1. The national power to regulate the price of milk moving
interstate into a marketing area extends to such control over
intrastate transactions there as is necessary and appropriate to
make the regulation of the interstate commerce effective; it
includes authority to regulate the price of intrastate milk, the
sale of which, in competition with the interstate milk, affects
adversely the price structure and federal regulation of the latter.
P. 315 U. S.
2. The federal power to regulate intrastate transactions is not
limited to persons who are engaged also in interstate transactions.
P. 315 U. S.
3. Viewed in the light of its legislative history, § 8c(1) of
the Agricultural Marketing Agreement Act of June 3, 1937, which
authorizes the Secretary of Agriculture to issue marketing orders
fixing minimum prices to be paid to producers of milk, limiting the
regulation to such handling of the commodity as is in the current
of interstate or foreign commerce or as "directly affects" such
commerce, was intended, by a full exercise of the commerce power,
to confer upon the Secretary authority to regulate the handling of
milk produced and marketed intrastate, which by reason of its
competition with the handling of interstate milk so affects the
interstate commerce as substantially to interfere with its
regulation under the Act. P. 315 U. S.
4. Opinions of individual members of Congress on the meaning of
a bill, which conflict with committee reports concerning it and
explanations of it made on the floor by Committee members having it
in charge, are not persuasive of the Congressional purpose. P.
315 U. S.
123 F.2d 100 reversed.
Certiorari, 314 U.S. 605, to review the affirmance of a decree
dismissing a bill brought by the Government to enforce
Page 315 U. S. 111
an order of the Secretary of Agriculture, and granting an
injunction to the defendant against the execution of the order.
Page 315 U. S. 115
MR. CHIEF JUSTICE STONE delivered the opinion of the Court.
The principal questions for our decision are whether certain
price regulation by the Secretary of Agriculture of milk produced
and sold intrastate is authorized by the
Page 315 U. S. 116
provisions of the Agricultural Marketing Agreement Act of June
3, 1937, 50 Stat. 246, 7 U.S.C. § 608c, and is a permissible
regulation under the commerce clause of the Constitution.
Section 8c of the Act authorizes the Secretary of Agriculture to
issue marketing orders fixing minimum prices to be paid to
producers of milk and certain other commodities. Paragraph 1 of the
section provides that orders of the Secretary
"shall regulate, in the manner hereinafter in this section
provided, only such handling of such agricultural commodity, or
product thereof, as is in the current of interstate or foreign
commerce, or which directly burdens, obstructs, or affects,
interstate or foreign commerce in such commodity or product
The United States sought in the present suit a decree directing
respondent to comply with the Secretary's Order No. 41, of August
28, 1939, regulating the handling of milk in the "Chicago,
Illinois, marketing area." Respondent is a handler in that area of
milk which it purchases from producers in Illinois. The order,
which is of the type described in the opinion of this Court in
United States v. Rock Royal Cooperative, Inc.,
307 U. S. 533
307 U. S.
-555, is, by its terms, applicable to respondent and
purports to carry out the statutory scheme for regulating the price
of milk paid to producers, considered in the opinion in that case.
By the order, the Secretary found that all milk produced for sale
in the marketing area "is handled in the current of interstate
commerce, or so as directly to burden, obstruct, or affect
interstate commerce in milk or its products . . . ," and directed
that it apply to such "handling of milk" in the marketing area "as
is in the current of interstate commerce or which directly burdens,
obstructs, or affects interstate commerce."
The order, as provided by the statute, § 8c(5), classifies milk
according to its uses, and establishes a formula for determining
the minimum price to be paid to producers
Page 315 U. S. 117
for each class of milk. It prescribes the method of determining
the value of milk received from producers by each handler during
each month. It requires the payment of a uniform unit price to
producers, computed by dividing the total value of milk reported by
all handlers in the marketing area by the total quantity of such
milk, with deductions of certain amounts to provide a cash balance
in a "producer settlement fund." The handler is required to pay
producers the uniform price, subject to butterfat and location
differentials. But he is also required to pay into the settlement
fund, or permitted to withdraw from it, as the case may be, certain
amounts, depending on whether the total value of the milk used by
him is greater or less, respectively, than his total payments to
producers at the uniform price. The amounts withdrawn from the
settlement fund by handlers are required to be used to bring the
price received by certain producers up to the uniform price set in
the order where, because of the purpose for which the handler has
sold it, the value of their milk is less than the uniform price.
Handlers are required to make reports to the Administrator
containing information necessary for the execution of the order,
and to bear the expense of administering it.
Respondent's answer in the District Court sets up that its
business is entirely intrastate, and that, in consequence, the
statute does not, and under the commerce clause cannot,
constitutionally apply to it. The answer also sets up additional
grounds, which need not now be considered, for respondent's
contention that the order is invalid, and, by way of counterclaim,
prays that the United States and its officers and agents be
enjoined from enforcing the order. The court found that respondent
had not complied with the order; that, in the course of its
business, it purchases milk from producers within the Illinois,
processes the milk and sells it in the state "in competition with
the milk of other handlers in the area;" that
Page 315 U. S. 118
none of respondent's milk is physically intermingled with that
which has crossed state lines, and that, prior to the order, 60
percent of the milk sold in the marketing area was produced in
Illinois and 40 percent in neighboring states, and that, at the
time of the findings, "over 60 percent" was produced in Illinois.
The record shows that "approximately 40%" comes from without the
The court held that "the order was issued by the Secretary in
full compliance with the law. All conditions precedent to the
effectiveness of said order have occurred," but that the business
of the defendant
"was not in the current of interstate . . . commerce, and did
not directly burden, obstruct or affect interstate . . . commerce
in milk marketed within the Chicago, Illinois, marketing area."
It accordingly decreed that the complaint be dismissed, and
granted the injunction prayed by the counterclaim.
The Circuit Court of Appeals affirmed, 123 F.2d 100, 103, on the
sole ground that Congress is without authority under the commerce
clause to regulate intrastate transactions in milk which affect
interstate commerce through competition only. It recognized that
respondent's milk is sold in competition with other milk moving
interstate; that the "milk problem is a serious one, and
apparently, for the most effective control, requires unified
regulations," and that, if respondent is not subject to the present
"[it] may well be that the effective sanction of the order will
wither before the force of competition, the morale of the market
will disintegrate, and this attempted solution of the problem by
the National Government will fail."
But it concluded that there is a hiatus between the
constitutional power of state and nation which precludes any
solution of the problem by Congressional legislation.
We think there is no such hiatus. Congress plainly has power to
regulate the price of milk distributed through the medium of
interstate commerce, United States v. Rock Royal Cooperative,
and it possesses every power
Page 315 U. S. 119
needed to make that regulation effective. The commerce power is
not confined in its exercise to the regulation of commerce among
the states. It extends to those activities intrastate which so
affect interstate commerce, or the exertion of the power of
Congress over it, as to make regulation of them appropriate means
to the attainment of a legitimate end, the effective execution of
the granted power to regulate interstate commerce. See McCulloch
4 Wheat. 316, 17 U. S. 421
United States v. Ferger, 250 U. S. 199
Consolidated Edison Co. v. Labor Board, 305 U.
, 305 U. S. 221
United States v. Darby, 312 U. S. 100
312 U. S.
-119. The power of Congress over interstate commerce
is plenary and complete in itself, may be exercised to its utmost
extent, and acknowledges no limitations other than are prescribed
in the Constitution. Gibbons v.
9 Wheat. 1, 22 U. S. 196
follows that no form of state activity can constitutionally thwart
the regulatory power granted by the commerce clause to Congress.
Hence, the reach of that power extends to those intrastate
activities which in a substantial way interfere with or obstruct
the exercise of the granted power.
Familiar examples are the Congressional power over commodities
inextricably commingled, some of which are moving interstate and
some intrastate, see United States v. New York Central R.
Co., 272 U. S. 457
272 U. S. 464
the power to regulate safety appliances on railroad cars, whether
moving interstate or intrastate, Southern Ry. Co. v. United
States, 222 U. S. 20
power to control intrastate rates of a common carrier which affect
adversely federal regulation of the performance of its functions as
an interstate carrier, Shreveport Case, 234 U.
; Railroad Commission of Wisconsin v. Chicago,
B. & Q. R. Co., 257 U. S. 563
regulation by the Tobacco Inspection Act of tobacco produced
intrastate and destined to consumers within the state as well as
without, Currin v. Wallace, 306 U. S.
; the regulation of both interstate and intrastate
Page 315 U. S. 120
tobacco under the Agricultural Adjustment Act, Mulford v.
Smith, 307 U. S. 38
307 U. S. 47
cases collected and discussed in United States
v. Darby, 312 U. S. 100
312 U. S.
Competitive practices which are wholly intrastate may be reached
by the Sherman Act because of their injurious effect on interstate
commerce. Northern Securities Co. v. United States,
193 U. S. 197
Swift & Co. v. United States, 196 U.
; United States v. Patten, 226 U.
; Coronado Coal Co. v. United Mine
Workers, 268 U. S. 295
Local 167 v. United States, 291 U.
; Stevens Co. v. Foster & Kleiser
Co., 311 U. S. 255
too the marketing of a local product in competition with that of a
like commodity moving interstate may so interfere with interstate
commerce or its regulation as to afford a basis for Congressional
regulation of the intrastate activity. It is the effect upon the
interstate commerce or its regulation, regardless of the particular
form which the competition may take, which is the test of federal
power . Cf. Shreveport Case, supra; Railroad Commission of
Wisconsin v. Chicago, B. & Q. R. Co., supra; Labor Board v.
Jones & Laughlin Corp., 301 U. S. 1
301 U. S. 36
United States v. Darby, supra, 312 U. S.
As the court below recognized, and as seems not to be disputed,
the marketing of intrastate milk which competes with that shipped
interstate would tend seriously to break down price regulation of
the latter. Under the conditions prevailing in the milk industry,
as the record shows, the unregulated sale of the intrastate milk
tends to reduce the sales price received by handlers and the amount
which they in turn pay to producers. Study of the order which we
have summarized makes clear that the unregulated handler selling
fluid milk can pay producers substantially less than the minimum
price set in the order for milk of that class, and yet pay as much
as, or more than, the "uniform price" prescribed by the regulatory
scheme for all producers,
Page 315 U. S. 121
which is based upon the average price for the several classes of
milk combined. Such a handler would have an advantage over others
in the sale of the class of milk in which he principally deals, and
could force his competitors dealing in interstate milk to surrender
the market or seek to reduce prices to producers in order to retain
It is no answer to suggest, as does respondent, that the federal
power to regulate intrastate transactions is limited to those who
are engaged also in interstate commerce. The injury, and hence the
power, does not depend upon the fortuitous circumstance that the
particular person conducting the intrastate activities is, or is
not, also engaged in interstate commerce. See Chicago Board of
Trade v. Olsen, 262 U. S. 1
Stevens Co. v. Foster & Kleiser Co., supra.
It is the
effect upon interstate commerce or upon the exercise of the power
to regulate it, not the source of the injury, which is the
criterion of Congressional power. Second Employers' Liability
Cases, 223 U. S. 1
223 U. S. 51
conclude that the national power to regulate the price of milk
moving interstate into the Chicago, Illinois, marketing area
extends to such control over intrastate transactions there as is
necessary and appropriate to make the regulation of the interstate
commerce effective, and that it includes authority to make like
regulations for the marketing of intrastate milk whose sale and
competition with the interstate milk affects its price structure so
as, in turn, to affect adversely the Congressional regulation.
We turn to the question whether Congress has exercised that
authority by § 8c(1). Respondent argues that Congress, in enacting
it, did not intend to exercise its full power over commerce, and
that, read in the light of its legislative history, the section
does not authorize the regulation of competing intrastate milk. In
terms, the statute speaks of the handling of products "in the
current of interstate . . . commerce" or "which directly burdens,
obstructs, or affects
Page 315 U. S. 122
interstate . . . commerce." The argument is that the word
"directly" in the statute is restrictive, evidencing an intention
to exercise less than the full authority possessed by Congress, and
a purpose not to extend that authority to the regulation of local
products which affect the interstate commodities and their
regulation only by competing with them.
In support of this contention, respondent points to the
precursor of the present statute, the Agricultural Adjustment Act
of 1933, 48 Stat. 31, 35, as amended by 48 Stat. 528, which
contained provisions omitted from the present statute, specifically
authorizing certain regulation of products "in competition with"
those in interstate commerce. Section 8(2) of the 1933 Act, as
amended, authorized the Secretary to enter into marketing
agreements with those
"engaged in the handling of any agricultural commodity or
product thereof, in the current of or in competition with, or so as
to burden, obstruct, or in any way affect, interstate or foreign
And § 8(3) provided for the issuing of licenses to those
"in the handling, in the current of interstate or foreign
commerce, of any agricultural commodity or product thereof, or any
competing commodity or product thereof."
In the 1935 amendments to the Agricultural Adjustment Act, these
provisions were replaced by the phraseology which was taken over
without change into § 8c(1) of the Agricultural Marketing Agreement
Act of 1937, already quoted. Hence, it is to the legislative
history of the 1935 amendments that we must turn to ascertain the
significance of the phrase, "directly affects" interstate commerce,
which then appeared in the statute for the first time.
The bills providing for the 1935 amendments, as introduced,
eliminated the differences between § 8(2) and § 8(3) of the 1933
Act, as amended, and authorized the Secretary to issue licenses to
"engaged in the handling of any agricultural commodity or
product thereof, or any
Page 315 U. S. 123
competing commodity or product thereof, in the current of or in
competition with or so as to burden, obstruct, or in any way
affect, interstate or foreign commerce."
S.R.1807, H.R. 7713 and 8052, 74th Cong.1st Sess. In the reports
of the House and Senate Committees on Agriculture, it was pointed
out that, although "the full extent of the Federal power over
interstate commerce is intended to be vested in the Secretary," it
"not intended to authorize the licensing of persons handling
goods only in intrastate commerce except where such handling
burdens, obstructs, or affects interstate commerce."
S.Rep. No. 548, p. 6, H.Rep. No. 808, p. 5, H.Rep. No. 952, p.
5, 74th Cong., 1st Sess.
These bills were pending in Congress when Schechter Corp. v.
United States, 295 U. S. 495
decided on May 27, 1935. In consequence of that decision, a new
bill, H.R. 8492, was reported out which superseded the pending
bills and eventually became the Act of 1935. The new bill, in
terms, permitted the Secretary to regulate the handling of products
which "directly affects" interstate commerce. As the legislative
history demonstrates, this phraseology was deliberately chosen to
conform to that adopted in the opinion in the Schechter
case, as signifying the full reach of the commerce power, and with
the avowed purpose of conferring on the Secretary authority over
intrastate products to the full extent of that power. See
79 Cong.Rec. 9478 and S.Rep. No. 1011, p. 8, H.Rep. No. 1241, p. 8,
74th Cong., 1st Sess.
In the Schechter
case, the Court was concerned only
with the alleged infringements of the "Code of Fair Competition"
for the live poultry industry of the New York City metropolitan
area, which had been adopted under the provisions of § 3 of the
National Industrial Recovery Act of June 16, 1933, 48 Stat. 195,
196. The violations of the code charged were that wholesale
distributors who had purchased poultry in New York, most
Page 315 U. S. 124
of which came from without the state, and who were engaged in
slaughtering and reselling to retailers, had failed to maintain for
their employees wages and hours prescribed by the code, and had
failed to abandon "selective selling" to their customers in New
York which the code had prohibited.
The Court's opinion pointed out that the defendants were not
charged with injury to interstate commerce or interference with
persons engaged in that commerce, and that the acts charged had no
different relation to or effect upon interstate commerce than like
acts in any other local business which handle commodities brought
into the state. Schechter Corp. v. United States, supra,
295 U. S.
-546. It characterized their effect upon interstate
commerce as "indirect," and distinguished them from those acts and
transactions intrastate which, because they "directly affect"
interstate commerce, are within he Congressional regulatory power.
In explanation of this distinction and as examples of direct
effects which are within the commerce power, it referred to the
"fixing of rates for intrastate transportation which unjustly
discriminate against interstate commerce," citing the
Shreveport Case, supra,
and referred to intrastate
restraints upon competition injuriously affecting interstate
commerce condemned by the Sherman Act, citing Local 167 v.
United States, supra,
and other cases.
In adopting the change in the new bill giving to the Secretary
the authority to regulate the handling of products "directly
affecting" interstate commerce, and in deleting the phrase "in
competition with" interstate commerce, the House and Senate
Committees on Agriculture, after referring to the
"This phrase has been omitted from the proposed § 8c(1) of the
bill which deals with orders . . . because the proposed language
makes it clear that the full extent of the Federal power over
interstate and foreign commerce, and no more,
Page 315 U. S. 125
is intended to be vested in the Secretary of Agriculture in
connection with orders."
S.Rep. No. 1011, p. 9; H.Rep. No. 1241, p. 8, 74th
Cong., 1st Sess.
The same interpretation of the amendments was given by the
Committee representative charged with explaining them on the floor
of the Senate, who declared, 79 Cong.Rec. 11139,
"The position of the Committee in respect to these amendments is
that intrastate commerce may burden or affect interstate commerce,
and that consequently this is a constitutional enactment under the
decision of the Court in the Shreveport
The House debates also disclose general recognition that the
bill as amended was intended to be a full exercise of the federal
power over competing intrastate milk. 79 Cong.Rec. 9479-9480,
The opinions of some members of the Senate, [Footnote 1
] conflicting with the explicit
statements of the meaning of the statutory language made by the
Committee reports and members of the Committees on the floor of the
Senate and the House, are not to be taken as persuasive of the
Congressional purpose. Cf. United States v. Trans-Missouri
Freight Assn., 166 U. S. 290
166 U. S. 318
Moreover, other Senators, not members of the Committee on
Agriculture, accepted its views of the extent to which the federal
power was to be exerted by the proposed legislation. [Footnote 2
We think it clear that Congress, by the provisions of § 8c(1),
conferred upon the Secretary authority to regulate the handling of
intrastate products which, by reason of its competition with the
handling of the interstate milk, so affects that commerce as
substantially to interfere with its regulation by Congress, and
that the statute, so read, is a constitutional exercise of the
commerce power. Such was the view expressed in United States v.
Page 315 U. S. 126
Cooperative, Inc., supra,
307 U.S. at 307 U. S. 568
We adhere to that opinion now.
The judgment will be reversed, but, as errors assigned below
have not been passed on there or argued here, the cause will be
remanded to the Circuit Court of Appeals for further proceedings in
conformity with this opinion. The mandate will issue forthwith.
MR. JUSTICE ROBERTS took no part in the consideration or
decision of this case.
* Together with No. 783, Wrightwood Cairy Co. v. United
also on writ of certiorari, 314 U.S. 605, to the
Circuit Court of Appeals for the Seventh Circuit.
79 Cong.Rec. 11135-6.
79 Cong.Rec. 11134-9.