INTER-STATE COMMERCE

AS. AFFECTED BY THE LATE WABASH DECISION.

Prior to the present century the world's traffic remained almost stationary for a thousand years. The adoption of steam for transportation purposes marks the beginning of a new era in commerce. The first fifty years of railway history witnessed legislation mainly devoted to railway development and extension. This resulted in the concentration of capital and the creation of corporations. The people in their frantic efforts to foster railway building endowed these corporations with almost unlimited powers, charter privileges and corporate franchises. The corporations in turn, clothed with grants, privileges and constitutional guaranties, coupled with power of aggregated capital, became possessed, as they supposed and strenuously asserted, of unlimited power as to the rates charged for the transportation of freights and passengers. Though they were the creatures of legislative will and were indebted to the law-making power for their very existence, yet, they asserted under the plea of the inviolability of charter contracts an independence of legislative control truly startling.

This supposed sanctity of charter contracts and freedom from subsequent legislative regulation and control, was first authoritatively and distinctively announced in the now famous Dartmouth College case. The principles enunciated in that case were not without limitation by the decision itself, and subsequent events demonstrated that the Court, though wise in legal lore and constitutional learning, had but a faint conception of

the immense power and influence corporations were soon to exert in commercial affairs. It is sufficient to say in passing, as every student of constitutional jurisprudence well knows, that by a sort of judicial pruning, limitations and exceptions, the remains of the famous College case became quite inadequate to shield corporations from subsequent legislative regulation, except in the few rare instances where by the charter contract in words of "unmistakable import" the legislature had forever granted away its power of subsequent control and reg

ulation.

It is believed that the long contest over this constitutional question in its varied phases reaching, as it does, from a period early in the judicial life of Chief Justice Marshall down to and including a large portion of that of Chief Justice Waite, would be, perhaps, without a parallel in interest, learning and profound research in all the annals of English and American constitutional history.

The vitality of corporations is axiomatic, and quietly submitting to a legal defeat is certainly not one of their characteristics. We, therefore, next find commercial traffic corporations defending themselves against unfriendly legislation from another constitutional stand-point, known as the inter-state commerce ground. This barrier to the supposed inroads of State legislation upon the so-called vested rights of railway and other traffic corporations to fix their charges at will, was distinctly interposed in what are now known as the Granger cases. -(Munn v. Illinois, 94 U. S. 113, Chicago &c. R. R. Co. v. Iowa, 94 U. S. 105.)

It was not, however, a new principle in the constitutional law of this country, but rather an application to a new class of subjects with different surroundings of an old and well known principle.

Prior to the adoption of the Constitution. colonial history is replete with acts, arising from rivalry, avarice, and perhaps other unjustifiable motives, which seriously crippled the then existing inter-colonial commerce. The same state of affairs existed during the period our government was under the Articles of Confederation. The framers of our Constitution, therefore,

wisely incorporated in that instrument the clause giving to Congress the power to regulate commerce with foreign nations and among the several States. The application of this provision of the Constitution to the advancing stages of our civilization, and adapting it to the new conditions of commerce and adjusting the rights growing out of the continually changing order of things, has been a work of great difficulty, aided as our courts have been by our greatest constitutional lawyers. This difficulty has been augmented no little by the fact that our greatest exponents of constitutional law have always been divided into strict constructionists and liberal constructionists; those who have construed this clause of the Constitution to mean that the power of Congress over this subject of interstate commerce is absolute and prohibitory as to the States, and those who, admitting congressional jurisdiction, yet, contended that the power of the State was concurrent with Congress. Hence it is that no reconcilement can be made of the conflicting decisions growing out of this vexed question.

Indeed it is impossible to reconcile the decisions of the same Court at different periods of its existence. Even the decisions of the Supreme Court of the United States are, as we shall see, not entirely harmonious. That great tribunal, popularly supposed to be at all times above local influence and to be invested with a sort of majestic supremacy upon constitutional questions, has at times manifested a wavering disposition, as if a reed shaken by the wind.

The current of its decisions has not been as the crow flies. One source of difficulty has been in attempting to extend congressional regulation not only over that which is strictly commerce, but to all the instruments of commerce by means of which traffic is carried on; as harbors, pilotage, wharfage, bridges, steamboats, rivers, canals, railroads, telegraphs, &c.

There would seem to be more practical wisdom displayed in a uniform system of law regulating bills of exchange and promissory notes without the use of which, but few commercial transactions occur, than there is in the question in what particular part of a steamboat a particular passenger should or should not sit or sleep, and that in the absence of congressional action.

A large number of our conflicting decisions may be properly eliminated from consideration upon the inter-state commerce question, upon the ground that our courts have not infrequently assumed congressional functions. This class of cases forms a species of judicial legislation, pure and simple. For it will be observed that the language of the Constitution is: "Congress shall have power to regulate," when in its legislative wisdom the public necessities require. It is quite different from those other clauses reading: "No State shall pass any law," &c. This system of politico-judicial legislation is defended on the ground that when Congress means to regulate it legislates, and when it (Congress) means that a subject matter shall be free from all regulation it says nothing, a sort of affirmative negation, and therefore no State has a right to say aught.

These courts have not always been mindful of the fact that it was to Congress power was given to regulate commerce and not to the courts.

But while this doctrine has been announced in a few cases by the Court, and strenuously advocated by a few individual judges, yet it is believed that an unbroken line of decisions may be found in our Supreme Court, extending from those of Cooley v. Board of Wardens, 12 Howard, 299; Gibbon v. Ogden, 9 Wheat 181, down to and including the Granger cases, holding that in the absence of Congressional action, State legislation in matters of inter-state commerce, will be upheld as constitutional and valid. Especially is this true in matters of State legislation affecting inter-state commerce, where the free interchange of commodities between States is not seriously interfered with, as in the case of the regulation of bridges across navigable rivers. Escanaba Company v. Chicago, 107 U. S. 678.

Another cause of the irreconcilable condition of our decisions upon inter-state commerce is owing to the fact that we have not kept in view the fundamental distinctions between subjects sought to be regulated. For instance, commerce carried on upon our navigable rivers is not analogous to that carried on upon railroads. Navigable rivers know no State lines; are as free to all who use them as the high seas; are not

creations of State or nation. While, on the other hand, railways while in one sense public highways, are owned and managed by corporations, which are creations of the State; exercise franchises granted and grantable only by the State; are to a great extent monopolies, and can extend only to State lines. The moment they go from one State into another that moment they look to a new source of authority for power to act, as well as to exist. And hence it would seem that the power of the State to regulate and control in the latter case would be unquestioned, if looked at from a logical stand-point.

Again: Is it a matter of national concern whether a corporation of Illinois charges a citizen of Illinois for transportation four cents a mile or three cents a mile for services rendered? Very much of the legislation of Congress as well as the decisions of Federal courts for the past ten years has been as if corporations were the especial wards of the government.

It would seem to be fundamental that the legislature of each State has a right to create corporations, and by charter fix the conditions on which their business shall be carried on, and among other things to fix the rate to be charged for transportation. If the charter is a contract and the contract prescribes no rate, wherein iɛ it different from all other contracts in that the charge shall be reasonable? This is the established law of this country applicable to transportation companies, corporations and individuals alike.

But where does the right to regulate and control the rates cease? This question has been answered by a divided court in the late Wabash case, wherein it has been held that the Illinois law regulating freight and passenger rates is unconstitutional and void when applied to inter-state commerce. Commerce is traffic; it is intercourse, and as we have seen embraces the instruments by which traffic or intercourse is carried on. Interstate commerce is the buying, selling and exchange of commodities between a citizen of one State and a citizen of another State, and also includes the instruments by which it is carried on. The constitutional clause in question, if for any purpose, was designed to facilitate the free and untrammeled exchange or sale of the products of one State in the marts of