259 U.S. 20 (1922), argued 7–8 Mar. 1922, decided 15 May 1922 by vote of 8 to 1; Taft for the Court, Clarke, without opinion, in dissent. Immediately following the unexpected invalidation of the first federal child labor law in 1918, Congress sought another way to protect dependent and exploited children in the workplace. With the two houses again virtually unanimous, the Child Labor Tax law was enacted (1919), its justification resting upon contemporary precedents, notably Chief Justice Edward D. White's opinion in McCray v. United States (1904), which sustained the imposition of confiscatory excises to end the production of offending articles.
While White lived, the Court did not render a decision in the first child labor tax case, Atherton v. Johnston (1922), but, following his death, the new chief justice, William Howard Taft, massed the bench in Bailey to invalidate the Child Labor Tax. His opinion sought to distinguish McCray and the other cases in which the Court had legitimated using the taxing power for regulatory purposes. The constitutionally sanctioned regulatory measures, he asserted, had involved “only … incidental restraint and regulation,” while the stigmatized statute imposed a penalty whose “prohibitory and regulatory effect” was palpable (pp. 36–37). As in Hammer v. Dagenhart (1918), the Court found in Bailey that Congress had exceeded its authority and invaded the states’ internal affairs.
Although Taft's distinction lacked merit, the lone dissenter, Justice John H. Clarke, failed to challenge it. With the coming of the New Deal, this distinction began to erode, but Congress relied primarily thereafter upon the commerce power to protect the social and economic welfare of the country.
Stephen B. Wood