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corporations engaged in insurance." In Congress an effort was made to have a separate bureau of insurance provided for, and this project was abandoned only in the conference committee to which the bill went. In his annual message of December, 1904, President Roosevelt declared: "The business of insurance vitally affects the great mass of the people of the United States, and is national, and not local, in its application. It involves a multitude of transactions among the people of the different States and between American companies and foreign governments. I urge that Congress carefully consider whether the power of the Bureau of Corporations cannot constitutionally be extended to cover interstate transactions in insurance."

That the force of the cases already decided may be weakened, it has been argued that in each of them the validity of a state law was involved and not the constitutionality of a federal statute, Should an act of Congress, regulative of insurance, be passed and questioned in the courts, it is argued that a presumption in favor of its validity would exist which does not exist as to the invalidity of state laws claimed to be in violation of the commerce clause.

Furthermore, it is argued that the reasoning of the court in these decided cases has been defective in so far as it is based on the fact that a contract of insurance is not, in itself, an article. of commerce. This of course is true, except in so far as it is treated as a piece of paper; but though not an article of commerce it is, it is argued, an instrument of commerce. Thus, for example, it is said, "Every contract of insurance is an agreement to pay, for which there is a sufficient consideration. Such being the substance of the contract, the final object of insurance, or of the insurance business, is an exchange of property. This fact stands out most clearly, perhaps, in life insurance, where A delivers annually to B a certain amount of property, and B, in return, at a given date, or upon the happening of a given event delivers to

A or his appointee, a certain amount of property. The property usually consists of money.

§ 295. Lotteries.

18

By act of March 2, 1893, entitled "An act for the suppression of lottery traffic through national and interstate commerce and the postal service, subject to the jurisdiction and laws of the United States,' ,"19 the carriage of lottery tickets from one State to another, whether by mail, or by freight or express was absolutely prohibited. Two objections to the constitutionality of this measure were raised. First, that the regulative power given to the Federal Government over interstate commerce did not include the power absolutely to prohibit that commerce. This objection will be considered in a later chapter. Secondly, it was objected that lottery tickets are not articles of commerce, the chief reliance for this contention being the decisions of the court as to bills of exchange and contracts of insurance.

After having been three times argued before the Supreme Court the Lottery Law was upheld in Champion v. Ames,20 four justices dissenting. The majority, in their opinion, holding lottery tickets to be articles of commerce, say: "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 cannot 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

18 American Law Register, December, 1900.

19 28 Stat. at L. 963.

20 188 U. S. 321; 23 Sup. Ct. Rep. 321; 47 L. ed. 492.

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at 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 drawing 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. (28 Stat. at L. 933, U. S. Comp. Stat. 1901, p. 3179.) That fact is not without significance in view of what the court has said. That act, counsel for the accused well remarks, was intended to supplement the provisions of prior acts, excluding lottery tickets from the mails, and prohibiting the importation. of lottery matter from abroad, and to prohibit the act of causing lottery tickets to be carried, and lottery advertisements to be transferred from one State to another by any means or method.' 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."21

§ 296. Bearing of the Lottery Decision on Insurance.

The holding by the court that lottery tickets are articles of commerce and may become articles of interstate commerce, has

21 In the minority opinion it is urged that the same reasoning which had been applied to hold bills of exchange and policies of insurance not to be articles of commerce was applicable to lottery tickets. "The lottery tickets," says Chief Justice Fuller, speaking for the minority, "purports to create

undoubtedly increased the possibility that, should a federal law be enacted in regulation of insurance companies doing business in more than one State, it will be sustained by the Supreme Court. Certainly there are very great points of similarity between a policy of insurance and a lottery ticket. Like the insurance policy, the lottery ticket is a promise to pay upon the happening of a certain contingency. Lottery tickets, to be sure, do indeed freely pass from hand to hand by sale or exchange, but, though not so readily, insurance policies are also at times sold and exchanged. Furthermore, as has been already observed, should the constitutionality of a federal law in regulation of insurance be involved, it would receive the benefit of every rational doubt.

§ 297. Commerce Does not Include the Production of the Commodities Transported.

In a series of most important decisions it has been held that commerce does not begin until the goods intended for purchase, sale, or exchange in another State have begun their trip thither. That is to say, they must at least have been placed in the hands.

contractual relations, and to furnish the means of enforcing a contract right. This is true of insurance policies, and both are contingent in nature.

If a lottery ticket is not an article of commerce, how can it become so when placed in an envelope or box or other covering, and transported by an express company? To say that the mere carrying of an article which is not an article of commerce in and of itself nevertheless becomes such the moment it is to be transported from one State to another, is to transform a noncommercial article into a commercial one simply because it is transported. I cannot conceive that any such result can properly follow. It would be to say that everything is an article of commerce the moment it is taken to be transported from place to place, and of interstate commerce if from State to State. An invitation to dine, or to take a drive, or a note of introduction, all become articles of commerce under the ruling in this case, by being deposited with an express company for transportation. This in effect breaks down all the difference between that which is, and that which is not, an article of commerce, and the necessary consequence is to take from the States all jurisdiction over the subject so far as interstate communication is concerned. It is a long step in the direction of wiping out all traces of state lines, and the creation of a centralized government."

of the agents who are to transport them. The mere fact that goods are manufactured to be transported and sold in another or other States, or that they have been segregated in the place where produced, for that purpose, is not sufficient to make them. articles of interstate commerce. In some way they must have advanced some distance upon their way outside of the State of production. It is clear, therefore, that the whole process of manufacture or production is definitely excluded from the operation of the commerce clause. "Commerce succeeds to manufacture, and is not a part of it."

" 22

This subject will receive especial treatment in Chapter XLIII in which will be considered the extent of the legislative powers of the Federal Government under the commerce clause and, especially, the discussion arising under the Anti-Trust Act of 1890.

§ 298. Intent to Export not Controlling.

The fact that goods are manufactured for export does not render their manufacture an element in the interstate or foreign commercial transaction.

22 U. S. v. E. C. Knight Co., 156 U. S. 1; 15 Sup. Ct. Rep. 249; 39 L. ed. 325. In Kidd v. Pearson (128 U. S. 1; 9 Sup. Ct. Rep. 6; 32 L. ed. 346) the court say: "No distinction is more popular to the common mind, or nore clearly expressed in economic and political literature, than that between manufacture and commerce. Manufacture is transformation the fashioning of raw materials into a change of form for use. The functions of commerce are different. The buying and selling and the transportation incidental thereto constitute commerce; and the regulation of commerce in the constitutional sense embraces the regulation at least of such transportation. If it be held that the term includes the regulation of all such manufactures as are intended to be the subject of commercial transactions in the future, it is impossible to deny that it would also include all productive industries that contemplate the same thing. The result would be that Congress would be invested, to the exclusion of the States, with the power to regulate not only manufactures but also agriculture, horticulture, stock raising, domestic fisheries, mining-in short, every branch of human industry. For is there one of them that does not contemplate, more or less clearly, an interstate or foreign market? Does not the wheat grower of the Northwest or the cotton planter of the South, plant, cultivate and harvest his crop with an eye on the prices at Liverpool, New York and Chicago? The power being vested in Congress and denied to the States, it would follow as an inevitable

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