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The Essentials of American Constitutional Law

By

Francis Newton Thorpe, Ph.D. LL.D.

(Of the Pennsylvania Bar)
Professor of Political Science and Constitutional Law
University of Pittsburgh

“It is a Constitution we are expounding.”—John Marshall

G. P. Putnam’s Sons
New York and London
The Knickerbocker Press

Copyright, 1917
BY
FRANCIS NEWTON THORPE

Made in the United States of America

* AD * JUVENES *
* LEGUM * STUDIOSOS *
* QUANDO *
* ADVOCATOS * JUDICES *
* LEGISLATORES *
* HODIE *
* ANNORUM * AMICOS *
* HIC * LIBELLUS *
* DEDICATUS *

PREFACE

The principles of American constitutional law are the foundation of all judicial decisions, and it is (as Marshall observes) “the province and duty of the Courts to say what the law is.” Judicial decisions, however, are technical, are handed down by experts, and set forth authoritatively as results of experience which the junior student of the law is likely to find difficult, if not incomprehensible. But to attempt merely to simplify the law, or its interpretation by the Courts, is likely to result in variation from the original spirit and purpose of the law: because decisions are essentially a reduction of questions at issue to a principle, and laws themselves are (or ought to be) simple, clear, comprehensive, and complete.

For purposes of study or instruction it is necessary to bring the principle involved in a law (be it the Supreme Law of the Land,—that is, the Constitution, a Treaty, or an Act of Congress; or a State Constitution, or an Act of a State Legislature) within the compass of a principle, or a fundamental, by examination of an issue, or issues, in which the principle is involved. There must ever be before the Court the issue and the law, and the law itself may be an issue, in the American system of government which recognizes the authority of the Court to pass on the constitutionality of the law.

But principles are not numerous. Possibly in Nature there is but one basic principle and all our so-called “natural laws” are but aspects of that principle as the human mind conceives or recognizes it. The analogy in government permits the assertion that the principles of constitutional law are few. Possibly they are severally aspects of one principle: that of sovereignty. To the student of the law, especially to junior students, principles are matters of memory rather than of understanding. It is a vigorous and essentially mature mind that can reduce a complex issue to such simple form as to deduce the principle on which it rests.

Books on American constitutional law should be simple, comprehensive, authoritative, and specially adapted to the conditions under which the subject is pursued. In later years the subject is usually approached through two books: a treatise on constitutional law, and a book (collection) of leading cases illustrative of the principles involved. The tendency is toward bulky volumes. Meanwhile other subjects than constitutional law,—other branches of the law,—must be pursued. Multiplicity of subjects is characteristic of the curriculum whether at Law School or at College or University. Time is brief: studies are many. The necessary result is concentration upon the essentials of a subject,—careful isolation of its principles together with familiarity with authoritative illustrations of their application. This means a small, compact, authoritative book on the subject. There are few principles,—there are innumerable applications of them. Values are twofold,—perception of the principle, and understanding of its application. The question is not “What principle?” but rather, “What application?” Thus the student of law may wisely be led to consider, to weigh, to study the great or the leading application of a principle: that is, he is properly directed to the important decisions of the Courts of Law. In America, these decisions are handed down by the Supreme Courts of States and the Supreme Court of the United States. From these decisions the principles of our constitutional law may be derived. Great writers, like Hamilton, Madison, Kent, Story, or Cooley, must be listened to: but it is the Court of Law that speaks with authority. Our great writers on constitutional law and our great judges sitting as Courts of Law practically agree as to what comprise the principles of our constitutional law.

Whether the principles of the law are reached by induction or by deduction does not affect the principles. Judicial decisions illustrate both methods of approach. Stated broadly,—a treatise on constitutional law sets forth its principles and cites decisions as illustrations of their application; a collection of cases provides many illustrations from which the principles may be, or are, deduced. By combining the treatise and the case-book (and the present volume may be used in connection with any of the current “Collections” of “Leading Cases”) the benefits of both methods,—deductive and inductive,—are realized. Whether the two sorts of books are used together, or in succession, must depend upon the time, the place, and the importance assigned to the subject itself. Highly beneficial results have followed when a first semester has been given to the treatise, and a second to the cases, whether in a “Collection” (of which there are several of highest value now in use), or in the original “Reports.”

But constitutional law is more than a technical subject for a Law School: it is a branch or part of the study of government,—of political philosophy so-called. It is a branch of “Politics” as Aristotle uses that word. Hence it is also a “culture” study, entitled to a respectable place in the curriculum of College or University. But as such a study, it must also be pursued as are other branches of philosophy. Whatever part it has as dialectics it also has part in the interpretation of the government,—of the sovereignty behind that government,—under which we live. The difficulties of constitutional law are also the difficulties of government and of philosophy itself.

Shall the college man leave college with a fair knowledge of the principles of the Supreme Law under which he lives? That is the question. Whatever book or books or method best brings that consummation is the best.

F. N. T.

University of Pittsburgh.

CONTENTS

CHAPTER I.

 

PAGE

The Supreme Law 1

CHAPTER II.

The Law of Legislative Powers

(1)

18

CHAPTER III.

The Law of Legislative Powers

(2)

33

CHAPTER IV.

The Law of Taxation 51

CHAPTER V.

The Law of Commerce 63

CHAPTER VI.

The Law of Contracts and Property 89

CHAPTER VII.

The Law of the Executive Power 102

CHAPTER VIII.

The Law of Judicial Power 113

CHAPTER IX.

The Law of State Comity, Territories, and Possessions 146

CHAPTER X.

The Law of Limitations 164

CHAPTER XI.

The Law of Fundamental Rights 191

CHAPTER XII.

The Law of Citizenship 212                     The Constitution of the United States 230 Cases Cited 265 Index 273

The Essentials of American Constitutional Law

CHAPTER I
THE SUPREME LAW

1. The supreme law of the land is the Constitution, and acts of Congress and treaties made under its authority. By this supreme law the judges in every State are bound, “anything in the constitution or laws of any State to the contrary notwithstanding.” All legislative, executive, and judicial officers both of the United States and of the several States are bound by oath or affirmation to support the Constitution, and in our actual government, every administrative official, State or national, is bound in like manner.1 Aliens becoming American citizens by naturalization,—by which they disavow allegiance to any other sovereignty,—solemnly bind themselves, by oath or affirmation, to support the Constitution. Every citizen is impliedly under oath to support the Constitution.

2. Such supremacy of the Constitution is essential to American sovereignty. The people of the United States ordained and established this supreme law. They are sovereign. The oath or affirmation to support it is the formal and sovereign promise of fidelity to that sovereign, to any sovereign, or quasi-sovereign,—for example, to England, France, or a State in the American Union. The supreme law of a sovereignty,—its “constitution,” may be written, like ours, or partly unwritten, as the British constitution. The essential fact is of the supremacy of the law because of the sovereignty of the law-giver.

3. The laws of the United States are made by Congress and the President, or by Congress alone over his veto.2 The laws of a State are made by its legislature and governor, or by the legislature alone over his veto; but Congress, the President, State legislature and governors are only agents of their sovereign: they possess derivative, not original, powers; they represent sovereignty. The American sovereign is “We the People” of the United States, and for many purposes, “We the People” of the respective States. All government in America is representative government. The sovereign makes laws through its agents or representatives. No other method is possible in a sovereignty conceived and operating as ours. Whether the law thus formulated be a constitution,—national or State,—an act of Congress or of Assembly, it is an expression, on the principle of agency, of the will of the sovereign. The Convention that frames a constitution is an agent of sovereignty; the Congress or State Legislature that enacts a law is an agent of that sovereignty, and that sovereignty prescribes through its agents the method of ratifying and administering that law. Through other agents, e. g., the judiciary, that sovereignty interprets constitutions and laws.3 Legislative, executive, judicial, and administrative officials constitute the governmental group, the public servants to whom, for a term, the sovereign delegates some of its powers. The members of this group are agents of the sovereign and are answerable to that sovereign as is the agent to his principal.

4. Madison, in The Federalist, states the whole case: A republic is

a government which derives all its powers directly or indirectly from the great body of the people, and is administered by persons holding their offices during pleasure, for a limited period, or during good behavior. It is essential to such a government that it be derived from the great body of the society, not from an inconsiderable proportion, or a favored class; otherwise a handful of tyrannical nobles, exercising their oppressions by a delegation of their powers, might aspire to the rank of republicans, and claim for their government the honorable title of republic. It is sufficient for such a government that the persons administering it be appointed, either directly or indirectly, by the people, and that they held their appointments by either of the tenures just specified; otherwise every government in the United States, as well as every other popular government that has been or can be well organized or well executed, would be degraded from the republican character.4

5. The supreme law of the land represents the will of the people of the United States for purposes of government. The authority of that law is derived wholly from the people. They may change or amend it at any time. They prescribe the procedure for such change or amendment.5 Through this supreme law the entire public business is carried on. The constitution of Massachusetts sets forth the essential fact:

All power residing originally in the people, and being derived from them, the several magistrates and officers of government, vested with authority, whether legislative, executive, or judicial, are their substitutes and agents, and are at all times accountable to them.6

The distinction between original and derivative powers made by the constitution of Massachusetts is true of the supreme law of the United States.

6. The quality of supremacy involves and implies sovereignty. Sovereignty is indefinable; is not, strictly speaking, comprehensible. There is therefore a difference between sovereignty and government. Sovereignty ordains and establishes a form of government. The form varies among different peoples and at different times. The Constitution declares that “The United States guarantees to every State in this Union a republican form of government.”7 This form, in America, is the creation, that is, the creature, of the sovereign, the people. The essential matter here is of powers and relations, and is made clear by Chief Justice Marshall: The government of the United States proceeds directly from the people; is ordained and established in their name for definite purposes declared in the Preamble to the Constitution, and the assent of the States in their sovereign capacity is implied in calling the Convention of 1787, which framed the Constitution, and in submitting that instrument to the people. The people were at perfect liberty to accept or to reject it, and their act was final. It required not the affirmance and could not be negatived by the State governments. When thus adopted, the Constitution was of complete obligation, and bound the State sovereignties.8 But had not the people of America, in 1787, already surrendered all their powers to the State sovereignties and had nothing more to give? The question whether they may resume and modify the powers granted to their government cannot be raised in this country. The people always possess that power and since 1787 they have exercised it in making seventeen amendments to the Constitution. The legitimacy of the general government might be doubted had it been created by the States, for the States, as governments, are creations of the people, and possess only derivative powers. “The powers delegated to the State sovereignties were to be exercised by themselves, not by a distinct and independent sovereignty created by themselves.” The States were competent to form a league, such as was the Confederation of 1781,

but when “in order to form a more perfect Union” it was deemed necessary to change this alliance into an effective government, possessing great and sovereign powers, and acting directly on the people, the necessity of referring it to the people, and of deriving its powers directly from them, was felt and acknowledged by all. The government of the Union is emphatically and truly a government of the people. In form and substance it emanates from them. Its powers are granted by them and are to be exercised directly on them, and for their benefit. This government is acknowledged by all to be one of enumerated powers. But the question respecting the extent of the powers actually granted is perpetually recurring, and will probably continue to arise as long as our system shall exist. The government of the Union, though limited in its powers, is supreme within its sphere of action.9

This supremacy results from the nature of the government.

It is the government of all; its powers are delegated by all; it represents all, and acts for all. Though any one State may be willing to control its operations, no State is willing to allow others to control them. The nation, on those subjects on which it can act, must necessarily bind its component parts. But this question is not left to mere reason; the people have in express terms decided it by saying, this Constitution and the laws of the United States which shall be made in pursuance thereof, and all treaties made under its authority, shall be the supreme law of the land, and by requiring executive, legislative, judicial (and administrative) officers to take the oath of fidelity to it.10

7. The question of sovereignty arises here and, as commonly stated, of national sovereignty and of State sovereignty. The equal vote allowed each State by the Constitution,11 “is at once a recognition of the portion of sovereignty remaining in the individual States, and an instrument for preserving that residuary sovereignty.”12 Are there two sovereignties in America?

The sovereignty of a State [declares Marshall], extends to everything which exists by its authority, or is introduced by its permission; but does not extend to these means which are employed by Congress to carry into execution powers conferred on that body by the people of the United States. These powers are not given by the people of a single State, but by the people of the United States to a government whose laws, made in pursuance of the Constitution, are declared to be supreme. Consequently, the people of a single State cannot confer a sovereignty which will extend over them.13

8. The exercise of the taxing power illustrates the principle here involved. The power of taxation residing in a State measures the extent of sovereignty which the people of a single State possess, and can confer on its government.

We have a principle (here) [continues Marshall], which leaves the power of taxing the people and property of a State unimpaired; which leaves to a State the command of all its resources, and which places beyond its reach all these powers which are conferred by the people of the United States on the government of the Union, and all these means which are given for the purpose of carrying these powers into execution. We have a principle which is safe for the States and safe for the Union.... The people of the United States did not design to make their government dependent on the States. The government of the Union possesses general powers of taxation.... The people of all the States and the States themselves are represented in Congress, and by their representatives exercise this power. When they tax the chartered institutions of the States, they tax their constituents and these taxes must be uniform.14 But when a State taxes the operations of the government of the United States, it acts upon institutions created not by their own constituents, but by people over whom they claim no control. It acts upon the measures of a government created by others, as well as themselves; for the benefit of others in common with themselves. The difference is that which always exists, and always must exist, between the action of the whole on a part, and the action of a part on the whole, between the laws of a government declared to be supreme, and these of a government which, when in opposition to those laws, is not supreme.... In America, the powers of sovereignty are divided between the government of the Union and those of the States. They are each sovereign with respect to the objects committed to the other.15

Plainly the essential matter here is one of functions. Neither the government of the United States nor that of a State is sovereign, for each possesses only delegated powers. But the powers delegated to the two governments are not for all purposes the same, or of equal extent. The two governments have different jurisdictions. Distinctively federal functions are not State functions, as, for example, the distinctively Federal functions of coining money, making treaties, and declaring war.16 On the other hand, distinctively State functions are the exercise of the police power of the State,17 the control of intrastate commerce, the power of extradition between States,18 the validity in a State of the public acts, records, and judicial proceedings of another State19 and the right of citizens of each State to all privileges and immunities of citizens in the several States.20

9. The question of the relative sovereignty of the United States and that of a State is one of jurisdiction, and is determined by extent of powers delegated, not of original powers possessed. Delegated powers are expressed in constitutions and laws. Two governments exist in America: that of the Union and that of the respective States. The Constitution of the United States was ordained and established by the people of the United States for themselves, for their own government and not for the government of the individual States.21 The constitution of a State is made by the people of that State for themselves only. Sovereignty in America has declared the Constitution of the United States the supreme law of the land, thus formally relegating State constitutions and laws to inferior rank,—that is, to a position of powerlessness when in conflict with the supreme law. Thus when we speak of two “sovereignties,” or of “residuary sovereignty,” we really mean “two governments of delegated powers,”—that is, the State governments and the national government. When we speak of the two sovereignties, we do not mean sovereignty (which is by nature indivisible), but government (which is divisible), the creation of sovereignty and, unlike sovereignty, possesses only delegated powers.

10. For administrative purposes, or, stating the case in other words, for legal reasons and in harmony with precedents in law, the terms “sovereignty” and “residuary sovereignty” continue in use among lawyers, judges, political writers, and civil officials; but government is not, never was, and in such a country as ours, never can be sovereignty. American constitutional law is law made by authority of the sovereign people: the law of the United States is made by Congress, the authorized legislative agent of the people of the United States: the law of the State, is made by its Legislature, the authorized law-making agent of the people of the State. The same essential may be stated after the manner of Chief Justice Marshall as the law of the whole: the Nation; the law of the part, the State. Government is the child of sovereignty.

11. Because of the sovereignty of the people of the United States, and consequently, of the supremacy of the Constitution, several results follow:

Madison expresses one of these in The Federalist22:

The idea of a national government involves in it not only an authority over the individual citizens, but an indefinite supremacy over all persons and things, so far as they are objects of lawful government.

Marshall expresses other results,—

The general government, though limited as to its objects, is supreme with respect to these objects. This principle is a part of the Constitution. To this supreme government ample powers are confided. With the ample powers confided to this supreme government are connected many express and important limitations on the sovereignty of the States.23

Hamilton, commenting on the Constitution, declares that “the national and State systems are to be regarded as one whole.”24 And finally, although our supreme law does not contain the word “sovereign,” or “sovereignty,” it implies sovereignty. The crowning illustration of this principle of implied sovereignty grew out of the acquisition of Louisiana in 1803. President Jefferson could find no provision of the Constitution specifically empowering the United States to make the acquisition, or to incorporate the region into the United States. He therefore proposed amending the Constitution so as to authorize the purchase. The President’s doubts of the power of the United States to acquire Louisiana were weaker than his doubt of power to incorporate the province into the United States,—that is, to make a foreign province or provinces inhabited, by an alien people, partakers in an American Commonwealth. He consulted his Cabinet. Levi Lincoln, the Attorney-General, was of opinion that to share the privileges and immunities of the people of the United States with a foreign population required the consent of the people of the United States, and he suggested that if a treaty of cession were made, containing such agreements, it should be put in the form of a change of boundaries instead of a cession, so as to bring the territory within the United States. Albert Gallatin, Secretary of Treasury, replied that to him it appeared: (1) That the United States as a nation have an inherent right to acquire territory; (2) That whenever that acquisition is by treaty, the same constituted authorities in which the treaty-making power is vested have a constitutional right to sanction the acquisition; and (3) That whenever the territory has become acquired, Congress have the power either of admitting it into the Union as a new State, or of annexing it to a State, with the consent of that State, or of making regulations for the government of such territory.25 Thus, according to Gallatin, the United States, by its very nature, has the undoubted right to acquire, to hold, and to govern territory as a possession.26 Twenty-five years after the purchase of Louisiana, Chief Justice Marshall handed down the decision of the Supreme Court, that “the Constitution confers absolutely on the government of the Union the powers of making war and of making treaties; consequently that government possesses the power of acquiring territory, either by conquest or treaty.”27 In this decision, Marshall reasons as did Gallatin that a nation is by its very nature, sovereign, and possesses the powers and functions of sovereignty. When the American nation, a sovereign, created a government of delegated powers, under the Constitution, it delegated to that government powers adequate to its purposes as a nation.28 The essential purpose of sovereignty is to continue sovereign. The word “sovereign” though not occurring in the Constitution is necessarily implied as a permanent quality or mark of the power that ordained and established the Constitution. Sovereignty cannot be delegated, but a supreme law, such as the Constitution, necessarily implies a sovereignty that has delegated the powers expressed or implied in the Constitution itself. In other words, the Constitution of the United States is the supreme law of the land because the people of the United States are a sovereign. Sovereignty alone has original powers; all others are delegated. Thus the Constitution itself declares that “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.”29

12. American constitutional law is, therefore, the authoritative formulation, in constitutional, or statutory, or treaty form, of the will of the sovereign, the people of the United States. This formulation accords with the powers delegated by that sovereign. The expression of this delegation of powers in the conduct of the public business is government. Therefore in America, government is another word for the delegation of powers,—for limitations of authority. Sovereignty is unlimited; government is limited. The Constitution of the United States is the supreme law of the land because through it the people of the United States,—not the people of any particular State or group of States,—have delegated larger powers than have the people of any particular State through its constitution. The whole is greater than the part. “That the people have an original right to establish for their future government such principles as, in their opinion, shall most conduce to their own happiness, is the basis on which the whole American fabric has been erected.”30 The exercise of this original right is an exercise of sovereignty. The result of this exercise, in America, is the Constitution of the United States which, this sovereignty declares to be “the supreme law of the land.”31

CHAPTER II
THE LAW OF LEGISLATIVE POWERS (1)

13. The organization of the government of the United States reflects the original and supreme will of the people as they have seen fit to assign to different departments of that government their respective powers. “The powers of the Legislature are defined and limited; and that these limits may not be mistaken, the Constitution is written.”32 Thus the Constitution declares that “all legislative powers herein granted” are vested in Congress.33 The inevitable conclusion is “no grant, no power.” Congress possesses only delegated powers. If an issue arises under an act of Congress, there must ever be the fundamental question of authority for the act. This question of authority once settled, the act, by the terms of the Constitution itself, is a part of the supreme law.34 Rarely is an act of Congress declared unconstitutional. Legislative experience avoids the enactment of laws whose constitutionality is doubtful.

14. The general American doctrine is of the separation of delegated powers, and is commonly set forth in State constitutions.35 Such separation of powers is not expressly declared in the Constitution of the United States; the principle here is of limitation no further than is necessary for the protection of each department of government. Fundamentally it is a question of functions. Whatsoever authority is necessary and proper for a department of government to exercise, belongs to that department. The separation of powers,—legislative, executive, judicial,—is a matter of agreement or convention made by the sovereign. Government is a unit, not a tripartite machine or device. But in order to administer government, and make it, as the business man would say, “a going concern,” it is conceived and organized into departments. Sovereignty in America vests legislative power, so far as the people of the United States have delegated that power,—in Congress. The Constitution does not specify all the powers so delegated. Such specification is impossible. Such specification “could scarcely be embraced by the human mind”; its details “would partake of the prolixity of a legal code.”36 The practical procedure is followed in the Constitution of selecting general—that is, large, comprehensive powers, or groups of powers, and authorizing Congress to exercise them. As a matter of practical government, had the American people chosen to declare in the Constitution that Congress shall have power to make all laws necessary and proper for the government of the United States, the grant would be essentially the same as that made by naming the powers of Congress in that instrument. The powers delegated to Congress are mentioned chiefly in the eighth section of the first article of the Constitution. In other parts of the same article other powers of Congress are declared, such as the power of each House over its members; to choose a presiding officer; the power of the Representatives to impeach; of the Senators to convict,—or try impeachments, and the respective powers of the Houses, under some circumstances, to elect a Vice-President, or a President,—and other powers, as of proposing amendments.37

15. The powers of Congress, delegated to it as a whole, or to its respective Houses, and largely regulative of congressional membership and procedure, may be described as necessary parliamentary powers, excepting the powers of the respective Houses in the selection of President and Vice-President. Parliamentary powers are functions essential to the efficiency of a legislative body, and they were worked out, largely, before and during colonial times. Such parliamentary functions were exercised by the British Parliament and by State Legislatures prior to the making of the Constitution. Indeed, the provisions respecting such powers, in the State constitutions from 1776 to 1787, were the immediate precedents for them in the Constitution of the United States.38 But when we speak of the legislative powers vested in Congress, we do not mean, commonly, these strictly parliamentary powers; rather do we mean another group or class of powers included under such headings as “taxation,” “money,” “commerce,” “banking,” “the army,” “the navy,” “territory,” and others of notable rank. Such powers as those indicate (or seem to indicate), a larger delegation of authority to Congress than its authority to regulate its membership. Whatever may be thought of the relative rank of the powers of Congress, all emanate from the same source, “the people of the United States.”

16. In determining the nature and extent of these powers, we are aided by the Constitution itself which sets limitations. Thus,

all duties, imposts, and excises shall be uniform throughout the United States.39 The privilege of the writ of habeas corpus shall not be suspended unless when in cases of rebellion or invasion the public safety may require it.40 No bill of attainder or ex post facto law shall be passed.41 No tax or duty shall be laid on articles exported from any State.42 No preference shall be given by any regulation of commerce or revenue to the ports of one State over these of another; nor shall vessels bound to or from one State be obliged to enter, clear, or pay duties in another.43 No money shall be drawn from the treasury but in consequence of appropriations made by law; and a regular statement and account of the receipts and expenditures of all public money shall be published from time to time.44

In addition to these limitations, there are limitations set forth in the first ten, in the thirteenth, fourteenth, and fifteenth amendments. These amendments, in the aggregate, deny to Congress authority to violate what we commonly designate as fundamental rights. In other words, the people of the United States have given Congress no power whatever to imperil these rights: they are excepted out of the government of the United States.45

17. In the several States a like limitation of the powers of the Legislature is made in the constitutions. A typical statement of this limitation may be found in the constitution of Pennsylvania, in the last clause of the Declaration of Rights:

To guard against transgressions of the high powers which we (“the people of the Commonwealth”) have delegated, we declare that everything in this article (“the Declaration of Rights”) is excepted out of the general powers of government and shall forever remain inviolate.46

The discrimination here is between government and sovereignty by means of a clear limitation or denial of powers. Thus the carefully guarded fundamental rights are sovereign, not governmental rights. That the sovereign has the right or power to delegate any of these fundamental rights, or the control over them is a question in political science. That the sovereign, in the modern republic, has not so delegated them, is indisputable. Yet, in 1913 the people of the United States ratified the Sixteenth Amendment, namely, that “The Congress shall have power to lay and collect taxes on incomes from whatever source derived, without apportionment among the several States and without regard to any census or enumeration.”47 This amendment more nearly identifies government with sovereignty than any other in the Constitution. It removes limitations on the power of Congress with respect to what is commonly called “direct taxation.” It makes Congress practically sovereign in its power to impose such taxation and to collect such taxes. It does not require that direct taxes, like indirect taxes, shall be “uniform throughout the United States.” It is the first departure in America from the doctrine of limited government.48

18. Of the powers delegated to Congress by the American people it may be said that, save as excepted by the silence of the Constitution, or by positive limitation, they are universal and affirmative. Their extent as well as their nature are made known by interpretation,—that is, through the judiciary.49 Judicial interpretation must be distinguished from economic, industrial, political, or even moral interpretation. The Constitution provides only for judicial interpretation.50 The American people have vested legislative powers in Congress, and the exercise of them by Congress must be measured by the terms of the grant.51 Thus far the supreme test of the constitutional exercise of these powers is to compare the particular act of Congress with the Constitution. Shall the act overrule the Constitution, or shall the Constitution overrule the act? This is the final test of congressional exercise of powers delegated; it is the essential measure of federal legislation. Practically it is congressional legislation which, sooner or later, brings out clearly,—or at least as clearly as the government of the United States can bring out,—the real nature of that government. Thus it is congressional legislation which, as tested in the courts of law, brings into view the implied and inherent powers of the federal government; the relations of that government with the States, and the powers of that government as to territories and outlying possessions.52 So, too, it is congressional legislation that determines the objects and the extent of taxation, both direct and indirect; that regulates commerce, coins money, and fixes its value; affords equal protection to citizens, and applies the police power of the United States. It is congressional legislation which largely determines the jurisdiction of federal courts and assigns duties and powers to the President.53 In brief, the legislative powers vested in Congress reflect the convictions of the people of the United States of the eighteenth century, when the trend of political thought was to dethrone kings and to enthrone legislatures, with basic regard for individualism. A like tendency and regard are discernible in the State constitutions of that period. The American people did not create an omnipotent Congress, but they created a Congress having few limitations and these they practically nullified by the “sweeping clause” which empowers Congress “to make all laws which shall be necessary and proper for carrying into execution,” the powers granted, “and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.”54

19. The phrase “necessary and proper” practically includes all the purposes of government, and these the Constitution itself sets forth, as

To form a more perfect Union,
To establish justice,
To insure domestic tranquillity,
To provide for the common defense,
To promote the general welfare,
To secure the blessings of liberty

to themselves (“the people of the United States”) and their posterity.55

This exercise of power by Congress is essentially political, and Congress alone is judge of “the choice of means and is empowered to use any means which are in fact conducive to the exercise of a power granted by the Constitution.”56 This conclusion is inevitable. A legislative body could exist on no other principle. Thus it follows that necessity is supremacy, in the case of congressional legislation. To any understanding of American constitutional law, comprehension of this principle is fundamental.

20. May Congress abuse its powers? Possibly. The remedy is through popular election of members of either House, and repeal of the laws which—even though their constitutionality be sustained by the courts, may, in the judgment of the people, transcend limits popularly supposed to be placed on Congress. Thus there are two checks on congressional legislation: the courts of law and the votes of the people. It follows that the American sovereign—the people—may by their votes approve or condemn congressional legislation—approval or condemnation resulting in a continuance or a change of membership of Congress, in conformity to the relative strength of political parties. It is here that part of the unwritten constitution is disclosed. The written Constitution contains no reference to political parties, but actual government in the United States is by and through political parties who, as organized agencies of the public mind, give expression, in large measure, to the unwritten constitution. Interpretation of the Constitution, and of course, of the powers of Congress, is largely interpretation by political parties.

21. Two interpretations of the Constitution have evolved in America, the strict, or literal, commonly called the Jeffersonian, and the liberal, or interpretation according to the spirit of the Constitution, commonly called the Hamiltonian. Chief Justice Marshall was a disciple of Hamilton and enthroned his ideas in the decisions of the Supreme Court for thirty years, and these the first thirty years of the existence of the Court. Later judges, whatever their politics, have rarely departed from the course of interpretation laid down by Marshall. To what extent the political convictions of a judge determine his judicial decisions, and to what extent party doctrines find utterance in the decisions of courts of law are matters of opinion quite as diverse as the men who hold them. Yet, in order to understand American constitutional law it is necessary also to be familiar with American political and constitutional history. Without that history, that law lacks background and circumstance.57

22. In attempting, then, to understand the legislation of Congress, which is an exercise of delegated powers, it is also necessary to know the history of the times in which it was enacted. Thus the first ten amendments were added in response to a quite unanimous demand of the American people for what they considered at the time, 1789, an adequate protection of their fundamental rights. The Eleventh Amendment of 1798 grew out of the unwillingness of the people that a State should be made defendant in a federal court at the suit of a citizen of another State; therefore federal jurisdiction in such cases was denied. The Twelfth Amendment of 1804 was added to remedy a defect in the Constitution in the method and procedure of choosing the President and the Vice-President. The Thirteenth, Fourteenth, and Fifteenth Amendments, of 1865, 1868, and 1870, were added because of the negro race. The Sixteenth and Seventeenth Amendments, of 1913, were added after long agitation over direct taxation and the popular election of senators of the United States, the one essentially an economic, the other, a political question. The history of the times records how these amendments were brought about. So too does that history largely explain the legislation enacted by Congress by authority of these amendments.58

23. The essential fact as to the powers of Congress is of their limitation. Turning to the Constitution itself, one will find that it devotes nearly three times as much matter to legislative as to executive power; and nearly eight times as much matter to legislative as to judicial power. Doubtless this spatial distribution of powers (or limitation of powers) tells the whole story. Government is largely an affair of legislation. Essentially, government is the public business, controlled and administered for public or general purposes. Government, in a republic, may be said to express itself in laws. So important is this expression of the will of the sovereign, constitutional law consists almost wholly of the interpretation of legislation. This means that the principles of government are to be learned chiefly from the judicial decisions in particular cases; and this again means that the particular law having in due course come before the tribunal, that law, when tested by the supreme law of the land is sustained, or is declared to be without authority,—hence it is unconstitutional. In the final test, all legislation of Congress must stand the strain of this question: By what authority is this law made? We come then, sooner or later, in congressional legislation, to the supreme law of the land and to sovereignty in America,—“We, the people of the United States.”

24. It is a presumption of law, necessary in the conduct of government, that all acts of Congress are constitutional until pronounced unconstitutional by a competent judicial tribunal. An issue arising between parties involves a law. In deciding the issue the tribunal decides as to the constitutionality of the law, provided its constitutionality forms part of the issue. Unless the issue of the constitutionality arises and is before the tribunal, that body can make no decision respecting the constitutionality of the law. Thus whether or not the powers exercised by Congress, as expressed in a piece of legislation—exceed the powers granted to it by the Constitution is a question which Congress itself is powerless to decide. The Constitution itself does not so declare; on the other hand it does not provide that Congress shall be the final judge of its own powers. The principle regulative of the exercise by Congress of powers delegated to it is laid down by the Supreme Court:59 “Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional.”

CHAPTER III
THE LAW OF LEGISLATIVE POWERS (II)

25. The powers of Congress, whether expressed or implied, are powers incident to sovereignty, being essential to the existence of the government which sovereignty has created. The principle is laid down in The Federalist, that the government of the Union “must possess all the means and have a right to resort to all the methods of executing the powers with which it is intrusted.”60 The immediate comparison here is between the government of the United States and those of the States. The federal government must possess powers as adequate for its purposes as are the powers possessed and exercised by the particular States. The principle is laid down by Hamilton yet more explicitly:

A government ought to contain in itself every power requisite to the full accomplishment of the objects committed to its care, and to the complete execution of the trusts for which it is responsible, free from every other control but a regard for the public good and to the sense of the people.61

This principle applies to both American governments,—that of each State, and that of the United States. Each within its own jurisdiction is supreme. This means that the national government possesses powers adequate to the existence and efficient operation of such a government. With this principle in mind, the exercise, by Congress, of its powers becomes reasonably plain. The people of the United States are a sovereignty; they have ordained and established the Constitution of the United States. This Constitution is a plan of republican, that is of representative, government. The powers granted by this sovereignty to this government are adequate to the ends and purposes of this government. Whence follows all our constitutional law: for the constitutional law of the States cannot vary essentially from that of the United States. The principle here is stated by Chief Justice Marshall: “The Constitution, when thus adopted, was of complete obligation, and bound the State sovereignties.”62

26. The powers of Congress are derived through this Constitution and are adequate to the legislative needs of the government thus created. Here again applies the principle as to proper legislative powers: “Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional.” If this principle be true (and it lies at the basis of government in America), it seems unnecessary that the Constitution should specify, or enumerate the powers of Congress. These which are enumerated may not be said to be in any logical order. Doubtless the qualities of sovereignty are equal qualities—each essential to the supreme end and purpose of sovereignty—which end and purpose is to be and to remain sovereignty.

27. But to Congress and to the State Legislatures powers are granted. Does the grant of powers to Congress extinguish the grant to the State Legislatures? Here, again, Hamilton states the principle:

An entire consolidation of the States into one complete sovereignty would imply an entire subordination of the parts; and whatever powers might remain in them, would be altogether dependent on the general will. But as the plan of the Convention (“of 1787”) aims only at a partial union or consolidation, the State governments would clearly retain all the rights of sovereignty which they before had, and which were not, by that act, exclusively delegated to the United States. This exclusive delegation, or rather, this alienation, of State sovereignty, would only exist in three cases: where the Constitution in express terms granted an exclusive authority to the Union; where it granted in one instance an authority to the Union, and in another prohibited the States from exercising the like authority; and where it granted an authority to the Union, to which a similar authority in the States would be absolutely and totally contradictory and repugnant.63

The implication of the extinguishment of the powers of the State Legislature by the powers of Congress can arise only where exercise of State authority is “absolutely and totally contradictory and repugnant to the power delegated to Congress.”64 Therefore “where the authority of the States is taken away by implication, they may continue to act until the United States exercise their power, because until such exercise there can be no incompatibility.”65 The principle here laid down is illustrated by laws fixing the standard of weights and measures; bankruptcies; counterfeiting the coin and securities of the United States; copyrights and patent rights. If Congress legislates on these subjects, such legislation excludes State legislation in conflict with it. In the absence of congressional and in the presence of State legislation, on these (and some other subjects falling in the same class) the respective State legislation is supreme within the jurisdiction of the State.66 Stated in a different way, this principle of American constitutional law would read,—the mere grant to the federal government of power over a subject does not necessarily extinguish State authority over the same subject. Thus the State has power by common law, or by statute, to fix a standard of weights and measures. The issue here is not one merely of authority but of relative authority. The exercise of authority by Congress is not, by that fact, prohibition of exercise of authority by a State. This exercise is radically different from that of legislation on coining money, making treaties, granting titles of nobility, issuing letters of marque and reprisal,—or any other subject over which Congress has exclusive, and a State no jurisdiction. Here the question is one of exclusive, or sole authority. Thus, State Legislatures have authority to pass bankrupt or insolvent laws, provided there is no act of Congress, on the subject, in force establishing a uniform system of bankruptcy conflicting with the State law, and, further, providing that the State law does not impair the obligation of contracts.67

28. But State insolvent laws apply to contracts within the State between one of its citizens and a citizen of another State, and they do not apply to contracts not made within the State. The principle here is one of jurisdiction: no State has authority outside its own jurisdiction. Therefore interstate matters are beyond State jurisdiction and are exclusively under the control of Congress. This principle is expressed judicially: “Insolvent laws of one State cannot discharge the contracts of citizens of other States because they have no extra-territorial operation.”68

29. Congress exercises any of its powers as an agent of its sovereign, the people of the United States. These powers, like those of the President, or of the federal courts, are expressed or implied; the government of the United States is “a national government with sovereign powers, legislative, executive, and judicial.”69 Because this government is a sovereign government it possesses the choice of means to make its sovereignty real. Hence it possesses power to pay the debts of the United States, to borrow money, to incorporate banks, to coin money, to make war, and to do whatever acts it considers necessary and proper, and in such manner as it sees fit,—all acts of sovereignty. It alone can determine what is a legal tender, what the value of coins, domestic or foreign (within its jurisdiction) and, in brief it can do all acts such “as accord with the usage of sovereign governments.” Thus the national currency may be coin or paper, as Congress shall regulate. Whatsoever Congress by legislation declares to be a legal tender in payment of debts between individuals or corporations is thereby a legal tender, because Congress is “the legislature of a sovereign nation” and is expressly empowered by the Constitution to enact laws of the kind.70 This power is commensurate with the jurisdiction of Congress in this matter,—a power which absolutely and totally excludes the power of the several States.

30. As a matter of constitutional law, it must be admitted that, granting the national sovereignty of the people of the United States, it must follow that the legislature of this sovereign nation would possess such power over currency and coinage. That is, the power would be implied if it were not expressed. It is the office or function of a supreme national government to legislate for national ends and purposes.71

But the principle of national sovereignty which operates in Congressional legislation on money, currency, coinage, and legal tenders, does not nullify the principle of contracts. A lawful contract between parties that calls for payment of a particular article with a particular article, be it silver coin, gold coin, national bank notes, treasury notes, reserve bank issues, or subsidiary coin, is satisfied only when executed in the terms of the contract. The obligation of the contract would be impaired if it were executed otherwise than as the contract itself sets forth.72

31. Congress is not under contract to coin money, to pay the debts of the United States, or to borrow money in any particular way. Duties, excises, and imports must be uniform throughout the United States, and this condition is a fundamental limitation. No limitation is placed by the Constitution on the power of Congress over the currency. This power is supreme. It is a power which, duly exercised, secures the existence of sovereignty itself.73

A function of sovereignty is performed in the issuing of a bill of credit, the sovereign power thus pledging its faith, and the thing issued is designed to circulate as money. The State, or Commonwealth, in the Union, is not a sovereign for this purpose, as the Constitution provides.74 So when a State incorporates a bank, which issues bills of credit, the act of the bank is not an act of sovereignty, and the State, though a stockholder in the bank, imparts none of its sovereignty to the bank. The bank as a corporation, not the State as an incorporator, is answerable for the obligations of the bank.75 To constitute a “bill of credit,” in the meaning of the Constitution, it must be issued by a State, on the faith of the State and be designed to circulate as money.76

32. Power to provide for the punishment of counterfeiting the securities and current coin of the United States is specially delegated to Congress,77 but it is not denied to the several States. The power to coin money belongs exclusively to Congress78 as a mark and necessary incident of sovereignty, but counterfeiting the coin constitutes an offense against both the State and the United States. The uttering of counterfeit coin is a cheat, and the State can protect its citizens against fraud by exercise of its police power. Such offenses fall strictly within State jurisdiction. Counterfeiting debases the coin, throws spurious and base metal, or false securities into circulation, and is an offense against that constitutional power which is exclusively authorized to create a currency for public uses. The offense is against the sovereignty of the nation, and, being a fraud, it is against the sovereignty of the State. In either case it imperils sovereignty.79

33. The power of Congress to establish post offices and post roads is not an exclusive power, for the States are not prohibited to legislate on the same subject. But Congress has unlimited power over it and may designate what may be included in and what may be excluded from the mails. This exercise is doubtless of the police power. It does not follow that congressional establishing and regulation of post offices and post roads mean that Congress has power to deal with crime or immorality within a State in order to maintain that it possesses the power to forbid the use of the mails in aid of the perpetration of crime and immorality. So a postal law of Congress excluding lottery tickets from the mail is not an abridgment of the freedom of the press. Congress, by reason of the nature of its functions, is empowered to determine what shall and what shall not be carried in the mails, and the right of freedom of speech does not give the right to injure the objects or to defeat the purposes which government is ordained and established to further and protect.80 But the State, in exercise of its police power, may undoubtedly protect its citizens from injury springing out of that intercourse known as the mail service so long as it is wholly intrastate,—that is, within its jurisdiction.

34. Copyrights and patent rights are privileges granted by Congress for a term of years and are strictly statutory—for the United States has no common law. The States may exercise their powers in like manner, subject to the essential condition that the Constitution is the supreme law of the land. Copyrights and patent rights are examples of rights which exist by act of Congress,81 but the right thus created does not annul the ordinary police power as put forth in the police regulations of a State. The person owning or controlling either copyright or patent right is not thereby empowered to defy the laws of a State as respecting the sale of the article in which or over which he has the exclusive right. The article itself may be adjudged injurious to the public and, therefore, by police regulation, forbidden to be sold or to be exposed for sale in the State. The patent right prevents others than the inventor from participating in the fruits of his invention, without his consent; but the exercise of the right must be in subordination to the police regulations of the State, otherwise, “a person might with as much propriety claim a right to commit murder with an instrument, because he held a patent for a new and useful invention.”82 It may be accepted as a principle that “patent laws do not interfere with the power of a State to pass laws for the protection and security of its citizens, in their persons and property, or in respect to matters of internal polity, although such laws may incidentally affect the profitable use or sale by a patentee of his inventions.”83

35. The power of Congress, expressly delegated to it, “to define and punish piracies and felonies committed on the high seas, and offenses against the law of nations,” is not exclusive. The States are not prohibited from legislating on the subject. Offenses committed within the jurisdiction of a State are punishable by State laws. Such offenses are punishable by common law. If there is no act of Congress covering the offense, then the United States has not assumed jurisdiction. But absence of a specific mention or definition of the offense does not invalidate a claim of jurisdiction when the result of the offense is piracy. Piracy is robbery committed within the jurisdiction of the admiralty,84 but an offense that effects piracy, though not technically robbery, is piracy.85 As piracy is an offence against the law of nations, and not strictly against domestic municipal law, it falls within the jurisdiction of the admiralty—a jurisdiction over which the judicial power of the United States is expressly extended by the Constitution.86 This jurisdiction is not exclusive as provided for by the Constitution. Practically, however, the States do not legislate on the subject, unless it be to provide for the execution of their police power over their own waters.

36. The “admiralty jurisdiction” of the United States is co-extensive with its authority over or on waters, fresh or salt, including the high seas, the Great Lakes, and rivers and streams commerce over which it has power to regulate. Thus this jurisdiction is over the American ship wherever it may be. “Offenses committed on vessels belonging to citizens of the United States, within their admiralty jurisdiction (‘that is within navigable waters’) though out of the territorial limits of the United States, may be judicially considered when the vessel and parties are brought within their territorial jurisdiction.”87

37. The war power is possessed by Congress exclusively,88 for the limitation of the States as to declaring war can be construed only as an exclusive delegation of this power to the United States. The exercise of this power is a sovereign act and may consist in a formal declaration of war, or a formal recognition or declaration of a state of war. War existing by such regulation, the President, as commander-in-chief of the army and navy, and of the militia of the several States when called into the actual service of the United States, is bound by his oath faithfully to execute his office—which is to execute the laws of the United States. It is for the President to determine how to execute his office; that is a political, not a judicial question. “He must determine what degree of force the crisis demands.” He must decide the character of the opposing forces, whether they are belligerents, or of some other character. He may close ports or declare a blockade of the enemy. He possesses the whole executive power of the United States. Ratification of his acts though ex post facto are constitutional,—fundamentally because sovereignty having vested the executive office in a President, and he having performed its duties to the best of his ability, refusal to consider his acts as constitutional would be repudiation by sovereignty of an act which had been done by its authority.89

38. The word “State” in the Constitution refers to a State of the Union.90 For while the Constitution was made, “ordained and established by the people of the United States for themselves,”91 it was made for the people of the United States in States. Thus it follows that over a domain not constituting a State, that is, over a domain consisting of a ceded district, or a territory, or an outlying possession, Congress has sole jurisdiction. Only the United States and the several States possess sovereignty. No State, or a member of the Union, has jurisdiction over the district and there is no other American government than Congress to exercise it. “Territory” like property by common law must have an owner; if it is self-owned and self-governed, it is sovereign; otherwise it is a subject or possession of sovereignty. It follows, as to American constitutional law, that subdivisions of States are wholly within State jurisdiction: Congress having no jurisdiction over counties or cities other than as, in a general way over matters, Congressional legislation affects counties and cities as parts of States throughout the United States.92 And unless a State has ceded its jurisdiction over a district within its borders, it has full authority to levy taxes, to execute its inspection and other police laws and regulations within that district. Thus Kansas ceded the Ft. Leavenworth Military Reservation to the United States in 1875, but the deed of cession granted no more than use of the land as a military post; the State, therefore, could levy and collect taxes within this area, having never parted with the sovereign right to do so.93 And any other powers or rights of the State, over this area, not explicitly granted to the United States by Kansas in the deed of cession remain intact in the State; its original jurisdiction as a State, save as explicitly modified by that deed, remains.

39. The power of Congress to govern territory, implied in the right to acquire it, and given to Congress in the Constitution,94 to whatever other limitation it may be subject, the extent of which must be decided as questions arise, does not require that body to enact for ceded territory, not made a part of the United States by Congressional action, a system of laws which shall include the right of trial by jury, and that the Constitution does not, without legislation, and of its own force, carry such right to territory so situated.95

The principle laid down by the Supreme Court recognizes two kinds or classes of ceded territory: one, “made a part of the United States by congressional action,” that is, incorporated into the United States; the other, unincorporated. While congressional authority over either class is supreme, when the Constitution and laws of the United States are extended by Congress over a territory, they cannot be withdrawn,96 for if the Constitution could be withdrawn directly it could be nullified indirectly by acts passed inconsistent with it. The Constitution would thus cease to exist as such and would become of no greater authority than an ordinary act of Congress.97 The decision of the Court as to the power of Congress over territory of the United States makes Congress absolute in the exercise of its power. The Court does enumerate the limitations on Congress, in such control, but leaves each limitation to be determined as the issue involving it shall arise.98 The safeguard against congressional absolutism is thus expressed by the Court:

There are certain principles of natural justice inherent in the Anglo-Saxon character, which need no expression in constitutions or statutes to give them effect, or to secure dependencies against legislation manifestly hostile to their real interests.99

CHAPTER IV
THE LAW OF TAXATION

40. In our system of government [observes the Supreme Court], it is oftentimes difficult to fix the true boundary between the two systems, State and federal [and, adopting the words of Chief Justice Marshall, proceeds],—endeavoring to fix this boundary upon the subject of taxation, if we measure the power of taxation residing in a State by the extent of sovereignty which the people of a single State possess, and can confer on its government,—we have an intelligible standard applicable to every case to which the power may be applied. We have a principle which leaves the power of taxing the people and property unimpaired; which leaves to a State the command of all its resources, and which places beyond its reach all these powers which are conferred by the people of the United States on the government of the Union, and all these means which are given for the purpose of carrying these powers into execution. We have a principle which is safe for the States and safe for the Union.100 We are relieved, as we ought to be, from clashing sovereignty.

It follows that the powers and functions of the two governments can be harmonized “only by a wise and forbearing application of this principle.”101

41. A tax is a burden or charge imposed by the legislature on property or persons to raise money for public purposes.102 The two essentials of a good tax are that it is to be laid for a public purpose and by authority. The exercise of the taxing power not only distinguishes sovereignty but also the government which sovereignty creates by delegation of power. But the State cannot exercise taxing power beyond its jurisdiction,103 a limitation parallel to the limitation of the sovereignty of the State, that is, a version (however unphilosophical) of the idea in the phrase “residuary sovereignty.”104 But unless restrained by the federal Constitution the power of Congress as to mode, form, or extent of taxation is unlimited.

The test here is jurisdiction.105 Taxation is the correlative of protection. As the State cannot protect so it cannot tax beyond its jurisdiction.106 Thus the person or the property must be within the jurisdiction of the State to bring either within its taxing power. Tax laws can have no extra-territorial operation,107 but there is no established limit of the taxing power or to the selection of objects to which it is applicable.108

42. A State Legislature may abuse this power, but the Constitution of the United States was not intended to furnish a corrective for every abuse of power committed by the State governments. Relief lies wholly with the electors within the State who, if the State constitution does not afford security against unjust taxation and unwise legislation, can both alter the State constitution and elect other legislators.

So long as the State by its laws, prescribing the mode and subjects of taxation, does not entrench upon the legitimate authority of the Union, or violate any right recognized, or secured by the Constitution of the United States, the (Supreme) Court, as between the State and its citizens, can afford no relief against State taxation, however unjust, oppressive, or onerous.

The discretion of the State,—that is, of the State Legislature, is beyond the power of the federal government, or any of its departments, to supervise or control.109

43. The fundamental idea in America is that each government—the State, the national—possesses powers and functions adequate to its own ends and purposes. Thus the State has no power to lay a tax on any constitutional means employed by the government of the Union to execute its powers, otherwise, by taxation of such means or agencies,—say the mail, the mint, judicial process, patent rights,—the States might defeat all the ends of the national government,—a design not intended by the people of the United States.110 But this protection of government is not limited to the United States by limiting the States; it applies to the States as limiting the United States.

The sovereign powers vested in the State governments by their respective constitutions, remain unaltered and unimpaired, except so far as they were granted to the government of the United States.111 As the powers not delegated were reserved to the States respectively, or to the people, the government of the United States can claim no powers not so delegated, and the powers actually granted must be such as are expressly given, or given by necessary implication.

In our complex system, the existence of the States in their separate and independent condition

is so indispensable, that without them the general government itself would disappear from the family of nations.112 Whence the necessary conclusion that the means and instrumentalities employed for carrying on the operations of their governments (the State governments), for preserving their existence, and fulfilling the high and responsible duties assigned to them in the Constitution, should be left free and unimpaired, should not be liable to be crippled, much less defeated by the taxing power of another government, which power acknowledges no limits but the will of the legislative body imposing the tax, and more especially, those means and instrumentalities which are the creation of their sovereign and reserved rights, one of which is the establishment of the judicial department, and the appointing of officers to administer the laws. Without this power and the exercise of it, no one of the States, under the form of government guaranteed by the Constitution, could long preserve its existence.113

44. One of the reserved powers of the States was to establish a judicial department.

All of the thirteen States were in possession of this power, and had exercised it at the adoption of the Constitution; and it is not pretended that any grant of it to the general government is found in that instrument. It is therefore one of the sovereign powers vested in the States by their constitutions, which remained unaltered and unimpaired, and in respect to which the State is as independent of the general government as that government is independent of the States. In respect to reserved powers, the State is as sovereign and as independent as the general government.114

The means and instrumentalities employed by the one government to carry its powers into operation are as necessary to its self-preservation as the means and instrumentalities are necessary to the other. Unimpaired existence is as essential to the one as to the other. There is no express provision in the Constitution that prohibits the general government from taxing the means and instrumentalities of the States, or prohibiting such taxation.

In both cases the exemption rests upon necessary implication, and is upheld by the great law of self-preservation; as any government whose means employed in conducting its operations, if subject to the control of another and distinct government, can exist only at the mercy of that government.115

45. This was the constitutional law of the United States as settled in 1870,116 the case arising in Massachusetts; the plaintiff a judicial officer of that Commonwealth having brought suit to recover from the United States Revenue Collector the amount of income tax exacted from him, it being part of his salary as a judge in that Commonwealth. The Supreme Court of the United States sustained the plaintiff for reasons given in the opinion, part of which has been quoted. By parity of reasoning, as followed in that decision, any act of Congress imposing a tax on the salary of any State officer, if his office is a means and instrumentality employed by the State to carry its powers into operation must be declared unconstitutional. In 1913 the Constitution was amended so that “The Congress shall have power to lay and collect taxes on incomes from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”117

Does this amendment increase the taxing power of Congress beyond that power as possessed prior to 1913 and as limited by the Supreme Court in its decision in the case of The Collector v. Day? If any officer of a State, executive, legislative, judicial, or administrative, receives a salary, large or small, (and it forms part of his income) is it beyond the jurisdiction of the United States as a taxable estate, despite the explicit power of Congress, in this Sixteenth Amendment “to lay and collect taxes on incomes, from whatever source derived?” Does the amendment overrule the decision in The Collector v. Day?118 Evidently the amendment empowers Congress to levy an income tax wholly in disregard of the effect of the tax in impairing the “necessary means and instrumentalities of a State.” Here too the issue is one of jurisdiction. The person taxed being within the jurisdiction of the United States has no redress against that jurisdiction more than has a person, taxed and being within the jurisdiction of a State, redress against the State. But can the Commonwealth of Massachusetts, or any other State, imposing an income tax, lay and collect it from whatever source derived, and that source be the treasury of the United States,—that income be salary received by a citizen of the State who also is a federal official, say a federal Judge, or a Collector of the Revenue, or a United States Marshal, or a Senator of the United States, or a Congressman, or the President of the United States?119

46. In the operations of government, the delegation of authority by the executive, the legislative, or the judiciary is rare. The constitutional test, in either case, is purpose and authority. Thus a municipal corporation is a representative not only of the State, but is a portion of its governmental power. It is one of its creatures, made for a specific purpose, to exercise within a limited sphere the powers of the State. “The action is no less a portion of the sovereign authority when it is done through the agency of a town or city corporation.”120 Thus a tax authorized by the State Legislature, to be imposed by a municipal corporation is a good tax in law, provided it is for a public purpose. This is not a delegation of the taxing power, but is the exercise of it by the Legislature. The municipality itself has no power to tax, or even to be a municipality, save by authority of the State, usually by the constitution, vested in its Legislature. The amount of the tax, the subjects of taxation, the method of assessment and of collection are wholly within the discretion of the Legislature. The exemption of churches, schools, colleges, and charitable institutions may or may not be required by a State constitution. If this is silent on the subject, the question is wholly one of legislative discretion. A charitable institution has no fundamental right to exemption from taxation, as a person has a fundamental right to “due process of law.”121 The principle of exemption from taxation is that taxation of the person or the property tends to destroy the powers or to impair the efficiency of the State.122

47. A tax must not only be laid by authority but it must be for a public purpose. Thus any assessment imposed upon persons or property by the government, State or federal, for the gain, emolument, or advantage of a private person, or an official, is unconstitutional. The purpose must be public, as for example, for schools, highways, canals, public buildings, markets, asylums, jails, or to keep the same in repair and to use them for public purposes. The Legislature cannot authorize a town or a county, or any subdivision of the State, to raise money for other than public purposes and uses. It cannot confer benefits on individuals, however meritorious, by taxation.123

48. Taxes, imposed under the Constitution, have been classed as direct or indirect,—the direct being apportionable among the States according to population; the indirect being uniform throughout the United States.124

The Sixteenth Amendment of 1913 abolishes the limitation of apportionment or enumeration in the imposition and collection of an income tax. The Income Tax law of October 3, 1913—the first of the kind enacted by Congress under the amendment—exempted incomes of $3000, or less, or $4000, or less, as the person taxed may be single or married. The amount of the exemption is fixed at the discretion of Congress. So too is the rate of taxation by duties, imposts, and excises, as well as the inclusion or exclusion of articles subject to them, but Congress must make such taxes uniform throughout the United States.125

The taxing power may be used to encourage or to discourage an activity, or to destroy it. As thus used, the exercise of the taxing power, whether by the State or by the United States, may characterize the policy, or administration of its government. So too if a State engages in manufacturing, or in any activity or occupation taxable under federal revenue laws, it is amenable in taxes like a private person.126

CHAPTER V
THE LAW OF COMMERCE

49. The power to regulate commerce belongs to sovereignty. By the Constitution Congress is empowered “to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.”127 The principle of this regulation, or of the exercise of the power, is essentially that of taxation: it is a matter of jurisdiction. “The power of Congress to regulate commerce,” observes Chief Justice Marshall, in the first American judicial decision on the subject, “comprehends and warrants every act of national sovereignty which any other sovereign nation may exercise.”128

The enormous powers Congress wields through this clause cannot be fully defined. The Supreme Court has not defined them. Like sovereignty itself, the exercise of its essential powers, even when delegated functionally in government, does not yield to the limits of definition. The decisions of the Supreme Court are not definitions of the power over commerce so much as they are definitions of the particular exercise of the power of Congress within its jurisdiction, with respect to commerce, by the Constitution.129 For the States also have jurisdiction over commerce. Our knowledge of the boundaries of these two jurisdictions arises from the conflict of laws concerning them.

50. In defining national jurisdiction and State jurisdiction over commerce, two propositions are fundamental:

(1) The Constitution of the United States is the supreme law of the land.130

(2) It is the province and duty of the judicial department to say what the law is.131

It should be clearly understood that power to regulate commerce is incident to sovereignty. Government—whatever its form—is a delegation of power by sovereignty, and of necessity possesses this power of regulation. The degree or extent of the delegation of the power to regulate commerce marks unmistakably the jurisdiction of the government exercising the power. The analogy is in the taxing power. In our system of dual government—national and State—there are two jurisdictions. The respective States have power over commerce; the United States has power to regulate commerce,—each jurisdiction expressly or impliedly outlined by the Constitution.

51. With slight change in wording, the leading decisions of the Supreme Court on the power of the United States to lay and collect taxes, and its decisions on the subject interpretative of the taxing power of the States, apply, in principle, to their respective powers over commerce:

If we measure the power of

{

taxation

}

“regulating commerce”

residing in a State, by the extent of sovereignty which the people of a single State possess and can confer on its government, we have an intelligent standard, applicable to every case to which the power may be applied. We have a principle which leaves the power of

{

taxing the people and property of the State

}

“regulating the commerce of the State”

unimpaired; which leaves to a State the command of all its resources, and which places beyond its reach all those powers which are conferred by the people of the United States on the government of the Union, and all those means which are given for the purpose of carrying those powers into execution. We have a principle which is safe for the States, and safe for the Union. We are relieved, as we ought to be, from clashing sovereignty; from interfering powers.132

52. No evil contributed more to the feebleness of the old Confederation than its inability to regulate commerce. The mischief being great, the grant of power to correct the mischief was correspondingly great. This grant of power to regulate commerce comprehends “all foreign commerce and all commerce among the States.” As inefficiency was the evil, the grant of power was to secure efficiency. In construing this grant—the commerce clause of the Constitution—the large and single purpose is so to construe as not to impair its efficiency and thus defeat the object of the grant.133

The commerce clause has become the authority for exercising the enormous powers of the national government as is illustrated, possibly, by the exercise of power under no other clause. This means that the United States in exercising this delegated power exercises so vast a power that it seems to be sovereignty itself. Vast as this power is—and practically it is incommensurable—it is a delegated, not an original power of the national government. The scope, purpose, and nature of this national power to regulate commerce are indicated by the Supreme Court in its construction of the commerce clause. Here as in the exercise of the taxing power the test is jurisdiction. The essential question is, What is the jurisdiction of the United States, what that of the respective States over commerce?

53. Commerce is intercourse,134 and comprehends traffic, navigation, telegraphic intercommunication, and consequently, communication by telephone, wireless, or signals.135

The Constitution empowers Congress to regulate commerce “among the several States,” an expression which excludes “the completely interior traffic of a State.” This completely internal commerce is reserved for the State itself. To whatsoever extent the foreign or interstate commerce of the United States penetrates a State, it is subject to regulation by the United States; it is carried on within national jurisdiction. The power of Congress to regulate commerce within this jurisdiction is complete in itself and knows no limitations other than these prescribed in the Constitution. Thus this power to regulate commerce, though limited to commerce with foreign nations and among the States, and with the Indian tribes, is plenary as to these objects, and Congress in exercising this power is commonly spoken of as “sovereign.”136 It follows, that as the Constitution is the supreme law of the land, and the Supreme Court has power to say what the law is—State laws to regulate commerce, in conflict with national laws, are unconstitutional. The essential issue, in such conflict, is one of jurisdiction. And here, the real question is whether the regulation of commerce by a State is essential to its existence as a State, or regulation by the United States is essential to its existence as the United States. Such regulation by a State is known as the exercise of the police power.137

But the United States also possesses police power. The line of demarcation between the State and the national police power follows closely, if not precisely, the line of demarcation between State power and national power to regulate commerce.138 The State has power to protect itself,—that is, to guard its people against contagious or infectious diseases, as is exemplified in laws for the inspection of foods, for forbidding the pollution of streams, for securing the accuracy of weights and measures, the peace and good order of communities, the comfort of the inhabitants,—and, in a word,—to exercise such authority as, were no such authority exercised, the State would cease being the State.

54. The power granted to Congress to regulate commerce is not a power granted to the States; it pertains to the United States only. Therefore Congress has no power to regulate commerce that is not “with foreign nations, and among the several States, and with the Indian tribes.” Practically this deprives the State of police power over foreign and interstate commerce, and deprives the United States of police power over commerce that is, as to the State, completely internal. To what extent a State can protect itself from the entrance of paupers, insane or diseased persons, is a question for determination by the Courts. If such persons are “commerce” their entrance is a matter within the jurisdiction of Congress. But the welfare of the people of the United States is essentially the welfare of the people of the States, and Congress, in considering that welfare, avoids possible conflict with State legislation. Thus the immigration laws—all of which are national—include, or seek to include, these provisions for inspection which a State would prescribe, in the exercise of its police power for the health, safety, and general welfare of its own citizens. But here, too, a dominant principle prevails;

The government of the United States, within the scope of its powers, operates upon every foot of territory under its jurisdiction. It legislates for the whole nation, and is not embarrassed by State lines. Its peculiar duty is to protect one part of the country from encroachments by another upon the national rights which belong to all.139

Tested by this principle, any State laws conflicting with national immigration laws are unconstitutional.

55. The power to regulate commerce among the several States extends to commercial highways and to agencies employed in such commerce. Thus waterways capable of navigation and the free and unobstructed use of them are subjects of congressional legislation under the commerce clause. From this it follows that Congress legislates concerning these waterways, their protection, their dredging, the bridges that cross them, the boats that navigate them, the form, size, construction, command, and equipment of these boats, the inspection of boilers, the licensing of officers,—indeed, concerning navigation in its broadest application under the commerce clause. Vessels engaged in such commerce are described as “the public property of the nation, and subject to all the requisite legislation of Congress.”140

56. In like manner, the national power to regulate commerce extends over interstate commerce when carried on by land transportation. Thus cars on railroads used in interstate commerce must be equipped with automatic couplers and continuous brakes, and locomotives with driving-wheel brakes.141

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

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

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

Manufacture is transformation,—the fashioning of raw materials into a change of form for use. The functions of commerce are different. The buying and selling and the transportation incidental thereto constitute commerce; and the regulation of commerce in the constitutional sense, embraces the regulation at least of such transportation. If it be held that the term includes the regulation of all such manufactures as are intended to be the subjects of commercial transactions in the future, it is impossible to deny that it would also include all productive industries that contemplate the same thing. The result would be that Congress would be invested, to the exclusion of the States, with the power to regulate, not only manufactures, but also agriculture, horticulture, stock-raising, domestic fisheries, mining,—in short, every branch of human industry.148

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

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

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

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

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

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

62. Interstate commerce cannot be taxed by the State even though the same amount of tax should be laid by the State on commerce carried on wholly within its limits.159 The right involved is not a State right. “To carry on interstate commerce is not a franchise or privilege granted by the State; it is a right which every citizen of the United States is entitled to exercise under the Constitution and laws of the United States.”160 That persons engaged in such commerce are incorporated under the laws of a State and thereby possess facilities for carrying on their business cannot deprive them of their fundamental right as against the State, but Congress, by its power to regulate commerce, may prescribe conditions under which their business is carried on, or by regulation, destroy their business entirely.161 Thus a State cannot, by a license tax, exclude from its jurisdiction a foreign corporation engaged in interstate commerce, or impose any burdens upon such commerce within its limits.162 But it is within the police power of a State to protect the lives and health of its people, and to protect property through laws suppressing nuisances; prohibiting manufactures injurious to the public health; prohibiting the manufacture and sale of intoxicating liquors; prohibiting lotteries, gambling, horse-racing, or anything else which the Legislature considers opposed to the public welfare.163 A local regulation limiting the speed of trains on entering a town or city, or approaching a curve or a bridge, or requiring a train to stop at a particular place, comes within the exercise of the police power of the State.164

63. The power of a State over commerce being exclusive only as to commerce strictly internal and within its own boundaries,—that is, within its own jurisdiction,—it follows that “a State can no more regulate or impede commerce among the several States than it can regulate or impede commerce with foreign nations.”165 Taxation, by a State, of goods coming into it from another State, would destroy freedom of trade within the nation, which Congress has seen fit shall remain undisturbed. This freedom of trade is national in character, and interference with it, by a State, would violate a function and defeat the purpose of nationality: that is, such violation would prevent the people of the United States from realizing their own sovereignty.

64. An illustration of the constitutional use of the power of the State over commerce is afforded by the tax, in Texas, on telegraph messages sent from one place to another exclusively within the State, by private parties, and not by the agents of the government of the United States. The Texas law imposing this tax is not in conflict with the power of Congress to regulate commerce,166 and therefore was not repugnant to the Constitution of the United States. The line of demarcation as to exercise of the police power by a State is drawn “by the undoubted right of the States of the Union to control their purely internal affairs, in doing which they exercise powers not surrendered to the general government.”167

Many State laws regulating its administration of internal affairs are applications of its police power. The police power of the State is of right, and is founded on “the sacred law of self-defense.”168 But this sacred law applies strictly to the domain of the State—to its own jurisdiction. “It cannot invade the domain of the national government.”169 A State inspection law is a familiar example of the exercise of its police power, but such a law, working obstruction of interstate commerce, or any limitation of it, though such effect be only incidental, is repugnant to the Constitution.170 Such repugnancy is effected by a State law levying a tax on tonnage, and is void.171 But a charge for mooring or landing at a wharf, is not a tax on tonnage, but a charge for services rendered;172 neither is the tax a tonnage tax when the State imposes a tax on vessels (even if regularly engaged in interstate commerce), the property of persons residing within the jurisdiction of the State, the vessels themselves being part of the mass of property within the State, being moored for long periods at the wharf for repairs and being under the protection of the State. The taxing power is a distinct and separate power from the power to regulate commerce. The right of taxation in a State remains over every subject where it existed before the adoption of the Constitution with the exception only of prohibitions expressed or implied in the Constitution.

The sovereign jurisdiction of the State is not limited; within that jurisdiction it is free to tax. But the powers to tax and to prohibit taxation are given in the Constitution by separate clauses, and these powers are separate and distinct from the power to regulate commerce. From this it follows that the enrolment of a ship or vessel in interstate commerce does not exempt its owner from taxation for his interest in it as property, upon a valuation by State law, as in the case of other personal property.173

65. There ever remains the question of the extent of the power of Congress to regulate commerce. American constitutional law as to commerce is largely of what the States may not do. But the enormous power of Congress to regulate commerce, more and more as the years pass,—as the meaning of “national jurisdiction” is defined by the courts of law,—the definition, however, slowly conforming to public opinion,—discloses the extent of the federal power through the commerce clause. Doubtless Congress has made but a beginning in its exercise of this power. Thus it has made lottery tickets articles of commerce, has excluded them from the mails, has assumed plenary authority of the carriage of such articles from State to State, and, by authority of the commerce clause has practically destroyed the lottery business in the United States.174 The principle here decided is that, under the power to regulate commerce, regulation may take the form of prohibition, and that the power “may be exerted with the effect of excluding particular articles from such commerce.”175

In this decision the Court observes, “that the suppression of nuisances injurious to public health or morality is among the most important duties of government,” and quotes an earlier decision as to “the widespread pestilence of lotteries.” It might seem that while exercising its powers under the commerce clause Congress was really exercising the police power of the United States.

66. Of highest importance is the act of Congress of July 2, 1890, and later amendments, known as the Anti-Trust Act, entitled, An “Act to Protect Trade and Commerce against Unlawful Restraints and Monopolies.” The decisions growing out of this act have been made on issues involving the particular questions whether or not restraints and monopolies so-called were such under the act and conflicted with it. The power of Congress, under the commerce clause to prohibit such restraints and monopolies has not been denied. It will be remembered that power to regulate commerce is not power to regulate manufactures. The purpose of the Anti-Trust law176 is “to destroy the power to place any direct restraint on interstate trade or commerce, when by any combination or conspiracy formed by either natural or artificial persons, such a power has been acquired; and the government may intervene and demand relief as well after the combination is fully organized as while it is in process of formation.”177 The principle involved here is as to the power of corporations organized under State laws to restrain or to monopolize interstate commerce. The State has no power to create corporations with such powers, and consequently they cannot exercise them lawfully. And like attempts to restrain and monopolize interstate commerce made by individuals is alike unlawful.178

67. So, too, where a labor organization sought by a boycott to prevent the manufacture of articles intended for interstate commerce, and to prevent the re-selling of these articles in other States, the combination and plan were held to be restraint of commerce and in violation of the Anti-Trust act.179 The cases strongly suggest that federal laws to regulate commerce may be essentially police regulations as, notably, laws requiring safety appliances on railroad trains and steamboats; laws regulating hours of labor and child labor; laws requiring arbitration of controversies between employers and employees operating in interstate commerce; the pure food law; the exclusion of lottery tickets from the mails, and the like. The Constitution contains no clause explicitly delegating the police power to the United States, and the exercise of police power by Congress has thus far been quite without exception under the commerce clause. Yet by parity of reasoning, the police power may be included under the power to declare war.

68. There is such a thing as the peace of the United States.180 The enormous power of Congress under the commerce clause has undoubtedly promoted that peace: “domestic tranquillity” is one of the specified purposes in ordaining and establishing the Constitution. As absence of power to regulate commerce marked the weakness of the Articles of Confederation, so the special inclusion of that power among those delegated to Congress marks the strength of the Constitution.

69. Within their respective jurisdictions the United States and the several States have power to regulate commerce. The power over commerce, in either jurisdiction, is exercisable within the principle of self-preservation. Whatsoever exercise of this power is essential to the existence of either government belongs to that government and cannot be repugnant to the other, that is, under the dual system of American constitutional government. Simple as this principle may seem, its practical application in defining the two jurisdictions, or the authority of either government, involves all the issues in American constitutional law, and the decisions of the American judiciary in cases arising under the commerce clause of the Constitution.

A notable instance of the authority given by the commerce clause is the power of Congress, over the transportation of the mails, to prevent “any unlawful and forcible interference” with them. “The strong arm of the government may be put forth to brush away all obstructions to the freedom of interstate commerce or the transportation of the mails”; “the United States have a property in the mails.” The contents of the mail-bags—that is, matter, lawfully mailable—are commerce in the sense in which that word is used in the Constitution.

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 train and the steamship. Just so is it 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.181

Under the commerce clause Congress

may enact such legislation as shall declare void and prohibit the performance of any contract between individuals or corporations where the natural and direct effect of such a contract will be, when carried out, to directly, and not as a mere incident to other and innocent purposes regulate to any substantial extent interstate commerce.

And “interstate” also includes “foreign commerce.”182

All the decisions

illustrate the principle that Congress in the exercise of its paramount power may prevent the common instrumentalities of interstate and intrastate commercial intercourse from being used in their intrastate operations to the injury of interstate commerce. This is not to say that Congress possesses the authority to regulate the internal commerce of a State, as such, but that it does possess the power to foster and protect interstate commerce, and to take all measures necessary or appropriate to that end, although intrastate transactions of interstate carriers may thereby be controlled.183

CHAPTER VI
THE LAW OF CONTRACTS AND PROPERTY

70. The supreme law of the land provides that no State shall pass any law impairing the obligation of contracts.184 A contract is an agreement between competent persons to do or not to do a certain thing; the law is part of the contract.185 An unlawful contract cannot be made, for the so-called contract, being unlawful, has never existed as a contract. The limitation as to contracts in the Constitution is on the States. Thus a State can no more impair its own contracts, by legislation, than it can impair the obligation of the contracts of individuals.186 A sovereign State is supposed to have a more scrupulous regard to justice, and a higher morality than belongs to the ordinary transactions of individuals.

71. A State may incorporate a bank which, by its charter, is empowered to issue, and does issue, stock, bills, or notes. These are contracts. By its police power the State may repeal that section of the bank’s charter authorizing issues of notes, but legislation affecting the stock, or notes, so as to impair their obligation is unconstitutional.187 The question is not one of currency but of impairing the obligation of a contract. A legislature may make a contract binding upon later legislatures,—as a law existing at the time contracts under it are made, it becomes part of them, but a municipal act levying a tax upon city bonds held by non-residents diminishes the value of the bonds and therefore impairs the obligation of a contract.188 For the bonds call for a certain interest payment at a certain time, and a tax upon them, and retaining the same from payment, make an entirely different contract from the original. The constitutional provision against impairing contract obligations is a limitation on the taxing power as well as on all legislation—whatever its form.189

72. But such limitation must not be confused with legitimate exercise of the police powers of the State. Thus an arrangement determinable at the will of either party is not a contract beyond control, change, or cessation under the police power. For example, a bounty law, as for killing destructive animals, or for the encouragement of manufactures (the boring of salt wells and pumping of water from them for making salt), does not involve the State in a contract. It is a matter purely voluntary on the part of those who avail themselves of the opportunity, and the Legislature may or may not continue the law at discretion, as a matter of public policy.190

73. The execution of an office to which a person has been lawfully elected, or appointed, by the performance, by him, of its duties, is a completed contract, with perfect obligation to pay for services rendered at the rate of compensation fixed by the contract, and this obligation can no more be impaired by a law of the State than that arising on a promissory note.191

74. The charters of private charitable institutions are contracts within the letter of the Constitution, and their obligation cannot be impaired without violating it.192 But if a charter to a corporation, for example a railroad, or a college, provides for possible alteration or amendment by the Legislature of the State, such power of alteration duly exercised by a later Legislature is not unconstitutional as impairing the obligation of a contract.193

75. The police power of the State extends to the protection of the lives, health, and property of citizens, and to the preservation of good order and the public morals, nor can the Legislature, by any contract, divest itself of the power to provide for these objects.

They belong emphatically to that class of objects which demand the application of the maxim, salus populi suprema lex; and they are to be attained and provided for by such appropriate means as the legislative discretion may devise. That discretion can no more be bargained away than the power itself.194

In exercise of this police power the Legislature prohibits the manufacture and sale of malt liquor. Such manufacture or sale is not an exercise of a right by contract, and prohibition of the business is not legislation impairing the obligation of a contract.195 So too, a provision in a State constitution forbidding lotteries and gift enterprises within a commonwealth, and revoking lottery charters theretofore granted, is not a law impairing the obligation of a contract.196 The principle followed here is expressed by the Chief Justice (Waite): “No legislature can bargain away the public health or the public morals.” Thus it may be accepted as settled constitutional law that the people in their sovereign capacity and through their properly constituted agencies may exercise powers as the public good may require.197 But corporations and private persons possessing and exercising rights and franchises vested in them by law and possessing property rights by contract are entitled to compensation when, under the State power of eminent domain, such vested rights are taken away.198

76. Whether property or employment possesses the qualities or attributes of a public use will largely determine the character of legislative control for the purpose of safe-guarding the public against “danger, injustice, and oppression”; the police power of the State is here paramount.199

77. The principle involved in the obligation of contracts is clearly set forth by the Supreme Court:

In placing the obligation of contracts under the protection of the Constitution, its framers looked to the essentials of the contract more than to the forms and modes of proceeding by which it was to be carried out into execution; annulling State legislation which impaired the obligation, it was left to the States to prescribe and shape the remedy to enforce it. The obligation of a contract consists in its binding force on the party who makes it. This depends on the laws in existence when it is made; these are necessarily referred to in all contracts and forming a part of them as the measure of the obligation to perform them by the one party, and the right acquired by the other. There can be no other standard by which to ascertain the extent of either, than that which the terms of the contract indicate according to their settled legal meaning; when it becomes consummated, the law defines the duty and the right, compels one party to perform the thing contracted for, and gives the other a right to enforce the performance by the remedies then in force. If any subsequent law affect to diminish the duty, or to impair the right, it necessarily bears on the obligation of the contract, in favor of one party, to the injury of the other; hence, any law which, in its operation, amounts to a denial, or obstruction, of the rights accruing by a contract, though professing to act only on the remedy, is directly obnoxious to the prohibition of the Constitution.200

78. The prohibition of legislation impairing the obligation of contracts does not extend to the United States as it does to the States. Thus in the Legal Tender Cases201 and in sundry bankruptcy cases.202 the Supreme Court has decided that the exercise of the power of Congress “does not depend upon the incidental effect of its exercise on contracts, but on the existence of the power itself.” This means that the United States possesses a police power, salus populi suprema lex, in exercise of which at the discretion of Congress, the obligation of contracts must yield to the higher obligation of the general welfare.203

79. It is a fundamental of government in America that no person shall be deprived of life, liberty, or property without due process of law, nor shall private property be taken for public use without compensation.204 The prohibition and protection as to due process of law extends both to the United States and to the States. The taking by a State of the private property of a person,—and a corporation is legally a person,—without the owner’s consent, for the private use of another is not due process of law,205 and it violates the Fourteenth Amendment. A State possesses exclusive jurisdiction and sovereignty over persons and property within its territory and consequently may determine for itself the civil status and capacities of its inhabitants; may prescribe the subjects upon which they may contract, and regulate the manner and conditions upon which property situated within its territory—or jurisdiction—may be acquired, enjoyed, and transferred; but no State can exercise direct jurisdiction and authority over persons or property without its jurisdiction. The laws of a State have no operation outside its territory “except so far as is allowed by comity; any exertion of authority by a State beyond its territory is a nullity.” The sovereign power of the State over property within its jurisdiction, belonging to non-residents is exercisable as over the property of residents. But the property right of the non-resident cannot be invalidated save by due process of law, which means, inter alia, the right of the non-resident to appear personally, or by representative, in the courts of the State to protect his own interests. A State law under which a nonresident’s property should be taken without such notice would be unconstitutional by the Fourteenth Amendment.206

But the Fourteenth Amendment does not deprive the States of their police power over “subjects within their jurisdiction.”207

80. The right of eminent domain is essentially of the police power, and for State purposes is exclusively within the State. Each State in the Union regulates its domestic commerce, contracts, the transmission of estates,—real and personal—and acts upon all internal matters which relate to its moral and political welfare. Over these subjects the federal government has no power. The acknowledged police power of a State extends often to the destruction of property. A nuisance may be abated.208 Thus a State constitution, or a statute under it, prohibiting the manufacture and sale of intoxicating liquors, except for medicinal, scientific, and mechanical purposes, does not conflict with the clause of the Fourteenth Amendment which provides that “no State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States, nor shall any State deprive any person of life, liberty, or property, without due process of law.” The so-called “right” to manufacture or sell such articles is not a right growing out of citizenship of the United States.209 Such manufacture or sale, or its prohibition is wholly within the power of the State to control.210

Such control is of wholly internal affairs. The right to manufacture or sell such articles is not a right under a contract as the word contract is used in the Constitution.211 Prohibition of the manufacture and sale of such articles, save as excepted, does not deprive the citizen of his constitutional rights. Such prohibition is the policy of the supreme power in the State and is an exercise of a function within its jurisdiction.

The exercise of the police power of the State by the destruction of property which is itself a public nuisance, or the prohibition of its use in a particular way whereby its value becomes depreciated, is very different from taking property for public use, or from depriving a person of his property without due process of law. In one case, a nuisance only is abated; in the other, unoffending property is taken away from an innocent owner.212

81. The provision of the Constitution that private property shall not be taken for public use without compensation is a limitation on the power of the federal government, and not on the States,213 but the State constitutions usually include the limitation in their Bills of Rights: the principle is “essentially a part of American constitutional law.”214

82. For consequential injury resulting from the exercise of the power of eminent domain there is no redress,215 but where such exercise of power works effectual destruction of land so as to impair its usefulness, it is a taking of property for public use and the owner is entitled to compensation.216 The principle here is that,

If in such cases suitable and adequate provision is made by the Legislature for the compensation of those whose property or franchise is injured or taken away, there is no violation of public faith or private right.

It is also a well-established principle that no construction of the clause in the Bill of Rights (in any constitution) providing compensation for property taken for a public use shall so extend the benefits of the clause as to give indirect or consequential damages to a person when the public already has a rightful use of the property.217

83. Though the right of eminent domain and its exercise are not enumerated in the Constitution, the power being inseparable from sovereignty and the right being the offspring of political necessity, must be recognized as existing. The right is one of these which is not denied, and being essential, is implied. Were the right to acquire property, and for other purposes, denied the United States, the unwillingness of property-holders to sell, or legislation by a State prohibiting a sale to the federal government would make nugatory the government itself, and its existence would thus depend upon the will of a State, or even upon that of a private citizen.218 The essential matter here is of sovereignty, or jurisdiction. The two sovereignties, the several States and the United States, possess, each, this right commensurable with their respective jurisdictions.

The proper view of the right of eminent domain seems to be, that it is a right belonging to a sovereignty to take private property for its own public uses, and not alone for those of another. Beyond that, there exists no necessity; which alone is the foundation of the right. If the United States have the power, it must be complete in itself. It can neither be enlarged nor diminished by a State.219