United States v. Butler Case Brief

Why is the case important?

Butler, the Respondent (Respondent), seeks judgment that the Agricultural Adjustment Act of 1933 (the Act) is unconstitutional in its scope.

Facts of the case

In the 1933 Agricultural Adjustment Act, Congress implemented a processing tax on agricultural commodities, from which funds would be redistributed to farmers who promised to reduce their acreage. The Act intended to solve the crisis in agricultural commodity prices which was causing many farmers to go under. Authority to determine which crops would be affected was granted to the Secretary of Agriculture. He decided that one of the crops should be cotton, and Butler received a tax claim as a receivers of the Hoosal Mills Corp., a cotton processor.

Question

May Congress tax crop production in excess of preset limits?

Answer

No. Appeals court ruling reversed and remanded.
The taxing and spending power is broad – that is, not limited to the enumerated list of issues in Article I, Section: 8 of the United States Constitution (Constitution).
However, the tax in this case was levied to discourage production of crops beyond the limits set by the Act. This is beyond the powers delegated to the Federal Government. Specifically, the regulation of agriculture is, absent a nexus with interstate commerce, delegated to the states.

Conclusion

“The Court held that while the Act might have been within Congress’ power if it fell within the ambit of the term “”general welfare,”” the Court did not have to reach the question of the interpretation of that whether it did so because the Act was unconstitutional on other grounds. The Act was clearly designed to regulate agriculture by coercing a non-cooperating minority to a desired action with economic pressure. However, the power to regulate agriculture was not granted to Congress by the Constitution, but rather, was reserved to the States. The tax, the appropriation of the funds raised, and the direction for their disbursement, were possibly permissible means to an unconstitutional end. Thus, Congress had no power to enforce its commands on the farmer to the ends sought by the Act, and it could not indirectly accomplish those ends by taxing and spending to purchase compliance.”

  • Case Brief: 1936
  • Petitioner: United States
  • Respondent: William M. Butler et al., Receivers of Hoosac Mills Corp.
  • Decided by: Hughes Court

Citation: 297 US 1 (1936)
Argued: Dec 9 – 10, 1935
Decided: Jan 6, 1936