[442] "The Bond and Share system, including American and Electric, possesses an undeniable interstate character which makes it properly subject, from the statutory standpoint, to the provisions of § 11 (b) (2). This vast system embraces utility properties in no fewer than 32 States, from New Jersey to Oregon and from Minnesota to Florida, as well as in 12 foreign countries. Bond and Share dominates and controls this system from its headquarters in New York City. * * * the proper control and functioning of such an extensive multi-state network of corporations necessitates continuous and substantial use of the mails and the instrumentalities of interstate commerce. Only in that way can Bond and Share, or its subholding companies or service subsidiary, market and distribute securities, control and influence the various operating companies, negotiate inter-system loans, acquire or exchange property, perform service contracts, or reap the benefits of stock ownership. * * * Moreover, many of the operating companies on the lower echelon sell and transmit electric energy or gas in interstate commerce to an extent that cannot be described as spasmodic or insignificant. * * * Congress, of course, has undoubted power under the commerce clause to impose relevant conditions and requirements on those who use the channels of interstate commerce so that those channels will not be conduits for promoting or perpetuating economic evils. * * * Thus to the extent that corporate business is transacted through such channels, affecting commerce in more States than one, Congress may act directly with respect to that business to protect what it conceives to be the national welfare. * * * It may compel changes in the voting rights and other privileges of stockholders. It may order the divestment or rearrangement of properties. It may order the reorganization or dissolution of corporations. In short, Congress is completely uninhibited by the commerce clause in selecting the means considered necessary for bringing about the desired conditions in the channels of interstate commerce. Any limitations are to be found in other sections of the Constitution. Gibbons v. Ogden, 9 Wheat. 1, 196." American Power & Light Co. v. S.E.C., 329 U.S. 90, 98-100 (1946).
[443] Appalachian Coals, Inc. v. United States, 288 U.S. 344, 372 (1933).
[444] 48 Stat. 195.
[445] 295 U.S. 495 (1935).
[446] Ibid. 548. See also Ibid. 546.
[447] In United States v. Sullivan, 332 U.S. 689 (1948), the Court interpreted the Federal Food, Drug, and Cosmetics Act of 1938 as applying to the sale by a retailer of drugs purchased from his wholesaler within the State nine months after their interstate shipment had been completed. The Court, speaking by Justice Black, cited United States v. Walsh, 331 U.S. 432 (1947); Wickard v. Filburn, 317 U.S. 111 (1942); United States v. Wrightwood Dairy Co., 315 U.S. 110 (1942); United States v. Darby, 312 U.S. 100 (1941). The last three of these cases are discussed below. See pp. [155], [159]. Justice Frankfurter dissented on the basis of Federal Trade Commission v. Bunte Bros., 312 U.S. 349 (1941). It is apparent that the Schechter case has been thoroughly repudiated so far as the distinction "direct" and "indirect" effects is concerned. See also McDermott v. Wisconsin, 228 U.S. 115 (1913), which preceded the Schechter decision by more than two decades.
The N.I.R.A., however, was found to have several other constitutional infirmities besides its disregard, as illustrated by the Live Poultry Code, of the "fundamental" distinction between "direct" and "indirect" effects, namely, the delegation of uncanalized legislative power; the absence of any administrative procedural safeguards; the absence of judicial review; and the dominant role played by private groups in the general scheme of regulation. These objections are dealt with elsewhere in this volume. Supra, pp. [75], [78], [80].
[448] 48 Stat 31 (1933).
[449] United States v. Butler, 297 U.S. 1, 63-64, 68 (1936).
[450] 49 Stat. 991.