Home » LAW » Bailey v. Drexel Furniture Co. 1922

Bailey v. Drexel Furniture Co. 1922


11 Comments

  1. Congress imposed child labor taxes which the USSC deemed to be beyond Congress’ ability because this was a regulation of business rather than a tax. It undermines State sovereignty and Congress’ intended duties. Taft stated that a tax is for government use while a penalty is to discourage certain behavior which is beyond the power of Congress.

  2. This is one of the cases where Congress was not allowed to freely pass taxes on something they wish. The court found that the power to regulate child labor laws like creating a tax on the employer was in the hands of the states. It is unfortunate to learn that Congress was trying to tax and gain money from child labor, instead of trying to fight against child labor.

  3. Drexel seems to be a sudden turnaround from Doremus and McCray, which causes me to think about whether the Court was simply sympathetic to big businesses using child labor (again) or whether they wanted Congress to be more specific in their taxing. After all, the tax in Drexel was fairly broad.

  4. Man, the Court really loves their child labor. This one hit home for me because I own Drexel furniture (passed down from my grandmother and refinished). I can’t tell if this is a function of who’s on the Court, or the broader American mentality at the time (that there’s nothing wrong with it, that it’s economically expedient, etc). Either way, cases like this make me worried about the trustworthiness of the Court as an institution.

  5. There is simply no reason to say taxing child labor to disincentivize it is unconstitutional but taxing dyed margarine to disincentivize it is constitutional. This is complete ideological incohrence. The only reason the Court ruled differently here is because they support child labor, while they didn’t support the margarine industry. They’re not interpreting the law consistently and fairly, it all depends on who is currently standing before them, and what a sad state of affairs that is.

  6. Congress was not allowed to fine companies employing under 14 year old children in this case. The court found that this should be up to states. Taft in this case seems to talk about congress not being allowed to tax things in order to prevent or try and limit them; child labor in this example. I think this just shows work to actually try and stop child labor from being harder to obtain by the court as it was a part of the economy sadly.

  7. Facts: Congress enacted the Revenue Act of 1919. (Child Labor Tax law) This law forced companies employing children would be asses 10% of their annual profits. When this law was passed, Drexal furniture corp. was found in violation and required to pay over $6,000 in taxes. (which they did under protest)

    Constitutional question: Did congress violate the constitution in passing the Child Labor Tax law in attempting to regulate employment of children, which was a power reserved for the states under the 10th amendment?

    Holding: 8-1; court found the Child Labor Tax law unconstitutional

    Reasoning: Court found that it violated on the jurisdiction of the states to adopt and enforce labor codes.

  8. I. Bailey v. Drexel Furniture Company
    II. 259 U.S. 20 (1922)
    III. Facts: Congress passed the Revenue Act of 1919, which mandated that companies employing children under the age of fourteen be assessed ten percent of their annual profits. Drexel Furniture Company was in violation of this Act and required to pay over 6000 dollars in taxes.
    IV: Issues:
    (1) Did Congress violate the Constitution by attempting to regulate the employment of children with the Revenue Act of 1919?
    V: Decision and Action:
    (1) Yes.
    VI: Reasoning:
    (1) The Revenue Act of 1919 disguised criminal penalties as taxes. Allowing Congress to do this would infringe upon powers reserved to the States by the Tenth Amendment of the United States Constitution.
    VII. Concurrence(s): N/A.
    VIII: Dissent(s): N/A.
    IX: Voting Coalitions: (8 to 1). For the majority, Taft, Brandeis, Day, Holmes, McKenna, McReynolds, Pitney, and Van Devanter. For the minority, Clarke.
    X: Summary: Bailey v. Drexel Furniture Company made a clear distinction between penalization and taxation. It affirmed that Congress could not use their taxing power to regulate the behavior of corporations.
    XI: Free Space:

  9. Sebastian MoscosoJun 7, 2021
    In this case I still cant believe the court sided with the furniture company. I think that if a piece of legislation that would benefit child labor should be approved. The whole concept of children working long hard hours in companies and not having them getting recompensed accordingly is appalling. Just the fact that many young kids had to go through this and have the court not help them is something else.
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    Amy Siddiqui
    Amy SiddiquiJun 7, 2021
    The Court sides with the furniture company in that they view the Child Labor Tax Law to be more than just a tax. There was a quote that stuck out to me – “If he (the employer) does not know the child is within the named age limit, he is not to pay.” I mean that just sounded ridiculous. To me, if a person seems underage and the employer is questioning whether or not the person is underage, then it’s the employer’s duty to ask the person for their age. This just seemed like a giant loophole and something that places the burden on the employees, the kids. It reminded me of the labor situations in many developing countries, where we get much of our products made. Although many of those countries outlawed child labor, child labor is a huge problem.
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    Alex Nguyen
    Alex NguyenJun 7, 2021
    In this case congress enacted the Revenue act of 1919 which was a Tax on Child Laborer, but the court ruled this act unconstitutional as the power to regulate the employment of children, was reserved to the states under the Tenth Amendment.
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    Jarod Rhymes
    Jarod RhymesJun 6, 2021
    Congress’ Child Labor Tax law enacted in 1919 allowed them to exercise a 10 percent tax of a company’s NET profit if they employed children under 14. Drexel of course stated that the tax was unconstitutional and I have to agree. Lower court ruled in favor of the company and the Supreme Court found the tax to be unconstitutional.
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    Jeff Gemini
    Jeff GeminiJun 6, 2021
    I am a little confused to why this tax wasn’t allowed because others were but they simply claimed they didn’t have jurisdiction in this regard yet they deemed years earlier that they did. The Justices feared that Congress would try and rule through taxation forcing people to do thing or be taxed otherwise.
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    Cassidy McLernon
    Cassidy McLernonJun 6, 2021
    Congress enacted the Revenue Act of 1919, also called the Child Labor Tax Law. This law makes it so that companies employing children under fourteen years old would be assessed ten percent of their annual profits. Drexel Furniture Company was found in violation of it and was required to pay over $6000 in taxes. The Supreme Court found that Act was in violation of the Constitution. The tax law exerted a “prohibitory and regulatory effect” in a realm over which Congress had no jurisdiction.
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    Jacqueline Lopez
    Jacqueline LopezJun 6, 2021
    Even though this case was ruled upon 3 years after U.S v Doremus (1919) and 18 years after McCray v U.S (1904) where in both of those cases the U.S Supreme Court upheld regulatory taxes, this case was rejected. The other two cases were used to regulate the sale of colored oleomargarine or opium and cocoa leaves and were upheld as constitutional. However, the regulating child labor with a tax was deemed unconstitutional. This is poor judgement on behalf of the justices.
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    Itsawong Pongreangrong
    Itsawong PongreangrongJun 5, 2021
    This case is a prove of Congress violates 10th amendment. This is allowed big companies continue to use child’s labor force, which is under 14. Therefore, it does not protect the kids but rich companies. Congress benefits from tax while child rights is violated.
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    Jamie Musso
    Jamie MussoJun 9, 2020
    This case deemed the 1919 child labor tax law as unconstitutional. This law taxed companies that employed children. Drexel sued claiming that the tax was an excise tax from congress. The lower courts ruled with Drexel, but Justice Taft did rule that tax on child labor is unconstitutional because it is a criminal penalty in disguise and is a regulation on businesses and not exactly a tax.
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    Augustas Tamavicius
    Augustas TamaviciusJun 5, 2020
    In this case, the Supreme Court sided against the federal government, and ruled that the Child Labor Tax Law of 1919 unconstitutional. The Supreme Court argued that taxes levied against businesses utilizing child labor were unconstitutional because the “tax” was a penalty under the guise of a tax.
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    Amy Gordon
    Amy GordonJun 5, 2020
    In this case, the court struck down the ability of Congress to tax employers who used child labor as it was clear that by taxing child labor, they were imposing a penalty on its use.
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    Sarita Cavazos
    Sarita CavazosJun 5, 2020
    the court struck down this second attempt by congress to regulate and limit child labor
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    Kiera Gnatz
    Kiera GnatzJun 5, 2020
    The Court found that the Child Labor Tax Law was in violation of the Constitution violated the 10th amendment, which inherently delegated the power to regulate child labor laws to the States. There is not perceived rational relationship between child labor and interstate commerce in this case, so the Court had to strike it down (regardless of its good intentions)
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    Brianna Moling
    Brianna MolingJun 5, 2020
    The Court ruled that the Child Labor Tax Law violated the Constitution. Adopting and enforcing child labor laws is a power reserved to the states under the Tenth Amendment, and therefore Congress does not have jurisdiction.
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    Crystal Quevedo
    Crystal QuevedoJun 5, 2020
    The Revenue Act of 1919 imposed a tax on employers using child labor. Wow, the ct rules the act is an intrusion on states rights, and child labor continues unpenalized for well over another decade in the U.S.
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    Krystal Garcia Centeno
    Krystal Garcia CentenoJun 5, 2020
    In Bailey v. Drexel Furniture Co, the Court ruled the 1919 Child Labor Tax Law unconstitutional and an improper attempt by Congress to penalize employers using child labor.
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    Mara Ortiz
    Mara OrtizJun 4, 2020
    Seems about right that congress would fumble the ball on something as important as child labor. Congress implemented a 10% tax on businesses that employed children under 14 through the Child Labor Tax Law. When Drexel Furniture Co. violated it, the courts ruled in their favour determining that the act unconstitutional as it violated the 10th amendment. This was a win for states rights, but in my opinion a loss for human rights.
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    Jared Cuthbertson
    Jared CuthbertsonJun 4, 2020
    In contrast with the last few cases, this case explicitly limits congress’s ability to freely pass excise taxes in a manner to limit their regulatory control. The court found that the power to regulate child labor laws fell in the hands of the states.
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    Johanna Fernandez
    Johanna FernandezJun 4, 2020
    In trying to do something good, Congress did not really win this one since it would be overstepping their legislative powers. It was a step in trying to take down child labor but the Act was ruled unconstitutional.
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    Johnathon Giesecke
    Johnathon GieseckeJun 4, 2020
    Congress tried to actually pass quality legislation by fining companies that employ children under the age of 14. However, the court rules this violated the10th amendment making the act unconstutional.
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    Matt Springer
    Matt SpringerJun 4, 2020
    In Bailey v. Drexel Furniture Co., Congress enacted the Child Labor Tax Law which fines companies that employees children 14 years of age or under be assessed 10% of their profits. Drexel violated the law. The Question was “Did Congress violate the Tenth Amendment by attempting to regulation the hiring of children?” Sadly, The Court sided against Congress
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    April Quevedo
    April QuevedoJun 4, 2020
    This case made me think of all the other weird/harmful things Congress is not able to regulate because it is not explicitly delegated to them (age of consent, incestuous marriages, etc). There are definitely some issues the national government should have power over rather than the 50 individual states.
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    Martin Tully
    Martin TullyJun 4, 2020
    The 10th Amendment should be removed from the Constitution or amended because a single law that extends throughout the US is easier to follow than fifty state laws that are all different.
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    Cheyenne Henry
    Cheyenne HenryJun 4, 2020
    Taft feared that upholding this law would destroy state sovereignty and devastate “all constitutional limitation of the powers of Congress” by allowing it to disguise future regulatory legislation in the cloak of taxes.
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    Justyna Kucharczyk
    Justyna KucharczykJun 4, 2020
    The Court found that the Child Labor Tax Law violated the Constitution. Justice Taft argued that Congress had no jurisdiction or power to regulate in that area.
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    Christopher Mathew
    Christopher MathewJun 4, 2020
    This case provided a check on the regulatory powers of Congress regarding state sovereignty. It could not pass regulations that impeded the 10th Amendment, which provides for state rights.
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    Tess Manke
    Tess MankeJun 4, 2020
    The Revenue Act/Child Labor Tax Law was enacted by Congress in 1919 which entailed that any company employing children under 14 years of age would be taxed 10% of their annual profits. Bailey, the Collector of Internal Revenue for North Carolina, brought suit against Drexel Furniture Co. because they were in violation of the act and needed to pay their taxes. Question: Was the Child Labor Tax Law unconstitutional because that power was reserved to the states? YES. The Court ruled that it impeded state jurisdiction to adopt/enforce child labor codes.
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    Matthew Breslin
    Matthew BreslinJun 12, 2019
    Bailey v. Drexel was one of the few cases in the early 20th Century that applied some limits to Congress’s capacity to regulate commerce. For whatever reason, it seems like “states rights” victories are often at the expense of being on the right side of history.
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    Blanca Henkle
    Blanca HenkleJun 9, 2019
    The Child Labor Act was ruled unconstitutional. The Supreme Court held that Congress power to tax was not valid to regulate domestic behavior, that power is a reserved power of the states.
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    Jacob Mattenson
    Jacob MattensonJun 8, 2019
    The Court here ruled that Congress does not have the authority to lay taxes upon Drexel Furniture Co., as it was seen as a possible precursor to Congress extending its authority over issues that are relegated to the States as per the 10th Amendment.
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    Deleted user
    Deleted userJun 7, 2019
    Congress does not uphold their taxing power or expand it like in the other cases.
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    Deleted user
    Deleted userJun 17, 2018
    Issue. May Congress impose a tax as a penalty for failure to comply with regulatory standards?No. Congress is not validly exercising its taxing power when it imposes a tax with a prohibitory and regulatory effect and purpose.
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    Deleted user
    Deleted userJun 16, 2018
    Congress has no jurisdiction over the regulation of Child labor standards and laws which is reserved to the individual states under the 10th amendment. The act attempted to create a path to allow Congress to regulate, and is thus unconstitutional.
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    Deleted user
    Deleted userJun 15, 2018
    Can Congress impose a tax on industries as a means of regulating child labor, under the pretext of the taxing power?
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    Deleted user
    Deleted userJun 14, 2018
    This was a large victory for state’s rights in stopping Congress from using its taxing power to force states to follow Congress’s authority.
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    Deleted user
    Deleted userJun 11, 2018
    The significance of this of this case is that it ruled the child labor tax law of 1919 as unconstitutional under the taxing clause
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    Deleted user
    Deleted userJun 10, 2018
    Question: May Congress impose a tax as a penalty for failure to comply with regulatory standards?

    Holding: No

    Reasoning: Congress is not validly exercising its taxing power when it imposes a tax with a prohibitory and regulatory effect and purpose. It is irrelevant that the taxes are also generating revenue. Attempting to regulate local behavior, such as the employment of children under certain conditions, through a tax is an impermissible use of power.
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    Deleted user
    Deleted userJun 9, 2018
    The Court found that the Child Labor Tax Law was in violation of the Constitution as it intruded on the jurisdiction of states to adopt and enforce child labor codes. Chief Justice Taft argued that the tax law in question did much more than simply impose an “incidental restraint” but exerted a “prohibitory and regulatory effect” in a realm over which Congress had no jurisdiction. Taft feared that upholding this law would destroy state sovereignty and devastate “all constitutional limitation of the powers of Congress” by allowing it to disguise future regulatory legislation in the cloak of taxes.
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    Deleted user
    Deleted userJun 8, 2018
    While possibly a loss for many child workers, I think the Court’s decision to strike down the Child Labor Tax Law was a necessary check on Congress.
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    Jung Kim
    Jung KimJun 7, 2018
    Congress imposed child labor taxes which the USSC deemed to be beyond Congress’ ability because this was a regulation of business rather than a tax. It undermines State sovereignty and Congress’ intended duties. Taft stated that a tax is for government use while a penalty is to discourage certain behavior which is beyond the power of Congress.
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    Deleted user
    Deleted userJun 6, 2018
    Was the Child Labor Tax Law made in order to limit child labor, or was it just used as an opportunity for the government to obtain more tax revenue ?
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    Deleted user
    Deleted user
    Personally, I think that it has a lot to do with Congress taking another opportunity to collect taxes. I think that this basically being a penalty, as the Court stated, means Congress knew it would be broken and that they would be able to profit off of it.
    Jun 8, 2018•Delete
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    Kevin Lyles
    Deleted user
    Deleted userNov 15, 2017
    Was the Child Labor Tax Law a violation of the 10th amendment? Yeah, the USSC found it did violate the tenth amendment. (The Child Labor Taz gave congress the right to tax 10% to companies that hired children under 14).
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    Deleted user
    Deleted userNov 14, 2017
    What I find most interesting about the case, is that Taft, the only president to also serve as a supreme court justice, decided that he did not want to extend the power of congress by diminishing the power of the states and therefore invalided the power of congress to regulate child labor laws. Taft, understanding the implications of this expansion of the commerce clause, ruled against its expansion.
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    Deleted user
    Deleted userNov 12, 2017
    The court refrains from doing what it considered the greater good in allowing Congress to penalize child labor and chooses to allow constitutional rights to supersede.
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    Deleted user
    Deleted userNov 12, 2017
    This case ruled that the Child Labor Tax Law of 1919 is unconstitutional since it sought to punish businesses who employed children rather than just tax for revenue.
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    Kevin Lyles
    Kevin LylesDec 5, 2016
    Hi Steven,
    Great question. I think I mentioned this quickly in class but here is my view.

    Steven, I understand that you see “contrasting outcomes.” In Doremus, [$1.00 per year tax, Harrison Narcotic Drug Act] the Court expands the taxing power (as you wrote in your email). The Act is upheld. The Doremus Court finds: “The fact that other motives may impel the exercise of Federal taxing power does not authorize the courts to inquire into the subject. If the legislation enacted has some reasonable relation to the exercise of the taxing authority conferred by the Constitution, it cannot be invalidated because of the supposed motives which induced it.”

    However, Bailey concerns the 1919 Congress Child Labor Tax Act. The Court is “in a bind” because they support[ed] the states’ right to exploit child labor. Go back to Hammer v. Dagenhart (which is 1918), just one year prior to Doremus. Hammer is not overruled until 1941 in Darby. Bailey does NOT overrule Doremus.

    I understand the confusion. Perhaps the “contrasting outcome” is more about a pro-business Taft Court refusing to prohibit child labor than it is about interpreting the commerce or taxing and spending powers of Congress. In short, the Court ruled that the child labor law in Bailey, could not be distinguished from Hammer. The common thread is CHILD LABOR.

    In my personal view I think the Taft Court is saying “We support the exploitation of child labor and we will find a way to preserve it (lyles).”

    Read these three pages, pp. 127 to 129 in The Taft Court: Justices, Rulings, and Legacy, by Peter G. Renstro.
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    Deleted user
    Deleted userNov 7, 2016
    Opinion: Justice Taft delivers the majority opinion and explains that the 1919 child labor tax is unconstitutional. The act sought to punish the business sector through taxation for employing children in the production process as opposed to it being just a regular tax for revenue. The Supreme Court would later abandon this philosophy.
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    Deleted user
    Deleted userNov 6, 2016
    5) Did Congress violate the Constitution by adopting the Child Labor Tax Law in attempt to regulate the employment of children?
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    Demitri Kladis
    Demitri KladisNov 6, 2016
    1) Facts: In 1919, Congress passed the the Child Labor Tax Law, which imposed a federal excise tax of 10% on annual profits to businesses that employed people of the age of 16 and under. If anyone in a company knowingly employed someone under the appropriate age, the tax would automatically kick in. Drexel Furniture Company was found in violation of the law and was asked to pay the tax, which they did under protest. Drexel believed Congress was using an unconstitutional attempt to regulate manufacturing, while Congress believed it was just an excise tax that it was allowed to issue under its taxation abilities in Article I.
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