Highland v. Russell Car & Snow Plow Co.
Headline: Wartime coal price controls are upheld, allowing government-set mine prices to limit sellers’ ability to charge higher rates and ensuring manufacturers pay regulated coal prices during the war
Holding: The Lever Act and presidential orders setting wartime coal prices did not violate the Fifth Amendment, so sellers could be bound by government-set coal prices.
- Allows wartime government limits on coal prices, restricting sellers’ ability to demand higher prices
- Helps manufacturers secure coal at government-set prices during national emergencies
- Confirms power to regulate supply and prevent wartime price manipulation
Summary
Background
A coal seller sued a company that bought coal to recover $830.80 for deliveries between October 17, 1917 and February 15, 1918. The seller had purchased the output of certain mines and offered coal at $3.60 per ton; the buyer ordered a carload per week. After a miners’ wage agreement, the seller said he would charge $4.05 per ton. The buyer relied on presidential orders issued under the Lever Act that fixed coal prices; state courts held the seller bound by those government-set prices.
Reasoning
The Court considered whether Congress and the President could lawfully set coal prices during the war without violating the Fifth Amendment’s protection of contract and property. The Lever Act authorized the President to fix prices, regulate distribution, requisition coal, and provided for compensation when property was taken. The Court said the law aimed to secure supply and prevent price manipulation in wartime, and that the seller’s coal could have been seized if regulation failed. Because the seller did not claim he received less than a compensatory amount if the coal had been taken, the price orders merely removed his opportunity to negotiate a higher wartime price. The statute and orders were not so arbitrary or unreasonable as to violate due process.
Real world impact
The decision permits enforcement of wartime price limits on coal, limiting sellers’ ability to demand higher contract prices. Companies manufacturing war-related goods, like the snowplow maker in this case, gain more stable coal supply and predictable costs. The ruling upholds broad wartime authority to regulate production and distribution to prevent hoarding and protect national defense.
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