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§ 373 a.1 Issuing policies of insurance is not a transac tion of commerce within the meaning of the Constitution, and therefore a statute controlling the operations within the state, of insurance companies chartered in other states, is not a regulation of commerce, and does not interfere with any power ov ercommerce conferred upon Congress.2 The statute of Nevada already referred to, levying a tax upon travellers passing through or beyond the territorial limits, was objected to on the ground that it was a regulation of interstate commerce. The Supreme Court, while condemning the tax for other reasons, refused to sustain this objection. Adopting a doctrine which had been before advanced in certain cases, it held that the power of Congress to regulate foreign and interstate commerce embraces (1) subjects necessarily of a national character, and therefore exclusively within the control of Congress; and (2) subjects of a local character, such as pilots, bridges over navigable streams, etc. Upon this latter class the states may legislate in the absence of national legislation thereon. The statute in question belongs within this subdivision, and as there are no laws of the United States whatever relating to the same matters, it is not obnoxious to the objection raised against it. The court was not unanimous in this decision. Chase, C. J., and Clifford, J., dissented, holding the act to be a regulation of interstate commerce exclusively within the jurisdiction of Congress. A statute of Louisiana established port wardens for New Orleans, and provided among other things that they "should be entitled to demand and receive in addition to their fees the sum of $5.00, whether called upon to perform any service or not, for every vessel arriving in that port." This act was condemned as a regulation of foreign commerce forbidden to the states. The provision quoted was an interference with the business of navigation and traffic, without any corresponding consideration. The case was thus dis

This and the three following sections were originally in the Appendix, but have now been inserted here. ED.

Paul v. Virginia, 8 Wall. 168.

8 Crandall v. Nevada, 6 Wall. 35.

tinguishable from Cooley v. Port Wardens, before mentioned in which a statute somewhat similar was sustained.1

373 b. The whole subject of regulating commerce among the states, the respective powers of Congress and of the state legislatures over the same, was thoroughly discussed in two or three very recent cases which I must refer to at some length. In Reading R. R. v. Pennsylvania, or "Case of the State Freight Tax," a statute of Pennsylvania imposing a tax upon freight taken up within the state and carried out of it, or taken up without and brought within it by any railroad, was held to be void. The decision was placed squarely upon the ground that the law was a regulation of commerce among the states, and that, in respect to such subjects at least, the power of Congress is exclusive; the statute was therefore void, although Congress has never legislated in relation to the same subject-matter. The prevailing opinion, which was delivered by Mr. Justice Strong, announces the following propositions in a very distinct manner as the various steps by which the conclusion is reached: (1.) "The transportation of the subjects of commerce [freight] is a constituent of commerce itself," it makes no difference whether by water or by land. "In either case the bringing the goods from the seller to the buyer is commerce." (2.) A tax upon goods [freight] transported from state to state is a regulation of commerce among the states.4 (3.) "Whenever the subjects over which the power to regulate commerce is asserted are in their nature national, or when they admit of one uniform system or plan of regulation, they are within the exclusive control of Congress." 5 (4.) The transportation of goods and passengers from one state to another is such a subject. Justices Swayne and Davis dissented, solely, however, on the construction of the statute, holding that by its true interpretation it did not lay a tax on the freight. As they did not object to the other reasoning of

1 Steamship Co. v. Port Wardens, 6 Wall. 31.
2 15 Wall. 232.

Ibid. pp. 266-278.

• Ibid. pp. 280, 281.

• Ibid. p. 275.

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Ibid. pp. 279, 280.

the majority, we must conclude that the court was unanimous in its ruling upon the constitutional questions involved. The importance of this decision cannot be over-estimated. Although the direct object of the action was to test the validity of a tax law, yet this validity was made to rest exclusively upon the question as to the respective powers of the nation or of the state over the subject of interstate commerce. The sole objection suggested to the statute was its necessary character as a regulation of commerce. The ratio decidendo therefore involved primarily the matter of commerce regulation and not that of tax imposition. Keeping in mind this fundamental fact, we find that the Supreme Court has settled some most important questions. First. The power of Congress over commerce among the states is exactly the same in kind and degree as the power to regulate foreign commerce. In respect to some elements or phases of this interstate commerce, the legislative function is possessed by the nation exclusively; the states cannot legislate even though Congress may have been silent. In respect to other elements or phases, the states are at liberty to enact laws as long as Congress refrains from any interference; but as soon as that body sees fit to adopt any measures, these state laws, so far as they are regulations of the interstate commerce, are suspended. In determining what subjects are thus exclusively within the jurisdiction of the United States, the court has established a new and additional criterion: namely, that the subject admits of one uniform system or plan of regulation. It had previously been ruled that if the subjects to be regulated were in their nature national, the power over them is confined to Congress; but the second line of distinction laid down by Mr. Justice. Strong is very different, and restricts the legislative function of the states within much narrower limits. Secondly. The court has determined that the general subject of transporting goods and passengers from a state into or through another is one which belongs exclusively to Congress to regulate. It cannot be said that this subject is peculiarly national in its nature; it plainly falls within the domain of Congres

sional legislation, because it admits of an uniform system or plan of regulation. The consequences of this particular ruling are very far reaching. If the matter of transporting goods and passengers beyond the boundaries of a single state is one over which the states are forbidden to exercise any control, even in the absence of action by Congress, a vast number of state statutes are utterly null and void, and a very wide field is open for legislation by Congress. In fact, without such legislation the through lines of railway which transact business from state to state would be utterly without any legal control. It being thus established as a general principle that the transportation of goods and passengers from state to state is a matter exclusively within the domain of Congress, the inquiry remains, what particular measures in respect thereof are properly regulations of commerce? Do laws chartering railway and other companies for the transaction of interstate traffic, or providing for connections, and the running of trains, and the rates of charge, and the like, by companies already existing, come within this definition? To these questions no judicial answer has yet been given.

§ 373 c. It has been settled, however, by a still more recent decision of the Supreme Court, that a large mass of powers of control and direction over interstate means of traffic and transportation still remains in the state legislatures, and is exclusively theirs, being beyond the competency of Congress. The measures which the states may thus adopt belong to their general police power, and are not to be regarded as true regulations of commerce, however much they may incidentally affect the processes of traffic and transportation. This very important limitation was announced by the court in Railroad Co. v. Fuller. In the year 1866 Congress passed a general statute to the effect that railroad companies may carry passengers on their way from one state to another and may receive compensation therefor. A state subsequently enacted a statute requiring all railroads operating within its territory to fix their rates of charge

1 17 Wall. 560.

for passage at the commencement of each year, and to cause such rates to be posted up in all their stations upon certain penalties. This statute was held to be valid even in its application to railroads which extend beyond the boundaries of the state and which carry on an interstate traffic. It was declared not to be a regulation of commerce at all, but to be a matter of police regulation. "It is not everything that affects commerce that amounts to a regulation of it within the meaning of the Constitution." From these two decisions, which are easily and plainly reconcilable, it is possible, if not probable, that very many measures, which at first blush might be regarded as regulations of commerce, will be treated as mere regulations of police, and therefore within the authority of the state legislatures.

§ 373 d. The nature and effect of the national power over interstate commerce has been still further defined, and its limits still more accurately fixed, in a decision but just pronounced. The power to regulate commerce, it is said, was designed to secure equality and freedom in commercial intercourse against discriminating state legislation. It was not intended to interfere with private contracts, valid when made and not designed to create impediments to such intercourse. Congress authorized the construction of a railroad bridge across the Mississippi River at the city of Dubuque. This bridge rendered entirely useless a contract which had been previously made between a railroad company and an elevator company, by virtue of which all grain brought to that city by the railroad, for the purpose of shipment to points beyond, was to be received by and stored in the elevator at a stipulated rate of compensation. By means of the bridge the cars were able to cross the river without breaking bulk, and there was no longer any necessity for handling and transshipping the grain at the elevator. The Supreme Court held that, under the power given to regulate commerce among the states, Congress could authorize the construction of the bridge; but this exercise of the power had produced no effect upon the contract; that remained in full force, notwithstanding the erection of the bridge had

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