PART III

INTERSTATE COMMERCE LAW

CHAPTER I

COMMERCE CLAUSE OF CONSTITUTION

§1. Origin and Occasion Of. The beginning of the Federal Constitution may be said to have emanated in large measure from a desire to secure relief from the burdensome and discriminatory regulations imposed upon commerce by the several States under the Confederacy. Each State in the interest of its own commerce and local conditions legislated without regard to the larger commercial interests and rights of the whole country. The result was that commerce between the States was hampered by conflicting and discriminatory laws, and one of the conditions which led to the adoption of the Federal Constitution was the necessity for securing uniformity and harmony in commerce laws. Said Marshall, C. J.:

"It may be doubted whether any of the evils proceeding from the feebleness of the Federal Government, contributed more to that great revolution which introduced the present system, than the deep and general conviction that commerce ought to be regulated by Congress."1

Hence, the so-called "Commerce Clause" of the Federal Constitution, providing that Congress shall have power "to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.”2

The present discussion will be concerned mainly with 1 Brown v. Maryland, 12 Wheat. 419. 2 Const. U. S., Art. I, § 8, cl. 3.

"commerce among the States", or "interstate commerce", because most of the problems of conflicting State and Federal authority arise out of interstate commerce. It should be borne in mind, however, that while the power to regulate commerce with the Indian tribes, and with foreign nations, is likewise in Congress, the scope of the power is broader than that over interstate commerce. As pointed out by the late Mr. Chief Justice Fuller:

"The power to regulate commerce with foreign nations and the power to regulate interstate commerce, are to be taken diverso intuitu, for the latter was intended to secure equality and freedom in commercial intercourse as between the States, not to permit the creation of impediments to such intercourse; while the former clothed Congress with that power over International commerce, pertaining to a sovereign nation in its intercourse with foreign nations, and subject, generally speaking, to no implied or reserved power in the States. The laws which would be necessary and proper in the one case, would not be necessary or proper in the other.""

§ 2. Clause a Grant of Power. The Federal Government, by which is meant the Government of the United States, is a government of limited or enumerated powers. It has only such powers as are given to it by the Federal Constitution. State governments, on the other hand, are governments of unlimited or general powers, except so far as the State Constitution restricts or limits those powers. Unless, therefore, it is restricted by the State or Federal Constitutions, a State may exercise all the powers ordinarily pertaining to a sovereign government. The Federal Government, while supreme and sovereign within its sphere, must find its authority for action in the Federal Constitution. All powers not granted to the Federal Government remain with the States. The powers of the Federal Government include all those expressly granted and those reasonably and necessarily incident thereto. The power over commerce exists by virtue of an express grant in the Constitution, which is quoted in the preceding paragraph.

8 Champion v. Ames, (Lottery Case), 188 U. S. 321, 373.

§3. Relation of Federal and State Governments in Commerce. The Federal power over commerce is supreme within its proper sphere and when exercised excludes State control. This supremacy exists by reason of an express provision in the Federal Constitution which declares that "this constitution and the laws and all treaties made or which shall be made under the authority of the United States, shall be the supreme law of the land." While supreme as regards the several States, this power is not above the Federal Constitution itself, and it must be exercised within the limits prescribed by that instrument. It must, for instance, yield to the Fifth Amendment, if in its exercise it would deprive a person of life, liberty, or property without due process of law, or take private property for public use without due compensation.

Inasmuch as the States retain all powers not conferred upon the Federal Government, the question has been constantly present: What is the proper scope of State action and what is the proper scope of Federal action? This question pertains not merely to the commerce clause but to all parts of the Federal Constitution purporting to define the sphere of the local and the central government. The final decision on all questions of conflict between the two governments is with the Supreme Court of the United States. To the decisions of that tribunal, therefore, one must look in order to ascertain what each government may do with respect to the control of commerce. As will be more fully pointed out in later sections, there were from the beginning two general doctrines of interpretation applicable to the determination of the question involved. The scope of the power of the Federal Government over commerce will depend upon which of these two doctrines be followed. Although the Federal Government has been in existence for more than one hundred years, the entire extent of its jurisdiction over commerce has never been fully determined. While many questions have been settled, new ones arising out of changed conditions, resulting from the economic and

4 Const. Art. VI.

industrial development of the country-are continually presenting themselves.

§ 4. Commerce Defined. The word commerce means more than the mere barter and sale of commodities. It is a word of very large import. The term is not defined in the Constitution, and unlike "due process of law", "habeas corpus", and other phrases used throughout that instrument, has no accepted juridical or technical meaning. Commerce is not merely commercial intercourse; it is intercourse in all its branches, including navigation and carriage as well as the mere sale and exchange of goods. It includes all the instrumentalities and agencies by which commerce is ordinarily carried on. Accordingly, the New York legislation giving to Livingston and Fulton exclusive right to operatc steamboats on the waters within the jurisdiction of the State was held unconstitutional, as an obstruction to commerce between the States, and as an encroachment upon the power of Congress over the subject.5

Of equal importance with navigation as intercourse are all other forms of transportation by which commerce is conducted. Transportation is recognized as a constituent part of commerce itself; hence the multitude of railway cases under the commerce clause. Similarly, telegraph and telephone companies are engaged in commerce."

8

Whether Commercial Purpose Necessary. It has been suggested that a commercial purpose should be the test of the intercourse that is to be considered commerce; yet in Covington Bridge Co. v. Kentucky, the maintenance of a toll-bridge or ferry for persons crossing a river between two States was held to be commerce, although many of those using the bridge or ferry doubtless had no commercial purpose whatsoever. A bridge, said the court, is just as much a vehicle of commerce as is a ferryboat, and the fact that one is movable and the other a fixture makes no differ

5 Gibbons v. Ogden, 9 Wheat. 1.

• Hopkins v. U. S., 171 U. S. 578.

7 Pensacola Tel. Co. v. W. U. Tel. Co., 96 U. S. 1.

8 154 U. S. 204, 218.

"The thousands

ence in the application of the rule. of people who daily pass and repass over this bridge may be as truly said to be engaged in commerce as if they were shipping cargoes of merchandise from New York to Liverpool." As the bridge was between two States, to fix the toll rates thereon was held to be beyond the power of either one of them.

The meaning of the term commerce received elaborate consideration in a recent decision known as the "Lottery Case", holding the carrying from one State to another by independent carriers, of lottery tickets entitling the holder to a certain specified sum of money, to be commerce. But the late Mr. Chief Justice Fuller, expressing therein also the dissent of three other justices, declared:

"When Chief Justice Marshall said that commerce embraced intercourse, he added, commercial intercourse, and this was necessarily so since, as Chief Justice Taney pointed out, if intercourse were a word of larger meaning than the word commerce, it could not be substituted for the word of more limited meaning contained in the Constitution. Is the carriage of lottery tickets from one State to another commercial intercourse?......If a lottery ticket is not an article of commerce, how can it become so when placed in an envelope or box or other covering, and transported by an express company? To say that the mere carrying of an article which is not an article of commerce in and of itself, nevertheless becomes such the moment it is to be transported from one State to another, is to transform a non-commercial article into a commercial one simply because it is transported. I cannot conceive that any such result can properly follow. It would be to say that everything is an article of commerce the moment it is taken to be transported from place to place, and of interstate commerce if from State to State."

Water has recently been held not to be an article of commerce in the sense of making State legislation prohibiting its diversion from the State unconstitutional.10 While the commercial element, as strictly understood, may sometimes

9 188 U. S. 321, 367, 371.

10 McCarter v. Hudson County Water Co., 70 N. J. Eq. 695, 65 Atl. 489.