In the case of Schechter Corp. _v._ United States,[445] one of these codes, the Live Poultry Code, was pronounced unconstitutional. Although it was conceded that practically all poultry handled by the Schechters came from outside the State, and hence via interstate commerce, the Court held, nevertheless, that once the chickens came to rest in the Schechters' wholesale market interstate commerce in them ceased. The act, however, also purported to govern business activities which "affected" interstate commerce. This, Chief Justice Hughes held, must be taken to mean "directly" affect such commerce: "the distinction between direct and indirect effects of intrastate transactions upon interstate commerce must be recognized as a fundamental one, essential to the maintenance of our constitutional system. Otherwise, * * *, there would be virtually no limit to the federal power and for all practical purposes we should have a completely centralized government."[446] In short, the case was governed by the ideology of the Sugar Trust Case, which was not mentioned in the Court's opinion.[447]
Congress' second attempt to combat the Depression comprised the Agricultural Adjustment Act of 1933.[448] As is pointed out elsewhere the measure was set aside as an attempt to regulate production, a subject which was held to be "prohibited" to the United States by Amendment X.[449] _See_ pp. 917-918.
The third measure to be disallowed was the Guffey-Snyder Bituminous Coal Conservation Act of 1935.[450] The statute created machinery for the regulation of the price of soft coal, both that sold in interstate commerce and that sold "locally," and other machinery for the regulation of hours of labor and wages in the mines. The clauses of the act dealing with these two different matters were declared by the act itself to be separable so that the invalidity of the one set would not affect the validity of the other; but this strategy was ineffectual. A majority of the Court, speaking by Justice Sutherland held that the act constituted one connected scheme of regulation which, inasmuch as it invaded the reserved powers of the States over conditions of employment in productive industry, was violative of the Constitution and void.[451] Justice Sutherland's opinion set out from Chief Justice Hughes's assertion in the Schechter Case of the "fundamental" character of the distinction between "direct" and "indirect" effects; that is to say, from the doctrine of the Sugar Trust Case. It then proceeded: "Much stress is put upon the evils which come from the struggle between employers and employees over the matter of wages, working conditions, the right of collective bargaining, etc., and the resulting strikes, curtailment and irregularity of production and effect on prices; and it is insisted that interstate commerce is greatly affected thereby. But, ..., the conclusive answer is that the evils are all local evils over which the Federal Government has no legislative control. The relation of employer and employee is a local relation. At common law, it is one of the domestic relations. The wages are paid for the doing of local work. Working conditions are obviously local conditions. The employees are not engaged in or about commerce, but exclusively in producing a commodity. And the controversies and evils, which it is the object of the act to regulate and minimize, are local controversies and evils affecting local work undertaken to accomplish that local result. Such effect as they may have upon commerce, however extensive it may be, is secondary and indirect. An increase in the greatness of the effect adds to its importance. It does not alter its character."[452] We again see the influence of the ideology of the Sugar Trust Case.[453]