would contend that their right of engaging in private commerce was unconstitutionally restricted. It was finally decided by those involved in this "great secret," that since Congress has exclusive power to control interstate commerce, it has power to compel "persons" desiring to engage in privileged activities to incorporate under a federal statute.

To make a licensing or incorporation plan workable, it was decided Roosevelt would take directly to the people, his appeal to centralize all power, in order to help relieve the pain and suffering the people were feeling from the stress of economic and social disturbances. After all, Roosevelt could feel their pain.

Once a sufficient amount of the citizenry voluntarily availed themselves of this new federal incorporation or licensing plan, the law of contracts and the doctrine of estoppel could then be utilized thereby, forcing the citizenry to comply with all the regulations promulgated by Congress pursuant to the statute. For legal precedent, Roosevelt would relied on Guardian Trust Co. v. Fisher.Footnote13 In the Guardian Trust case the Supreme Court stated:

"An individual may be under no obligation to do a particulate thing, and his failure to act creates no liability, but if he voluntarily attempts to act and do the particular thing he comes under an implied obligation in respect to the manner in which he does it."

Once the individual accepts to act a certain way, he is under an implied obligation or contract to act. It is important that he must voluntarily accept to act. Did you voluntarily accept a social security card? After all you went to the field office and voluntarily applied for one, or did your parents fill out the SS-5 application for you?

"The Social Security Act is unconstitutional," you might be saying. "I'll claim that the Act is unconstitutional." Under the Ashwander Doctrine you would be estopped from addressing this argument in a cause of action. The principle of the Ashwander DoctrineFootnote14 states:

"one who accepts the benefit of a statute cannot be heard to question its constitutionality. Great Falls Manufacturing Co. v. Attorney General, 124 U.S. 581; Wall v. Parrot Silver & Copper Co., 244 U.S. 407; St. Louis Casting Co. v. Prendergast Construction Co., 260 U.S. 469."

The acceptance of the benefit, in your case social security, would estop you from bringing a constitutional issue before the court concerning the Social Security Act or its amendments. "But I have yet to receive any benefits from social security," you're probably saying. Sorry, under the act, the social security account number is the benefit. This is stated in Jones v. Bowen.Footnote15 In this case the court said:

"a social security number, or corresponding card, constitutes a benefit created by statute (42 USCS 405(c)(2)(D), ..."

We thus see that the individual could voluntarily accept to place himself under the jurisdictional umbrella of Congress by accepting a federal license to engage in the privilege of interstate commerce and by such a voluntary act, he would be barred under the doctrine of estoppel from bringing a constitutional issue before the Court on any issue where this number or "license" is attached or claimed. Could this be the reason, you are always being asked for your social security number? After all, according to Department of Health and Human Services publications, the number was not intended to be used as a Standard Universal Identifier (SUI).

Those involved in this "great secret" found this proposal the most satisfactory method of achieving Roosevelt's desire for complete control over all business activities. This proposal for a federal license would be more orthodox than the proposal to permit states to exclude from the privilege of doing interstate business those corporations formed in non-conforming states. A federal licensing act would also be more effective than the other proposals, for the reluctance of some states to join a compact would be overcome by the realization that corporations formed under their laws could not secure a federal license to engage in interstate commerce in any state. It would be more satisfactory than a compulsory federal incorporation, for, by leaving incorporation to the states, it should tend to produce a greater degree of uniformity, first, by eliminating the possible divergence between the federal act and the various state corporation acts, and second, by offering the states the incentive to join the compact in order to retain the business of incorporating companies to engage in interstate commerce.

It was not intended that the proposal would include a requirement that every business "unit" must incorporate in order to obtain a federal license to engage in interstate commerce, but only that those businesses which are incorporated must show the satisfactory condition of the law under which they were incorporated before they can obtain a federal license. The proposal included a recommendation that even individuals must secure a federal license to engage in privileged activity or receive some benefit associated with such activity under interstate commerce. Included under this federal licensing act would be a regulation requiring all licensees to furnish to a designated federal officer, commission or other federal agency, such reports, statements and information regarding their business and their financial condition, such as income derived from their privilege activity under interstate commerce, as that officer, commission or federal agency may require.

After careful planning by those involved in this "great secret" it was decided a federal licensing act, one involving natural individual "persons" and one for artificial corporate "persons" would provide Roosevelt with the necessary legal entanglements to fulfill his vision for a new socio-economic order and would bring the citizenry of the American union under the total control of Roosevelt's centralized government.Footnote16

Footnote1

Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 210 (1921).

Footnote2

Kansas v. Colorado, 206 U.S. 46, 90 (1907).

Footnote3

Schechter Poultry v. United States, 295 U.S. 495, 529, 549 (1935).

Footnote4

Railroad Retirement Board v. Alton R.R. Co., 295 U.S. 330, 346 (1935).

Footnote5

Bailey v. Drexel Furniture Co., 259 U.S. 20, 37 (1922).

Footnote6

Note 3, supra.

Footnote7

July 10, 1858.

Footnote8

Howard v. Illinois R.R. Co., 207 U.S. 463, 496. (1908).

Footnote9

Laws of 1935, Ohio, S.J. R. No. 52.

Footnote10

THE FEDERALIST, pg. 657. In arguing for the constitutionality of the act under which the First Bank of the United Stated was incorporated, Hamilton argued that the power existed in congress under the Commerce Clause to create trading corporations.

Footnote11

242 U.S. 311 (1917).

Footnote12

242 U.S. at 326-327.

Footnote13

200 U.S. 57 (1906).

Footnote14

Ashwander v. Tennessee Valley authority, 297 U.S. 288, 323 (1936).

Footnote15

692 F.Supp. 887 (1988).

Footnote16

The proposal which was finally adopted by Congress and utilized today by the federal government to regulate all business of the citizenry of the states is explained in Volume II of this work.