tion of the United States. There is no doubt of the supremacy of the national power over interstate commerce. Its inaction, it is true, may imply prohibition of State legislation but it may imply permission of such legislation. In other words, the burden of the legislation, if it be a burden, may be indirect and valid in the absence of the assertion of the national power. So much is a truism; there can only be controversy about its application. The language of the statute is, 'except as otherwise provided in this act, no dealer shall, within this State, dispose of certain securities issued or executed by any private or quasi-public corporation, copartnership, or association (except corporations not for profit) * * * without first being licensed so as to do as hereinafter provided.'

"The provisions of the law, it will be observed, apply to dispositions of securities within the State, and while information of those issued in other States and foreign countries is required to be filed (secs. 6373-6379), they are only affected by the requirement of a license of one who deals in them within the State. Upon their transportation into the State there is no impediment-no regulation of them or interference with them after they get there. There is the exaction only that he who disposes of them there shall be licensed to do so, and this only that they may not appear in false character and impose an appearance of a value which they may not possess and this certainly is only an indirect burden upon them as objects of interstate commerce, if they may be regarded as such."

*

* * The questions are pertinent, the answer to them one way or the other, of consequence; but we may pass them, for regarding the securities as still in interstate commerce after their transportation to the State is ended and they have reached the hands of dealers in them, their interstate character is only incidentally affected by the statute." (Hall v. Geiger-Jones, 242 U. S., 539.)

The decisions of the Supreme Court which appear to be most nearly in point on this question are probably found in the Lottery case (188 U. S., 321) and International Text Book Co. v. Pigg (217 U. S., 91). The former case involved the validity of an act of Congress prohibiting the carriage by United States mail, or the carriage generally from one State to another in the United States, of lottery tickets. It was urged that such tickets are not, and could not be subjects of commerce, and this being true, their carriage from one State to another was not commerce. To the first contention, the court said in part:

"It was said in argument that lottery tickets are not of any real or substantial value in themselves, and therefore are not subjects of commerce. If that were conceded to be the only legal test as to what are to be deemed subjects of the commerce that may be regulated by Congress, we can not accept as accurate the broad statement that such tickets are of no value. Upon their face they showed that the lottery company offered a large capital prize, to be paid to the holder of the ticket winning the prize at the drawing advertised to be held at Asuncion, Paraguay. Money was placed on deposit in different banks in the United States to be applied by the agents representing the lottery company to the prompt payment of prizes. These tickets were the subject of traffic; they could have been sold; and the holder was assured that the company would pay to him the amount of the prize drawn. That the holder might not have been able to enforce his claim in the courts of any country making the drawings of lotteries illegal, and forbidding the circulation of lottery tickets, did not change the fact that the tickets issued by the foreign company represented so much money payable to the person holding them and who might draw the prizes affixed to them. Even if a holder did not draw a prize, the tickets, before the drawing, had a money value in the market among those who chose to sell or buy lottery tickets. In short, a lottery ticket is a subject of traffic, and is so designated in the act of 1895.'

66 * * * We are of opinion that lottery tickets are subjects of traffic and therefore are subjects of commerce, and the regulation of the carriage of such tickets from State to State, at least by independent carriers, is a regulation of commerce among the several States.'

"The nature of the business done by the International Text Book Co., which is held by the Supreme Court to be interstate commerce, is sufficiently indicated by the following passage of the opinion of the Supreme Court in that case:

"It is true that the business in which the International Textbook Co. is engaged is of a somewhat exceptional character, but, in our judgment, it was, in its essential characteristics, commerce among the States within the meaning of the Constitution of the United States. It involved, as already suggested, regular and practically continuous intercourse between the Textbook Co., located in Pennsylvania, and its scholars and agents in Kansas and other States. That intercourse was conducted by means of correspondence through the mails with such agents and scholars. While this mode of imparting and acquiring an education may not be such as is commonly adopted in this country, it is a lawful mode to accomplish the valuable purpose the

parties have in mind. More than that; this mode-looking at the contracts between the Textbook Co. and its scholars-involved the transportation from the State where the school is located to the State in which the scholar resides, of books, apparatus, and papers, useful or necessary in the particular course of study the scholar is pursuing and in respect of which he is entitled from time to time, by virtue of his contract, to information and direction. Intercourse of that kind, between parties in different States-particularly when it is in execution of a valid contract between them--as is much intercourse, in the constitutional cause, as intercourse by means of the telegraph-‘a new species of commerce,' to use the words of this court in Pensacola Telegraph Co. 2. Western Union Telegraph Co., 96 U. S., 1, 9

*

* * *

* If intercourse between persons in different States by means of telegraphic messages conveying intelligence or information is commerce among the States, which no State may directly burden or unnecessarily encumber, we can not doubt that intercourse or communication between persons in different States, by means of correspondence through the mails, is commerce among the States within the meaning of the Constitution, especially where, as here, such intercourse and communications really relates to matters of regular, continuous business, and to the making of contracts and the transportation of books, papers, etc., appertaining to such business. In our further consideration of this case we shall therefore assume that the business of the Textbook Co., by means of correspondence through the mails and otherwise between Kansas and Pennsylvania, was interstate in its nature."

If lottery tickets may be the subject of interstate commerce, certainly corporate stocks, bonds and similar securities may be. Lottery tickets partake much more of the nature of insurance contracts than does corporate stock. The lottery ticket is in fact evidence of a promise to pay in the event of a certain contingency. If the lottery refused to pay the owner of the ticket drawing a prize, and such owner were in a jurisdiction where gambling contracts were enforceable, it is conceived that he would seek to recover the prize money in a contract action. In this respect the lottery ticket resembles a contract, but it was urged, unsuccessfully, in the lottery case, that the decision in Paul v. Virginia, holding insurance not to be commerce, but a mere contract of indemnity, applied.

On the other hand, a lottery ticket is negotiable in the sense that it could be passed from hand to hand for a consideration and was good in the hands of the holder. Corporate stock is not a contract, in the sense that an insurance policy is, but is evidence of title to a share in the net assets of the corporate property in the management of "the company, and to dividends if there be any. It passes by assignment and in commercial practice is the subjest of thousands of sales per day. Both in thoery and practice the reasons for holding it to be a subject of commerce are much more cogent than in the case of insurance policies or lottery tickets. The only other decision which appears to look towards holding corporate stock not to be a commodity or subject of commerce is Nathan v. Louisiana (8 How. 73) where it was held that a broker whose business consisted of buying and selling bills of exchange drawn on persons in different States was subject to State taxation, on the ground that he was not engaged in commerce but in supplying an instrument of commerce. Bills of exchange, however, partake more of the character of money-a medium of exchangethan of a commodity of commerce, where as corporate stock serves no such purpose but is itself the subject of sale.

The board of review is persuaded by the decisions above cited that corporate stocks and bonds and similar securities may be the subjects of interstate commerce, and that where such securities are sold by persons in one State to persons in other States by means of correspondence, or other interstate transmission of intelligence, or by traveling salesmen, it constitutes commerce among the several States and is subject to the regulation of Congress under the commerce clause.

2. It may be questioned whether the sale by corporations not proposing to engage in interstate commerce, either because the business is to be purely intra-State or because the corporation is to engage in some line of business which is not commerce, such as insurance, of the necessary amount of stock to procure capital with which to do business in commerce. It might be urged that such sale of stock is practically an indispensable incident to doing business under corporate form, and, as such sale does not relate to matters of regular continuous business, but usually occurs but a few times at most in the life of a corporation, it does not constitute commerce, the subsequent dealings with such stocks when they have passed into the hands of the purchaser may be commerce. There are certain expressions to be found in the decisions of the Supreme Court construing the Sherman Law which indicate that the continuous character of the transactions may have some hearing upon whether they constitute interstate commerce. Thus, in the International Textbook case the court says:

66* * * We can not doubt that intercourse or communication between persons in different States by means of correspondence through the mails, is commerce among the states within the meaning of the Constitutlon, especially where, as here, such intercourse and communication really relate to matters of regu.ar continuous business,

etc.

Again, in United States v. Swift (196 U. S. 375, 398-399), the court says:

When cattle are sent for sale from a place in one State with the expectation that they will end their transit, after purchase, in another, and when in effect they do so, with only the interruption necessary to find a purchaser at the stockyards, and when this is a typical, constantly recurring course, the current thus existing is a current of commerce among ng the States, and the purchase of the cattle is a part and incident of such commerce. While these expressions indicate that in order to amount to commerce within the regulating power of Congress, there must be a continuous course of business, they do not by any means decide this point, and the board is of the opinion that when a case is presented wherein this question can be decided, the decision will be in favor of Federal jurisdiction over any amount of commerce between the States. The correct view appears to the board to be found in Steers v. U. S. (192 Fed. 1, C. C. A. 1911) where it was urged that the interference by Night Riders with a single shipment of tobacco from one State to another, did not amount to restraint of trade within the meaning of the Sherman Antitrust Act. The Circuit Court of Appeals held that such interference was sufficient, saying in part:

"Trade, as referring to a business which must have a fixed continuance and established character in order to be in existence so as to be subject to a tax or so as to be carried on within a State, can not be synonymous with "trade" in the sense of commerce, or traffic or transportation from one place to another; and so decisions like Cooper Manufacturing Co. v. Ferguson (113 U. Š. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137), are not relevant.

"In the Packet Co. case, the interference under consideration, aside from that dependent on the sale of the vendor's good will, was indirect, contingent and uncertain. The court did not say that the amount of traffic was too insignificant to require action, but that this uncertain, remote, and contingent interference was insignificant. In the present case the interference was absolute and entire. All of the traffic or commerce involved was wholly stopped.

"We do not find in the Standard Gil and Tobacco cases any holding that a direct restraint or trade must affect an unreasonably great amount of commerce in order to be within the prohibition. As we read these opinions, the matter under consideration, from the standpoint of reason, was not the amount of merchandise or traffic affected by the restriction, but the character and extent of the restriction itself; and it was thought that, if such restriction reasonably pertained to lawful results, it was not of itself necessarily forbidden. These opinions contain no justification for the idea that a direct and absolute restraint, bearing no reasonable relation to lawful means of accomplishing lawful ends, can be permitted only because the volume of traffic affected is not very great.

"It is true that the theory of injury to the public lies at the bottom of the statute, and that it is directed against things which tend 'to deprive the public of the advantages which flow from free competition' (Northern Securities case, 193 U. S. 197, 332, 24 Sup. Ct. 438, 484, 48 L. Ed. 679); but a single, private injury may well tend to this public result."

Again in Montague v. Lowry (193 U. S. 38), it was said that an interference with less than 1 per cent of the business in tiles in the city of San Francisco was within the prohibition of the Sherman law, and in Standard Sanitary Manufacturing Co. v. United States (226 U. S. 20, 50-51), it was held that the fact that a small portion of the business of one of the defendants was interstate commerce, was sufficient to bring such defendant within the operation of the act. The following is taken from an opinion of the court:

"The testimony as to the State or interstate character of its business is that it manufactures at Elizabeth, N. J., and buys also from other manufacturers and jobbers. It ships from there to its warehouses in New York, Worcester, Mass., and Brooklyn. The trade of its Worcester branch covers about 200 miles around Worcester, its efforts being to localize its business. It is doubtful, it is testified, if the trade goes beyond Massachusetts, the trade being circumscribed. Sales in Connecticut are made through the New York office from the warerooms.

"It is manifest that the Colwell Co. was a party to the combination and was also engaged in interstate commerce. The fact that its trade was less general than that of the other manufacturers and jobbers does not take from it the character of an interstate trader. The fact that it was restricted in less degree than the other jobbers,

given a certain freedom of competition to meet local conditions in New York, diminishes only the degree of culpability but does not entirely remove it. Indeed, it may be said that such freedom does not even diminish culpability. It is a concession, which may be made a means of crushing competition where it is most formidable." While these decisions do not bear directly upon the point of whether it is necessary that interstate transactions be continuous in their nature in order to be within the regulating power of Congress, they do indicate clearly that although the shipments from State to State be relatively insignificant and more or less incidental, such transactions are nevertheless within the regulating power of the Federal Government. The board, is therefore of the opinion that the fact that a corporation may utilize the facilities of interstate commerce for the sale of a relatively small amount of stock, or that it may engage in such sale for a short period of time, does not render the business of selling its stock any the less interstate commerce, nor deprive the Federal Government of jurisdiction to regulate it for whatever period it may continue. If, then, the Government does not have jurisdiction of the sale by a corporation of the stock necessary to raise capital with which to do business, it must be for the reason that there is something different in the original issuance and sale of corporate stock from the issuance and sale of lottery tickets or of other accepted articles of commerce. It might be urged that the original purchasers of stock are to be regarded as investin in the business itself rather than in the stock, since at the inception of the corporation's existence the value of the stock may be almost wholly speculative or problematical; but that once the business of a corporation has become thoroughly established, and its stock is sold generally on the great exchanges, it comes to be regarded, as a practical matter, as having in itself a recognized value, and is passed from hand to hand as a commodity. The answer to this, however, appears to be that the real value of the stock is at all times to be measured by the value of the assets, tangible and intangible, of the corporation, and the quality of its management, taking into consideration existing business conditions; and the fact that exchange manipulations may temporarily force the quotations of the stock up or down does not change its intrinsic value. The mere fact that the stock of an established corporation may have a more definite value than stock in a corporation just organizing, will not make the sales of the former interstate commerce and the sales of the latter, under similar conditions, something else; nor would the fact that the subscribers to the original issues of the stock of a corporation perhaps contemplated holding it for a substantial period until its value is established, whereas the purchaser on the exchange of the stock of an established concern might contemplate its resale almost immediately, affect the character of the transactions.

The fact that a manufacturer sells to ultimate consumers for immediate consumption does not differentiate his business from that of a manufacturer who sells to the trade for resale. While the difference between the original sales of stock of a corporation and sales of the stock of an established concern, such as sales on an exchange suggests itself, the board finds no justification in the decisions of the courts nor in reason for such a distinction as will take the one out of the operation of the commerce clause and leave the other in Federal jurisdiction, nor can such jurisdiction be affected by the fact that the sale of stock is an indispensable condition of doing business in corporate form. As well might a manufacturer who primarily engages in intrastate commerce but who sells a small surplus in other States, urge that he does not subject himself to Federal jurisdiction. Federal jurisdiction can not be made to depend upon whether interstate commerce is engaged in as a matter of necessity or of choice. The only question to be answered in order to determine the presence of such jurisdiction is does the person in fact engage in interstate commerce?

The board is therefore of the opinion that the sales by the respondent of its stock to persons in various States of the Union, through the services of salesmen and by the use of the mails for correspondence with such salesmen, for advertising stock and for transmitting it, are transactions in interstate commerce and subject to Federal jurisdiction.

3. If corporate stock may be the subject of interstate commerce, it would appear that brokerage or banking houses which engage practically continuously in its sale to persons in various States through the service of traveling salesmen or through the use of the mails and express companies, would be engaged in interstate commerce. Such a business would have all the elements of interstate commerce with the exception, possibly, that the broker or banking house ordinarily does not have title to the stock and sells it on commission for the corporations issuing it. The decision of the Supreme Court of the United States in Hopkins v. United States (171, U. S. 578) raises some doubt whether business of this character is interstate commerce owing to the fact that commission men merely furnish a facility of interstate commerce rather than themselves engaging in such commerce. In that case the Government attacks the validity

under the Sherman Antitrust Act of certain rules of the Kansas City Live Stock Exchange. The business of the members of the exchange was to receive individual consignments of cattle and other live stock from the owners of the same in States and territories other than Missouri and Kansas (the exchange being located on the State line between Kansas and Missouri, and partly in both States), and feed such stock and prepare them for the market and dispose of the same, to receive the proceeds and pay it to the owners after deducting the commissions and other charges. The exchange, by rule, fixed the commissions to be charged by its members for selling live stock, prohibited members from buying live stock from a commission merchant not a member of the exchange, prohibited the employment of agents to solicit consignments of such stock except upon stipulated salary and forbade the sending of prepaid telegrams with information respecting market conditions. The Supreme Court held that the business of the commission men was not in itself commerce, and that the rules governing the exchange affected interstate commerce so indirectly and remotely as not to be within the prohibition of the Sherman law. This decision is of such importance that an extended quotation from it appears to be justified. Mr. Justice Peckham, in delivering an opinion, said in part:

"We come, therefore, to the inquiry as to the nature of the business or occupation that the defendants are engaged in. Is it interstate commerce in the sense of that word as it has been used and understood in the decisions of this court? Or is it a business which is an aid or facility to commerce, and which, if it affect interstate commerce at all, does so only in an indirect and incidental manner?"

"The business of defendants is primarily and substantially the buying and selling in their character as commission merchants, at the stockyards in Kansas City, live stock which has been consigned to some of them for the purpose of sale, and the rendering of an account of the proceeds arising therefrom. The sale or purchase of live stock as commission merchants at Kansas City is the business done, and its character is not altered because the larger proportion of the purchases and sales may be of live stock sent into the State from other States or from the Territories. Where the stock came from or where it may ultimately go after a sale or purchase, procured through the services of one of the defendants at the Kansas City stockyards, is not the substantial factor in the case. The character of the business of defendants must, in this case, be determined by the facts occurring at that city.

"If an owner of cattle in Nebraska accompanied them to Kansas City and there personally employed one of these defendants to sell the cattle at the stockyards for him on commission, could it be properly said that such defendant in conducting the sale for his principal was engaged in interstate commerce? Or that an agreement between himself and others not to render such services for less than a certain sum was a contract in restraint of interstate trade or commerce? We think not. On the contrary, we regard the services as collateral to such commerce and in the nature of a local aid or facility provided for the cattle owner toward the accomplishment of his purpose to sell them; and an agreement among those who render the services relating to the terms upon which they will render them is not a contract in restraint of interstate trade or commerce.

"Is the true character of the transaction altered when the owner, instead of coming from Nebraska with his cattle, sends them by a common carrier consigned to one of the defendants at Kansas City with directions to sell the cattle and render him an account of the proceeds? The services rendered are the same in both instances, only in one case they are rendered under a verbal contract made at Kansas City personally while in the other they are rendered under written instructions from the owner given in another State. This difference in the manner of making the contract for the services can not alter the nature of the services themselves. If the person, under the circumstances stated, who makes a sale of the cattle for the owner by virtue of a personal employment at Kansas City, is not engaged in interstate commerce when he makes such sale, we regard it as clear that he is not so engaged, although he has been employed by means of a written communication from the owner of the cattle in another State."

*

*

*Granting that the cattle themselves because coming from another State, are articles of interstate commerce, yet it does not therefore follow that before their sale all persons performing services in any way connected with them are themselves engaged in that commerce, or that their agreements among each other relative to the compensation to be charged for their services are void as agreements made in restraint of interstate trade. The commission agent in selling the cattle for their owner simply aids him in finding a market; but the facilities thus afforded the owner by the agents are not of such nature as to thereby make that agent an individual engaged in inter