The Essentials of American Constitutional Law

by Francis Newton Thorpe

To what length this regulation of commerce may be carried by Congress is unknown, nor can it be determined in advance. The limitations, if any, are of expediency.[142] Thus in exercise of this vast power Congress may regulate hours of labor, wages, selection and use of material in construction of vehicles engaged in such commerce; the education, training, and conduct of persons engaged in handling such commerce; the age of employment; and physical equipment for the welfare of employees, as well as tariff rates and other incidents.[143]

57. But in the exercise of this power to regulate commerce Congress has legislated “to protect trade and commerce against unlawful restraints and monopolies.”[144] Individuals, or corporations under State laws, engaged in business, in so far as they are contracts, combinations in the form of trusts, or otherwise, or conspiracies in restraint of trade or commerce among the several States are illegal. The test here is, Are such combinations in restraint of commerce among the several States, or with foreign nations, or with the Indian tribes? If any such combination be in restraint of commerce completely internal in a State, it does not fall within the jurisdiction of the United States. If illegal, it is illegal by State laws.[145] Thus a combination that is engaged in manufacturing is within the jurisdiction of the police power of the State, not within the jurisdiction given by the commerce clause of the Constitution.[146] The regulation of manufactures is not the regulation of commerce. A monopoly of manufacturing is not necessarily a monopoly of commerce among the several States. In other words, manufacturing is not commerce. The Constitution does not give Congress power to regulate manufactures. However, as soon as the article manufactured becomes an article of commerce among the several States, then it is subject to regulation by Congress.

58. As soon as the article is manufactured it is subject to the law of the State; the moment the article commences its final movement from the State of its origin, that moment it is an article of commerce as that word is used in the Constitution, and is within the jurisdiction of Congress.[147]

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 subjects 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.[148]

Assumption of power such as this by Congress would conflict with the residuary powers of the States,—powers over intrastate commerce, and that vast authority possessed by the States and known as their police powers. Were such authority possessed and exercised by Congress, the State governments would be paralyzed and between the States and the United States there would be endless conflict.

59. It is not the delegation to Congress of power to regulate commerce that makes the exercise of a similar power by the State void; it is the actual exercise by Congress of its power to regulate commerce that works the prohibition. In the absence of congressional legislation on the subject the State may legislate. Thus a State law for the regulation of pilots and pilotage, in the absence of Federal law for the same, is valid.[149] This means that sovereignty acting through the State government controls—or has jurisdiction—unless sovereignty has acted in the matter through the government of the United States. Thus, where the subject, say a bridge, a wharf, or a stream, over which power may be exercised, is local in its nature and operation, or constitutes a mere aid to commerce, the authority of the State may be exerted for its regulation and management until Congress interferes and supersedes State action.[150]

But a license fee exacted by a State law, from a vessel engaged in commerce is a tax for the use of navigable waters and not a charge in the nature of compensation for any specific improvement, or use of wharves. It is a burden on commerce and is a State regulation of commerce in conflict with the power of Congress to regulate it and therefore unconstitutional.[151] But the internal commerce of a State, that is, the commerce that is wholly confined within its limits is as much under its control as foreign or interstate commerce is under the control of the general government.[152]

60. By the words “taxation of commerce” is understood the taxation of the agency, means, instrument, vehicle, or article in such a way or with such effect as to control commerce; and by “control” is understood any degree of control. If the State can tax foreign or interstate commerce lightly, it can tax it heavily, and if heavily, it can so tax as to destroy commerce. So long as the article imported remains in the original form of package, the property of the importer, in his warehouse, it is within the jurisdiction of the United States; but as soon as it has become incorporated and mixed with the mass of property in the State, it is within the jurisdiction of the State and becomes subject to its taxing power.[153]

Were the State to tax the importer as such, this would be a tax on importation and beyond State jurisdiction. So too would be any charges, imposed by the State, on the introduction or incorporation of the imported article into and with the mass of property in the State. The essential principle here is that the taxing power of the State cannot reach and restrain the action of the national government within its proper sphere. “It cannot interfere with any regulation of commerce.”[154]

61. The object in delegating to Congress the power to regulate commerce—a delegation without limitations—was to insure uniformity against discriminating State legislation.[155] The large and fundamental purposes of the people of the United States in establishing a national government are cited in the Preamble to the Constitution. Unless the power to regulate commerce with foreign nations and among the several States was delegated to Congress, these fundamental purposes could not be realized.[156] It is a nice question: When has the commercial power of the United States over a commodity ceased and the power of the State commenced? The Supreme Court answers: The federal commercial power continues until the commodity has ceased to be the subject of discriminating legislation by reason of its foreign character. That power protects it even after it has entered the State from any burdens imposed by reason of its foreign origin.[157] Any article brought into a State, as an article of commerce, from another State,—that is from another political jurisdiction possesses “foreign character.” The principle involved here may thus be stated: (1) The Constitution having given Congress power to regulate commerce with foreign nations and among the several States, that power is necessarily exclusive whenever the subjects of it are national in their character, or admit only of one uniform system, or plan of regulation. (2) Where the power to regulate is exclusively in Congress, the failure of Congress to make express regulations indicates its will that the subject shall be left free from any restrictions or impositions; and any regulation of the subject by the States, except only in matters of local concern, is repugnant to such freedom. (3) The only way in which commerce between the States can be legitimately affected by State laws is when, by virtue of its police power, and by its jurisdiction over persons and property within its limits, a State provides for the security of the lives, limbs, health, and comfort of persons and the protection of property. But these police regulations, affecting commerce only incidentally,—such as (for example) the establishment and regulation of highways, canals, railroads, and wharves by taxation as forming part of the mass of property within the State,—must be strictly internal regulations, not imposing taxes on persons or property passing through the State, or coming into it for a temporary purpose and forming no part of the common mass of property within its jurisdiction. Any State regulation which discriminates adversely to the persons or property of other States is an unauthorized interference with the power of Congress over the subject.[158]