Page images
PDF
EPUB

The power to regulate commerce includes the power to declare what articles are legal subjects of commerce.25

$255. What commerce does not include.—While the courts have given a very broad meaning to the term commerce, still not every transaction involving the payment of money is com

merce.

26

Insurance is not commerce. This subject is deserving of especial attention here, in view of the present agitation for the national regulation of insurance companies. The only ground upon which the Federal government could assume such regulation would be as a regulation of commerce, and the decisions of the United States Courts have, without exception, held that insurance is not commerce. In the leading case of this subject. Paul v. Virginia, Mr. Justice Feld, in delivering the opinion of the court, said: "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 corporation and the insured, 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 parties to them. They are not commodities to be shipped or forwarded 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 policies do not take effect-are not executed contracts-until delivered by the agent in Virginia. They are then local transactions and are governed by the local law. They do not constitute a part of the commerce between the States any more than a contract for the purchase and sale of goods in Virginia by a citizen of New York, whilst in Virginia would constitute a portion of such commerce."

In the Liverpool and London Life and Fire Insurance Com

Bowman v. Railway Co., 125

U. S. 465; Leisy v. Hardin, 135
U. S. 100; United States v. Pap-

per, 98 Federal Reporter, 427.

26

8 Wallace, 182.

pany v. Massachusetts,27 the court reaffirmed the decision in Paul v. Virginia; and in Berry v. Mobile Life Insurance Company, this doctrine was applied to life insurance contracts. This last case also decided that the fact that the parties were domiciled in different States was immaterial. This principle that insurance is not commerce was affirmed by the Supreme Court for the last time (to date) in New York Life Insurance Company v. Cravens, decided in 1900.

29

The United States Government cannot restrain a State from passing such insurance regulations as it deems proper, or even from discriminating against foreign insurance companies. A statute of the State of New York provided that when the laws of the other States imposed upon insurance companies incorporated under the laws of New York as a condition to their doing business in such States, greater burdens than were imposed by the laws of New York upon similar companies of such other States doing business in New York, then the same burdens should be imposed upon the companies of such other States doing business in New York as were by the laws of such States imposed upon New York companies. The Supreme Court decided that this law was not unconstitutional under the fourteenth amendment to the Constitution of the United States, providing that no State shall "deny to any person within its jurisdiction the equal protection of its laws."30

The mere production and manufacture of commodities are not acts of commerce. In Kidd v. Pearson 31 the constitutionality of the Iowa law prohibiting the manufacture of intoxicating liquors within the limits of the State was attacked, on the ground that as the whole or a part of the liquor produced was to be sent out of the State, its manufacture was one step in a transaction of interstate commerce. The court refused to take this view, saying:

"We think the construction contended for by plaintiff in error would extend the words of the grant to Congress, in the Constitution, beyond their obvious import, and is inconsistent with

Fed. Cas. No. 1, 358.

0178 U. S. 401.

Fire Association of Philadel

phia v. New York, 119 U. S. 110.

21 128 U. S. 1.

2710 Wallace, 566.

its objects and scope. The language of the grant is: 'Congress shall have power to regulate commerce with foreign nations and among the several States,' etc. The words are used without any veiled or obscure signification. *

*

**

No distinction is more popular to the common mind, or more clearly expressed in economic and political literature, than that between manufactures 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 transportation incidental thereto constitute commerce."

A contract entered into for the erection of a factory to be supervised and operated by the officers of a foreign corporation is not a transaction of interstate commerce in the constitutional sense merely because of the fact that the products of the factory are largely sold and shipped to other localities.32

But where the contract is for its delivery in another State, the transaction is one of interstate commerce, although the vendor may have also agreed to manufacture it in order to fulfill his contract of sale.33 So, also, a shipment of merchan'dise C. O. D. from one State into another constitutes interstate commerce.34

A State tax on money or exchange brokers is not in violation of the powers of Congress. This is true even in the case of a broker who deals exclusively in foreign bills of exchange. Foreign bills of exchange are instruments of commerce, but not more so than are the products of agriculture or manufactures, over which the taxing power of a State extends until they are separated from the general mass of property by becoming exports.35

The power of the United States over commerce will not be allowed to invalidate State laws passed for the prevention of fraud.36

[blocks in formation]

§ 256. The power of the States over Interstate Commerce. -The question more than on any other which the respective powers of the Federal and State governments have been the subject of litigation has been that of the extent of the authority of each in the regulation of commerce. The famous commerce clause of the Constitution gives Congress the power: "To regulate commerce with foreign nations and among the several States, and with the Indian tribes." This provision has never been held to entirely prohibit the States from making any commercial regulations. The right of the States to completely regulate all commerce confined within its own limits has never been disputed. On the other hand, it has been conceded that the power of Congress over interstate commerce is supreme. The doubtful border line has been created by the question whether the States could in any instance legislate on questions of interstate commerce, if such legislation did not conflict with any Federal statute.

§ 257. Gibbons v. Ogden.-Gibbons v. Ogden3 was the first case to come before the Supreme Court of the United States which involved this question, whether the power over interstate commerce was exclusive or only concurrent. This case grew out of the action of the Legislature of the State of New York in granting to Robert L. Livingston and Robert Fulton the exclusive right of navigation in all the waters within the jurisdiction of the State, with boats moved by fire or steam, and authorizing the courts of the State to award an injunction to restrain any other person whatever for navigating such waters with boats of this description. This act was assailed by the appellant in the case as unconstitutional, as being in violation of the power of Congress over the interstate commerce. The decision of the particular question involved in this case was

garine case, and the decision has
been criticised as being opposed to
the doctrine as laid down in Leisy
v. Hardin, and as resting upon dis-
crimination rather than law.
other oleomargarine cases
Schallenbeiger V. Pennsylvania,

For

see

171 U. S. 1; Collins v. New Hamp

shire, 121 U. S. 30; Powell v. Pennsylvania, 127 U. S. 678. See also the section of this book on the Police Power of the States.

a United States Constitution, Article I, Section 8, Clause 3.

9 Wheaton, 1, decided 1824.

not a difficult one. In spite of the decision of the highest court of the State of New York, awarding the injunction asked against the infringement of this monopoly, it was very evident that if a State could pass laws of this character, the control of Congress over interstate commerce was a myth. The Supreme Court decided that the act of the State of New York was unconstitutional as infringing the power of Congress over interstate commerce. The simplicity of the decision of the point at issue in the case seems to have encouraged the court to lay down a sweeping generalization on the supremacy of Congress over all cases of interstate commerce. In their dicta in this case the Supreme Court took a position which after occasioning trouble to the Supreme Court in later cases had finally to be abandoned. The general principle here laid down was that the power of Congress over interstate commerce was not only supreme but exclusive, and that any State legislation on the subject, even if only referring to points which had not been legislated upon by Congress, was therefore an infringement of the powers of Congress and unconstitutional.

$258. Later Cases. The position taken in Gibbons v. Ogden was soon reiterated in the case of Brown v. Maryland, which decision involved the constitutionality of a statute of the State of Maryland imposing a license tax upon importers for the privilege of selling imported goods. The Supreme Court decided this statute to be unconstitutional, as violating two provisions in the Constitution, (1) that clause which declared that "no State shall, without the consent of Congress, lay any imposts, or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws"; (2) the clause giving Congress power over interstate commerce. The decision in this case is partially based upon the assumed fact that the commercial power is exclusive in Congress, even in cases where Congress had failed to exercise this power by legislating on the subject in question.

Only two years after the decision of Brown v. Maryland, a case was presented to the Supreme Court which compelled that body to render a decision which cannot be harmonized with

12 Wheaton, 419, decided 1827.

« ՆախորդըՇարունակել »