Other People's Money, and How the Bankers Use ItBrandeis, Louis Dembitz
History
Other People's Money, and How the Bankers Use It
Brandeis, Louis Dembitz
Banks and banking -- United States; Finance -- United States
The answer to both questions is clear. Congress has ample power to
impose such prohibitions upon practically all corporations, including
state banks, trust companies and life insurance companies; and evasion
may be made impossible. While Congress has not been granted power to
regulate _directly_ state banks, and trust or life insurance companies,
or railroad, public-service and industrial corporations, except in
respect to interstate commerce, it may do so _indirectly_ by virtue
either of its control of the mail privilege or through the taxing power.
Practically no business in the United States can be conducted without
use of the mails; and Congress may in its reasonable discretion
deny the use of the mail to any business which is conducted under
conditions deemed by Congress to be injurious to the public welfare.
Thus, Congress has no power directly to suppress lotteries; but it has
indirectly suppressed them by denying, under heavy penalty, the use
of the mail to lottery enterprises. Congress has no power to suppress
directly business frauds; but it is constantly doing so indirectly by
issuing fraud-orders denying the mail privilege. Congress has no direct
power to require a newspaper to publish a list of its proprietors and
the amount of its circulation, or to require it to mark paid-matter
distinctly as advertising: But it has thus regulated the press, by
denying the second-class mail privilege, to all publications which fail
to comply with the requirements prescribed.
* * * * *
The taxing power has been resorted to by Congress for like purposes:
Congress has no power to regulate the manufacture of matches, or
the use of oleomargarine; but it has suppressed the manufacture of
the “white phosphorous” match and has greatly lessened the use of
oleomargarine by imposing heavy taxes upon them. Congress has no power
to prohibit, or to regulate directly the issue of bank notes by state
banks, but it indirectly prohibited their issue by imposing a tax of
ten per cent. upon any bank note issued by a state bank.
The power of Congress over interstate commerce has been similarly
utilized. Congress cannot ordinarily provide compensation for accidents
to employees or undertake directly to suppress prostitution; but it
has, as an incident of regulating interstate commerce, enacted the
Railroad Employers’ Liability law and the White Slave Law; and it has
full power over the instrumentalities of commerce, like the telegraph
and the telephone.
Public-domain text, read in full here on John Shaqi.
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