6. What do you think should be the policy of the United States in reference to immigration?

7. What is the present policy of each of the political parties in reference to the tariff?

8. In what way will the Panama Canal be likely to benefit the foreign commerce of the United States?

Topics for Special Work.-The Protective Tariff: 20, 491-503. Restriction on International Trade: 21, 387-410. Immigration: 27, 68111. The Payne-Aldrich Tariff: 30, 441-448.

XLIV

DOMESTIC COMMERCE

Interstate and Intrastate Commerce. Domestic commerce is that which is carried on within the United States, and consists of interstate commerce and intrastate commerce. It is not easy to draw clearly the line which separates interstate from intrastate commerce. Broadly speaking, when a commercial transaction begins in one State and ends in another, that transaction is a subject of interstate commerce, but when a commercial transaction begins and ends in the same State it is a subject of intrastate commerce. When a merchant ships his goods to a point within a State he engages in intrastate commerce; when he ships them to a point outside of the State he is engaged in interstate commerce. A railroad which has its termini and the whole length of its tracks within the State cannot be regarded as being engaged in interstate commerce, but a railroad which has its termini in different States must be so regarded. A river lying wholly within a State and having no connection with bodies of water extending beyond the boundaries of the State-a thing which rarely ever occurs-is an instrument of intrastate commerce, but a river wholly within a State connecting with navigable waters that extend beyond the boundaries of the State is regarded as an instrument of interstate commerce. Does a certain commercial act or a certain instrument of commerce, a river, a canal, a railroad, concern one State or more than one? If it concerns one State only it is an affair

of intrastate commerce; if it concerns more than one State it is an affair of interstate commerce.

The Regulation of Interstate Commerce. During the period of the Confederation, commerce between the States was subjected to many inconveniences and burdens. Goods brought into one State from another were treated as if they were goods from a foreign country. When the New Jersey farmer carried his produce to New York he was met by the tax-collector and compelled to pay a tax upon what he had to sell. When a vessel from Baltimore sailed into the harbor of Boston its master was liable to be called upon to pay tonnage before unloading his cargo. We have seen (p. 46) that it was unsatisfactory trade relations between Virginia and Maryland that led to the calling of the Annapolis Convention, and that this led to the calling of the Constitutional Convention of 1787.

The men of the convention treated the whole subject of commerce with a firm hand. They gave to Congress complete power to regulate commerce between the States (47). They forbade a State to lay tonnage (76) or any export or import duty without the consent of Congress (74). Within its borders a State can regulate its commerce in its own way, but goods and passengers that are on their way from one State to another are placed under the regulation of the federal government.

The power of Congress over interstate commerce is comprehensive and far-reaching. It extends to the instruments of commerce,-to canals and vessels and railways and telegraph lines, and to the persons engaged in it, as well as to the articles of commerce themselves. Under the provisions of the interstate commerce clause a State is not permitted to discriminate by taxation or otherwise against residents of other States, or against business carried on by them in the State. A State can interfere with interstate traffic only so far as it may be necessary to exercise its police power (p. 390).

The Interstate Commerce Commission. With the view of remedying evils that had been creeping into interstate commerce, Congress in 1887 established the Interstate Commerce Commission (p. 143) and clothed it with some substantial powers in reference to the regulations of railroads. The law which created this commission requires that freight and passenger rates shall be just and reasonable, that there shall be no discrimination between persons and localities; it provides that there shall be proper facilities for the interchange of traffic between connecting lines; it forbids the issuance of free interstate passes; it requires that railroads print and make public their freight and passenger rates. A supplemental law (the Elkins law, passed in 1903) forbids rebates and provides that rates lower than those published shall not be charged. It is the duty of the Interstate Commerce Commission to carry these provisions into effect.

In 1906 Congress gave the Commission, upon the complaint of an interstate shipper (or passenger), the power to do away with a rate which it regards as unjust or unreasonable, and to fix a new rate which it regards as just and reasonable. In 1910 Congress went a step further and empowered the Commission to make investigations of its own motion, and when it finds certain rates unreasonable and unjust, to change them, even though there has been no complaint whatever. Moreover, by the law of 1910 new rates may be suspended in their operation by the order of the Commission, and if they are found by that body to be unjust and unreasonable they cannot go into operation at all. The railroads, however, may appeal to the Court of Commerce.

Intrastate Commerce. The power of the State over commerce which concerns only the people within its borders is unlimited. It is the custom of all the States to permit great freedom in commercial transactions and to foster the growth of commerce. For the encouragement of commerce the State, or the locality acting for it, maintains high

ways, improves rivers and harbors,2 constructs canals, and in rare instances builds and operates railroads. The great Erie Canal owned and operated by the State of New York is the most remarkable instance of State canal building, although many other States, notably Ohio, Indiana, Illinois and Michigan, have aided their commerce by constructing canals.

The most important factor of commerce is transportation, and transportation for the most part begins upon a common highway, upon a paved street or upon a country road. The construction of roads and streets and bridges is almost everywhere a function of the local government, the township or county or municipality. In a few States the highways are being taken out of the hands of local authorities, and are being placed under the control of the State government. This is the case in Maine, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Maryland, and Delaware. Roads in these States are constructed in part at least under the supervision of State road commissioners, and the cost is apportioned to the State, the county and the local district. The State-aid policy in reference to highways is also meeting with favor in several of the States of the Middle West.

Next to the highways, steam railroads and electric-car lines are the most important instruments of State commerce. Railroads ordinarily receive their charters from the State, although several transcontinental lines have been chartered by Congress. Sometimes the State not only charters the railroad, but also assists with money in its construction. As a rule, however, the States have kept out of the railroad business, and have allowed the railroads to

1 The old Cumberland road extending from Cumberland, Maryland, to Wheeling, West Virginia, and thence through Columbus, Ohio, to Vandalia, Illinois, was built by the federal government (1806-1818), but its operation was left to the States through which it passed.

2 The improvement of rivers and harbors is a function of the federal government also, and Congress habitually appropriates large sums for this purpose.