§ 27. Law of interstate commerce before congressional action. The Federal Constitution has been construed to vest in Congress the exclusive power to regulate interstate transportation rates (22). That body did not for many years pass a general code for the regulation of that commerce, and it became a serious question for the courts and the public, whether there was any law under which the transaction between an interstate carrier and a party shipping products between states, where no contract had been made, could be regulated, and the rights and duties of the shipper and carrier fixed. The question became of serious importance when interstate carriers gave discriminating rates to shippers, and when the shippers who paid excessive rates brought actions against the carriers to recover the difference between what other shippers paid, who received the low rate, and the amount paid by the complaining shippers. The lower courts differed as to whether there was any regulative law applicable, and it was not until the Supreme Court of the United States applied the rules of Conflict of Laws that the question was finally settled.

§ 28. Same: View that no law forbids discrimination. The first opinion to call particular attention to the subject was given by Judge Grosscup sitting as United States circuit judge for the northern district of Illinois in the case of Swift v. Philadelphia and Reading Railroad Co. (23). In that case he expressed the view that there was no law, in the absence of express legislation by Congress, under which a recovery could be had for an exac

(22) Wabash, etc., Ry. Co. v. Illinois, 118 U. S. 557. (23) 58 Fed. 858.

tion by a carrier from a shipper of an unreasonable interstate rate, and that the entire matter of rates was without regulation until Congress passed a statute with reference to it. He held that the United States, as a sovereignty, had no distinct common law separate from the common law of the states, and refused to recognize the applicability of the common law of the states to the subject of interstate rates, because the power of furnishing the law applicable thereto had been by the Constitution absolutely surrendered to Congress.

§ 29. Same (continued). Neither did he accede to the proposition, as he pointed out in a subsequent case (24), involving the same question, that the United States succeeded to the law of any state which regulated rates and gave relief against unjust exactions made by carriers. In the latter case he said: "The supreme power of the

state is, with us, divided.

The line of division is not territorial, but topical. Each inch of soil is subject to the rule of two powers of state, overlapping each other in some respects, but never conflicting, and divided always according to prearranged constitutional adjustments. In some fields the nation is the sole power to prescribe rules of conduct, in other fields that power is exclusively in the state, and in still other fields it is concurrent. It is plain that in the first of these fields the emanation of a rule of conduct from the state as, in the second, a like emanation from the nation, would not have the effect of law. Neither, in the field of the other, is a power in the state. The nation has not the power to prescribe rules of civil conduct

(24) Swift v. Philadelphia, etc., Ry. Co., 64 Fed. 59.

within the field exclusively belonging to the state. The state has not the power to prescribe rules within the fields exclusively belonging to the nation. From each of these two fields, the nation and the state, as the case may be, is excluded as a lawgiver. Now, this must apply as well to the system of law to which the sovereign succeeds as to that which it immediately creates; to the common or civil law, as well as to that which comes from its own legislative or judicial will. In other words, the state or nation, having no power to give law in the fields exclusively belonging to the other, logically, can have succeeded to no law applicable to such fields. Neither can have a common law or a civil law within fields to which it can extend no law at all."

30. Same: View that a Federal common law is applicable. The same question arose before Judge Shiras sitting as circuit judge of the United States for the northern district of Iowa in a case (25) where the carrier had given concessions and rebates to the plaintiff's competitors, in the business of buying and shipping grain to Chicago, of fifteen dollars a car. The action was brought to recover from the carrier the damages caused to the shipper by being compelled to pay the excessive and unreasonable rate. Judge Shiras held that the carrier was liable. He repudiated the view of Judge Grosscup that there was no law regulating rates applicable to interstate commerce shipments, in the absence of a statute passed by Congress. His opinion was that there was a national common law which should be applied to all the topics for

(25) Murray v. Chicago, etc., Ry. Co., 62 Fed. 24.

which Congress had the exclusive power by the Constitution to legislate.

§ 31. Same: View that state common law continues until changed by Congress. The Supreme Court of the United States, in the case of Western Union Telegraph Co. v. Call Publishing Co. (26), passed upon the same question. The Call Publishing Company was publishing the Lincoln Daily Call, a newspaper in Lincoln, Nebraska. Its competitor was the Nebraska State Journal. The defendant, the Western Union Telegraph Company, furnished daily dispatches from the Associated Press to both of these publishers, but it furnished such dispatches to the competitor at a considerably less charge than to the plaintiff. The suit was brought to recover the excess from the telegraph company. That court, Judge Brewer delivering the opinion, took a view that placed a liability upon the telegraph company for exacting unreasonable rates. His conclusion is reached, however, by a method of reasoning entirely consistent with the principles of Conflict of Laws, and repudiating the theories of the lower courts. The underlying principle upon which that decision is based is the principle governing cases where there has been an accession of new territory. The United States government, in the fields over which it is given the exclusive power to legislate, stands in the same relation towards the states that make up the Union as the conquering nation does to the nation it has conquered, as pointed out above (27). It stands in the same relation

(26) 181 U. 3., 92.

(27) See $ 25.

towards the states that it does towards territory (28) it has acquired for purposes of erecting forts and other military purposes, and the rule of Conflict of Laws applicable to territory acquired in that way is applicable to the states of the Union.

§ 31a. Same: Reasoning in support of latter view. Every state when admitted to the Union had some law by which the rates carriers could charge were regulated, and by which a recovery could be had against a carrier that charged unreasonable rates. It was this law to which the court resorted in making the Western Union Telegraph Company liable. The court said: "There is no body of Federal common law, separate and distinct from the common law existing in the several states, in the sense that there is a body of statute law enacted by Congress, separate and distinct from the body of statute law enacted by the several states. But it is an entirely different thing to hold that there is no common law in force generally throughout the United States, and that the countless multitude of interstate commercial transactions are subject to no rules, and burdened by no restrictions, other than those expressed in the statutes of Congress. Can it be that the great multitude of interstate commercial transactions are freed from the burdens created by the common law, as so defined, and are subject to no rule except that to be found in the statutes of Congress? We are clearly of the opinion that this cannot be so, and that the principles of the common law are a feature upon all

(28) See § 26.