Mr. Justice Butler comes to the consideration of the equal-protection question and to the dismissal of Truax v. Raich that he adduces the consideration that "the quality and allegiance of those who own, occupy and use the farm lands within its borders are matters of highest importance and affect the safety and power of the state itself." We have already dealt with the inadequacy of this as a justification for the California discrimination in favor of nondeclarant eligible aliens. Its weakness in that connection has slight, if any, bearing upon the due-process complaint of the noneligible alien. If the alien is really a menace on the farm, it does not matter from a due process standpoint that California has refrained for the moment from dealing with all the menace that it might. Legislation is not wanting in due process of law merely because it is less general or less complete than it might be.

66

A tight technician might see added difficulties in the restraint on alien ownership of stock in corporations authorized to own agricultural land, which was sustained in Frick v. Webb. Are we not assured that the property of the corporation is wholly distinct from the property of the stockholder? Are we not frequently warned of the danger and the confusion which will result if we intrusively pierce the veil of the corporate entity? We are. Still the courts do it whenever they think it is a good thing to do. Jural prestidigitation finds this one of the easiest exemplifications of "Now you see it, now you don't." No logical difficulties disturb the performer of the feat. The manipulation is a simple exercise of judgment and of will. Nothing more was needed in the present case than Mr. Justice Butler's two assertions that "as the state has the power to . . . prohibit, it may adopt such measures as are reasonably appropriate and needful to render exercise of that power effective" and that "it may forbid indirect as well as direct ownership and control of agricultural land by ineligible aliens."68 With this there can be no legitimate quarrel. It would certainly be absurd to characterize alien landholding as a menace and then to find in the sheerest of technicalities an insuperable due-process objection to a statute which is essential if the menace is to be suppressed.

66 Supra, n. 2.

67 Frick v. Webb (1923) 263 U. S. 326, 333, quoted from Crane v. Campbell (1917) 245 U. S. 304, 307, 62 L. Ed. 304, 38 Sup. Ct. Rep. 98.

68 Frick v. Webb (1923) 263 U. S. 326, 334.

The more difficult due-process question was presented by the cropping-contract case of Webb v. O'Brien." Mr. Justice Butler treats it as follows:

"The term of the proposed contract, the measure of control and dominion over the land which is necessarily involved in the performance of such a contract, the cropper's right to have housing for himself and to have his employees live on the land, and his obligation to accept one-half the crops as his only return for tilling the land clearly distinguish the arrangement from one of mere employment. The case differs from Truax v. Raich, 239 U. S. 33. In that case, a statute of Arizona making it a criminal offense for an employer of more than five workers, regardless of kind or class of work or sex of workers, to employ less than eighty per cent. native born citizens of the United States was held to infringe the right, secured by the Fourteenth Amendment, of a resident alien to work in a common occupationcooking in a restaurant. The right to make and carry out cropper contracts such as that before us is not safeguarded to ineligible aliens by the Constitution. A denial of it does not deny the ordinary means of earning a livelihood or the right to work for a living. The practical result of such contract is that the cropper has use, control and benefit of land for agricultural purposes substantially similar to that granted to a lessee. Conceivably, by the use of such contracts, the population living on and cultivating the farmlands might come to be made up largely of ineligible aliens. The allegiance of the farmers to the State directly affects its strength and safety. Terrace v. Thompson, supra. We think it within the power of the state to deny to ineligible aliens the privilege so to use agricultural lands within its borders." 9970

With the difference to the alien between being excluded from one occupation and being excluded from all, we may be satisfied without further comment. The difference between the cropping contract and contracts of employment generally is equally manifest. The difference, like most differences, is one of degree; but it is one of considerable degree. The alien's constitutional position may be strong enough to save him from state-imposed starvation and still be weak enough to afford him no refuge from interdiction of certain forms of agricultural enterprise.

Distinctions, however, should be more than stated. They should be analyzed and justified. Mr. Justice Butler's declaratory diction

does not venture into these further enterprises. This "take-it-fromme" temper has more justification in opinions sustaining legislation than in opinions declaring statutes unconstitutional, but it still has something of an unsatisfactory flavor. We must wonder why the question of allegiance has anything to do with the case when those whose un-allegiance or perhaps dis-allegiance is voluntary are left without restraint and when those restrained from farming are left free for other pursuits. We must wonder what is the ineligible alien's peculiarly defective qualification for farming as compared with other occupations. Mr. Justice Butler gives no hint that ineligible aliens are such mal-adroit cultivators of the soil that they are likely to turn it into waste places and in consequence to become charges on public charity. In short, he tells us substantially nothing that can be dignified by the name of a reason. We get our only helpful pointers from the reference to the canons chosen by Congress in designating ineligible aliens and from the fact that the treatymaking power has put agriculural enterprise in a class by itself.

If the Supreme Court chooses to refuse to satisfy the curiosity of Californians, I may be pardoned for following its example. It would be ungracious for a visitor to suggest that a substantial justification for the particular picking on farming might be that the ineligible alien is competent rather than incompetent. No one unfamiliar with local conditions would be fitted to pass judgment on such a matter. Yet one who is curious about constitutional issues might well wish to speculate on the hypothetical question whether the police power of the state extends to excluding a class from some pursuit for the reason that in that particular calling they have shown themselves unusually efficient. Our anti-trust legislation has behind it the idea that there may be a menace in extreme effectiveness in individually successful methods of competitive enterprise. Much of our labor legislation proceeds upon a recognition that the economically strong must be curbed for the protection of the economically weak. Legislation against fraud restrains those with a type of superior endowment for the benefit of others who lack the acumen to perceive the wiles of the smart. A protective tariff seeks to bolster up the weak by putting barriers against the strong. Even in horse racing we put weights upon the fleet. An aversion to letting the devil take the hindmost is common in legislation as in life. This is often sought to be justified or rationalized by a profession that it springs from no mawkish sentimentality for the hindmost but from a conviction that the welfare of the hindmost is vital to

the welfare of us all. Hence our hypothetical constitutional question will find legislative and judicial precedents in favor of an affirmative answer. If such an answer be given, it is in turn a precedent for other legislation such as a minimum-wage law which has behind it a widely felt need that the general public welfare is served by protecting those with inferior bargaining power from the bargains which those with superior power might induce.

In so far as the restraint upon the alien is justifiable merely because of his alienage, these other considerations need not enter. Yet it seems that some genuine realistic menace should be found in the inhibited form of alien cultivation in order to justify the restraint upon citizens who lose the opportunity to contract as they desire. Freedom of contract has been so exalted in some recent Supreme Court opinions and is so often extolled as one of the inalienable and fundamental constitutional rights of American citizens that Messrs. Terrace, Porterfield, O'Brien and Frick may well be wondering why Mr. Justice Butler has given them no better reasons for the frustration of their hopes. Perhaps in their hearts they know, without being told. If perchance their self interest blinds them to a full realization, there may still be others who appreciate the significance and the weight of possible considerations underlying the recent Supreme Court judgments which failed to find expression in the opinions. These considerations are not a fine flowering of a secure constitutional concept of liberty of contract. The cases recognize that important social ends may sometimes be better served by restraint of contract than by liberty of contract. The land legislation before us is of the type often denounced as socialistic. It is restraint upon individuals for an assumed general good. So is practically all legislation. Perhaps a fuller realization of this in connection with legislation widely welcome may serve to shut off some of the loose talk about similar legislation less pleasing. It may thereby turn us from denunciatory shibboleths to a more careful and more practical analysis of the competing benefits and burdens and the contending merits and defects to be found in other legislation which comes before us for judgment.

School of Jurisprudence,

University of California.

Thomas Reed Powell.

T

The Defects in Mr. Justice Brandeis'
Theory of Prudent Investment
as a Rate Base

HERE have recently been many attacks on "Cost of Repro

duction" as a factor in rate making, but the attack that is of

the most compelling interest is contained in the concurring opinion delivered by Mr. Justice Brandeis in Southwestern Bell Telephone Company v. Public Service Commission of Missouri.1 If the Supreme Court ever changes the present law on the subject, the change will probably be largely due to his influence. That there is at least some possibility that the court will reverse itself may be surmised from the fact that Mr. Justice Holmes has already done so. In the case of San Diego Land and Town Company v. Jasper,2 he said, "It is no longer open to dispute that under the Constitution 'what the company is entitled to demand, . . . . is a fair return on the reasonable value of the property at the time it is being used for the public."" And in the principal case, he concurred in the following entirely opposite statement, to wit, "The thing devoted by the investor to the public use is not specific property, tangible and intangible, but capital embarked in the enterprise... The Constitution does not guarantee to the utility the opportunity to earn a return on the value of all items of property used by the utility, or any of them."

And he also broke away from an established principle when he concurred with another departure of Mr. Justice Brandeis, which was stated as follows, "That part of the rule of Smyth v. Ames which fixes the rate of return deemed fair, at the percentage customarily paid on similar investments at the time of the rate hearing, also exposes the investor and the public to danger of serious injustice,” with the conclusion that there should be adopted "the amount of the capital charge as the measure of the rate of return.” Dividends on stock and interest on bonds are treated alike by him.

1 (1923) 262 U. S. 276, 67 L. Ed. 619, 43 Sup. Ct. Rep. 544.

2 (1902) 189 U. S. 439, 442, 47 L. Ed. 892, 23 Sup. Ct. Rep. 571.

$ 262 U. S. 276, 290.

4262 U. S. 276, 304.

5262 U. S. 276, 306.