Commerce Clause

Author:Robert L. Stern

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The commerce clause is the small part of the Constitution that provides that "The Congress shall have power ? to regulate commerce with foreign nations, and among the several states, and with the Indian tribes."

The phrase relating to the Indians was derived from the provision in the 1781 ARTICLES OF CONFEDERATION which gave the federal congress "the sole and exclusive right and power of ? regulating the trade and managing all affairs with the Indians." Despite the elimination of the sweeping second phrase, there never has been any question that the Indian part of the commerce clause (plus the

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TREATY and WAR POWERS) gave Congress power over all relations with the Indians, and no more need be said about it.

Nor has there been much question as to the scope of the federal power to regulate foreign commerce. Combined with the tax and WAR POWERS and the provisions prohibiting the states from entering treaties and agreements with foreign powers and from imposing duties on imports and exports, this power clearly gave the federal government complete authority over relations with foreign nations.

The short clause relating to "commerce among the several states," however, has become one of the most significant provisions in the Constitution. It has been in large part responsible for the development of the United States as a single integrated economic unit, with no impediments to the movement of goods or people at state lines.

The draftsmen of the commerce clause could not have envisaged the eventual magnitude of the national commercial structure or the breadth of the CONSTITUTIONAL INTERPRETATION which that structure would produce. Nevertheless the need for a national power over commerce led to the calling of the CONSTITUTIONAL CONVENTION OF 1787, and the seed for the growth of the power was planted in the early years.

In 1786 the Virginia General Assembly, and then a commission representing five states meeting at Annapolis, called for the appointment of commissioners to consider "the trade of the United States" and "how far a uniform system in their commercial regulation may be necessary to their common interest and their permanent harmony." The Congress created under the Articles of Confederation thereupon approved the calling of a convention to meet in Philadelphia in May 1787 for the purpose of revising the Articles and reporting its recommendations to the Congress and the States.

The Convention, after considerable debate, adopted a resolution generally describing the powers to be given the National Legislature, in the form proposed by the Virginia delegation led by GEORGE WASHINGTON, Governor EDMUND RANDOLPH, and JAMES MADISON. It was resolved that "the national legislature ought ? to legislate in all cases for the general interests of the Union, and also in those to which the states are separately incompetent, or in which the harmony of the United States may be interrupted by the exercise of individual legislation." This and other resolutions were sent to a drafting committee, which reported out the commerce clause and other powers to be conferred on Congress in substantially the form finally adopted.

Although the needs of commerce had been principally responsible for the calling of the Convention, the clause was accepted with hardly any debate. The same was true in the state ratifying conventions. All reflected the view that in general the new Constitution gave the federal government power over matters of national but not of local concern.

The same view was expressed in the first commerce clause case in 1824 (GIBBONS V. OGDEN), written for a unanimous Supreme Court by Chief Justice JOHN MARSHALL, who had been a member of the Virginia ratifying convention. The Court declared that the commerce power did not extend to commerce that is completely internal, and "which does not extend to or affect other states." It "may very properly be restricted to that commerce which concerns more states than one.? The genius and character of the whole government seems to be, that its action is to be applied to all the concerns of the nation, and to these internal concerns which affect the States generally."

Of course, neither in 1787 nor in 1824 did those who wrote or ratified or interpreted the Constitution contemplate the tremendous and close-knit economic structure that exists today and the accompanying inability of the states, or of any agency but the nation, to meet the governmental problems that structure presents. Indeed, in the 1820s and into the 1850s many persons regarded even the construction of the principal highways within each state as purely internal matters not subject to federal power, as appeared from President JAMES MONROE'S veto on constitutional grounds of an appropriation to construct what is now Interstate 70 from Maryland to the Western states. Although the MARSHALL COURT would not have agreed, some of the more STATES ' RIGHTS -minded Supreme Court Justices of the 1840s and 1850s did.

In general, during the century from 1787 to 1887, the only national commercial problems concerned foreign trade and navigation and the removal of state-imposed barriers to interstate trade. Affirmative federal regulation applied almost entirely to matters of navigation on the oceans, lakes, and rivers. An early statute required vessels engaged in coastal traffic to obtain federal licenses. Reasonably enough, none of these were challenged as falling outside the commerce power.

All of the commerce clause cases during the first 100 years, and a great many of them thereafter, were concerned with the negative effect of the clause upon state legislation?even though the clause did not mention the states. The Constitution merely said that Congress should have the power to regulate commerce. Other clauses imposed specific prohibitions upon the states, but the commerce clause did not. On the other hand, it was well known during the early period that the principal evil at which the commerce clause was directed was state restrictions upon the free flow of commerce.

The issue first came before the Supreme Court in Gibbons v. Ogden (1824). New York had granted Robert Fulton

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and ROBERT LIVINGSTON the exclusive right for thirty years to operate vessels propelled by steam in New York waters, thereby excluding steamboats coming from neighboring states. New Jersey, Connecticut, and Ohio had promptly passed retaliatory legislation forbidding the New York monopoly from operating in their waters. The case presented an example (though unforeseeable in 1787) of the type of interstate commercial rivalry which the commerce clause had been designed to prevent.

A unanimous Supreme Court held that Congress's commerce power extended to all commercial intercourse among the states, rejecting arguments that it did not apply to navigation and passenger traffic. The Court, speaking through Marshall, further concluded that Congress had exercised its power in the Coastal Licensing Act, that Gibbons's vessels were operating in compliance with that statute, and that New York's attempt to prohibit them from operating in New York waters was inconsistent with the federal statute and therefore unconstitutional under the SUPREMACY CLAUSE of the Constitution. The Court did not find it necessary to decide whether the power of Congress to regulate interstate commerce was exclusive or whether the states had CONCURRENT POWER in the absence of a conflicting federal law, although Marshall seemed to favor the former view. But Marshall recognized that, although the states had no power to regulate interstate or FOREIGN COMMERCE as such, they could exercise their preexisting powers to enact laws on such subjects as health, quarantine, turnpikes and ferries, and other internal commerce, even though that might overlap the subjects that Congress could reach under the commerce clause. Thus, as a practical matter, the Court recognized that the states had concurrent powers over many aspects of commerce, or of internal matters that might affect external commerce.

After ROGER B. TANEY became Chief Justice in 1835, a number of the Justices, including Taney, took the flat position that only state laws inconsistent with acts of Congress were preempted, and that the commerce clause itself had no preemptive effect. But in none of the cases could a majority of the Court agree on any theory.

This unhappy and unhealthy state of the law was formally resolved in 1852, when, speaking through newly appointed Justice BENJAMIN R. CURTIS, the Court sustained a Pennsylvania law governing the use of pilots in the port of Philadelphia in COOLEY V. BOARD OF WARDENS OF PHILADELPHIA (1852). Six Justices agreed that whatever subjects of this power are in their nature national, or admit only of one uniform system, or plan of regulation, may justly be said to be of such a nature as to require exclusive legislation by Congress. Where there was no need for regulation on a national scale, only state laws inconsistent with federal would fall.

The Court still cites the Cooley principle with approval, although the Cooley formula has been largely superseded by an...

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