The appellee refused to pay the penalty or comply with the Act’s requirements after he violated the Act that required wheat farmers to grow crops only to amounts established by Congress.
Congress has the power to regulate production of goods for commerce. Questions of the power of Congress are not to be decided by reference to any formula which would give controlling force to nomenclature such as “production” and “indirect” and foreclose consideration of the actual effects of the activity at issue.
Pursuant to the Agricultural Adjustment Act of 1938, there was established for the appellee’s 1941 crop a wheat acreage allotment of 11.1 acres and a normal yield of 20.1 bushels of wheat an acre. Though the appellee was given notice several times, he sowed 23 acres and harvested from his 11.9 acres of excess acreage 239 bushels, which constituted farm marketing excess subject to a penalty of 49 cents a bushel. The appellee had had not paid the penalty or complied with any required action. The Committee refused him a marketing card, necessary to protect a buyer from liability to the penalty and upon its protecting lien. The general purpose of the Act was to control the volume moving in interstate and foreign commerce to avoid surpluses and shortages and consequent abnormally low or high wheat prices and obstructions to commerce.
Does Congress have the power to require wheat farmers to grow crops only to amounts established by Congress and have him pay penalty for a failure?.
Yes, the Act did not violate the Constitution. The effect of consumption of home-grown wheat on interstate commerce is obvious due to the fact that it constitutes the most variable factor in the disappearance of the wheat crop. Because consumption of home-grown wheat indirectly affects the interstate commerce, Congress has the authority to establish the amount that each wheat farmer may produce.
The power to regulate commerce includes the power to regulate the prices at which goods in that commerce are dealt in and practice affecting such prices. The primary purpose of the Act was to increase the market price of wheat and to do so, limit the volume that could affect the market. A factor of such volume and variability as home-consumed wheat would have a substantial effect on price and market conditions. In markets, wheat overhangs the market and if induced by rising prices tends to flow into the market and check price increases. On the other hand, it wheat is never marketed, it supplies a need of the farmer who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat, thus, competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function like prohibitions or restrictions thereon. Therefore, Congress may properly have considered that wheat consumed at home would have a substantial effect in obstructing its purpose to stimulate trade at increased prices.