CHAPTER IV.

THE REGULATION OF COMMERCE.

26. The constitutional provisions.

27. The history of the commercial clause.

28. Commerce defined.

29. The regulation of commerce defined.

30. The general distinction between the powers of the United States and of the states over commerce.

31. Navigable waters.

32. Title to the soil under navigable waters.

33. The regulation of navigation.

34. The regulation of subjects of commerce.

35. The taxation of ships.

36. Duties on tonnage.

37. The taxation of the water transportation of passengers.

38. The taxation of goods in interstate commerce.

39. Discriminating taxation against products and manufactures of other

rates.

40. The taxation of exports by the United States.

41. State taxation of imports and exports, and inspection laws.

42. Improvements of navigation.

43. Dams and bridges.

44. Ferries.

45. Wharves and piers.

46. Pilotage.

47. Quarantine and sanitary regulations.

48. Port dues.

49. Port regulations.

50. Preferences of ports.

51. Interstate railway transportation.

52. Railway tolls.

53. The police regulation of railways.

54. State taxation of interstate transportation by railways.

55. Telegraphs.

56. Commerce with the Indian tribes.

26. The Constitution of the United States contains three clauses which directly bear upon the regulation of commerce. Section 8 of article I declares that "the

Congress shall have power to regulate commerce

;

with foreign nations, and among the several states, and with the Indian tribes." Section 9 of the same article enumerates among the exceptions from the powers granted to the United States, that " no tax or duty shall be laid on articles exported from any state. No preference shall be given, by any regulation of commerce or revenue, to the ports of one state over those of another nor shall vessels bound to or from one state be obliged to enter, clear, or pay duties in another." Section 10 of the same article, in its enumeration of the expressed restrictions upon the powers of the states, declares, that "no state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws and the net produce of all duties and imposts, laid by any state on imports or exports, shall be for the use of the treasury of the United States; and all such laws shall be subject to the revision and control of the Congress. No state shall, without the consent of the Congress, lay any duty of tonnage." There are also other clauses of the Constitution, which indirectly affect the regulation of commerce by the states. Thus, an act of a state legislature may be valid as a regulation of commerce in a matter of merely local concern, and yet the act, as affecting a particular person or corporation may be void as an impairment of the obligation of a legally enforcible contract, or the act may be void for repugnancy to those other clauses of the Constitution which, having regard to the rights of citizenship, forbid a state to discriminate in favour of its own citizens and against the rights of citizens of other states. These constitutional provisions are not only in full force and vigour to-day, but their application is wider and more far-reaching than the framers of the Constitution

imagined to be within the bounds of possibility. In the century that has passed since the adoption of the Constitution the country has made great strides. Less than three millions of people have grown to be more than fifty millions in number. Discoveries in science and inventions in the arts have developed new subjects of trade, and have created new agencies of commerce. Steam and electricity have been made to do man's bidding. Sailing vessels have given way to steamships, and railways have superseded turnpike roads and Conestoga wagons. Telegraphs and telephones have annihilated distance. The growth of population, the creation of new subjects of trade, and the improvements in the movement of traffic have necessarily resulted in a vast enlargement in the volume of commerce. In view of these great changes in the conditions of the problem, it is more than ever important that the constitutional limits upon the regulation of commerce should be clearly comprehended, and that the line which separates the provinces of federal and of state authority over this subject of national interest should be, so far as is possible, accurately defined.

27. It is an historical fact that the Constitution was framed and adopted mainly because all of the states had suffered under the Confederation by reason of the selfish commercial policy of England in closing her markets to goods of American manufacture, and because some of the states had also suffered by reason of the no less selfish commercial policy of other states in the imposition of heavy duties on imported goods, and in the enforcement of vexatious restrictions upon trade. There were great differences of opinion as to other features of the Constitution, but, in the convention of 1787 and among the people, there was practical unanimity as to the expediency of vesting in the government of the

United States the power of so regulating commerce as to overcome the disintegrating forces which threatened the loss of all that had been gained by the success of the Revolution.1

28. The term "commerce," therefore, as the framers of. the Constitution understood it, and as Marshall, C. J., construed it in Gibbons v. Ogden,2 meant not only traffic, but also commercial intercourse in all its branches, including the purchase and sale of commodities, their transportation by sea and on land, their importation and exportation, and all that was necessarily incident to the transaction. As the Constitution is a frame of government intended to endure for all time, it follows that the term "commerce" must receive a construction sufficiently elastic to comprehend not only the subjects and instrumentalities of commerce known and used when the Constitution was framed, but also all present and future subjects of commerce and agencies of commercial intercourse.3 Yet everything that is connected with commerce is not necessarily commerce. Bills of exchange may be given in payment for goods to be imported, and yet such bills are mere personal obligations, and are not in themselves subjects of commerce.1 On the same principle, the issuing or negotiation of a policy of insurance against the loss by fire of any property, which is not made a subject of commerce, does not constitute a transaction of commerce."

So

1 Gibbons v. Ogden, 9 Wheat. 11, 223; Brown v. Maryland, 12 id. 445; Cook v. Pennsylvania, 97 U. S. 574; County of Mobile v. Kimball, 102 id. 697; Chapters IV, V, VI, VII, and VIII of Mr. Bancroft's History of the Constitution.

29 Wheat. 1, 189.

3 P. Telegraph Co. v. W. U. Telegraph Co., 96 U. S. 1.

• Bank of Augusta v. Earle, 13 Pet. 519, 531; Sturges v. Crowninshield, 4 Wheat. 147; Nathan v. Louisiana, 8 How. 73.

5 Paul v. Virginia, 8 Wall. 168; Ducat v. Chicago, 10 Wall. 410; L. I. Co. v. Massachusetts, ibid. 566; P. F. Association v. New York, 119 U. S. 110.

2

3

also, a trade-mark, which identifies a particular article as one of a class which has as such acquired a special commercial value, is not in itself any part of commerce.1 On the other hand, bills of lading of goods sold and transported in the course of interstate commerce are, by reason of their representative character, entitled to protection as commerce, and the transmission of ideas by telegraph is commerce, for the reason that in the development of modern business methods the telegraph has become indispensable as a means of intercommunication in commercial intercourse. Would not the same reasoning apply, in the case of goods admittedly subjects of commerce, to the trade-marks on such goods, the bills of exchange drawn for the price of the goods, and the policies of insurance against the loss of the goods by fire, or by the perils of navigation? Insurance, commercial paper, and trade-marks are as certainly nearly related to, and as truly incidents of commerce, as a telegraphic inquiry as to the state of the market, or a telegraphic order for the forwarding of the goods, though unlike the bill of lading, they do not represent the goods. Of course, if the subjectmatter be in its nature commercial, it is immaterial whether the agency, by which commerce is carried on, be a natural person, or an association of natural persons, or a corporation.*

29. To regulate commerce is, as Marshall, C. J., said in Gibbons v. Ogden,5 "to prescribe the rule by which commerce is to be governed." It is obvious that com

1 The Trade-Mark Cases, 100 U. S. 82, 95.

2 Almy v. California, 24 How. 169; as explained by Miller, J., in Woodruff v. Parham, 8 Wall. 138.

3 P. Telegraph Co. v. W. U. Telegraph Co., 96 U. S. 1, 9.

Paul v. Virginia, 8 Wall. 168, 172; G. F. Co. v. Penna., 114 U. S. 196, 215, 217; W. F. Co. v. East St. Louis, 107 id. 374.

59 Wheat. 1, 196.