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Sec. 8.-Powers of Congress

CI. 3.-Commerce

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nations in all its branches; that commerce included navigation; that the language of this clause comprehends every species of commercial intercourse between the United States and foreign nations; that no sort of trade can be carried on between this country and any other to which this power does not extend; that commerce, as used in the Constitution, is a unit, every part of which is indicated by the term; that the word “among," as used in the clause, means “intermingled with,” and that it was restricted to that commerce which concerned more States than one; that the clause did not comprehend that commerce which is completely internal and carried on between man and man in a State, or between different parts of the same State, and which does not extend to or affect other States; that the completely internal commerce of a State may be considered as reserved to the State itself; that in regulating commerce with foreign nations the power of Congress does not stop at State lines; that the commerce of the United States with foreign nations is that of the whole United States; that this principle is still more clear when applied to commerce among the several States"; that

' commerce among the States must of necessity be commerce with the States, and the power of Congress must be exercised within the territorial jurisdiction of the States. The Chief Justice then inquired, “What is this power of Congress ?” and said it is the power to regulate, the power to prescribe the rule by which commerce shall be governed; that it is vested in Congress, is complete in itself, and may be exercised to its utmost extent, for it has no limitations beyond those found in the Constitution.

Brown v. Maryland (12 Wheat. 419), in which the court said:

Any penalty inflicted on the importer for selling the article in his character of importer must be in opposition to the act of Congress which au. thorizes importation. Any charge on the introduction and incorporation of the articles into and with the mass of property in the country must be hostile to the power given to Congress to regulate commerce.

Trade-mark Cases (100 U. S. 96), in which it was held:

When, therefore, Congress undertakes to enact a law which can only be valid as a regulation of commerce it is reasonable to expect to find on the face of the law, or from its essential nature, that it is a regulation of commerce with foreign nations, or among the several States, or with the Indian tribes. If not so limited it is in excess of the power of Congress. If its main purpose be to establish a regulation applicable to all trade, to commerce at all points, especially if it be apparent that it is designed to govern the commerce wholly between citizens of the same State, it is obviously the exercise of a power not confided to Congress.

Paul v. Virginia (8 Wall. 168), holding:

Issuing a policy of insurance is not a transaction of commerce. The policies are simple contracts of indemnity against loss by fire, entered into between the corporations and the assured, for a consideration paid by the latter. These contracts are not articles of commerce in any proper meaning of the word. They are not subjects of trade and barter offered in the market as something having an existence and value independent of the partias to them. They are not commodities to be shipped or forwarded Sec. 8.--Powers of Congress

Cl. 3.--Commerce

from one State to another and then put up for sale. They are like other personal contracts between parties which are completed by their signature and the transfer of the consideration. Such contracts are not interstate transactions, though the parties may be domiciled in different States.

The ruling as to a contract of fire insurance was afterwards applied to a contract of marine insurance (Hooper v. California, 155 U. S. 648), and as to a contract of mutual life insurance (New York Life Ins. Co. v. Cravens, 178 U. S. 389). The principal case has been much criticized but has been steadily followed. Its doctrine was reexamined in the light of subsequent decisions and was reaffirmed in New York Life Ins. Co. v. Deer Lodge County (231 U. S. 495).

Cooley v. Philadelphia (12 How. 299), in which the court said:

Whatever subjects of this power are in their nature national, or admit only of one uniform system or plan of regulation, may justly be said to be of such a nature as to require exclusive legislation by Congress.

The conclusion of this opinion was that the mere grant to Congress of the power to regulate commerce did not deprive the States of power to regulate pilots, and although Congress has legislated on this subject, its legislation manifests an intention, with a single exception, not to regulate this subject, but to leave its regulation to the several States.

In this connection, see Anderson v. Pacific Coast S. S. Co. (225 U. S. 187), summarizing the pilotage laws.

Hall v. De Cuir (95 U. S. 487), wherein it was said: There can be no doubt but that exclusive power has been conferred upon Congress in respect to the regulation of commerce among the several States. The difficulty has never been as to the existence of this power, but as to what is to be deemed an encroachment upon it; for, as has been often said, “ Legislation may in a great variety of ways affect commerce and persons engaged in it without constituting a regulation of it within the meaning of the Constitution.” . * * A State might regulate the charges of public warehouses and of railroads situated entirely within the State, eren though those engaged in commerce among the States might sometimes use the warehouses or the railroads in the prosecution of their business.

So, too, it has been held that States may authorize the construction of dams and bridges across navigable streams situated entirely within their respective jurisdictions.

The same is true of turnpikes and ferries. By such statutes the States regulate, as a matter of domestic concern, the instruments of coramerce situated wholly within their own jurisdictions and over which they have exclusive governmental control, except when employed in foreign or interstate commerce. As they can only be used in the State, their regulation for all purposes may properly be assumed by the State until Congress acts in reference to their foreign or interstate relations. When Congress does act the State laws are superseded only to the extent that they affect commerce outside a State as it comes within the State.

The line which separates the powers of the States from this exclusive power of Congress is not always distinctly marked, and oftentimes it is not easy to determine on which side a particular case belongs.

But we think it may safely be said that State legislation which seeks to impose a direct burden upon interstate commerce or to interfere directly with its freedom does encroach upon the exclusive power of Congress.

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Sec. 8.-Powers of Congress

Cl. 3.-Commerce

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Pensacola Telegraph Co. v. Western Union (96 U. S. 9), in which the court said:

The powers thus granted are not confined to the instrumentalities known or in use when the Constitution was adopted, but they keep pace with the progress of the country and adapt themselves to the new developments of time and circumstances. They extend from the horse with its rider to the stage coach, from the sailing vessel to the steamboat, from the coach and the steamboat to the railroad, and from the railroad to the telegraph, as these new agencies are successively brought into use to meet the demands of increasing population and wealth. They were intended for the government of the business to which they relate at all times and under all circumstances. As they were intrusted to the General Government for the good of the Nation, it is not only the right, but the duty, of Congress to see to it that intercourse among the States and the transmission of intelligence are not obstructed or unnecessarily encumbered by State legislation.

United States v. Knight Co. (156 U. S. 1), in which it was held:

Doubtless the power to control the manufacture of a given thing involves in a certain sense the control of its disposition, but this is a secondary and not the primary sense; and although the exercise of that power may result in bringing the operation of commerce into play, it does not control it, and affects it only incidentally and indirectly. Commerce succeeds to manufacture, and is not a part of it. The power to regulate commerce is the power to prescribe the rule by which commerce shall be governed, and is a power independent of the power to suppress monopoly. But it may operate in repression of monopoly whenever that comes within the rules by which commerce is governed or whenever the transaction is itself a monopoly of commerce.

The Shreveport Case (Houston, etc., R. Co. v. U. S., 234 U. S. 342), in which the court held:

Congress in the exercise of its paramount power may prevent the common instrumentalities of interstate and intrastate commercial intercourse from being used in their intrastate operations to the injury of interstate commerce. This is not to say that Congress possesses the authority to regulate the internal commerce of a State, as such, but that it does possess the power to foster and protect interstate commerce, and to take all measures necessary or appropriate to that end, although intrastate transactions of interstate carriers may thereby be controlled.

We find no reason to doubt that Congress is entitled to keep the highways of interstate communication open to interstate traffic upon fair and equal terms. That an unjust discrimination in the rates of a common carrier, by which one person or locality is unduly favored as against another under substantially similar conditions of traffic, constitutes an evil is undeniable; and where this evil consists in the action of an interstate carrier in unreasonably discriminating against interstate traffic over its line, the authority of Congress to prevent it is equally clear. It is immaterial, so far as the protecting power of Congress is concerned, that the discrimination arises from intrastate rates as compared with interstate rates. The use of the instrument of interstate commerce in a discrimatory manner so as to inflict injury upon that commerce, or some part thereof, furnishes abundant ground for Federal intervention. Nor can the attempted exercise of State authority alter the matter, where Congress has acted, for a State may not authorize a carrier to do that which Congress is entitled to forbid.

It is manifest that the State can not fix the relation of the carriers' interstate and intra state charges without directly interfering with the former, unless it simply follows the standard set by Federal authority.

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Sec. 8.—Powers of Congress

CI. 3.-Commerce

The “Recapture” Case (Dayton-Goose Creek Ry. v. U. S., 263 U. S. 456), interpreting section 422 of the transportation act of 1920 (section 15a, interstate commerce act), held:

That the provisions for "recapture” and use of excess income are essential to the plan of the act, which aims for an efficient national transportation system, and therein seeks to maintain uniform rates for all shippers as a means of distributing traffic and avoiding congestion on the stronger railroads, while keeping the net returns of the railroads, whether strong or weak, to the varying percentages that are fair to them, respectively; rates which as a body enable all the railroads necessary to do the business of a rate section, to enjoy not more than a fair net operating income on the aggregate value of their properties therein economically and efficiently operated, are, in their general level, reasonable from the standpoint of the individual shipper in that section; the statute leaves the reasonableness of each particular rate open to inquiry independently of the net return to the carrier from all; a railroad, however strong financially, is not entitled as a constitutional right to more than a fair net operating income upon the value of its properties devoted to transportation. Under the statute excess income is taken in trust, and the carrier never has such a title to it as to render its recapture by the Government a taking without due process, in violation of the Fifth Amendment. The recapture clause does not, by reducing net income from intrastate rates, invade the reserved power of the States in violation of the Tenth Amendment, but, in view of its relation to the plan and national purpose of the act, is within the power of Con. gress over interstate commerce.

Addyston Pipe & Steel Co. v. U. S. (175 U. S. 211), holding:

Under this grant of power to Congress, that body, in our judgment, may enact such legislation as shall declare void and prohibit the performance of any contract between individuals or corporations where the natural and direct effect of such a contract will be, when carried out, to directly, and not as a mere incident to other and innocent purposes, regulate to any substantial extent interstate commerce.

We do not assent to the correctness of the proposition that the constitutional guaranty of liberty to the individual to enter into private contracts limits the power of Congress and prevents it from legislating upon the subject of contracts of the class mentioned.

Champion v. Ames (188 U. S. 321), in which it was held 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”; such interstate carriage prohibited as injurious to the public generally.

Prohibition as a means of regulation has been approved by the Supreme Court in several other cases:

U. S. v. Holliday, 3 Wall. 407.
Buttfield v. Stranahan, 192 U. S. 470.
U. S. v. Delaware & H. Co., 213 U. S. 366.

Hoke v. U. S., 227 U. S. 308.
I. C. C.v. Delaware, etc., R. Co. (220 U. S. 235), holding that a
carrier can not make mere ownership of goods tendered for trans-
portation the test of the duty to carry, nor may a carrier dis-
criminate in fixing charges for carriage upon such ownership,
and that in the absence of statutory authority to exclude for-
warding agents from availing of published rates the courts can

Sec. 3.-Powers of Congress

CI. 3.-Commerce

not overrule a conclusion of the Interstate Commerce Commission that such exclusion would create a preference.

The term "commerce" not only includes navigation but the transportation, by whatever agencies, of commodities or of passengers, even on foot, or the transmission of ideas, and it is immaterial whether such transportation is connected with a sale. Included in the term transportation are all the services in connection with the receipt and delivery of the property transported. A contract may or may not be a transaction of interstate commerce. If it is in the form of a bill of lading, it is; but if in the form of a bill of exchange, or of a contract to perform labor outside the State, or of a contract for future delivery to be executed in another State, or of the contract of a private banker with his depositors, it is not.

Pennsylvania v. Wheeling Brdg. Co., 13 How. 518.
Gilman v. Philadelphia, 3 Wall. 713.
Head Money Cases, 112 U. S. 580.
U. S. v. Trans-Missouri Frt. Assn., 166 U. S. 290.
The Passenger Cases, 7 How. 282.
Covington Brdg. Co. v. Kentucky, 154 U. S. 204.
International Text-Book Co. v, Pigg, 217 U. S. 91.
Hanley v. Kansas City, etc., R. Co., 187 U. S. 617.
Houston, etc., R. Co. v. Mayes, 201 U. S. 321.
Almy v. California, 24 How. 169.
Woodruff v. Parham, 8 Wall. 123.
Nathan v. Louisiana, 8 How. 73.
Williams v. Fears, 179 U. S. 270.
Ware & Leland v. Mobile County, 209 U. S. 405.
Engel v. O'Malley, 219 U. S. 128.

See also-
Henderson v. New York City, 92 U. S. 259.
Lord v. Steamship Co., 102 U. S. 541.
The Daniel Ball, 10 Wall. 557.
Willson v. Blackbird Creek etc. Co., 2 Pet. 245.
Escanaba Co. v. Chicago, 107 U. S. 678.
Welton v. Missouri, 91 U. S. 275.
Railroad Co. v. Fuller, 17 Wall. 560.
Lake Shore etc. R. Co. v. Ohio, 173 U. S. 285.
Turner v. Maryland, 107 U. S. 38.

Inman S. S. Co. 1. Tinker, 94 U. S. 238.
Interstate commerce is not confined to transportation from
one State to another, but comprehends all commercial intercourse
between different States and all the component parts of that
intercourse, including the purchase and sale of the commodities
transported.

Dahnke-Walker Co. v. Bondurant, 257 U. S. 282.

The Grant of Power

To Congress

It is Congress, and not the judicial department, to which the Constitution has given the power to regulate commerce with foreign nations and among the several States. The courts can never take the initiative on this subject.

Transportation Co. v. Parkersburg, 107 U. S. 701.

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