J.W. Hampton, Jr., & Co. v. United States
Did Congress unconstitutionally delegate its legislative power to the President by authorizing him to adjust tariff rates under Section 315 of the Tariff Act of 1922?
The Decision
9-0 decision · Opinion by William Howard Taft · 1928
Majority Opinion— William Howard Taft
The Supreme Court unanimously upheld the constitutionality of Section 315 of the Tariff Act of 1922, ruling that Congress had not unconstitutionally delegated its legislative power to the President. The decision was 9–0, and the opinion was written by Chief Justice William Howard Taft, who — notably — was the only person in American history to have served as both President and Chief Justice, giving him a unique perspective on the relationship between the legislative and executive branches.
Chief Justice Taft's opinion acknowledged that the Constitution does indeed vest the legislative power in Congress and that Congress cannot simply hand that power over to someone else. However, the opinion drew an important distinction between delegating the power to make law and delegating the authority to determine facts and fill in details necessary to carry out a law that Congress has already made. The Court held that so long as Congress lays down by legislative act an 'intelligible principle' to which the person or body authorized to act is directed to conform, such legislative action is not a forbidden delegation of legislative power. This phrasing — the 'intelligible principle' test — became the foundational standard for evaluating whether Congress has improperly delegated its authority.
Applying this standard to the case at hand, the Court found that Congress had provided a clear and intelligible principle: the President was to adjust tariff rates so as to equalize the differences in costs of production between domestic and foreign goods. This was a specific, ascertainable standard that cabined the President's discretion. The President was not free to set tariffs at whatever rate he wished; he was required to follow the Tariff Commission's factual findings and adjust rates only to the extent necessary to achieve the cost-equalization goal that Congress had defined. The 50 percent cap on adjustments further limited the scope of presidential action.
Chief Justice Taft also reviewed the long history of congressional practice in this area. He pointed out that from the very first Congress onward, the legislature had frequently authorized the President to make contingent decisions related to tariffs and trade — for example, imposing or lifting trade restrictions depending on how foreign nations treated American commerce. This historical practice, the Court reasoned, demonstrated that such delegations had always been understood as consistent with the Constitution. The President was not making law; he was executing law by determining the facts that triggered the application of standards Congress had already set.
The decision affirmed the judgment of the Court of Customs Appeals and allowed the higher tariff rate on barium dioxide to stand. More broadly, it established a durable and permissive framework for evaluating delegation challenges, one that would govern American constitutional law for generations. Under the intelligible principle test, Congress has wide latitude to empower the executive branch and administrative agencies to flesh out the details of legislation, so long as it provides meaningful guidance on the goals and limits of the delegated authority.
Background & Facts
J.W. Hampton, Jr., & Co. was a New York-based importing company that brought barium dioxide into the United States from Germany. Under the Tariff Act of 1922, also known as the Fordney-McCumber Tariff Act, the company was required to pay a duty on the imported chemical. However, the company's dispute was not with the tariff rate that Congress itself had set in the statute. The problem was that President Calvin Coolidge had issued a proclamation raising the tariff rate on barium dioxide above what Congress had originally written into the law, and the company believed the President had no constitutional authority to do so.
Section 315 of the Tariff Act of 1922 contained a 'flexible tariff' provision. It directed the United States Tariff Commission — an independent investigative body created by Congress — to study the differences in production costs between goods made domestically and the same goods made abroad. Once the Commission completed its investigation and reported its findings to the President, the President was authorized to increase or decrease tariff rates by up to 50 percent in order to equalize those production costs. The idea was to ensure that foreign goods entering the American market did not have an unfair cost advantage (or disadvantage) compared to American-made products. Using this authority, President Coolidge raised the duty on barium dioxide from four cents per pound to six cents per pound.
J.W. Hampton, Jr., & Co. paid the higher rate under protest and then filed a legal challenge, arguing that the flexible tariff provision was unconstitutional. The company's core constitutional objection was rooted in the separation of powers: under Article I, Section 8 of the Constitution, the power to lay and collect taxes, duties, and tariffs belongs exclusively to Congress. By handing the President the power to raise or lower tariff rates, the company argued, Congress had given away a core legislative function in violation of the nondelegation doctrine — the principle that Congress cannot transfer its lawmaking power to another branch of government.
The case was heard by the United States Court of Customs Appeals (a specialized federal court that handled disputes over import duties). That court ruled against the importing company and upheld the tariff. J.W. Hampton, Jr., & Co. then brought the case to the United States Supreme Court, which agreed to hear it because it raised a fundamental question about the constitutional limits on Congress's ability to delegate authority to the executive branch.
The case arrived at the Supreme Court at a time when the federal government was increasingly relying on administrative agencies and executive action to carry out complex regulatory tasks. The question of how much power Congress could hand off — particularly in the area of taxation and tariffs — was of enormous practical importance to the functioning of the modern government.
The Arguments
The company argued that Congress had unconstitutionally delegated its exclusive power to set tariff rates to the President. Because the Constitution vests the taxing power solely in Congress, only Congress itself could determine the rate of duty on imported goods, and it could not hand that decision to the executive branch.
- Article I, Section 8 of the Constitution grants the power to lay and collect duties exclusively to Congress, making tariff-setting a core legislative function that cannot be transferred.
- Section 315 effectively gave the President the power to legislate by allowing him to change the actual rates importers must pay, which is indistinguishable from making law.
- The flexible tariff provision granted the President too much discretion, with insufficient constraints, amounting to an abdication of Congress's legislative responsibility.
The government argued that Congress had not surrendered its legislative power but had merely directed the President to carry out a policy that Congress itself had defined. Congress set the goal — equalizing production costs — and the President simply filled in the factual details necessary to execute that policy.
- Congress itself established the tariff rates and set the policy objective of equalizing foreign and domestic production costs; the President merely applied that standard to specific facts.
- The President's authority was bounded by clear limits: he could only adjust rates up or down by 50 percent, and only after the Tariff Commission conducted an investigation and reported its findings.
- There was a long historical tradition of Congress authorizing the President to make adjustments in the tariff area, dating back to the earliest days of the Republic.