position of a quasi-judicial character. It is his duty to pass upon all appeals from the decision of the auditors, and to advise the disbursing officers in determining the validity of payments. His decisions are not reviewable by the Secretary of the Treasury, but appeal may be entertained by the appropriate court of law. Within his province the Comptroller is independent even of the Attorney-General upon questions of law. Nevertheless, like all officers except the judges, he is liable to removal by the president, and is thus, like them, subject to the directions of the president. His position, although involving judicial duties, is not so carefully protected from political influence as is that of the Comptroller in England, who in the performance of similar duties receives the same protection as is given to the judges.

The government slow to appreciate and use this power

Power to regulate com

only by the Constitution

CHAPTER XIX

THE REGULATION OF COMMERCE

THE POWER TO REGULATE FOREIGN AND INTERSTATE

COMMERCE

The right to regulate commerce stands second in the list of powers granted to Congress. Indeed, while the right to raise money might possibly be implied, the right to control commerce must depend upon some specific grant. The disastrous experience of the Confederation when both foreign and interstate commerce were at the mercy of state jealousy and avarice convinced the convention of 1787 that national regulation was absolutely essential. Although adopted as the result of a compromise and subject to several restrictions, the power contained in the grant has proved sufficient for the unexpected development and expansion of commerce and industry. The government was slow to appreciate the extent and the significance of this power. It was not until 1824 that the extent of the power was pointed out by the Supreme Court in Gibbons v. Ogden, and during the next sixty years the grant was more generally invoked to prevent state encroachments than to substantiate federal activity. Not until 1887 did Congress attempt in any comprehensive way to utilize affirmatively the authority given it over interstate commerce, and this attempt was hardly made efficacious until 1906.

་་

In 1824 Marshall, in his opinion in the case of Gibbons v. merce limited Ogden,1 pointed out the extent of the power in these words: The power to regulate commerce, like all other powers vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the Constitution."

Therefore, no assumed or additional restriction drawn from conditions existent in 1787 or the intent of the convention can

19 Wheat. 1, 196.

limited by

limit or control the extent of this power. This was clearly asserted Power not in 1889 when the court used these words: "The reasons which the intent of may have caused the framers of the Constitution to repose the the framers power to regulate interstate commerce in Congress do not, how- stitution ever, affect or limit the extent of the power itself." 1

of the Con

of the com

Thus, subject to the restrictions contained in the Constitution Development itself, Congress has full and absolute power to adopt any means mercial power to regulate commerce for any purpose that it shall deem advisable. To illustrate by anticipation, it will be seen that under this clause Congress has not merely checked state interference and provided for equality in transportation, but has utilized this power to accomplish, by federal legislation, economic, industrial, social, and moral reforms. In other words, by means of the authority to regulate commerce Congress has been able to enter the vast field of the police power from which it was otherwise debarred.

commerce?

The present conception of the term "commerce is the result What is of judicial interpretation and definition. From the very early years of the government the court has been liberal in its interpretation of this word. Thus, in 1827, Marshall said, "Com- Marshall's merce is intercourse"; while in 1875 Chief Justice Field gave the following more ample definition :

definition

sive definition

of commerce

Commerce is a term of the largest import. It comprehends inter- A comprehencourse for the purpose of trade in any and all its forms, including the transportation, purchase, sale, and exchange of commodities between the citizens of our country and the citizens or subjects of other countries, and between the citizens of different states. The power to regulate it embraces all the instruments by which such commerce may be conducted.2

In 1877 the court thus summarized the constantly increasing application of the term:

definition with chang

The powers thus granted are not confined to the instrumentalities of Expansion of commerce, or the postal service known or in use when the Constitution was adopted, but they keep pace with the progress of the country, and ing conditions adapt themselves to the new developments of time and circumstances. They extend from the horse with its rider, to the stage coach, from the

1 Addyston Pipe and Steel Co. v. United States, 175 U.S. 211, 228.

2 Welton v. Missouri, 91 U. S. 275, 280.

Commercial power covers agents and means of

commerce as

transported

sailing vessel to the steamboat, from the coach and steamboat to the railroad, and from the railroad to the telegraph, as these new agencies are successively brought into use to meet the demands of increasing population and wealth.1

Messages by telephone and wireless telegraph are also included within this definition, in short, anything that involves transportation of persons or things, tangible or intangible. "Transportation is essential to commerce, or rather it is commerce itself,” said the court in Railroad Co. v. Husen.2

The regulation of commerce extends not merely to the thing transported and the means by which it is transported but also to the persons engaged in the act of transportation. Thus, not well as thing only has the power of Congress to compel the use of safety appliances on railroads been upheld, but legislation concerning the hours of labor and the relations of the employees to the employers have been sustained on the ground that the employers were agencies of commerce. In sustaining the second Employers' Liability Act the court used these words:

What is not commerce:

(1) Bills of exchange

Among the instrumentalities and agents to which the power extends are the railroads over which transportation from one state to another is conducted, the engines and cars by which such transportation is effected, and all who are in any wise engaged in such transportation, whether as common carriers or as their employees.3

On the other hand, certain well-recognized commercial transactions do not fall within the definition. For example, the court has held that bills of exchange were not commerce, saying:

A bill of exchange is neither an export nor an import. . . . Now the individual who uses his money and credit in buying and selling bills of exchange, and who thereby realizes a profit, may be taxed by a state in proportion to his income, as other persons are taxed, or in the form of a license. He is not engaged in commerce, but in supplying an instrument of commerce. He is less connected with it than the shipbuilder, without whose labor foreign commerce could not be carried on.1

1 Pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1, 9.

By a similar reasoning fire insurance, marine insurance, and (2) Insurance life insurance have been declared not to be commerce but incidents of commercial transactions. This interpretation is subject, however, to considerable criticism, and is more typical of the nineteenth than the twentieth century.1

ture.

Although commerce is intercourse, transportation, and trade, (3) Manufacit does not include manufacture. This was emphatically stated by the court in 1894 as follows:

... The fact that an article is manufactured for export to another state does not make it an article of interstate commerce, and the intent of the manufacturer does not determine the time when the article or product passes from the control of the state and belongs to commerce.2

THE RELATION BETWEEN THE POWER OF CONGRESS AND THE

POWER OF THE STATES TO REGULATE COMMERCE

interstate

Although the power to regulate commerce is granted in the States control widest form, it is not exclusively vested in Congress. The states commerce still may exercise and must exercise some measure of regulation over commerce within their borders. The attitude of the court concerning the extent to which state regulation of commerce may go was clearly summarized by Justice Brown in 1893 as follows:

The adjudications of this court with respect to the power of the states over the general subject of commerce are divisible into three classes. First, those in which the power of the state is exclusive; second, those in which the states may act in absence of legislation by Congress; third, those in which the action of Congress is exclusive and the states cannot interfere at all.

state juris

The first class, including all those wherein the states have plenary Exclusive power, and Congress has no right to interfere, concern the strictly diction internal commerce of the state, and while the regulations of the state may affect interstate commerce indirectly, their bearing upon it is so remote that it cannot be termed in any just sense an interference. Under this power, the states may authorize the construction of highways, turnpikes, railways, and canals between points in the same state, and regulate the tolls for the use of the same.

1 See W. W. Willoughby, The Constitutional Law of the United States, Vol. II, pp. 636-638, with references to other cases.

2 United States v. Knight, 156 U.S. 1, 13. But see the discussion of the Addyston Pipe decision, p. 507.