Chapter XXIV: Section 1: of the act of 1887 contains the proviso "that the provisions (2)

The earliest such acts were in the nature of quarantine regulations and usually dealt solely with interstate transportation. In 1884 the exportation or shipment in interstate commerce of livestock having any infectious disease was forbidden.[488] In 1903 power was conferred upon the Secretary of Agriculture to establish regulations to prevent the spread of such diseases through foreign or interstate commerce.[489] In 1905 the same official was authorized to lay an absolute embargo or quarantine upon all shipments of cattle from one State to another when the public necessity might demand it.[490] A statute passed in 1905 forbade the transportation in foreign and interstate commerce and the mails of certain varieties of moths, plant lice, and other insect pests injurious to plant crops, trees, and other vegetation.[491] In 1912 a similar exclusion of diseased nursery stock was decreed,[492] while by the same act, and again by an act of 1917,[493] the Secretary of Agriculture was invested with powers of quarantine on interstate commerce for the protection of plant life from disease similar to those above described for the prevention of the spread of animal disease. While the Supreme Court originally held federal quarantine regulations of this sort to be constitutionally inapplicable to intrastate shipments of livestock, on the ground that federal authority extends only to foreign and interstate commerce,[494] this view has today been abandoned. _See_ pp. 248-249.

THE LOTTERY CASE

The first case to come before the Court in which the issues discussed above were canvassed 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 Constitution 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 assertion 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 Constitution 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 institutions as is the conservation of the supremacy of the federal power in all matters entrusted to the Nation by the Federal Constitution."[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 shipped are in themselves harmless. * * * When offered for shipment, 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 constituted 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 punishing 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 buttressed 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. Passing 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 Constitution--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 constitutional 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 shipment 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 reassuring 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 circumstance does not, however, of itself signify that the States were expected still to participate 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 pass 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 anticipated 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 embarrassing 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 constitutional 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 assertion, 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 entitled to fill the remaining gaps, if not by virtue of a "concurrent" power over interstate and foreign commerce, then by virtue of "that immense mass 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 passed 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 establishing the Constitution, 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 Constitution, '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 pass 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 Constitution 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 Constitutional 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 Constitutional 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 anticipated 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 surpassed 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. With "commerce among the States" it is very different. This is conducted in the interior of the country, by persons and corporations that are ordinarily engaged also in local business; its usual incidents are acts which, if unconnected with commerce among the States, would fall within the State's powers of police and taxation; while the things it deals in and the instruments by which it is carried on comprise the most ordinary subject matter of State power. In this field the Court has, consequently, been unable to rely upon sweeping solutions. To the contrary, its judgments have often been fluctuating and tentative, even contradictory; and this is particularly the case as respects the infringement of the State taxing power on interstate commerce. In the words of Justice Frankfurter: "The power of the States to tax and the limitations upon that power imposed by the Commerce Clause have necessitated a long, continuous process of judicial adjustment. The need for such adjustment is inherent in a Federal Government like ours, where the same transaction has aspects that may concern the interests and involve the authority of both the central government and the constituent States. The history of this problem is spread over hundreds of volumes of our Reports. To attempt to harmonize all that has been said in the past would neither clarify what has gone before nor guide the future. Suffice it to say that especially in this field opinions must be read in the setting of the particular cases and as the product of preoccupation with their special facts."[537]

THE STATE FREIGHT TAX CASE

The great leading case dealing with the relation of the State's taxing power to interstate commerce is that of the State Freight Tax,[538] decided in 1873. The question before the Court was the validity of a Pennsylvania statute, passed eight years earlier, which required every company transporting freight within the State, with certain exceptions, to pay a tax at specified rates on each ton of freight carried by it. Overturning the act, the Court held: "(1) The transportation of freight, or of the subjects of commerce, is a constituent part of commerce itself; (2) a tax upon freight, transported from State to State, is a regulation of commerce among the States; (3) whenever the subjects in regard to which a power to regulate commerce is asserted are in their nature National, or admit of one uniform system or plan of regulation, they are exclusively within the regulating control of Congress; (4) transportation of passengers or merchandise through a State, or from one State to another, is of this nature; (5) hence a statute of a State imposing a tax upon freight, taken up within the State and carried out of it, or taken up without the State and brought within it, is repugnant to that provision of the Constitution of the United States, which ordains that 'Congress shall have power to regulate commerce with foreign nations and among the several States, and with the Indian tribes.'"[539]

GOODS IN TRANSIT

States, therefore, may not tax property in transit in interstate commerce. A nondiscriminatory tax, however, is permitted if the goods have not yet started in interstate commerce, or have completed the interstate transit even though still in the original package, unless they are foreign imports in the original package; and States may also impose a nondiscriminatory tax when there is a break in an interstate transit, and the goods have not been restored to the current of interstate commerce. Such is the law in brief. Two questions arise, first, when do goods originating in a State pass from under its power to tax; and, second, when do goods arriving from another State lose their immunity?

The leading case dealing with the first of these questions is Coe _v._ Errol,[540] in which the matter at issue was the right of the town of Errol, New Hampshire, to tax certain logs on their way to points in Maine, while they lay in the river before the town or along its shore awaiting the spring freshets and consequent rise of the river. As to the logs in the river, which had come from Maine on their way to Lewiston in the same State, but had been detained at Errol by low water, the Supreme Court of New Hampshire itself ruled that the local tax did not apply, the logs being still in transit. As to the logs which had been cut in New Hampshire and lay on the shore or in tributaries of the river, both courts were again in agreement that they were still subject to local taxation, notwithstanding the intention of their owners to send them out of the State. Said Justice Bradley: "* * * goods do not cease to be part of the general mass of property in the State, subject, as such, to its jurisdiction, and to taxation in the usual way, until they have been shipped, or entered with a common carrier for transportation to another State, or have been started upon such transportation in a continuous route or journey."[541]

STATE TAXATION OF MANUFACTURING AND MINING

Under the above rule, obviously, production is not interstate commerce even though the thing produced is intended for the interstate market. Thus a Pennsylvania _ad valorem_ tax on anthracite coal when prepared and ready for shipment was held not to be an interference with interstate commerce although applied to coal destined for a market in other States;[542] and in Oliver Iron Company _v._ Lord[543] an occupation tax on the mining of iron ore was upheld, although substantially all of the ore was immediately and continuously loaded on cars and shipped into other States. Said the Court: "Mining is not interstate commerce, but, * * * subject to local regulation and taxation. Its character in this regard is intrinsic, is not affected by the intended use or disposal of the product, is not controlled by contractual engagements, and persists even though the business be conducted in close connection with interstate commerce."[544] Likewise an annual privilege tax on the business of producing natural gas in the State, computed on the value of the gas produced "as shown by the gross proceeds derived from the sale thereof by the producer," was held constitutional even though most of the gas passed into interstate commerce in continuous movement from the wells.[545] And in Utah Power and Light Co. _v._ Pfost[546] the generation of electricity in a State was held to be distinguishable from its transmission over wires to consumers in another State, and hence taxable by the former State. Likewise, a State statute imposing a privilege tax on the production of mechanical power for sale or use did not contravene the interstate commerce clause although applied to an engine operating a compressor to increase the pressure of natural gas and thereby permit it to be transported to purchasers in other States.[547] Similarly, a tax so much per pound on shrimp taken within the three-mile belt of the coast of the taxing State was valid, since the taxable event, the taking of the shrimp, occurred before they could be said to have entered the interstate commerce stream.[548]

PRODUCTION FOR AN ESTABLISHED MARKET

But while the production of goods intended for the interstate market is taxable by the State where it takes place, their purchase for an established market in another State is interstate commerce and as such is neither regulatable nor taxable by the State of origin, provided at any rate their trans-shipment is not unduly delayed.[549] Thus, oil gathered into the pipe lines of a distributing company and intended for the most part for customers outside the State, is in interstate commerce from the moment it leaves the wells;[550] and a like result has been reached as to natural gas.[551] "The typical and actual course of events," says the Court, "marks the carriage of the greater part as commerce among the States and theoretical possibilities may be left out of account."[552]

REJECTION OF THE ORIGINAL PACKAGE CONCEPT IN INTERSTATE COMMERCE

But the question also arises as to when goods entering a State from another State become part of the mass of property of the former and hence taxable by it? In Brown _v._ Maryland,[553] Chief Justice Marshall, had remarked at the close of his opinion, "We suppose the principles laid down in this case, apply equally to importations from a sister State."[554] Forty-two years later, in Woodruff _v._ Parham,[555] an effort was made to induce the Court, in reliance on this dictum, to apply the original package doctrine against a Mobile, Alabama tax on sales at auction, so far as it reached "imports" from sister States. The Court refused the invitation; first on the ground that Marshall's statement was _obiter_, the point not having been involved in Brown _v._ Maryland; second, because usage contemporary with the Constitution and of the Constitution itself confined the term "imports" as employed in article I, section 10 to imports from abroad; third, because the tax in question was nondiscriminatory. At the same time, nevertheless, reference was made to the power of Congress to interpose at any time in exercise of its power over commerce, "in such a manner as to prevent the States from any oppressive interference with the free interchange of commodities by the citizens of one State with those of another."[556] The same result was reached a few years later in Brown _v._ Houston,[557] where it was held that coal transported down the Mississippi from Pennsylvania had been validly subjected by Louisiana to a general _ad valorem_ property tax, having "come to its place of rest, for final disposal or use," and hence become "a part of the general mass of property in the State."[558] Again, however, a caveat was entered in behalf of the power of Congress to impose a different rule affording "a temporary exemption" of property transported from one State to another from taxation by the latter.[559]

INSPECTION CHARGES

Woodruff _v._ Parham and Brown _v._ Houston are still good law for the most part.[560] Nevertheless, there is one respect in which imports from sister States are treated as "imports" in the sense of the Constitution, and that is in being exempt from "unreasonable" inspection charges.[561] It is true, also, that in a series of cases involving sales of oil about 1920 the Court appeared to be contemplating reviving the original package doctrine,[562] but these holdings were presently "qualified" in a sweeping opinion by Chief Justice Taft, reviewing the cases.[563] But taxation is one thing, prohibition another. In the field of the police power, where its applicability was not so much as suggested in Brown _v._ Maryland, the original package doctrine has been frequently invoked by the Court against State legislation, and even today, perhaps retains a spark of life.[564]

LOCAL SALES: PEDDLERS

By the same token, local sales of goods brought into a State from another State are subject to a nondiscriminatory exercise of its taxing power. Such a tax, the Court has said, "has never been regarded as imposing a direct burden upon interstate commerce and has no greater or different effect upon that commerce than a general property tax to which all those enjoying the protection of the State may be subjected"; and this is true, even of goods immediately to be used in interstate commerce.[565] The commerce clause, therefore, does not prohibit a State from imposing special license taxes on merchants using profit sharing coupons and trading stamps although the coupons may have been inserted in retail packages by the manufacturer or shipper outside the State and are redeemable outside the State, either by such manufacturer or shipper, or by some other agency outside the State;[566] nor yet a nondiscriminatory tax upon local peddling of goods and sales thereof by peddlers even though the goods are foreign or interstate imports, since the sale occurs after foreign or interstate commerce thereof has ended.[567] And in Kehrer _v._ Stewart[568] it was held that a State tax upon resident managing agents of nonresident meatpacking houses did not conflict with the commerce clause, regardless of the fact that the greater portion of the business was interstate in character, the tax having been construed by the highest court of the State as applying only to the business of selling to local customers from the stock of "original packages" shipped into the State without a previous sale or contract to sell, and kept and held for sale in the ordinary course of trade. Contrariwise, a tax on sales discriminatory in its incidence against merchandise because of its origin in another State is _ipso facto_ unconstitutional. The leading case is Welton _v._ Missouri,[569] decided in 1876, in which a peddler's license tax confined to the sale of goods manufactured outside the State was set aside. The doctrine of Welton _v._ Missouri has been reiterated many times.[570]

STOPPAGE IN TRANSIT

It also follows logically from Coe _v._ Errol,[571] and the cases deriving from it, that a State may impose a nondiscriminatory tax when there is a break in interstate transit, and the goods have not been restored to the current of interstate commerce. The effect of an interruption upon the continuity of an interstate movement depends upon its causes and purposes. If the delay is due to the necessities of the journey, as in the Coe case, where the logs were detained for a time within the State by low water, they are deemed "in the course of commercial transportation, and * * * clearly under the protection of the Constitution."[572] Intention thus often enters into the determination of the question whether goods from another State have come to rest sufficiently to subject them to the local taxing power. In a typical case the Court held that oil shipped from Pennsylvania and held in tanks in Memphis, Tennessee for separation, distribution and reshipment, was subject to the taxing power of the latter State.[573] The delay in transportation resulting from these proceedings on the part of the owners, the Court pointed out, was clearly designed for their own profit and convenience and was not a necessary incident to the method of transportation adopted, as had been the delay of the logs coming from Maine in Coe _v._ Errol. The distinction is fundamental.[574]

Applying this rule in more recent cases, the Court has upheld State taxation: on the use and storage of gasoline brought into the State by a railroad company and unloaded and stored there, to be used for its interstate trains;[575] on gasoline imported and stored by an airplane company and withdrawn to fill airplanes that use it in their interstate travel;[576] on supplies brought into the State by an interstate railroad company to be used in replacements, repairs and extensions, and installed immediately upon arrival in the taxing State;[577] on equipment brought into the State by a telephone and telegraph company for operation, maintenance, and repair of its interstate system.[578] In all these cases the Court applied the principle that "use and storage" are subject to local taxation when "there is an interval after the articles have reached the end of their interstate movement and before their consumption in interstate operation has begun."[579] On the other hand, in the absence of such an "interval," the Court declared invalid State gasoline taxes imposed per gallon of gasoline imported by interstate carriers as fuel for use in such vehicles, and used within the State as well as in their interstate travel.[580]

THE DRUMMER CASES; ROBBINS _v._ SHELBY COUNTY TAXING DISTRICT

But there is one situation in which goods introduced into one State from another have until recent years enjoyed a special immunity from taxation by the former, and that is when they were introduced in consequence of a contract of sale. The leading case is Robbins _v._ Shelby County Taxing District,[581] in which the Court, after a penetrating survey of commercial practices, ruled that "the negotiation of sales of goods"--in this instance by sample--"which are in another State, for the purpose of introducing them into the State in which the negotiation is made, is interstate commerce." In short, whereas in foreign commerce, importation is succeeded by the right to sell in the original package, in interstate commerce sale was succeeded by the right of importation, which continued until the goods reached the hands of the purchaser. The benefits of this holding were extended in a series of rulings in which it was held to apply whether solicitation of orders was or was not made with sample,[582] and to sales which were not, accurately speaking, consummated until the actual delivery of the goods, which was attended by local incidents. So, where a North Carolina agent of a Chicago firm took orders for framed pictures, which were then sent to him packed separately from the frames and then framed by him before delivery, the rule laid down in the Robbins case was held to apply throughout, with the result that North Carolina could tax or license no part of the transaction described;[583] so also as to a sewing machine ordered by a customer in North Carolina and sent to her C.O.D.;[584] so also as to brooms sent in quantity for the fulfillment of a number of orders, and subject to rejection by the purchaser if deemed by him not up to sample.[585] Said Justice Holmes in the case last referred to: "'Commerce among the States' is a practical conception not drawn from the 'witty diversities' * * * of the law of sales. * * * The brooms were specifically appropriated to specific contracts, in a practical, if not in a technical, sense. Under such circumstances it is plain that, wherever might have been the title, the transport of the brooms for the purpose of fulfilling the contracts was protected commerce."[586] Nor did it make any difference that the solicitor received his compensation in form of down payment by the purchaser.[587] Moreover, sales under a mail order business, with delivery taking place within the State to a carrier for through shipment to another State to fill orders, was held to be beyond the taxing power of the first State.[588] The fact that a concern doing a strictly interstate business had goods on hand within the State which were capable of being used in intrastate commerce, did not, the Court declared, take the business out of the protection of the commerce clause and allow the State to impose a privilege tax on such concern.

LIMITATION OF THE ROBBINS CASE

On the other hand, it was early held that the rule laid down in the Robbins case did not prevent a State from taxing a resident citizen who engaged in a general commission business, on the profits thereof, although the business consisted "for the time being, wholly or partially in negotiating sales between resident and nonresident merchants, of goods situated in another State."[589] Also, it has been held that a stamp tax on transfers of corporate stock, as applied to a sale between two nonresidents, of the stock of foreign railway corporations, was not an interference with interstate commerce.[590] Likewise, the business of taking orders on commission for the purchase and sale of grain and cotton for future delivery not necessitating interstate shipment was ruled not to be interstate commerce, and as such exempt from taxation, although deliveries were sometimes made by interstate shipment.[591] And in Banker Bros. Co. _v._ Pennsylvania[592] it was held that a tax upon a domestic corporation selling automobiles built by a foreign corporation under an arrangement by which the latter agreed to build for and sell to the former, for cash, at a specified price less than list price, was not a tax on interstate transactions, there being nothing which connected the ultimate buyer with the manufacturer but a warranty and the buyer's agreement to pay the list price f.o.b. factory. Similarly, in Browning _v._ Waycross[593] it was held that the business of erecting lightning rods within the limits of a town by the agent of a nonresident manufacturer on whose behalf such agent had solicited orders for the sale of the rods, and from whom he had received them when shipped into the State, was validly subjected to a municipal license tax. "It was not," said the Court, "within the power of the parties by the form of their contract to convert what was exclusively a local business, * * *, into an interstate commerce business * * *"[594] Also, a municipal license tax upon persons engaged in the business of buying or selling cotton for themselves was found not to impose a forbidden burden upon interstate commerce even though the cotton was purchased with a view to ultimate shipment in some other State or country.[595] Nor was a gallonage tax imposed by a State upon a distributor of liquid fuel rendered repugnant to the commerce clause by the fact that the distributor caused fuel sold to customers in the State to be shipped from another State for delivery in tank cars--"deemed original packages"--on purchaser's siding, as agreed. Said the Court: "The contracts were executory and related to unascertained goods. * * * It does not appear that when they were made appellant had any fuels of the kinds covered, or that those to be delivered were then in existence. There was no selection of goods by purchasers. Appellant was not required by the contracts to obtain the fuels at Wilmington but was free to effect performance by shipping from, any place within or without Pennsylvania."[596]

THE ROBBINS CASE TODAY

In the cases reviewed in the preceding paragraph protestants against local taxation appealed, but unavailingly, to the Robbins case. So it would seem that the generative powers of that prolific precedent had begun to wane somewhat even before the Depression, an event which rendered judicial reaction against it still more pronounced. Indeed, by the Court's decision in McGoldrick _v._ Berwind-White Co.,[597] in 1940, the authority of the entire line of cases descending from Robbins _v._ Shelby County Taxing District was seriously impaired, for the time being, while a second holding the same year seemed to reduce the significance of the Robbins case itself to that of a reassertion of the elementary rule against discrimination. "The commerce clause," Justice Reed remarked sententiously, "forbids discrimination, whether forthright or ingenious."[598]

DEPRESSION CASES: USE TAXES

With a majority of the States on the verge of bankruptcy, extensive recourse was had to sales taxes and, as an offset to these in favor of the local economy, "use" taxes on competing products coming from sister States. The basic decision sustaining the use tax, in this novel employment of it, was Henneford _v._ Silas Mason Co.,[599] in which was involved a State of Washington two per cent tax on the privilege of using products coming from sister States. Excepted from the tax, on the other hand, was any property the sole use of which had already been subjected to an equal or greater tax, whether under the laws of Washington or any other State. Stressing this provision in its opinion, the Court said: "Equality is the theme that runs through all the sections of the statute. * * * When the account is made up, the stranger from afar is subject to no greater burdens as a consequence of ownership than the dweller within the gates."[600] There being no actual discrimination in favor of Washington products, the tax was valid.

DEPRESSION CASES: SALES TAXES

A companion piece of the Henneford case in motivation, although it occurred three years later, was McGoldrick _v._ Berwind-White Coal Mining Company,[601] in which it was held that in the absence of Congressional action, a New York City general sales tax was applicable to sales of coal under contracts entered into within the municipality and calling for delivery therein. Speaking for the majority, Justice Stone declared any "distinction * * * between a tax laid on sales made, without previous contract, after the merchandise had crossed the State boundary, and sales, the contracts for which when made contemplate or require the transportation of merchandise interstate to the taxing State," to be "without the support of reason or authority";[602] and the Robbins case was held to be "narrowly limited to fixed-sum license taxes imposed on the business of soliciting order for the purchase of goods to be shipped interstate, * * *"[603] Three Justices, speaking by Chief Justice Hughes, dissented. Three companion cases decided the same day were found to follow the Berwind-White pattern,[604] while a fourth was held not to, on the ground that foreign commerce was involved.[605] For the time being Robbins and family looked to be on the way out.

END OF THE DEPRESSION CASES

Two cases, decided respectively in 1944 and 1946, signalized the end of the Depression. In McLeod _v._ Dilworth Co.,[606] a divided Court ruled that a sales tax could not be validly imposed by a State on sales to its residents which were consummated by acceptance of orders in, and shipment of goods from another State, in which title passed upon delivery to the carrier. Said Justice Frankfurter for the majority: "A sales tax and a use tax in many instances may bring about the same result. But they are different in conception, are assessments upon different transactions, * * * A sales tax is a tax on the freedom of purchase * * * A use tax is a tax on the enjoyment of that which was purchased. In view of the differences in the basis of these two taxes and the differences in the relation of the taxing State to them, a tax on an interstate sale like the one before us and unlike the tax on the enjoyment of the goods sold, involves an assumption of power by a State which the Commerce Clause was meant to end."[607] He also "distinguished" the Berwind-White case--just as it had "distinguished" the Robbins case--but not to the satisfaction of three of his brethren, who found the decision to mark a retreat from the Berwind-White case.[608]

The second case, Nippert _v._ Richmond,[609] involved a municipal ordinance imposing upon solicitors of orders for goods a license tax of fifty dollars and one-half of one per cent of the gross earnings, commissions, etc., for the preceding year in excess of $1,000. Speaking for the same majority that had decided McLeod _v._ Dilworth Co., Justice Rutledge found that "as the case has been made, the issue is substantially whether the long line of so-called 'drummer cases' beginning with Robbins _v._ Shelby County Taxing District, 120 U.S. 489, shall be adhered to in result or shall now be overruled in the light of what attorneys for the city say are recent trends requiring that outcome."[610] The tax was held void, Berwind-White being not only "distinguished" this time, but also "explained." "The drummer," said Justice Rutledge, "is a figure representative of a by-gone day," citing Wright, Hawkers and Walkers in Early America (1927). "But his modern prototype persists under more euphonious appellations. So endure the basic reasons which brought about his protection from the kind of local favoritism the facts of this case typify."[611]

A year later a Mississippi "privilege tax" laid upon each person soliciting business for a laundry not licensed in the State, was set aside directly on the authority of the Robbins case.[612] It would appear that Robbins and his numerous progeny can once more claim full constitutional status.[613]

TAXATION OF CARRIAGE OF PERSONS