CHAPTER 4
THE COURT'S INTERPRETATION OF THE COMMERCE CLAUSE BEFORE 1937
"The sacred rights of mankind are not to be rummaged for among old parchments or musty records. They are written as with a sunbeam in the whole volume of human nature by the hand of the Divinity itself, and can never be erased or obscured by mortal power." Alexander Hamilton, 1775.
Before we continue further, and before the definition of the commerce clause as interpreted by the Roosevelt administration and eventually adopted by the courts can be fully understandable, a brief review of the interpretation by the courts of the commerce clause prior to Roosevelt's arrival in office seems to be not only proper but essential. To fully understand how we were led willingly, under the guiding hand of Roosevelt, into a condition where all our activities would be regulated under the interstate commerce clause, we must understand how things were before we grasped the hand stretched out to us.
The commerce clause of the Constitution of the United States reads:
The Congress shall have power ... to regulate commerce with foreign nations, among the several States, and with the Indian tribes. Constitution of the United States, Article I, Section 8, para. 3.
The section concludes:
The Congress shall have power ... to make all laws which shall be necessary and proper for carrying into effect the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department, or any officer thereof. Article I, Section 8, para. 18.
The Commerce Clause in the Constitution
The commerce clause in the federal Constitution illustrates more pointedly than any other the circumstances which forced the adoption of the Constitution and the formation of the government of the Union, and its judicial history is the clearest example of the adaptation of a written Constitution by construction to conditions and emergencies never contemplated by its framers. It was the necessity for national control over foreign commerce which was the immediate occasion for calling the convention of 1787, as the defect of the articles of confederation in failing to provide for the control of this commerce was universally recognized.
Under the articles of confederation adopted during the revolutionary war, Congress had power to regulate trade with the Indians, but the control of foreign and interstate commerce remained with the states. The compact between Virginia and Maryland relative to the navigation of the Potomac river and the Chesapeake Bay, and the report of the commissioners thereon led the Virginia legislature to call a conference at Annapolis in 1786 to take into consideration the "trade of the United States, to examine the relative situation in the trade of the states, to consider how far a uniform system in their commercial relations may be necessary to the common interests and their permanent harmony." From the Annapolis conference came the call for the Philadelphia convention of 1787, which framed the Constitution.
Commerce among the states however was in 1787 very simple, and other than that carried on in teams and wagons was carried on by navigation. There was comparatively little discussion in the debates of the convention or in the Federalist Papers concerning the federal control over interstate commerce, and no consideration seems to have been given to the question of the effect of this grant of the federal power upon the police or taxing power of the states. It was regarded as essentially supplemental to the control over foreign commerce, and was granted so as to make the control over foreign commerce effective. It was said by Mr. Madison,Footnote1 that without this supplemental provision the great and essential power of regulating foreign commerce would have been incomplete and ineffectual, and that with state control of interstate commerce, ways would be found to load the articles of import and export during the passage through their jurisdictions with duties, which would fall on the makers of the latter and the consumers of the former.
The far-reaching importance of this federal control over commerce among the states was not and could not be foreseen. It only came to be realized in the course of years, as the commercial development of the country demanded a judicial construction of the federal power in harmony with the requirements of such commerce. The basis of this construction for all time was made by the far-sighted and masterful reasoning in the broad and comprehensive opinions of Chief Justice Marshall.
The Supreme Court in 1895Footnote2 in affirming the supremacy of the federal power in interstate commerce, said:
"Constitutional provisions do not change, but their operation extends to new matters, as the modes of business and the habits of life of the people vary with each succeeding generation. The law of the common carrier is the same to-day as when transportation on land was by coach and wagon, and on water by canal boat and sailing vessel yet in its actual operation it touches and regulates transportation by modes then unknown, the railroad trains and steamships. Just so it is with the grant to the national government of power over interstate commerce. The Constitution has not changed. The power is the same. But it operates to-day upon modes of interstate commerce, unknown to the fathers, and it will operate with equal force upon any new modes of such commerce which the future may develop."
Federal Sovereignty in Interstate Commerce
The federal authority in interstate commerce is enforced not only by the power of regulation granted to Congress by the Constitution, but also by the exercise of other expressly enumerated powers of Congress, more or less directly relating to interstate commercial intercourse. Thus the power to establish post offices and post roads, to coin money, to establish uniform systems of bankruptcy, to grant patents for discoveries, and most important of all the taxing power, are closely associated with commercial relations and activities. There is also what has been termed the "co-efficient power," the power to make all laws necessary and proper to carry into effect the foregoing powers, and all other powers vested by the Constitution, in the government of the United States or in any department or office thereof.
The broad and comprehensive construction given to this co-efficient power, of selecting measures for carrying into execution the constitutional powers of the government has made academic rather than practical the long debated distinction between the express and implied powers of Congress.Footnote3 The words "necessary and proper" are not limited to such measures as are absolutely and indispensably necessary, without which the powers granted must fail of execution, but they include all proper means which are conductive or adapted to the end to be accomplished, and which in the judgment of Congress will most advantageously effect such end.Footnote4
The federal authority in interstate commerce, as in other matters, does not rest on a mere aggregation of the enumerated powers. Although the government of the United States is one of enumerated powers, and under the Tenth Amendment the powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively or to the people, it is also true that there is a national sovereignty - a national Federal State - within the scope of the enumerated powers, and the Constitution and laws of the United States are the supreme Law of the Land. Upon this broad principle of the sovereignty growing out of the aggregation of enumerated power was based the power to charter a national bank, the power to exercise the right of eminent domain, the power to issue legal tender notes, and the power to exclude aliens. The power to issue legal tender notes, which was strongly controverted, was based upon two enumerated powers, that of coining money and thereby establishing a national currency, and also upon the commerce power. It was also declared to be a power inherent in sovereignty, as exercised by other sovereignties at the time of the adoption of the Constitution, and not expressly withheld by the Constitution from Congress.
As a political sovereignty the government of the United States may by physical force, through its official agents in the enforcement of its powers, exercise complete sovereignty over every part of American soil which belongs to it. There is a "Peace in the United States," and this peace can be enforced by the executiveFootnote5 in the protection of the judicial officers of the United States throughout the United States and within the limits of any State. These fundamental principles were very strongly asserted in the Debs case,Footnote6 where the Court said that the government of the United States, in the exercise of its power over the mails and in protecting interstate commerce, had jurisdiction over every foot of soil in its territory and acted directly upon every citizen. The decision was expressly based upon the sovereign power of the United States within the limits of its enumerated powers, and on the power of the government to enforce that sovereignty through the executive or through the courts, acting directly through the citizens and not through the agencies of a state, when the federal authority is resisted.
The complexity of our federal governmental system includes this distinct sovereign power in the federal government with sovereign powers in the states. In the language of Chief Justice Marshall,Footnote7 the powers of a sovereign are divided between the government officers of the Union and those of the states. They are each sovereign with respect to the rights committed to the other. The Supreme Court of MassachusettsFootnote8 said that it was a bold, wise and successful attempt to place the people under two distinct governments, each sovereign and independent within its own sphere of action, dividing the jurisdiction between them, not by territorial limits nor by the relation of superior or subordinate, but classifying the subjects of jurisdiction and designing those over which each had entire and independent jurisdiction.
The federal government therefore, though sovereign within the sphere of its enumerated powers, has not what has been termed inherent sovereignty, nor has it any general police powers; but with its wide scope of selection of the means for the execution of its enumerated powers the distinction is hardly a practical one in the actual working of our dual political system.
The Case of
Gibbons v. Ogden
The judicial construction of the commerce clause begins in 1824 with the great opinion of Chief Justice Marshall in Gibbons vs. Ogden,Footnote9 wherein a grant of the state of New York for the exclusive right to navigate the waters of New York with boats propelled by fire or steam was held void as repugnant to the commerce clause of the Constitution, so far as the act prohibited vessels licensed by the laws of the United States from carrying on the coast trade by navigating the said waters by fire or steam.
The broad and comprehensive construction of the term "commerce" in this opinion is the basis of all subsequent decisions construing the commerce clause, and is the recognized source of authority. Commerce is more than traffic; it includes intercourse. The power to regulate is the power to prescribe the rules by which commerce is to be governed. This power like all others vested in Congress is complete in itself, and may be exercised to its utmost extent, and acknowledges no limitations other than as prescribed in the Constitution. The power over commerce with foreign nations and among the several States, said the Court, is vested in Congress as absolutely as it would be in a single government having in its Constitution the same restrictions on the exercise of the power as is found in the Constitution of the United States. The power comprehended navigation within the limits of every state, so far as navigation may be in any manner connected with commerce with foreign nations or among the several States, or with the Indian tribes, and therefore it passed beyond the jurisdictional line of New York and included the public waters of the state which were connected with such foreign or interstate commerce.
The most important and far-reaching declaration in the opinion was that of the supremacy of the federal power, so that in any case of conflict the act of Congress was supreme, and state laws must yield thereto, though enacted in the exercise of powers which are not controverted.
What is Commerce?
The term "commerce" is not defined in the Constitution, but its meaning has been determined by the process of judicial inclusion and exclusion on the broad and comprehensive basis laid down in Gibbons v. Ogden. Commerce, it was there said, is not traffic alone, it is intercourse. "It described the commercial intercourse between nations, and parts of nations in all its branches, and is regulated by prescribing rules for carrying on that intercourse."
In the Passenger CasesFootnote10 the rule declared in Gibbons v. OgdenFootnote11 was applied in holding invalid certain state statutes imposing taxes upon alien passengers. It was said that commerce included navigation and intercourse and the transportation of passengers.
In the Pensacola Telegraph Company caseFootnote12 the Court said that since the case of Gibbons v. OgdenFootnote13 it had never been doubted that commercial intercourse was an element which comes within the power of regulation by Congress, and that the power thus granted was not confined to the instrumentalities of commerce known or in use when the Constitution was adopted, but kept pace with the progress of the country, adapting themselves to the new developments of time and circumstances. In the language of the Court:
"They extend from the horse with its rider to the stage coach, from the sailing vessel to the steamboat, from the coach and steamboat to the railroad, and from the railroad to the telegraph, as these new agencies are successively brought into use to meet the demands of increasing population and wealth. They were intended for the government of the business to which they relate at all times and under all circumstances."
In a later caseFootnote14 it was said that the commerce which Congress could regulate included not only the interchange and transportation of commodities or visible and tangible things, but the carriage of persons and the transmission by telegraph of ideas, orders and intelligence.
The electrically transmitting of articulate speech by telephone between states is interstate commerce. This was assumed by the Supreme Court in holding that the Act of July 24, 1866 did not apply to the telephone business, telephone communication being unknown at the time of the passage of that act. The Court therefore said that when the act of 1866 spoke of telegraph companies it could have meant only such companies as employed the means then in use or embraced by existing inventions for the purposes of transmitting messages merely by sounds of instruments or by signs and writing.Footnote15
While a bridge is not a common carrier, it affords a highway for such carriage, and a state enactment prescribing the rate of toll on the interstate bridge is an unauthorized regulation of interstate commerce.Footnote16 Commerce among the states, therefore, embraces navigation, transportation, of passengers and freight traffic and the communication of messages by telegraph and by telephone.
The carrying of lottery tickets from one state to another by corporations or companies whose business it is to carry tangible property from one state to another, constitutes interstate commerce which may be properly prohibited by Congress under its power of regulation.Footnote17
Interstate commerce as distinguished from domestic commerce, includes traffic between points in the same state, but which in transit is carried through another state. It follows that the railroad commission of a state cannot, without violating the commerce clause, fix and enforce rates for the continuous transportation of goods between such terminal points. A tax on an interstate railroad can be apportioned according to mileage in a state, but when a freight rate is established it must be established as a whole.
Commerce includes navigation, and the power to regulate commerce comprehends the control, for that purpose and to the extent necessary, of all the rivers of the United States which are accessible from a state other than those in which they lie.Footnote18 The right to regulate navigation carries with it the right to regulate and improve navigable rivers and the ports on such rivers, and the power to close one of several channels in a navigable stream, if in the judgment of Congress the navigation of the river will be thereby improved. Thus the power of Congress over the Savannah river was not affected by the compact between South Carolina and Georgia in 1787, before the adoption of the Constitution.Footnote19
To constitute interstate commerce, it must be so in fact and not only in intention. The intention to ship manufactured goods to other states does not make a contract for the operation of a factory for their manufacture relate to interstate commerce in a Constitutional sense so as to exempt it from the operation of state laws,Footnote20 nor does such intention to export property from the state constitute a ground for the exemption from the power of State taxation.
What is Not Commerce?
While commerce is more than traffic and includes commercial intercourse and the transmission of intelligence, it does not include the contractual relations between citizens of different states, which are incidental or even in one sense are essential to interstate commercial intercourse.
The business of a manufacturing company, although the manufactured product is sold by the company in other states and in foreign countries, is not interstate commerce.Footnote21 Commerce succeeds manufacture and is not part of it, and the relation of the manufacturer, in such a case, to interstate and foreign commerce is incidental and indirect, and the business therefore is subject only to state control.
Trademarks, though useful and valuable aids of commerce, are not subject to Congressional regulation, unless limited to their use in commerce with foreign nations and among the several states and with Indian tribes.Footnote22
What are the Subjects of Commerce?
Commerce between the states includes only the subjects, which are properly and lawfully articles of commerce. The regulating power of Congress does not deprive the states of their inherent police power in protecting the lives and property of their citizens, although the line is oftentimes difficult to draw, as the dissents in the Supreme Court show, between reasonable police regulation which only indirectly or incidentally effects interstate commerce, and legislation which invades the prerogatives of Congress.
Thus the states may legislate to prevent the spread of crime, and may exclude from their limits paupers, convicts, persons likely to become a public charge, and persons afflicted with contagious diseases. A state may protect the moral as well as the physical health of its people. A corpse is not the subject of commerce. This power of the state includes the right to protect the people against fraud and deception in the sale of food products. The principle was applied by the Court in sustaining a Massachusetts statute,Footnote23 which prohibited the manufacture and sale of imitation butter, oleomargarine, artificially colored so as to cause it to look like butter.
This principle does not extend to the exclusion of any commodity which is generally recognized as a legitimate article of commerce, though condemned and sought to be excluded by the legislation of a particular state. A state cannot determine for itself upon its own standards of public opinion what are and what are not lawful subjects of commerce, against the generally accepted opinion of the commercial world.
Tobacco is also a legitimate article of commerce and the Supreme Court said that it could not take judicial notice of the fact that it was more noxious in the form of cigarettes than in other forms.Footnote24 It was therefore subject to the same extent as intoxicating liquors to the police power of the state, that is, the state could declare how far cigarettes should be sold or prohibit their sale entirely after they had been taken from the original packages or had left the hands of the importer, providing no discrimination was used as against those imported from other states, but could not prohibit their importation.
The lawful police power of the state also extends to the reasonable inspection of articles brought in from the other states, this right of inspection being expressly recognized by the Constitution in the case of foreign importation. But this inspection must be reasonable, and is invalid if burdened with such conditions as would wholly prevent the introduction of the sound article from other states.Footnote25
State Corporations in Interstate Commerce
The right of a state corporation to engage in business in another state by locating therein, without permission of that state, must depend upon whether the corporation is engaged in carrying on interstate commerce. In this connection the term "carrying on interstate commerce" is limited to the corporations actually engaged in carrying on interstate commerce, that is, common carriers and others who afford the facilities whereby commerce is carried on among the states or actually carry on such commerce and does not include manufacturing and trading companies making interstate shipments.
In one sense, all commercial business between citizens of different states is interstate commerce, and the manufacturer who ships his goods to the purchasers in another state is engaged in interstate commerce. This commerce is protected by the federal power against discriminating or interfering state legislation, and in such protection, there is no distinction between non-resident individuals and corporations. Corporations, it is true, are not citizens within the meaning of the Constitution,Footnote26 which provides that citizens of each state shall be entitled to all the privileges and immunities of the citizens of the several States. But they are persons within the meaning of the Fourteenth Amendment and are therefore entitled to due process of law and the equal protection of the laws. The right to engage in interstate commerce does not depend upon citizenship, and the capacity of the foreign corporation to carry on such business must be determined by its own charter, granted by the state of its creation, and by the law of the state in which it is carrying on business. The manufacturing or trading company incorporated and doing business under the laws of one state can send its commercial travelers soliciting sales through other states, and may ship its goods to the purchasers, and such business cannot be interfered with by the states in the exercise of either their taxing or police powers. Such interstate commerce does not constitute a "doing of business" within the state. But while the foreign manufacturing or trading corporation may sell its goods in the state, or solicit sales in the transaction of interstate commerce, it cannot establish a business office in the state without the consent of the state. As a state has the right to exclude foreign corporations, it necessarily has involved therein the right to impose conditions upon their admission into the state.Footnote27
A State Cannot Tax
Interstate Commerce
Although the necessity for the regulation of commerce was the great moving force in the adoption of the Constitution, and was thoroughly discussed in the proceedings of the convention and in the Federalist Papers, there is in neither any reference to any possible interference with the taxing power of the state growing out of such regulation. The law of federal restraints upon state taxation has been developed upon the fundamental principle of the supremacy of the federal authority. The exemption from state taxation of the means employed by the federal government for carrying on its functions was first declared in 1819, in McCulloch v. Maryland,Footnote28 and the principle was later extended in 1827, in Brown v. Maryland,Footnote29 to the limitation of the state taxing authority by reason of the national control over foreign commerce.
Under the rule declared by the Supreme Court for the first time in 1886,Footnote30 which was consistently adhered to by the Supreme Court prior to 1937, the business of carrying on interstate commerce cannot be taxed at all, as the right to bring goods from other states includes the right to sell them and to solicit sales therefor, as well as to deliver the property sold, the state cannot tax the right to right to sell or deliver, or to solicit sales, whether in the form of license tax or otherwise. It is immaterial that the tax is without discrimination, as between domestic and foreign drummers, as interstate commerce cannot be taxed at all by the state.Footnote31
But a State can Tax the Property Employed in Interstate Commerce
While a state could not tax interstate commerce prior to 1937, that is, the privilege of carrying on such commerce, it could tax the property in its jurisdiction employed in carrying on such commerce. The difficulty of defining the line where the state and federal powers meet in such cases was illustrated by the not infrequent dissents of members of the Supreme Court in cases involving these questions of conflict between the state and federal power.Footnote32 No question was made as to the power of a state to tax the tangible property within its jurisdiction of a railroad, telegraph or other company engaged in interstate commerce, but the difficulty has been found in determining what portion of the intangible property of such corporations can be located within a state so as to be subject to its taxing power. Thus, has been formulated the so-called "unit rule" whereunder the entire value of an interstate railroad, tangible as well as intangible, may be apportioned upon a mileage basis as a means, prima facie, of arriving at the value of the property within the state, that is, the state's proportionate part of the value of the entire property.Footnote33
The rule of the "average habitual use" has also been formulated in the taxation of railroad cars, so that a state may tax its proportionate part of the property actually employed in its jurisdiction.Footnote34
Thus also, while the receipts from interstate commerce cannot be taxed as such, the tax may be levied upon the corporation, as an excise or franchise tax, which may be apportioned on the basis of the proportion of the mileage within the state to the total mileage.Footnote35
These rules, however, are only admissible in determining the actual value of the property in the state for the purpose of taxation, and will not authorize the taxing by a state of the privilege of carrying on interstate commerce among the states, nor the taxation of property permanently outside of its jurisdiction.Footnote36
State Power of Taxation of Corporations Engaged in Interstate Commerce Summarized
In 1896,Footnote37 the Supreme Court, holding that a city could recover from an interstate telegraph company a reasonable license fee for the occupation of its streets by telegraph poles, subject however to the determination by a jury of the reasonableness of the charge, said that there were few questions more important or more embarrassing than those arising from the efforts of the states or municipalities to increase their revenues by collections from corporations engaged in interstate commerce, but that the following propositions had been so often adjudicated as to be no longer open to discussion: First: The Constitution of the United States having given to Congress the power to regulate commerce not only with foreign nations but among the several States, that power is necessarily exclusive whenever the subjects of it are national in their character or admit of only one uniform system or plan of regulation. Second: No state can compel a party, individual or corporation, to pay for the privilege of engaging in interstate commerce. Third: Immunity does not prevent a state from imposing ordinary property taxes upon property having a situs in its territory and employed in interstate commerce. Fourth: The franchise of a corporation, although that franchise is the business of interstate commerce, is, as a part of its property, subject to state taxation, provided the franchise is not derived from the United States. Fifth: No corporation, even though engaged in interstate commerce, can appropriate to its own use property, public or private, without liability to charge therefor.
Freedom of Interstate Commerce
The right of interstate commerce, that is, the right of conducting traffic and commercial intercourse between the states, is independent of state control, and where freedom of commerce between the states is directly involved, the non-action of Congress indicates its will that the commerce should be free and untrammeled, and the states cannot interfere therewith either through their police power or their taxing power.
This freedom of interstate commerce from state control was definitely established as to the taxing power of the state in the case of the State Freight Tax,Footnote38 in 1833, and later, in 1887, in the case of Robbins v. Shelby County Taxing District.Footnote39 The freedom of interstate commerce with respect to the police power of the state was also declared in the cases relating to the liquor traffic.Footnote40 Finally, in 1886, in the Wabash Railroad case,Footnote41 the Supreme Court held that a statute of a state, intended to regulate or to tax or to impose any other restrictions upon the transmission of persons and property or telegraph messages from one state to another, was not within that class of legislation which the states could enact in the absence of legislation by Congress, and that such statutes are void even as to that part of such transmission which may be within the state. The statute of Illinois, regulating railroad charges was, therefore, held to have no application as to an interstate shipment even as to the part of the distance which lay within the state of Illinois, and this regulation of interstate commerce from the beginning to the end of the shipment was confided to Congress exclusively under the power to regulate commerce among the states.
In 1894 this principle was extended to an interstate bridge, and it was held that the bridge was an instrument of interstate commerce whereon Congress alone possessed the power to enact a uniform schedule of charges, and that the authority of the state was limited to fixing tolls of such channels of commerce as were exclusively within its territory.Footnote42 The Court, in reviewing the cases, said that in none of the subsequent cases had any disposition been shown to limit or qualify the doctrine laid down in the Wabash case.
The same principle was later applied in holding invalid the dispensary laws of South Carolina regulating the sale of intoxicating liquors and prohibiting their importation.Footnote43 The Court held that as the state recognized the sale, manufacture and use of intoxicating liquors as lawful, it could not discriminate against their being imported from other states.
The right to carry on commerce among the states is subject only to the regulation of Congress, and as to this fundamental right to conduct such commerce, it is not the exercise but the existence of the power in Congress which excludes all state control and interference whether under the taxing or the police power.
This freedom from state control in the carrying on of interstate commerce must however be reconciled with the general police power of the state in regulating persons, corporations and property within its jurisdiction, and in determining their relative rights and obligations. Thus while a state cannot impose any tax upon interstate commerce as such, nor restrict the persons or things to be carried therein, nor regulate the rate of tolls, fares or freight, or interfere with trains, or exclude any lawful subjects of commerce, it can prescribe rules for the construction of railroads and their management and operation for the protection of persons and property. Such rules are not in themselves regulations of interstate commerce, although they may control in some degree that conduct and liability of those engaged in such commerce.Footnote44 While the line of distinction is not always clear between what is a lawful regulation of persons and property within the jurisdiction and what is a regulation of interstate commerce conducted by such persons or with such property, the rule remains as declared in the Wabash case, that it is not the exercise but the existence of the power in Congress which makes void any action by the state regulating such commerce.
The Beginning of Federal Regulation
Although the recognized necessity for the national control of interstate commerce was the immediate occasion and moving purpose in the adoption of the Constitution and the formation of the federal Union, and the broad and comprehensive construction of the commerce clause by the Supreme Court under Chief Justice Marshall has laid the foundation of all subsequent decisions, the direct federal regulations of such commerce, at least as to land transportation, did not begin until the close of the first century of the republic's existence. The far-reaching importance of national control over interstate as well as over foreign commerce was not and could not be foreseen at the time of the adoption of the Constitution. It was not until twenty years after the close of the civil war that changed economic conditions of the country made intolerable the discriminating legislation of the states and led to the judicial declaration by the supreme Court in 1866,Footnote45 that in the matter of interstate commerce the United States were but one country and are and must be subject to but one system of regulations, and not to a multitude of systems. Soon after this, in 1888 and in 1890,Footnote46 the Court extended the same principle of the freedom of interstate commerce to the police power of the states in the liquor traffic decisions. In 1886 it was also definitely decidedFootnote47 that the state power of regulation of railway traffic did not and could not extend to interstate traffic in any form, and that such shipments were national in their character, and their regulation confined to Congress exclusively. Thus it was for the first time decided that this right of interstate commerce was so essentially national in its character that the inaction of Congress was equivalent to its determination that commerce must be free, and that therefore, any state regulation of the right to carry on such commerce was inoperative and void. The principle of concurrent state powers during the inaction of Congress and the invalidation of state action by reason, not the existence, but of the exercise of the federal power had no application to the regulation of the right to carry on commerce between the states.
Thus the close of the first one hundred years of the government was marked by the distinct judicial declaration on the freedom of interstate commerce from any control or regulation by the states, either by police or taxing power, and the way was logically opened for the direct exercise by Congress of the power of regulation conferred by the Constitution.
The Railroad Act of 1866
Although Congress had frequently legislated on the subject of water transportation, its first legislation in regard to railroad transportation, other than the incorporation of the land grant and government aided Pacific railroads in 1862, was the Act of June 15, 1866. This act was entitled in its preamble:
Whereas the Constitution of the United States confers upon Congress in express terms, the power to regulate commerce among the several states, to establish post-roads, and to raise and support armies, etc.
Every railroad company in the United States, whose road is operated by steam, its successors and assigns, is hereby authorized to carry upon and over its road, boats, bridges and ferries, all passengers, troops, government supplies, mails, freight and property on their way from any state to another state, and to receive compensation therefor, and to connect with roads of other states, so as to form continuous lines for the transportation of the same to the place of destination.
This section shall not be construed to authorize any railroad company to build any new road, or any connection with another road, without authority from the state in which such railroad or connection shall be proposed.
The purpose of this act, as declared by the Supreme Court was to remove trammels upon transportation which had previously existed, and to prevent the creation of such trammels in the future,Footnote48 and also to be a declaration by Congress in favor of the great policy of continuous lines, and, therefore, as favoring such business arrangements between companies as would make such connections effective,Footnote49 and indicating that interstate commercial intercourse should be free.Footnote50
The statute, however, imposes no duties upon carriers so as to compel specific routing of interstate traffic, and merely permits or authorizes the carriage of freight or traffic from one state to another and the formation of continuous lines by mutual agreement.Footnote51 The act was only intended to remove trammels upon transportation between different states imposed by state enactment's or the then existing laws of Congress, and did not prevent the operation of police laws of the states affecting interstate railways.Footnote52
The statute did not interfere with the laws of the states having for their object the personal security of passengers, nor did it interfere with such state enactment's as the regulating of the running of trains on Sunday,Footnote53 or excluding diseased cattle. This statute, however, in its declaration of the national public policy in favoring continuous interstate transportation, was invoked by certain state Courts in holding that railroad cars employed in interstate transportation are not subject to levy under attachment process against the owning company when in the possession of a connecting company in another state.
Genesis of the Interstate Commerce Act
The recognition of the governmental power in controlling interstate commerce immediately preceded that judicial declaration that interstate railway transportation was beyond state control. The question of interference with interstate commerce had been raised in the Granger cases, and the Court had heldFootnote54 that the act regulating fares was valid in the absence of regulation by Congress, and until Congress undertook to legislate for those who were without the state, the state could provide for those within, even though those without might be indirectly affected.
The Supreme Court of IllinoisFootnote55 cited these cases in sustaining a state statute regulating interstate transportation within the limits of the state of Illinois. But the Supreme Court in the same case, said that in the Granger cases the importance of the question of the governmental power of regulation and of the company's contract right of exemption therefrom overshadowed all others, so that the question of freedom of interstate commerce received but little attention at the hands of the Court. This decision of the Supreme Court reversing the Supreme Court of Illinois, was rendered in 1886, in the same year that the freedom of interstate commerce from the state taxing power was declared in the Tennessee drummer case, and broadly affirmed that the statute of a state enacted to regulate and tax, or to impose any other restrictions upon the transmission of persons or property or telegraph messages from one state to another, was not within the class of legislation which the state, in the absence of legislation of Congress, could enact, and that the state statute was void as to all interstate shipments which was within the state.
Passage of the Interstate Commerce Act
The decision in the Wabash case demonstrated the lack of power in the states to regulate interstate shipments and the demand for the exercise of this power by Congress becoming irresistible, the interstate commerce bill which had been pending in Congress for several years became a law February 4, 1887.
The discussion in the two houses of Congress and in the public press was mainly directed to the long and short haul clauses contained in the fourth section, and the prohibition of pooling contained in the fifth section of the act. Differences of opinion developed between the House and the Senate, the former insisting on the prohibition of pooling and on a qualified long and short haul clause. The bill was finally enacted in the form reported by the conference committee of the two houses of Congress. Frequent references were made in the debates to the then recent decision of the Supreme Court in the Wabash case denying to the states any power for the regulation of interstate traffic. A very wide difference of opinion was developed in the discussion as to the proper construction of the act, particularly as to what were the "substantially similar circumstances and conditions" in the fourth section, and one of the members of the house in the final debate described the bill as "one which nobody understands, nobody wants, and everybody is going to vote for."Footnote56
Since the passage of the act, several amendments have been passed by Congress. Some well known amendments were the Expedition Act of 1903, which materially expedited the procedure in suits brought by the United States, or suits prosecuted by direction of the attorney-general in the name of the Interstate Commerce commission, and the Elkins Act, which made important changes and materially enforced the provisions against discriminations, in that it made the published rates conclusive against the carrier, every deviation therefrom being punishable. The scope of the Elkins Act was also materially extended as to the parties subject to the provisions. Fine was substituted for imprisonment in the penal provisions of the act.
The Department of Commerce and Labor
In 1903 Congress established the Department of Commerce and Labor, the Secretary at the head being made one of the executive officers of the government and as such one of the President's advisers within the Cabinet.
This department included several of the bureaus theretofore included in other departments, and among others the Department of Labor, which had been established by Congress in 1888.
Section 5 of this act establishes a Bureau of Manufactures, and section 6 a Bureau of Corporations, which is vested with the same power and authority of investigation in respect to corporations and combinations engaged in interstate commerce as is conferred on the Interstate Commerce Commission in respect to railroads. The commissioner of corporations is given powers of investigation, with the right to summon witnesses and call for the production of books and papers, subject to the same immunities against the enforcement of self-incriminating testimony, as is contained in the act of 1893 concerning the Interstate Commerce Act.
Prior to 1937, the federal government had no visitorial power over corporations which it did not create, and the power of the commissioner to make investigations or to compel reports would be clearly limited to transactions in interstate commerce, to the same extent as the powers of the interstate commerce commission were limited to transactions in interstate as distinguished from domestic commerce. This changed when the States entered into interstate compacts with one another and the federal government.Footnote57
The Unexercised Federal Power
In determining the possible limits of the unexercised federal power in the regulation of commerce, there is comparatively little in the way of direct judicial authority. The Supreme Court has frequently been called upon to decide, and has decided, what the states cannot do, and it is from the expressions in these negative opinions that we are compelled to rely in determining what Congress can do, that is, what are the limits of the regulating power of Congress. The law of interstate commerce is essentially judge made law, supplemented in comparatively recent years by the exercise of the regulating power of Congress. The Supreme Court has repeatedly declined to formulate a general rule as to the precise line where the power of Congress begins and the power of the state ends.Footnote58 It was on this question of the conflict between the admitted powers of the state and of the federal government, that Chief Justice Marshall said that the power and the restriction on it, though quite distinguishable when they did not approach each other, may well, like the intervening colors between white and black, approach so nearly as to perplex the understanding, as colors perplex the vision in marking the distinction between them.Footnote59
In the Lottery case the extent of the federal regulating power was directly presented and exhaustively discussed, and by a bare majority of the Court the federal power to prohibit interstate traffic in lottery tickets was sustained, but it was said in the prevailing opinion that the whole subject was too important and the question suggested by its consideration too difficult for solution, to justify any attempt to lay down a rule for determining in advance what could be enacted by Congress under the commerce clause.
The power of Congress in the regulation of interstate commerce has been impliedly declared by the Supreme Court with reference to the Interstate Commerce Act in several cases decided, involving the construction of that act. Thus the Court has pointed out the possible limits of the power which Congress could have delegated to the railway commission, saying that Congress could itself have prescribed the rates, or could have committed to some subordinate tribunal this duty; but it held as a matter of construction of this act that Congress had not taken either of these permissible courses in the commerce act.Footnote60
This unexercised federal power has been discussed in connection with the proposed amendment of the Interstate Commerce Act. While it seems to be conceded that Congress has the power to regulate rates or to delegate that legislative power to a commission, this power must be exercised subject to the guarantees of the "due process of law," and against the taking of private property for public use without compensation. In the exercise of this power, Congress, or any commission under the authority of Congress, is restrained by the provision that "no preference shall be given to any regulation of commerce or revenue to the ports of one state over those of another." "Ports" of entry are now not only on the seaboard, but are scattered through the interior, and the application of this provision to the federal regulation of carrier's charges in the recognition of "differentials" between competing "ports" is yet to be determined.
A wide field for the possible exercise of the federal power of regulation is found in the class of cases wherein the Court has adjudged that the states have a concurrent power of legislation in the non-action of Congress. In other words, Congress can act in cases wherein it has heretofore exercised its power of regulation by its non-action. These are cases where Congress has heretofore allowed local regulations to control, and also in the class of cases where the Court has sustained state statutes or state laws regulating the relations of interstate carriers to their patrons. In such cases the Court has said that as long as Congress has not legislated in aid of interstate commerce, they are to be regarded as a rightful exercise of the police power of the state in regulating the lawful duties of persons and corporations within their limitations.Footnote61
There is therefore a wide legislative discretion in Congress to determine when a subject is capable of uniform regulation in interstate commerce, and when it is so determined, all local or state legislation in respect to such matters and covering the same ground cease to have the same force whether formally abrogated or not, and the regulations prescribed by Congress will then alone control. It is for the Supreme Court to determine, when a question arises, as to whether a state law is thus abrogated by the exercise of the power of Congress. The power which the states can exercise, will in this way be suspended, until the national control is abolished and the subject thereby is again left under the control of the states.Footnote62
Regulation of Commerce Through the Taxing Power
Interstate commerce may also be regulated through the exercise of the taxing power by Congress. While Congress has not an unlimited power as to the purpose of taxation and can levy taxes in order to pay debts and provide for the common defense and general welfare of the United States,Footnote63 it is also true that under the permanent revenue system of the government, taxes are levied, not for specific purposes, but by continuing laws establishing the rate of customs duties and internal revenue taxes, and questions relating to the lawful purpose of taxation do not arise in levying revenue taxes but in the appropriation of public funds for public needs.
It is well recognized that the power of taxation is sometimes invoked with no purpose of revenue in view, but solely to destroy the interest or business upon which the tax is levied by taxing it out of existence. Thus the notes of the state banks were taxed out of existence in order to open the means for circulating the notes of the national banks. This act was sustained by the supreme Court.Footnote64 The Court said that it was immaterial that the tax destroyed the business or franchise exercised under state authority. While the only lawful purpose of taxation is revenue, the amount of the tax on any subject within the scope of the taxing power is for the legislative discretion to determine. In the words of Chief Justice Marshall in McCulloch v. Maryland,Footnote65 "it is a perplexing inquiry unfit for the judicial department, what degree of taxation is a legitimate use and what degree may amount to an abuse of the power?" A tax on oleomargarine was imposed for the avowed purpose of destroying the business. It therefore follows that Congress, subject to the Constitutional requirement of geographical uniformityFootnote66 and to the limitations of direct taxation,Footnote67 could impose indirect taxes and excises on subjects and facilities of commerce or upon the privilege of carrying on such commerce, whether by individuals or corporations, and that the amount of such taxes would be determined by the discretion of Congress.
The Demand for Federal Regulation of Business Combinations
As the demonstrated incapacity of the states to regulate interstate commerce was the direct occasion for the enactment of the Interstate Commerce Law in 1887, so the anti-trust agitation following thereafter caused the demand for the exercise of the federal power in dealing with business combinations in commerce which the states were powerless to control. The distinct economic trend in industrial development, which was then manifested in the effort to save economic waste in the protection and distribution by the concentration of capital in business enterprises, resulted in different forms of combinations for the restriction of competition in business, which aroused public hostility and lead to the enactment by many states of ant-trust laws more or less drastic, prohibiting all combinations in restraint of competition. Such laws, however, proved inadequate, as they could have no extra-territorial operation beyond state lines, and the freedom of commerce secured under the Constitution of the United States precluded the states from excluding "trust-made" goods imported from other states. Public opinions, which finds frequent expression in judicial opinions, was firmly convinced that the repression of competition tended to monopoly, and that the control of production and prices by the elimination of competition in any industry was dangerous to the public welfare. It was recognized that the control of prices could be exercised not merely in raising, but also at certain times in certain localities in unduly depressing them so as to crush competitors by underselling. The evil aimed at was the unregulated power of control over industries resulting from the successful elimination of competition through the extension of the principle of business association.
This agitation within and without Congress resulted in the passage of the so-called Sherman Anti-trust Act, which was approved July 2, 1890.Footnote68 While the occasion of the act was clearly the popular outcry against business combinations, it will be seen that in its judicial construction and practical workings its main effectiveness has been in its application to interstate railroads and labor combinations.
The Anti-Trust Act of 1890
This act, which was entitled "An Act to protect trade and commerce against unlawful restraints and monopolies," declared illegal and criminal, punishable by fine or imprisonment or both, every contract or combination in the form or trust or otherwise, or conspiracy in restraint of trade or commerce among the several states or with foreign nations. The act provided penalties for its violation, included contracts made in any territory or the District of Columbia, and provided for seizure and condemnation of property in the course of transportation owned under any contract made in violation of the act, gave an action to private persons injured by such combinations with threefold damages, and a summary procedure in equity at the suit of the United States to prevent and restrain violations of the act.
Construction of the Act by
the Supreme Court
The construction of the Act by the Supreme Court disappointed many of the anticipation's of its effectiveness, as it was held in the Sugar Trust caseFootnote69 that the statute did not reach a state manufacturing company which was acquiring by purchase of the stock of other refining companies through shares of its own stock, nearly complete control of the manufacture of refined sugar in the United States. The reasoning of the opinion went beyond the construction of the act, and indicated that the power of Congress was exhausted in its designation of the contracts and combinations which were made illegal. Manufacture precedes commerce but is not a part of it, and sale as an incident to manufacture, therefore, was distinguished from commerce. The monopolies denounced by the act are those in interstate and foreign commerce, and not those in the manufacture of the necessaries of life or anything manufactured. The Court said that if the term "commerce" were held to include the regulation of all such manufactures as were intended to be subject to commercial transactions in the future, the results would be that Congress would be invested to the exclusion of the states with power to regulate, not only manufactures, but all domestic industries, as they all contemplated more or less clearly interstate or foreign markets.
The Labor Legislation of Congress
The labor legislation of Congress has not been limited to the relations of labor in interstate commerce. Certain features of this legislation are distinctly related to the interstate commerce relations of labor, and the provisions of both the Interstate Commerce and the Anti-Trust Acts relating to unlawful combinations in interstate commerce have been construed as applicable to labor as well as to business combinations. The general labor legislation of Congress is therefore properly considered in this connection.
The Bureau of Labor created under the Act of June 27, 1884,Footnote70 was made a Department of Labor under the Act of June 13, 1888.Footnote71 The general design and duties of the Commissioner of Labor as declared by the act were "to acquire and diffuse among the people of the United States useful information on subjects connected with labor in general in the most comprehensive sense of the word, and especially upon its relation to capital, the hours of labor, the earnings of laboring men and women, and the general means of promoting their social, intellectual and moral prosperity."
The commissioner was charged to investigate conditions of labor, wages, cost of living, effect of customs laws, what articles were controlled by trusts, combinations of capital, and what effect trusts and other combinations of capital had on production and prices. The commissioner was also charged to investigate the cases of disputes between employees and employers.
By the Act of February 14, 1903,Footnote72 the Department of Commerce and Labor was established, and the Department of Labor made part of this department.
Regulation of Interstate Commerce in Relation to Labor
Congress also exercised its power of regulation in the effort to harmonize the relations of capital and labor in interstate railroads. The first legislation of this character was the Act of June 29, 1886.Footnote73 This act was not limited to the employees of carriers, but authorized the incorporation of any association of working people having two or more branches in the states or territories of the Union, and the incorporation was affected by filing articles in the office of the recorder for the District of Columbia. Provision was made for the establishment of branches and sub-unions in any territory of the United States.
The Adoption of the
Fourteenth Amendment
Prior to the adoption of the Fourteenth Amendment in 1868, there was no appeal to the federal Courts against any violation by state power of due process of law or of the equal protection of the laws, which did not involve an interference with national authority or a violation of some provision of the federal Constitution. The federal courts administered the state laws and followed, as they still do, the decision given by the state courts as to the construction of the state statutes.
The Fourteenth Amendment provided in its first clause that no state should deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws. Corporations are persons under this amendment and are therefore entitled to due process of law and to the equal protection of the laws,Footnote74 and a state has no more power to deny the equal protection of the laws to a corporation than it has to individual citizens.Footnote75
This far-reaching change in our judicial system, wherein the fundamental rights of property are protected by the federal power against state invasion, was adopted about the same time that the judicial declaration of the freedom of interstate commerce against the state interference had opened the way for the direct exercise of the federal regulating power.
Power of Congress to Regulate Intrastate Commerce and Matters that are not Commerce
The interstate commerce power of Congress is not confined to prohibiting or regulating affairs that are in themselves interstate commerce. It may regulate intrastate commerce or other intrastate activities which burden interstate commerce, provided the burdensome character of the activities upon interstate commerce is sufficiently clear and direct. It was upon this principle that the Supreme Court sustained the Safety Appliance Act, which required interstate carriers to use safety appliances on cars used in intrastate carriage as well as on those used in interstate traffic.Footnote76 The matter regulated need not be interstate commerce. It is not "the source of the injury but rather its effect upon interstate commerce" that determines the extent of Congressional power.Footnote77 Intrastate passenger rates fixed by state boards may be increased by the Interstate Commerce Commission if the rates fixed by the state board create a discrimination against interstate passengers. The operation of a branch line of the Colorado and Southern Railway, wholly in the State of Colorado and physically detached from the company's interstate line, was subject to the control of the Interstate Commerce Commission by reason of the effect of its operation on the interstate business of the company to the extent that the commission's certificate of abandonment to the company was sustained.Footnote78 The Packers and Stockyards Act of 1921Footnote79, giving the Secretary of Agriculture supervision over the commission men and livestock dealers in the stockyards of the country, thus enabling him to regulate prices and practices in matters wholly intrastate, was upheld,Footnote80 where the object of the Act was to "free and unburden the flow of live stock from the ranges of the West and the Southwest through the great stockyards and slaughtering centers on the border of that region and thence in the form of meat products in the Middle West and East, or, still as live stock, to the feeding places and fattening farms in the Middle West or East for further preparation for the markets."Footnote81 On the same basis, buying and selling of grain on boards of trade, though made wholly within the State of Illinois, were successfully made subject to the interstate power of CongressFootnote82 in the Grain Futures Act of 1922.Footnote83
In the light of the foregoing review of the elements and interpretation of the commerce clause of the Constitution by the United States Supreme Court, the task facing Franklin Roosevelt during the 1930's was how a partnership could be established between the National Government and business in which the federal government would be the senior and, to the extent that it thinks best, the dominating and controlling partner? Unless previous court decisions were overruled or judicial interpretation expanded, Congress in the 1930's was constitutionally powerless to fix maximum hours or minimum wages, to protect child labor, or otherwise to prescribe labor conditions, whether on farms, in mines, in manufacturing, in wholesaling or in retailing. Even if Congress could regulate all activities of interstate commerce, Congress cannot deprive any person of liberty or property without due process of law, unless that "person" voluntarily waived this right. Now the right to fix the price of one's goods or labor is a part of one's liberty of contract.Footnote84 One cannot be deprived of this liberty, says the Court - that is, have his prices fixed by governmental authority-unless his business or activity is "affected with a public interest."
It seems unmistakable, then, that, despite the effort by the Roosevelt administration to circumvent the plain prescriptions of the Constitution as expounded by the Supreme Court, no fundamental change in the economic or social system of the 1930's, no far-reaching alteration in the relations of government to business or to individual citizens, could be brought about without a fundamental change in the Constitution.
THE FEDERALIST, No. 42.
In re Debs, 158 U.S. 564 (1895).
McCulloch v. Maryland, 4 Wheat. 316, 438 (1820).
Legal Tender Cases, 110 U.S. 421 (1884).
In re Nagel, 135 U.S. 1 (1890).
Note 2, supra.
Note 3, supra.
Opinion of Justices, 14 Gray. 615.
Wheat. 1 (1824).
7 How. 283 (1849).
Note 9, supra.
96 U.S. 1 (1877).
Note 9, supra.
Western Union Tel. Co. v. Pendleton, 122 U.S. 347 (1887).
Richmond v. Southern Bell Telephone Co., 174 U.S. 761 (1899).
Covington, etc. Bridge Co. v. Kentucky, 154 U.S. 204 (1894).
Lottery Cases, 188 U.S. 321 (1903).
Gilman v. Philadelphia, 3 Wall. 713, 724 (1865).
South Carolina v. Georgia, 93 U.S. 4 (1876).
Diamond Glue Co. v. United States Glue Co., 103 Fed.Rep. 838 (1900).
Kidd v. Pearson, 128 U.S. 1 (1888).
Trade Mark Cases, 100 U.S. 82 (1879).
Plumley v. Massachusetts, 155 U.S. 461 (1895).
Austin v. Tennessee, 179 U.S. 343 (1900).
Minnesota v. Barber, 136 U.S. 313 (1890).
Art. IV, sec. 2; Crutcher v. Kentucky, 141 U.S. 47 (1901).
Waters Pierce Oil Co. v. Texas, 177 U.S. 28 (1900).
Note 3, supra.
12 Wheat. 419 (1827).
Robbins v. Shelby County Taxing District, 120 U.S. 489 (1887).
Asher v. Texas, 128 U.S. 129 (1888).
Erie R.R. Co. v. Pennsylvania, 158 U.S. 431 (1895).
State Railroad Tax Cases, 92 U.S. 575 (1875).
Pullman Palace Car Co. v. Pennsylvania, 141 U.S. 18 (1891).
Maine v. Grand Trunk R. Co., 142 U.S. 217 (1891).
Fargo v. Hart, 193 U.S. 490 (1904).
Atlantic, etc. Tel. Co. v. Philadelphia, 190 U.S. 160 (1896).
15 Wall. 232 (1872).
Note 30, supra.
5 How. 504 (1847).
Wabash Railroad Company v. Illinois, 118 U.S. 557 (1886).
Covington, etc., Bridge Co., v. Kentucky, 154 U.S. 294 (1894).
Scott v. Donald, 165 U.S. 53 (1897).
Chicago, etc., Railroad Co., v. Solan, 169 U.S. 133 (1898).
Robbins v. Shelby County Taxing District, supra.
Bowman v. Railway Co., supra.
Wabash, St. L. & P.R. Co. v. Illinois, supra.
Railroad Co. v. Richmond, 19 Wall. 584 (1873).
Union Pacific Railroad Co. v. Chicago, etc. Railroad Co., 163 U.S. 589 (1896).
Bowman v. C & N.W. R.R., 125 U.S. 465 (1888).
Kentucky & Indiana Bridge Co. v. L. & N. R. Co., 37 Fed.Rep. 567 (1889).
R.R. Co. v. Fuller, 17 Wall 560 (1873).
Hennington v. Georgia, supra.
Pike v. Chicago, etc. R. Co., 94 U.S. 1 (1876).
Wabash, St. L. & P. R. Co. v. Illinois, 104 Ill. 476.
Senate Report No. 307, 43rd Congress, 1st Session.
See Volume II of this work.
Welton v. Missouri, 91 U.S. 275 (1875).
Note 29, supra.
Interstate Commerce Commission v. Railroad Co., 167 U.S. 479 (1897).
Pennsylvania R. Co. v. Hughes, 191 U.S. 477 (1903).
Reid v. Colorado, 187 U.S. 137 (1902).
STORY ON THE CONSTITUTION, 907.
Veazie Bank v. Fenno, 8 Wall. 533 (1869).
Note 3, supra.
Knowlton v. Moore, 178 U.S. 41 (1900).
Pollock v. Farmers Loan & Trust Company, 158 U.S. 601 (1895).
26 Stat. 209.
United States v. Knight Company, 156 U.S. 1 (1895).
23 Stat. 60.
25 Stat. 182.
32 Stat. 825.
24 Stat. 86.
Santa Clara County v. Southern Pacific R. Co., 118 U.S. 394 (1886).
Railroad Co. v. Ellis, 165 U.S. 1 (1897).
Southern Ry. v. United States, 222 U.S. 20 (1911).
Second Employers Liability Cases, 223 U.S. 1 (1912).
Colorado v. United States, 271 U.S. 153 (1926).
Act of August 15, 1921, C. 64, 42 Stat. 59.
Stafford v. Wallace, 258 U.S. 495 (1922).
Id. at 514.
Board of Trade of the City of Chicago v. Olsen, 262 U.S. 1 (1923).
Act of September 21, 1922, c. 369, 42 Stat. 998.
For a discussion on Liberty of Contract see volume II of this work.