The Attorney-General submitted to the Senate, in June 1906, a statement of the results of all suits instituted by the Department of Justice under the anti-trust law, the Interstate Commerce Act and the Elkins Act, in the period from 1887 to June 1906 inclusive. Thirty-six suits were still pending; of the 250 which had been disposed of in some manner 186 ended in dismissal, non-prosecution or acquittal, and 64 were successful in securing in whole or in large part the object of the suit (in 30 cases conviction, in 34 cases the granting of a petition or an injunction, &c.). In addition to these results of federal efforts to regulate industry must be counted the cases in which carriers complied with the orders of the Interstate Commerce Commission without suit; but even then the total by 1906 was somewhat meagre.
The establishment of the Bureau of Corporations in 1903, and the considerable extension of the powers of inspection of the Department of Agriculture are recent changes of which the results cannot yet be fairly judged. The aim of the Bureau of Corporations is to ensure publicity in the management of corporations engaged in interstate and foreign commerce. The first commissioner, Mr James R. Garfield, showed much activity in pursuing the purposes of the act, and published informing reports upon the beef trust (1905), and upon the Standard Oil Company (1906). But the effect and possible extension of federal interference became from this time burning political questions of far-reaching importance of too recent a date to be dealt with historically in this article.
See also the Annual Reports of the Interstate Commerce Commission since 1887, and decisions; Prentice and Egan, The Commerce Clause of the Federal Constitution (Chicago, 1898); Reports of the Commissioner of Corporations on the Beef Industry (1905), on the Transportation of Petroleum (1906); W. Z. Ripley (ed.). Trusts, Pools and Corporations (1905), containing leading cases and analyses of the voluminous “trust” literature; F. N. Judson, The Law of Interstate Commerce and its Federal Regulation (Chicago, 1905); Beale and Wyman, Railroad Rate Regulation (Boston, 1906); Frank Hendrick, The Power to Regulate Corporations and Commerce (New York, 1906), favouring less of new legislation.
(F. A. F.)
[1] The lottery tickets were included only by a divided court (Lottery Cases, 188 U.S. 321) four judges emphatically dissenting. The moral issue doubtless influenced a decision so difficult to reconcile with other opinions of the court, which otherwise had held regularly that commerce involves the physical movement of persons or things and does not include the contractual relations between citizens incident to commercial intercourse. Not all things incidental to commerce are included in it, and it has been held that the following are not included: bills of exchange (in 1850, Nathan v. Louisiana, 8 How. 73), trade marks (in 1879, trade mark cases, 100 U.S. 82), insurance (in 1869, Paul v. Virginia, 8 Wall. 168), and manufacturing (in 1895, U.S. v. Knight Co., 156 U.S. 1). In the last-named case, which concerned a combination of sugar refineries controlling a large proportion of the product of the country, it was said that commerce succeeds manufacture and is not a part of it. The relation of the manufacturer to interstate and foreign commerce being thus only incidental and indirect, the business is subject to state control. By a series of decisions the transportation of persons has been decided to be commerce. (In 1848, passenger cases, 7 How. 283. In 1867, Crandall v. Nevada 6, Wall. 35. In 1875, Henderson v. the Mayor of New York, 92 U.S. 259, &c.).
[2] The question arose with reference to the police power of the state in those states prohibiting the liquor traffic, and in 1889 it was held (Leisy v. Hardin) that, in the absence of legislation by Congress, the right to sell goods taken into a state was unrestricted. This made it impossible for a state to exclude the importation of liquors to be sold within its territory, but this difficulty was remedied by the Wilson Original Package Bill of 1890, which made liquor subject to the police powers of the state to which it was carried.
[3] However, a very important distinction is drawn between taxing the commerce and taxing property employed in commerce. With the increase of interstate commerce, the states have been hard pushed to find sources of revenue adequate to their increasing needs. The courts, therefore, have sought to draw a line between taxes on the privilege of carrying on interstate commerce and taxes on the property employed in carrying on such commerce as a part of the general body of property in the state. Thus it has been held in the case of State Freight Tax (1872, 15 Wall. 232) that a state could not lay a tax on freight transported from one state to another, and yet the same year the court held in State Tax on Gross Receipts (15 Wall. 284) that a tax was valid when laid upon the receipts of railways organized under the laws of the state, as upon a fund which had become incorporated with the general mass of property. This latter decision was by a divided court (three of the nine judges dissenting), but it has since been frequently confirmed. The tax on gross receipts of all railway companies doing business in the state has been supported when levied in proportion to the mileage within as compared with the total within and without the state (Erie Ry. v. Pa., 21 Wall. 492). This so-called “unit rule,” as applied either to gross receipts or to the entire value of an interstate railway, has been upheld in a number of decisions. The method of taxation by gross receipts, however, has not tended to increase of late, but the unit rule, as applied to ad valorem taxes on property, is more and more being applied. Every case involving the distinction between a tax on commerce and a tax on property employed in commerce presents its own difficulties, yet a practical way is thus found to prevent discriminating action by the several states, while leaving to them adequate sources of revenue.
[4] 1873, State Freight Tax, 15 Wall. 232; 1887, Robbins v. Shelby County Taxing District, 120 U.S. 489; Wabash R. R. Company v. Illinois, 118 U.S. 557. The last-named case arose out of the attempts of the state of Illinois to prevent discrimination between two shippers, both being its own citizens and within its own borders, one of whom was being charged more than the other for a shorter shipment on the same line and in the same direction, from a point outside the state. The court, applying the established definition of interstate commerce with verbal formality of logic, decided that the state could do nothing, for even in such a case all regulation of interstate commerce, from the beginning to the end of a shipment, was confided to Congress exclusively. Thus a clause whose clear purpose was to prevent one state from burdening unequally the citizens of other states was successfully invoked by a private corporation to forbid the state securing equality of treatment for its own citizens as regards such parts of shipments as lay within its own borders. Most railway traffic was by this decision declared to be subject to legislation by Congress but Congress had not acted. The impossibility of this situation was so evident that the Interstate Commerce Act, long under discussion, became a law a few months later.
[5] This was probably aimed at the discriminating between New York and Philadelphia (see speech of Charles Sumner on the railroad usurpation of New Jersey in U.S. Senate, February 14, 1865).