Follow Progress For Westhampton Beach

By:  Progress for Westhampton Beach

Continued from CVS, Part III of V

In the midst of the Great Depression our state legislature adopted the New York Milk Control Acts of 1933 and 1934.

Milk was in abundant supply and prices were low.  Dairy farmers had taken to dumping milk in an effort to limit supplies and cause an increase in prices.  Dairy farmers sold their milk to producers that took the raw milk and processed it as milk, cheese or butter and sold these products to dealers.  Prices paid to dairy farmers had fallen well below the cost of maintaining a dairy farm.  To get a sense of the civil unrest at the time see Newspaper Clippings from New York Troopers History website.

The New York State Legislature enacted price controls to set a floor on the price for milk paid to producers by dealers; the producers had promised the Legislature they would share the profits with the dairy farmers.

G.A.F. Seelig, Inc. was a New York dealer that supplied New York hotels and it purchased 220 cans¹⁾a can held forty quarts of milk.  In 1901 Harry Houdini first performed his milk can escape. of milk and cream every day from its parent corporation in Vermont. These sales to G.A.F. Seelig, Inc. were below the New York price controls, prosecution was threatened and the case was taken to the U.S. Supreme Court.

New York State, by its then Attorney General, John J. Bennett, Jr.,²⁾no speculation is offered as to whether the former New York State Attorney General is any relation to the John J. Bennett Esq., who has appeared before the village trustees to represent CVS argued that if prices were too depressed then health and safety precautions would be compromised in favor of lowering the cost of production.  He argued the State had a vital interest in protecting the health and safety of its residents by enacting minimum prices.  “Health and Safety” concerns traditionally fall within the “police powers” reserved to the states.

In a stunning and unanimous reversal of a then recent 1934 Supreme Court precedent³⁾An earlier prosecution of Rochester resident Leo Nebbia had been upheld.  Nebbia had been convicted for selling two quarts of milk and a loaf of bread for eighteen cents, when the state price control minimum for milk was at nine cents per quart.  The free bread giveaway had violated the price 2 x 9¢  = 18 ¢plus the illegal loaf.  Nebbia v. New York, 291 U.S. 502 (1934)  Nebbia was fined Five Dollars! Justice Cardozo wrote in 1935:

 “What is ultimate is the principle that one state, in its dealings with another, may not place itself in a position of economic isolation. Formulas and catchwords are subordinate to this overmastering requirement. Neither the power to tax nor the police power may be used by the state of destination with the aim and effect of establishing an economic barrier against competition with the products of another state or the labor of its residents. Restrictions so contrived are an unreasonable clog upon the mobility of commerce.”

Baldwin v. G. A. F. Seelig, Inc.  294 U.S. 511

Tomorrow – we will reach the final case in the quartet of U.S. Supreme Court cases that determine what happens on Sunset Avenue…

In Part V of V