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Subject Area: Law
Topic: The American Revolution and Constitution

§ 220.: State regulation and prohibition of interstate commerce, particularly, articles of merchandise.— - Christopher G. Tiedeman, A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint, vol. 2 [1900]

Edition used:

A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint (St. Louis: The F.H. Thomas Law Book Co., 1900). Vol. 2.

Part of: A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint, 2 vols.

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§ 220.

State regulation and prohibition of interstate commerce, particularly, articles of merchandise.—

There are two phases of interstate commerce, which are readily suggested by the correlative words, exports and imports. The sale of the products of domestic labor beyond the limits of the State is just as much a transaction of interstate commerce, as would be the sale within the State of the products of labor done without the State. But before the products of either labor may become the subjects of interstate commerce, steps must have been taken for their sale in or transportation to another State or country. As long, therefore, as the products of domestic labor and manufacture are not set apart for sale to non-resident vendees or for transportation to another State, they may be subjected to any police regulation and restriction, which would not offend the limitations of the State constitutions, without infringing the interstate commerce clause of the national constitution.1 In this case, the Iowa statute, prohibiting the manufacture and sale of intoxicating liquors, was held not to interfere with interstate commerce, in that it prohibited the manufacture of liquors for export. On the same grounds, a statute, which prohibited the shipment beyond the State of certain fish which was caught within it, was held not to work an interference with interstate commerce, in the constitutional sense of the words.2

It has been held to be an unlawful interference with interstate commerce, for a State law to prohibit suit in the State courts on contracts of insurance, which are effected outside of the State with a non-resident or foreign insurance company, unless the insurance company complies with the license law of the State by the payment of the required license tax. The contract of insurance, which is effected by a resident with a foreign insurance company through correspondence with the home office or a non-resident agency, is a contract of the State in which the home office or agency is located, and is, therefore, not governed by the law of the State in which the insured resides. Furthermore, it is an interstate contract, and comes within the purview of the interstate commerce clause of the Federal constitution.3

On the other hand, State laws have been sustained, which prohibit the selling of any pool or bets within the State upon any races or games, which are to take place outside of the State, or the establishment within the State of any agency for the sale of such pools or bets,4 or for the transmission of money to race tracks outside of the State.1 In such a case, the contract is wholly made within the State, and for that reason does not fall within the interstate commerce clause of the Federal constitution. So, also, has a State statute been sustained, as not being an interference with interstate commerce, which declares void any stipulation in a contract which provides a shorter period of limitation than two years, or which requires that a notice of claim of damages be given within less than ninety days after suffering the damage.2

But the chief instances of police regulations by the State, which interfere with the prosecution of interstate commerce, relate to the importation of merchandise into the State, and the sale thereof within the State, in violation of the local police regulations. Generally these regulations, if they are so excessive as to amount to a burden or restriction upon commerce, are held to be void, and in contravention of the interstate commerce clause of the national constitution. But a disposition is manifested to sustain all reasonable police regulations, which do not restrain or burden the prosecution of the interstate business, and which are designed to protect the purchaser against fraud or injury. Naturally a State law, which only regulated the business in a way which did not prevent its prosecution, is more likely to be sustained than one, which served as a practical barrier to the profitable prosecution of the interstate business. Thus, a State law was held to be constitutional, which required that no lard be sold within the State that contains anything but the pure fat of healthy swine, unless each package is marked “compound lard.”3 And so, also, has the Supreme Court of the United States held a State law to be constitutional, which prohibits the sale of oleomargarine, whether made within or without the State, if it is colored so as to resemble butter in appearance, or if its appearance is not so changed in form or color as to prevent such resemblance.1 On the other hand, a United States Circuit Court held a Minnesota statute to violate the interstate commerce clause of the national constitution, so far as it was enforced against original packages, which prohibited the sale within the State, of any baking powder which contains alum, unless that fact is stated upon the label of the box or package.2 In Tennessee, it has been held that the State has the power to prohibit the sale of cigarettes, even in the original package of interstate commerce, because, being deleterious to the health, it was not a legitimate article of commerce.3

It has also been held to be a constitutional exercise of the police power of the State, to require that all coal, imported into the State, shall be gauged by State officials, before it can be sold.4 And provision for the inspection of goods, which are either imported or exported, is held to be a constitutional exercise of the police power.5

In the case of all of these regulations, the manifest single intent of the legislator was to protect the purchaser against fraud and imposition, without interfering in the slightest with the fair, straightforward interstate business of an honest man. They are, therefore, sustainable as reasonable police regulations, whose enforcement does not operate as an interference with interstate commerce. But where compliance with the requirements of the statute is impossible to the non-resident trader, and its enforcement against him would operate as a practical prohibition of his business—particularly, if the regulation is not impossible of performance to the resident, who is engaged in the same business—the regulation will be declared to be an unconstitutional interference with interstate commerce. Thus a law, which requires the inspection within the State of all live stock, which is slaughtered for sale within the State, cannot be complied with by non-resident stock dealers, and is, therefore, unconstitutional as a restriction upon interstate commerce. And such has been the almost unanimous opinion of the courts.1

Probably, for the reason that the motive of the regulation was not a reasonable one, it has been held that a State law, which prohibited the sale within the State of the products of the convict labor of other States, unless they are so labeled, is an unconstitutional interference with interstate commerce.2 And so, also, because it discriminated without reason against non-resident in favor of resident vendors, a State law, which required the vendors of nursery stock grown in another State to file an affidavit and bond with the Secretary of State, was held to be an unconstitutional restriction upon interstate commerce.3 It has also been held to be an unreasonable and unlawful interference with interstate commerce, for a State law to require that sheep be “dipped” before being imported into the State.4

In like manner, the State government cannot impose conditions upon the sale within the State of articles of interstate commerce, which are not required to protect the health of the community or the reasonable rights of the purchaser. These would be unreasonable; and, because they were unreasonable, they would be declared to be an unlawful interference with interstate commerce.1 In these cases, the statutes required foreign corporations, doing business within the State, to have a place of business and an agent within the State. It was held that this law could not be enforced against corporations who send goods into the State upon the order of resident buyers, which have been mailed to the home office of the corporation, or which have been given to its traveling salesmen.

Where the police regulation is an absolute prohibition of the importation of articles into the State, the regulation is likely to be declared to be an unconstitutional interference with interstate commerce. This was the case with State statutes, which, like that of the State of Missouri, prohibited absolutely the importation into or through the State of Texan, Indian or Mexican cattle during certain periods of the year. The statute was declared to be unconstitutional by the Supreme Courts of the United States and Missouri.2 In the latter case, the Supreme Court of the United States stated, in partial explanation of its judgment:—

“While we unhesitatingly admit that a State may pass sanitary laws, and laws for the protection of life, liberty, health or property within its borders; while it may prevent persons and animals suffering under contagious or infectious diseases, or convicts, etc., from entering the State; while for the purpose of self-protection it may establish quarantine and reasonable inspection laws, it may not interfere with transportation into or through the State, beyond what is absolutely necessary for its self-protection. It may not, under the cover of exerting its police powers, substantially prohibit or ourden either foreign or interstate commerce.” * * *

The Illinois courts held such an act to be constitutional.1

“Regarding the statutes as mere police regulations, intended to protect domestic cattle against infectious diseases, those courts have refused to inquire whether the prohibition did not extend beyond the danger to be apprehended, and whether, therefore, the statutes were not something more than exertions of police power. That inquiry, they have said, was for the legislature and not for the courts. With this, we cannot concur. The police power of a State cannot obstruct foreign commerce or interstate commerce beyond the necessity for its exercise; and, under color of it, objects not within its scope cannot be secured at the expense of the protection afforded by the Federal constitution. And as this range sometimes comes very near to the field committed by the constitution to Congress, it is the duty of the courts to guard vigilantly against any needless intrusion.”

In explanation of the distinction made by the national Supreme Court between total prohibition of the transportation of Texas and other Southern cattle into and through the State, and the police provisions for the protection of domestic cattle from contagiously diseased animals, the same court, in a later case, upheld, as a reasonable police regulation, the statute of Iowa which provided that any one, who had in his possession within the State Texas cattle, which had not wintered north of the southern boundary of Missouri and Kansas, shall be liable for any damages which may be suffered by the spreading of the Texas fever among domestic cattle.2

In the pursuit of the rigid enforcement of the game laws of a State,3 the inability to detect breaches of the law, if the sale of imported game of the prohibited kind is allowed, led to the extension of the statutory prohibition to all such game, whether it was domestic or imported. A statute of California, absolutely prohibiting the sale of hide or meat of deer during the closed season, was sustained as a lawful exercise of the police power of the State, although it was enforced against importations into the State, provided that the sale of the original package was not interfered with.1 In another case, the State prohibitive law was sustained, as not a violation of the interstate commerce clause, although it prohibited the sale of the imported game in the original package.2

Elsewhere,3 the curious and, to the author unjustifiable, legislative crusade against oleomargarine, a harmless substitute for butter, is very fully set forth, and the decisions for and against the constitutionality of the laws, prohibitory and regulative of its sale, are there more or less fully treated. These laws must be referred to again in the present connection, because their enforcement has proven to be unsuccessful, as long as the laws cannot prevent or control the sale of oleomargarine, which may be imported into the prohibitory State. All of the cases unite in declaring that a State statute, prohibiting the sale of oleomargarine, cannot prevent the sale of the imported oleomargarine in the original package in which it was shipped into the State; but that as soon as such original package is broken, and the component elements of the original package are offered for sale at retail, they have ceased to be articles of interstate commerce, and have become indistinguishable from the general property, which is subject to the reasonable exercise of the police power of the State. When the original package of oleomargarine, unbroken, is offered for sale in a prohibitory State, it is still an article of interstate commerce, and its sale cannot be prevented by State law.1 But it has been held that, where the police regulation of the sale of oleomargarine does not do more than establish conditions, which are designed, not to prohibit its sale, but only to prevent the practice of deception or fraud in the sale of it for genuine butter, the regulation is constitutional, even when it is enforced against the original package of interstate commerce.2 But in a recent case, it has been held by the Supreme Court of the United States that the New Hampshire statute, which required oleomargarine to be colored pink, was equivalent to a prohibition of interstate commerce in that article of merchandise when applied to original packages, and was for that reason void and unconstitutional.3

The same ruling, distinguishing between the original package of interstate commerce and the broken contents of the same, has been made in the case of State laws which prohibit the sale of cigarettes; the courts holding, that the States have no power to prohibit the sale of cigarettes, imported from another State, when they are offered for sale in the original package in which they had been imported into the State.4 The same ruling would be made in the case of any other article of interstate commerce, such as seed1 or baking powder.2

The most important occasion, for determining the proper line of demarcation of the police regulation of a trade which is conceded to a State, and the restraint upon or interference with interstate commerce which is denied by the national constitution, is in the State laws and the constitutional provision, which prohibit the sale of intoxicating liquors.

Two propositions have, as a result of the fruitful litigation over prohibitory laws in this traffic, been definitely settled, particularly by the decisions of the Federal courts. The first is, that no prohibitory law of a State can interfere with the purchase without the State, and the shipment into the prohibitory State, of intoxicating liquors for the purchaser’s own use and consumption. Any State law, which interferes with this interstate transaction, either to prohibit it altogether, or to subject it to the police supervision of the State,—as was the case in South Carolina under the dispensary act,3 requiring a certificate from the State chemist of the purity of the liquors so imported,—is an unconstitutional interference with interstate and extra-state commerce.4 The second proposition is—or was, until the enactment in 1890 of the so-called “Wilson Bill,” which will be explained presently,—that intoxicating liquors, imported into a prohibitory State, may be sold within such State, notwithstanding the prohibitory law, in the original package, in which it was imported; and that such liquors did not come within the prohibition of the State law, until the original package had been broken, and the contents in a different form or package were offered for sale.1

The decision of the Supreme Court of the United States in Leisy v. Hardin, sound as it was on the precedents laid down by the earlier cases,2 created a very natural consternation among the advocates and supporters of laws for the prohibition of the sale of intoxicating liquors; for it dealt a death-blow to their aims and aspirations for the banishment of intemperance from their States and domiciles. The breweries, in order to comply with the judicial determination of what was the original package of interstate commerce, constructed cars for the safe depository of single unpacked bottles of beer; and these cars, with the bottle-rack filled with the unpacked bottles of beer, would be transported to different places within the prohibition States, there side-tracked and opened daily for the transaction of business in the sale of original packages, in the form of single bottles of beer.

The courts had held that the original package of interstate commerce, whose sale within a State cannot be prohibited or restrained by State law, was the package that was delivered to the common carriers for transportation, in the exact condition in which it was shipped. For example in the case of liquors, the bottles, if shipped without any packing, were the original packages; but if they were packed in a box or barrel, or basket, the box, barrel or basket, was the original package, and not the individual bottles.3 The same ruling would be made in the case of any dry goods. The original case, box or barrel, in which the articles were shipped, would be the original package and not the smaller packages, which were packed for shipment in such case, box or barrel. This question has been recently raised in the shipment of cigarettes into States, in which their sale is prohibited by law. The cigarettes, as is well known, are put up in packages of twelve, either in a tin box, or incased in a paper wrapper. It was held by the Supreme Court of Iowa that, where these small packages were packed for shipment in a larger box or crate, the larger box or crate was the original package of interstate commerce, and that the requirement of an internal revenue stamp upon each one of the smaller packages did not make them original packages.1 In other cases,2 the same practical conclusion was reached, viz.: that the smaller packages of cigarettes were not so far original packages of interstate commerce, after they had reached their place of destination, as they may be sold in defiance of the prohibitory law of the State; but the court held that, nothwithstanding the conclusion just given, these smaller packages were made original packages, while in course of transportation, by the requirement of a revenue stamp on each one of them. In a Tennessee case, it was held that an open basket, filled with the smaller packages of cigarettes, was the original package, so that the sale of one of the smaller packages would not be the sale of an original package, if it has been shipped into the State in the basket, as described.3

The consternation, which the decision in the case of Leisy v. Hardin,4 had occasioned, led to the enactment of what is known as the “Wilson Bill,” which reads as follows:—

“That all fermented, distilled or other intoxicating liquors or liquids, transported into any State or Territory, or remaining therein for use, consumption, sale or storage therein, shall, upon arrival in such State or Territory, be subject to the operation and effect of the laws of such State or Territory, enacted in the exercise of its police power, to the same extent and in the same manner as though such liquids or liquors had been produced in such State or Territory, and shall not be exempt by reason of being introduced therein in original packages, or otherwise.”

This congressional enactment was suggested by a statement in the opinion of Chief Justice Fuller in Leisy v. Hardin, as follows: “Hence, inasmuch as interstate commerce, consisting in the transportation, purchase, sale and exchange of commodities, is national in its character, and must be governed by an uniform system, so long as Congress does not pass any law to regulate it, or allowing the States so to do, it thereby indicates its will that such commerce shall be free and untrammeled. * * * The conclusion follows that as the grant of the power to regulate commerce among the States, so far as one system is required, is exclusive, the States cannot exercise that power without the assent of Congress.”

The constitutionality of the Wilson bill was denied, on the ground that Congress had not the power under the constitution to delegate to the States the regulation of interstate commerce, which had been placed within the exclusive power of Congress by the interstate commerce clause of the constitution.1 But the Supreme Court of the United States2 sustained the Wilson law, claiming that Congress had the power to remove the obstruction to the State regulation of interstate commerce, which the constitutional grant of such power to Congress had created. The court held that, where Congress took no action for the regulation of interstate commerce of a national character, such as is the traffic in intoxicating liquors, its silence must be taken as equivalent to a declaration that the commerce must be free and untrammeled. “It followed as a corollary that, when Congress acted at all, the result of its action must be to operate as a restraint upon that perfect freedom which its silence insured. Congress has now spoken and declared that imported liquors and liquids shall, upon arrival in a State, fall within the category of domestic articles of a similar nature. * * * Congress did not use terms of permission to the State to act, but simply removed an impediment to the enforcement of the State laws in respect to imported packages in their original condition, created by the absence of a specific utterance on its part. It imparted no power to the State not then possessed, but allowed imported property to fall at once upon arrival within the local jurisdiction.”1

In a case, growing out of the enforcement of the South Carolina Dispensary Law,2 which converted the sale of intoxicating liquors into a government monopoly, and prohibited its sale within the State by private dealers, it was held by the United States Circuit Court that the Wilson bill did not apply to a State in which intoxicating liquors were allowed to be sold for consumption as beverage; that, where a State made the liquor business a government monopoly, and forbade the importer of original packages to sell the same, the law was in conflict with the interstate commerce clause of the constitution, and was for that reason void.3 The Supreme Court, however, did not agree to this distinction, reversed the decision of the Circuit Court, and held that the Wilson law placed intoxicating liquors in original packages within the control of the State laws, whatever those laws prescribed, in the regulation of the sale of intoxicating liquors. The only practical limitation which the court made in the scope of the Wilson bill, was that no State had the power to prohibit the importation into the State of intoxicating liquors for the purchasers’ own use and consumption.1 It has also been held by the Supreme Court of the United States that intoxicating liquors, imported into a State in which their sale is prohibited, were not brought within the prohibitory law of the State by the Wilson bill, until the carrier had transported them to the place of destination, and had made actual or constructive delivery to the consignee. The State’s interference with such transportation, by requiring the carrier, under penalties, to procure a certificate from some State official before the goods could be lawfully delivered to the consignee, was an unconstitutional interference with interstate commerce.2

[1]Kidd v. Pearson, 128 U. S. 1.

[2]State v. Northern Pac. Express Co., 58 Minn. 403.

[3]Allgeyer v. State of Louisiana, 165 U. S. 578.

[4]State v. Stripling, 113 Ala. 120.

[1]State v. Harbourne, 70 Conn. 484.

[2]Gulf, C. & S. F. Ry. Co. v. Eddins, 7 Tex. Civ. App. 116; 26 S. W. 161.

[3]State v. Snow, 81 Iowa, 642.

[1]Plumley v. Massachusetts, 155 U. S. 461. In this case, the court held the law to be valid in its enforcement against an original package of interstate commerce.

[2]In re Ware, 53 Fed. 783.

[3]Austin v. State, 101 Tenn. 563.

[4]Pittsburg & S. Coal Co. v. Louisiana, 156 U. S. 590.

[5]Patapoca Guano Co. v. Board of Agriculture of North Carolina, 171 U. S. 345.

[1]Minnesota v. Barber, 136 U. S. 313; Ga. Packing Co. v. City of Macon, 60 Fed. 774; State v. Klein, 126 Ind. 68; Hoffman v. Harvey, 128 Ind. 600; Schmidt v. People, 18 Colo. 78; Farris v. Henderson, 1 Okla. 384 (33 P. 380).

[2]People v. Hawkins, 85 Hun, 43; s. c. 47 N. Y. S. 56; 20 App. Div. 494; s. c. 157 N. Y. 1.

[3]In re Schechter, 63 Fed. 695.

[4]State v. Duckworth (Idaho), 51 P. 456.

[1]Allen v. Tyson-Jones Buggy Co., 91 Tex. 22; Cook v. Rome Brick Co., 98 Ala. 409.

[2]Grimes v. Eddy, 126 Mo. 168; Railroad Company v. Husen, 95 U. S. 465.

[1]Yeazel v. Alexander, 58 Ill. 254.

[2]Kimmish v. Ball, 129 U. S. 217.

[3]As to these, see ante, § 151.

[1]Ex parte Maier, 103 Cal. 476.

[2]Stevens v. State (Md. ’99), 43 Atl. 929.

[3]Ante, § 122.

[1]State v. Gooch, 44 Fed. 276; In re Worther, 58 Fed. 467; In re McAllister, 51 Fed. 282; Ex parte Scott, 66 Fed. 45; Armour Packing Co. v. Snyder, 84 Fed. 136; Waterbury v. Egan, 23 N. Y. S. 115; 3 Misc. Rep. 355; Commonwealth v. Paul, 148 Pa. St. 559; s. c. Paul v. Pennsylvania, 171 U. S. 1; Commonwealth v. Schollenberger, 156 Pa. St. 20; s. c. Schollenberger v. Pennsylvania, 171 U. S. 1; Fox v. State (Md. ’99), 43 Atl. 775.

[2]Plumley v. Massachusetts, 155 U. S. 471; Commonwealth v. Huntley, 156 Mass. 236; In re Plumley, 156 Mass. 236. In this case, the statute required the oleomargarine to be so colored or made as to destroy its resemblance to genuine butter.

[3]Collins v. New Hampshire, 171 U. S. 130.

[4]State of Iowa v. McGregor, 76 Fed. 956; Sawrie v. State of Tennessee, 82 Fed. 615; In re May, 82 Fed. 422; McGregor v. Cone, 104 Iowa, 465; State v. Goetze, 43 W. Va. 495; Austin v. State, 101 Tenn. 563.

[1]In re Saunders, 52 Fed. 802.

[2]In re Ware, 53 Fed. 783.

[3]As to which see ante, § 131.

[4]Donald v. Scott, 67 Fed. 854; s. c. 76 Fed. 559; Ex parte Gonzales, 76 Fed. 559; Scott v. Donald, 165 U. S. 58; Gardner v. Donald, 165 U. S. 58; W. A. Vandercook Co. v. Vance, 80 Fed. 786; s. c. Vance v. W. A. Vandercook Co., 170 U. S. 438.

[1]In re Lebolt, 77 Fed. 587; Bowman v. Chicago & N. W. Ry. Co., 125 U. S. 465; Leisy v. Hardin, 135 U. S. 100.

[2]Especially, see Nathan v. State, 8 How. 73.

[3]Guckenheimer v. Sellers, 81 Fed. 997; Commonwealth v. Schollenberger, 156 Pa. St. 201; Schollenberger v. Commonwealth of Pennsylvania, 171 U. S. 1; State v. Parsons, 124 Mo. 436.

[1]McGregor v. Cone, 104 Iowa, 465.

[2]In re May, 82 Fed. 422; contra, Austin v. State, 101 Tenn. 563.

[3]Austin v. State, 101 Tenn. 563.

[4]135 U. S. 100.

[1]See, especially, Stoutenburg v. Hennick, 129 U. S. 141.

[2]In re Rahrer, 140 U. S. 545.

[1]See, further, in support of the constitutionality of the Wilson law, Scott v. Donald, 165 U. S. 58; In re Spickler, 43 Fed. 653; Stevens v. State (Ohio, 1900), 56 N. E. 478.

[2]For a full discussion of this law, see ante, § 131.

[3]W. A. Vandercook Co. v. Vance, 80 Fed. 786.

[1]Vance v. W. A. Vandercook Co., 170 U. S. 438. See Rhodes v. State of Iowa, 170 U. S. 412.

[2]Rhodes v. State of Iowa, 170 U. S. 412; reversing s. c. State v. Rhodes, 90 Iowa, 496.