The Constitution of the United States of America: Analysis and Interpretation Part 19

The first case to come before the Court in which the issues discussed above were canva.s.sed at all thoroughly was Champion _v._ Ames,[495]

involving the act of 1895 "for the suppression of lotteries."[496] An earlier act excluding lottery tickets from the mails had been upheld in the earlier case of In re Rapier,[497] on the proposition that Congress clearly had the power to see that the very facilities furnished by it were not put to bad uses. But in the case of commerce the facilities are not ordinarily furnished by the National Government, and the right to engage in foreign and interstate commerce comes from the Const.i.tution itself, or is anterior to it.

How difficult the Court found the question produced by the act of 1895, forbidding any person to bring within the United States or to cause to be "carried from one State to another" any lottery ticket, or an equivalent thereof, "for the purpose of disposing of the same," is shown by the fact that the case was thrice argued before the Court, and the fact that the Court's decision finally sustaining the act was a five-to-four decision. The opinion of the Court, on the other hand, prepared by Justice Harlan, marked an almost unqualified triumph at the time for the view that Congress's power to regulate commerce among the States includes the power to prohibit it, especially to supplement and support State legislation enacted under the police power.[498] Early in the opinion extensive quotation is made from Chief Justice Marshall's opinion in Gibbons _v._ Ogden,[499] with special stress upon the definition there given of the phrase "to regulate." Justice Johnson's a.s.sertion on the same occasion is also given: "The power of a sovereign State over commerce, * * *, amounts to nothing more than, a power to limit and restrain it at pleasure." Further along is quoted with evident approval Justice Bradley's statement in Brown _v._ Houston,[500] that "the power to regulate commerce among the several States is granted to Congress in terms as absolute as is the power to regulate commerce with foreign nations."

NATIONAL PROHIBITIONS AND STATE POLICE POWER

Following in the wake of Champion _v._ Ames, Congress has repeatedly brought its prohibitory powers over interstate commerce and communications to the support of certain local policies of the States in the exercise of their reserved powers, thereby aiding them in the repression of the liquor traffic,[501] of traffic in game taken in violation of State laws,[502] of commerce in convict-made goods,[503] of the white slave traffic,[504] of traffic in stolen motor vehicles,[505]

of kidnapping,[506] of traffic in stolen property,[507] of racketeering,[508] of prize-fight films or other pictorial representation of encounters of pugilists.[509] The conception of the Federal System on which the Court based its validation of this legislation was stated by it in 1913 in sustaining the Mann "White Slave" Act in the following words: "Our dual form of government has its perplexities, State and Nation having different spheres of jurisdiction, * * *, but it must be kept in mind that we are one people; and the powers reserved to the States and those conferred on the Nation are adapted to be exercised, whether independently or concurrently, to promote the general welfare, material, and moral."[510] At the same time, the Court made it plain that in prohibiting commerce among the States, Congress was equally free to support State legislative policy or to devise a policy of its own. "Congress," it said, "may exercise this authority in aid of the policy of the State, if it sees fit to do so. It is equally clear that the policy of Congress acting independently of the States may induce legislation without reference to the particular policy or law of any given State. Acting within the authority conferred by the Const.i.tution it is for Congress to determine what legislation will attain its purposes. The control of Congress over interstate commerce is not to be limited by State laws."[511]

HAMMER _v._ DAGENHART

However, it is to be noted that none of this legislation operated in the field of industrial relations. So when the Court was confronted in 1918, in the case of Hammer _v._ Dagenhart,[512] with an act which forbade manufacturers and others to offer child-made goods for transportation in interstate commerce,[513] it held the act, by the narrow vote of five Justices to four, to be not an act regulative of commerce among the States, but one which invaded the reserved powers of the States. "The maintenance of the authority of the States over matters purely local,"

said Justice Day for the Court, "is as essential to the preservation of our inst.i.tutions as is the conservation of the supremacy of the federal power in all matters entrusted to the Nation by the Federal Const.i.tution."[514] As to earlier decisions sustaining Congress's prohibitory powers, Justice Day said: "In each of these instances the use of interstate transportation was necessary to the accomplishment of harmful results. * * * This element is wanting in the present case.

* * * The goods s.h.i.+pped are in themselves harmless. * * * When offered for s.h.i.+pment, and before transportation begins, the labor of their production is over, and the mere fact that they were intended for interstate commerce transportation does not make their production subject to federal control under the commerce power. * * * 'When commerce begins is determined, not by the character of the commodity, nor by the intention of the owner to transfer it to another State for sale, * * *, but by its actual delivery to a common carrier for transportation, * * *' (Mr. Justice Jackson in _In re Greene_, 52 Fed.

Rep. 113). This principle has been recognized often in this court. Coe _v._ Errol, 116 U.S. 517 * * *."[515]

The decision in Hammer _v._ Dagenhart was, in short, governed by the same general conception of the interstate commerce process as that which governed the decision in the Sugar Trust Case. Commerce was envisaged as beginning only with an act of transportation from one State to another.

And from this it was deduced that the only commerce which Congress may prohibit is an act of transportation from one State to the other which is followed in the latter by an act within the normal powers of government to prohibit. Commerce, however, is primarily _traffic_; and the theory of the Child Labor Act was that it was designed to discourage a widespread and pernicious interstate traffic in the products of child labor--pernicious because it bore "a real and substantial relation" to the existence of child labor employment in some States and const.i.tuted a direct inducement to its spread to other States. Deprived of the interstate market which this decision secured to it, child labor could not exist.

INTERSTATE COMMERCE IN STOLEN GOODS BANNED

In Brooks _v._ United States,[516] decided in 1925, the Court, in sustaining the National Motor Vehicle Theft Act of 1919,[517] materially impaired the _ratio decidendi_ of Hammer _v._ Dagenhart. At the outset of his opinion for the Court, Chief Justice Taft stated the general proposition that "Congress can certainly regulate interstate commerce to the extent of forbidding and punis.h.i.+ng the use of such commerce as an agency to promote immorality, dishonesty or the spread of any evil or harm to the people of other States from the State of origin." This statement was b.u.t.tressed by a review of previous cases, including the explanation that the goods involved in Hammer _v._ Dagenhart were "harmless" and did not spread harm to persons in other States. Pa.s.sing then to the measure before the Court, the Chief Justice noted "the radical change in transportation" brought about by the automobile, and the rise of "elaborately organized conspiracies for the theft of automobiles * * *, and their sale or other disposition" in another police jurisdiction from the owner's. This, the opinion declared, "is a gross misuse of interstate commerce. Congress may properly punish such interstate transportation by anyone with knowledge of the theft, because of its harmful result and its defeat of the property rights of those whose machines against their will are taken into other jurisdictions."[518]

The Motor Vehicle Act was sustained, therefore, mainly as protective of owners of automobiles, that is to say, of interests in "the State of origin." It was designed to repress automobile thefts, and that notwithstanding the obvious fact that such thefts must necessarily occur before transportation of the thing stolen can take place, that is, under the formula followed in Hammer _v._ Dagenhart, before Congress's power over interstate commerce becomes operative. Also, the Court took cognizance of "elaborately organized conspiracies" for the theft and disposal of automobiles across State lines--that, to say, of a widespread traffic in such property.

THE DARBY CASE

The formal overruling of Hammer _v._ Dagenhart, however, did not occur until 1941 when, in sustaining the Fair Labor Standards Act, a unanimous Court, speaking by Justice Stone, said: "Hammer _v._ Dagenhart has not been followed. The distinction on which the decision was rested that Congressional power to prohibit interstate commerce is limited to articles which in themselves have some harmful or deleterious property--a distinction which was novel when made and unsupported by any provision of the Const.i.tution--has long since been abandoned. * * * The thesis of the opinion that the motive of the prohibition or its effect to control in some measure the use or production within the States of the article thus excluded from the commerce can operate to deprive the regulation of its const.i.tutional authority has long since ceased to have force. * * * And finally we have declared 'The authority of the Federal Government over interstate commerce does not differ in extent or character from that retained by the States over intrastate commerce.'

United States _v._ Rock Royal Co-operative, 307 U.S. 533, 569. The conclusion is inescapable that Hammer _v._ Dagenhart, was a departure from the principles which have prevailed in the interpretation of the Commerce Clause both before and since the decision and that such vitality, as a precedent, as it then had has long since been exhausted.

It should be and now is overruled."[519] And commenting in a recent case on the Fair Labor Standards Act, Justice Burton, speaking for the Court said: "The primary purpose of the act is not so much to regulate interstate commerce as such, as it is, through the exercise of legislative power, to prohibit the s.h.i.+pment of goods in interstate commerce if they are produced under substandard labor conditions."[520]

CONGRESS AND THE FEDERAL SYSTEM

In view of these developments the following dictum by Justice Frankfurter, was no doubt, intended to be rea.s.suring as to the future of the Federal System: "The interpenetrations of modern society have not wiped out State lines. It is not for us [the Court] to make inroads upon our federal system either by indifference to its maintenance or excessive regard for the unifying forces of modern technology.

Scholastic reasoning may prove that no activity is isolated within the boundaries of a single State, but that cannot justify absorption of legislative power by the United States over every activity."[521] While this may be conceded, the unmistakable lesson of recent cases is that the preservation of our Federal System depends today mainly upon Congress.

The Commerce Clause as a Restraint on State Powers

DOCTRINAL BACKGROUND

The grant of power to Congress over commerce, unlike that of power to levy customs duties, the power to raise armies, and some others, is unaccompanied by correlative restrictions on State power. This circ.u.mstance does not, however, of itself signify that the States were expected still to partic.i.p.ate in the power thus granted Congress, subject only to the operation of the supremacy clause. As Hamilton points out in The Federalist, while some of the powers which are vested in the National Government admit of their "concurrent" exercise by the States, others are of their very nature "exclusive," and hence render the notion of a like power in the States "contradictory and repugnant."[522] As an example of the latter kind of power Hamilton mentioned the power of Congress to pa.s.s a uniform naturalization law.

Was the same principle expected to apply to the power over foreign and interstate commerce?

Unquestionably one of the great advantages antic.i.p.ated from the grant to Congress of power over commerce was that State interferences with trade, which had become a source of sharp discontent under the Articles of Confederation, would be thereby brought to an end. As Webster stated in his argument for appellant in Gibbons _v._ Ogden: "The prevailing motive was to regulate commerce; to rescue it from the embarra.s.sing and destructive consequences, resulting from the legislation of so many different States, and to place it under the protection of a uniform law." In other words, the const.i.tutional grant was itself a regulation of commerce in the interest of uniformity. Justice Johnson's testimony in his concurring opinion in the same case is to like effect: "There was not a State in the Union, in which there did not, at that time, exist a variety of commercial regulations; * * * By common consent, those laws dropped lifeless from their statute books, for want of sustaining power that had been relinquished to Congress";[523] and Madison's a.s.sertion, late in life, that power had been granted Congress over interstate commerce mainly as "a negative and preventive provision against injustice among the States,"[524] carries a like implication.

That, however, the commerce clause, unimplemented by Congressional legislation, took from the States any and all power over foreign and interstate commerce was by no means universally conceded; and Ogden's attorneys directly challenged the idea. Moreover, as was pointed out on both sides in Gibbons _v._ Ogden, legislation by Congress regulative of any particular phase of commerce would still leave many other phases unregulated and consequently raise the question whether the States were ent.i.tled to fill the remaining gaps, if not by virtue of a "concurrent"

power over interstate and foreign commerce, then by virtue of "that immense ma.s.s of legislation," as Marshall termed it, "which embraces everything within the territory of a State, not surrendered to the general government,"[525]--in a word, the "police power."

The commerce clause does not, therefore, without more ado, settle the question of what power is left to the States to adopt legislation regulating foreign or interstate commerce in greater or less measure. To be sure, in cases of flat conflict between an act or acts of Congress regulative of such commerce and a State legislative act or acts, from whatever State power ensuing, the act of Congress is today recognized, and was recognized by Marshall, as enjoying an unquestionable supremacy.[526] But suppose, _first_, that Congress has pa.s.sed no act; or _secondly_, that its legislation does not clearly cover the ground which certain State legislation before the Court attempts to cover--what rules then apply? Since Gibbons _v._ Ogden both of these situations have confronted the Court, especially as regards interstate commerce, hundreds of times, and in meeting them the Court has, first and last, coined or given currency to numerous formulas, some of which still guide, even when they do not govern, its judgment.

DOCTRINAL BACKGROUND; WEBSTER'S CONTRIBUTION

The earliest, and the most successful, attempt to set forth a principle capable of guiding the Court in adjusting the powers of the States to unexercised power of Congress under the commerce clause was that which was made by Daniel Webster in his argument in Gibbons _v._ Ogden, in the following words: "He contended, * * *, that the people intended, in establis.h.i.+ng the Const.i.tution, to transfer from the several States to a general government, those high and important powers over commerce, which, in their exercise, were to maintain a uniform and general system.

From the very nature of the case, these powers must be exclusive; that is, the higher branches of commercial regulation must be exclusively committed to a single hand. What is it that is to be regulated? Not the commerce of the several States, respectively, but the commerce of the United States. Henceforth, the commerce of the States was to be a unit; and the system by which it was to exist and be governed, must necessarily be complete, entire and uniform." At the same time Webster conceded "that the words used in the Const.i.tution, 'to regulate commerce,' are so very general and extensive, that they might be construed to cover a vast field of legislation, part of which has always been occupied by State laws; and therefore, the words must have a reasonable construction, and the power should be considered as exclusively vested in Congress, so far, and so far only, as the nature of the power requires."[527]

Webster also dealt with the problem which arises when Congress has exercised its power. The results of its act, he contended, must be treated as a unit, so that when Congress had left subject matter within its jurisdiction unregulated, it must be deemed to have done so of design, and its omissions, or silences, accordingly be left undisturbed by State action. Although Marshall, because he thought the New York act creating the Livingston-Fulton monopoly to be in direct conflict with the Enrolling and Licensing Act of 1793, was not compelled to pa.s.s on either of Webster's theories, he indicated his sympathy with them.[528]

COOLEY _v._ BOARD OF PORT WARDENS

Aside from Marshall's opinion in 1827 in Brown _v._ Maryland,[529] in which the famous "original package" formula made its debut, the most important utterance of the Court touching interpretation of the commerce clause as a restriction on State legislative power is that for which Cooley _v._ Board of Wardens of Port of Philadelphia,[530] decided in 1851, is usually cited. The question at issue was the validity of a Pennsylvania pilotage act so far as it applied to vessels engaged in foreign commerce and the coastwise trade. The Court, speaking through Justice Curtis, sustained the act on the basis of a distinction between those subjects of commerce which "imperatively demand a single uniform rule" operating throughout the country and those which "as imperatively"

demand "that diversity which alone can meet the local necessities of navigation," that is to say, of commerce. As to the former the Court held Congress's power to be "exclusive"--as to the latter it held that the States enjoyed a power of "concurrent legislation."

While this formula obviously stems directly from Webster's argument in Gibbons _v._ Ogden, it covers considerably less ground. Citation, nevertheless, of the Cooley case throughout the next half century eliminated the difference and brought the Curtis dictum abreast of Webster's earlier argument. The doctrine consequently came to be established, _first_, that Congress's power over interstate commerce is "exclusive" as to those phases of it which require "uniform regulation"; _second_, that outside this field, as plotted by the Court, the States enjoyed a "concurrent" power of regulation, subject to Congress's overriding power.[531]

JUDICIAL FORMULAS

But meantime other formulas had emerged from the judicial smithy, several of which are brought together into something like a doctrinal system, in Justice Hughes' comprehensive opinion for the Court in the Minnesota Rate Cases,[532] decided in 1913. "Direct" regulation of foreign or interstate commerce by a State is here held to be out of the question. At the same time, the States have their police and taxing powers, and may use them as their own views of sound public policy may dictate even though interstate commerce may be "incidentally" or "indirectly" regulated, it being understood that such "incidental" or "indirect" effects are always subject to Congressional disallowance.

"Our system of government," Justice Hughes reflects, "is a practical adjustment by which the National authority as conferred by the Const.i.tution is maintained in its fall scope without unnecessary loss of local efficiency."[533]

In more concrete terms, the varied formulas which characterize this branch of our Const.i.tutional Law have been devised by the Court from time to time in an endeavor to effect "a practical adjustment" between two great interests, the maintenance of freedom of commerce except so far as Congress may choose to restrain it, and the maintenance in the States of efficient local governments. Thus, while formulas may serve to steady and guide its judgment, the Court's real function in this area of judicial review is essentially that of an arbitral or quasi-legislative body. So much so is this the case that in 1940 three Justices joined in an opinion in which they urged that the business of drawing the line between the immunity of interstate commerce and the taxing power of the States "should be left to the legislatures of the States and the Congress," with the final remedy in the hands of the latter.[534]

State Taxing Power and Foreign Commerce

BROWN _v._ MARYLAND; THE ORIGINAL PACKAGE DOCTRINE

The leading case under this heading is Brown _v._ Maryland,[535] decided in 1827, the issue in which was the validity of a Maryland statute requiring "all importers of foreign articles or commodities,"

preparatory to selling the same, to take out a license. Holding this act to be void under both article I, sec. 10, and the commerce clause, the Court, speaking through Chief Justice Marshall, advanced the following propositions: (1) that "commerce is intercourse; one of its most ordinary ingredients is traffic"; (2) that the right to import includes the right to sell; (3) that a tax on the sale of an article is a tax on the article itself--a conception of the incidence of taxation which has at times had important repercussions in other fields of Const.i.tutional Law; (4) that the taxing power of the State does not extend in any form to imports from abroad so long as they remain "the property of the importer, in his warehouse, in the original form or package" in which they were imported--the famous "original package doctrine"; (5) that once, however, the importer parts with his importations "or otherwise mixes them with the general property of the State by breaking up his packages," the law may treat them as part and parcel of such property; (6) that even while in the original package imports are subject to the incidental operation of police measures adopted by the State in good faith for the protection of the public against apparent dangers. Lastly, in determining whether a State law amounts to a regulation of commerce the Court would, Marshall announced, be guided by "substance" and not by "form"--a proposition which has many times opened the way to extensive inquiries by the Court into the actualities both of commercial practice and of State administration.

The decision in Brown _v._ Maryland, but more especially the "original package doctrine" there laid down, has been sometimes criticised as going too far. It would have been sufficient, the critics contend, for the Court to have held the Maryland act void on account of its obviously discriminatory character; and they urge that original packages receiving the protection of the State ought to be subject to nondiscriminatory taxation by it. The criticism was partially antic.i.p.ated by Marshall himself in the apprehensions which he voiced that any concession to "the great importing States" might be turned by them against the rest of the country. Indeed, he is uncertain whether the original package doctrine will prove sufficient for its purposes and accordingly offers it not as a rule "universal in its application," but rather as a stop-gap principle. History has proved, however, that in this he builded better than he knew. For in the field of foreign commerce the original package doctrine has never been disturbed, and it has scarcely been added to; and so confined, it has never been surpa.s.sed by any later piece of judicial legislation, whether in point of durability or in that of definiteness and easy comprehensibility.[536]

State Taxation of the Subject Matter of Interstate Commerce

GENERAL CONSIDERATIONS

The task of drawing the line between State power and the commercial interest has proved a comparatively simple one in the field of foreign commerce, the two things being in great part territorially distinct.