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structive, not destructive. They represent a progressive trend of thought, and yet one ever mindful of our government's constitutional limitations. In some cases there were no such convincing precedents as those dealing with the commerce clause upon which to build. Occasionally precedents have been overruled expressly, because found to have been clearly erroneous, or impliedly, because of the stress of economic conditions, -- nullification by indirection, if
you will. But, for the most part, there has been a more or less successful attempt to square the latest decisions with the fountain heads that have gone before. To this general rule, however, the evolution of the commerce clause, in so far as it relates to the regulation of intrastate rates, is believed to be an exception, and it is the purpose of this article to trace this evolution by an analysis of the decisions which have brought it about.
The evolution of federal regulation of intrastate rates is properly to be traced by dividing the decisions construing the power of Congress over interstate commerce into five periods, each of which is more or less distinctly defined by reason of particular interpretations placed upon the commerce clause. The first period dates from the adoption of the Constitution in 1789 to 1829. This period is noteworthy in that it evolved these two basic principles: First, that the actual regulation of interstate commerce by Congress excludes its regulation by the states. Second, that the power to regulate purely internal commerce rests exclusively with the states regardless of whether they actually exercise this power or not. This period will be called the Constructive Period.
The second period dates from 1829 to 1876, the year of the socalled Granger Cases. This period is noteworthy in that in addition to upholding the two basic principles of the first period, it gradually evolved, although not without great controversy, a third basic principle, namely, that in matters essentially national in their nature and requiring uniformity of regulation the exclusiveness of congressional power is not dependent upon actual exercise of that power, but arises from the very grant itself of the power; while in matters which, though affecting interstate commerce, are primarily of local interest, the power of the states to regulate is
* Munn v. Illinois, 94 U. S. 113; Chicago, B. & Q. R. R. o. Iowa, 94 U. S. 155; Peik v. Chicago & N. W. Ry. Co., 94 U. S. 164; Winona & St. Peter R. R. Co. o. Blake, 94 U. S. 180.
plenary in the absence of congressional action. This latter power is generally, though it would seem rather inaccurately, described as concurrent. The use of the word “concurrent” rather conveys the idea of simultaneous operation of the state and the federal power, whereas the one operates only when the other is not exercised. From the fact that the state power is dominated by, and must give way to, the federal power when exercised, it would seem perhaps more accurate to speak of the one power as dominant and of the other as servient. This second period will be called the States' Rights Period.
The third period, one of only ten years, dates from 1876 to 1886, the year of the decision in the case of Wabash, St. L. & P. Ry. Co. v. Illinois. The decisions of this period are noteworthy in that they further extend the principle of so-called “concurrent” power to the point of saying that until Congress acts the states themselves may even regulate matters essentially national in their nature, namely, interstate rates, as well as those matters primarily of local interest. This period will be called the Extreme States' Rights Period.
The fourth period dates from 1886 down to but not including the so-called Minnesota Rate Cases, decided in 1913. During this period the decisions affirm the three principles enunciated in the first and second periods, and repudiate the Extreme States' Rights principle of the third period. This fourth period will be called the Federalistic Period.
The fifth and last period dates from the decision rendered in 1913 in the Minnesota Rate Cases to the present time, and therefore includes the decision in the Shreveport Rate Cases? rendered last June. This period is noteworthy for the further and hitherto unknown restriction of state power. A principle never before announced is now evolved to the effect that state regulation of local rates is exclusive only until Congress acts, or, in other words, that the power of the state is servient not merely in local matters affecting interstate commerce, but in the regulation of its own internal commerce as well. In short, it does not allow the corresponding usurpation to the federal government that was allowed to the states during the third or Extreme States' Rights period, that is,
118 U. S. 557.
• 230 U. S. 352.
334 U. S. 342.
regulation of intrastate rates until the states themselves regulate them, for of course that would be valueless; but it goes further and proclaims that there may be regulation of intrastate rates by Congress to the exclusion of state regulation whenever Congress may see fit to act. In addition, with the Interstate Commerce Commission, an agent of Congress, be it noted, is primarily vested the determination of this fundamental constitutional question, namely, whether state action is to be excluded, or, in short, whether the commerce clause has been violated. This last period will be called the Period of Judicial Amendment, so radical is it in its extension of the doctrine of national supremacy. The leading decisions of each period will now be considered.
I. THE CONSTRUCTIVE PERIOD
At the time of the adoption of the Constitution, commerce among the several States,” 8 to use the exact words of the commerce clause, consisted of touching the circumference of the states by the landing of vessels at coastwise points, and of transportation by land from one state to another, such as it was, by coach or wagon. The penetration and commingling of external and internal commerce is a product of the railroad and so unknown to our forefathers. To use the words of Henry Clay, “The country had scarcely any interior.” 9 While it is believed that by the language used in the Constitution more was in fact actually contemplated than transportation by water,10 it is quite clear that nothing more was immediately intended, either by the Federal Convention which framed the Constitution or by the state conventions which ultimately gave their approval, than to enable Congress to prevent the imposition of duties by particular states upon articles imported from or through other states. This power
8 Article 1, sec. 8, c. 3.
Speech in House of Representatives, January 30, 1824; Annals 18th Congress, ist Session, Vol. I, pl. 1315.
10 See contra, “Chief Justice Marshall on Regulation of Interstate Carriers,” by E. Parmalee Prentice, 5 Col. L. Rev. 77. Mr. Prentice bases his argument on the fact that states continued to grant monopolies to ferry and canal companies, land transportation companies and even to railroads as late as 1866, when, as we shall see, Congress intervened. See also, by the same author, “The Federal Power over Carriers and Corporations,” and “The Origin of the Right to Engage in Interstate Commerce,” 17 HARV. L. REV. 20.
given to Congress was thought to be merely negative, not affirmative. In short, it was conceded to the federal government, with virtually no debate, as supplementary to the attainment of the greatest object of the new government - destruction of state jealousies with regard to foreign commerce and the abuse of power by the importing states in taxing the non-importing, which had been so detrimental to harmony and progress under the Confederation, and in the place of these the establishment of one rule of uniformity.11
Although Chief Justice Marshall, with his broad discernment, saw the futility of declaring the power to regulate interstate commerce to be merely negative and gave to it at once an affirmative significance, the facts to which he applied his definition were so dissimilar to the facts with which we have to deal, that however broad, however elastic, he may have intended his definition to be, we cannot go beyond a reasonable construction of his words in any case. In Gibbons v. Ogden he decided that the laws of New York which granted to the successors of Livingston and Fulton the exclusive right to navigate with their steamboats all waters within the state, for a term of years, was an unconstitutional restriction
11 See Elliott's “Debates on the Federal Constitution"; "The Federalist," Nos. 7, II, 42; Max Ferrand, “The Records of the Federal Convention of 1787”; “The Framing of the Constitution.”
On February 13, 1827, James Madison, writing from his home at Montpelier to his friend J. C. Cabell, remarked in regard to the power of Congress over interstate commerce: “I always foresaw that difficulties might be started in relation to that power which could not be fully explained' without recurring to views of it which, however just, might give birth to specious though unsound objections. Being in the same terms with the power over foreign commerce, the same extent, if taken literally, would belong to it, yet it is very certain that it grew out of the abuse of the power by the importing states in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the states themselves rather than as a power to be used for the positive purpose of the general government in which alone, however, remedial power could be lodged.” Letters and Other Writings of James Madison, Vol. 4, pp. 14-15.
Strange as it seems, this was written three years after the decision in Gibbons v. Ogden. Madison's successor in the Presidency, James Monroe, actually believed that Congress had no power to make internal improvements by virtue of the Commerce Clause of the Constitution, on the theory that that clause merely gave power to impose duties on foreign trade, and to prevent duties on trade between the states, — or in fact by virtue of any other power granted to Congress. See James Monroe's Message to Congress of May 4, 1822, and accompanying paper on the subject of internal improvements, vetoing the act for the preservation and repair of the Cumberland Road. of interstate commerce, because it prevented vessels licensed to carry on the coasting trade under the laws of the United States from navigating those waters in the prosecution of that trade.
Difficult as this decision must have been to render as an original proposition, embracing as it did the announcement of national supremacy at the expense of the states, which was the basis of all the opposition to the new form of government, it was, from a judicial point of view at least, not so difficult as the determination of the present-day problems arising out of our complex commercial life and the complete inter-relation of almost all railroad rates. Let us analyze the opinion of Chief Justice Marshall. First, the word “commerce,” he said, as used in the Constitution “comprehends, and has always been understood to comprehend, navigation."12 And whatever conflicts there may have been as to the scope of the commerce clause, he set them at rest by declaring with equal emphasis that it "comprehends every species of commercial intercourse," 13 thus paving the way for the application of the commerce clause to railroads, which, however, was not directly utilized, as we shall see, until forty-eight years later. Second, he thus defined the distinction between interstate and intrastate commerce:
“Commerce among the states, cannot stop at the external boundary line of each state, but may be introduced into the interior. It is not intended to say that these words comprehend that commerce, which is completely internal, which is carried on between man and man in a state, or between different parts of the same state, and which does not extend to or affect other states. Such a power would be inconvenient, and is certainly unnecessary. Comprehensive as the word 'among' is, it may very properly be restricted to that commerce which concerns more states than one. The phrase is not one which would probably have been selected to indicate the completely interior traffic of a state, because it is not an apt phrase for that purpose; and the enumeration of the particular classes of commerce to which the power was to be extended, would not have been made, had the intention been to extend the power to every description. The enumeration presupposes something not enumerated; and that something, if we regard the language, or the subject of the sentence, must be the exclusively internal commerce of a state. The genius and character of the whole government seem to be, that its action is to be applied to all the external concerns of the nation, and to those internal
9 Wheat. (U. S.) p. 193.
u Ibid., p. 193.