State Regulation of Commerce

Author:Edward L. Barrett

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When the Framers of the Constitution granted Congress the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes," they did not specify what regulatory powers were to be left to the states. Did they intend simply to grant a power to Congress which left the states free to regulate until such time as Congress acted? Were states restrained only from enacting statutes inconsistent with federal statutes? Or was the grant of power to Congress intended to be exclusive, forbidding the states to regulate commerce among the states even though Congress had not acted?

These questions troubled the Court several times during JOHN MARSHALL'S tenure as Chief Justice. As a strong nationalist, he was attracted by the argument presented by DANIEL WEBSTER in GIBBONS V. OGDEN (1824) that the word "regulate" implied full power over the thing to be regulated and necessarily excluded the power of the states to regulate the same thing. But Congress could not be expected to regulate all commerce among the states. Most transportation was by water. Inland transportation was slow and difficult. It could take a week or ten days to travel from Boston to New York, and in practical effect Georgia was more remote from New York than from the ports of Europe.

Marshall's solution was to suggest that Congress had full power to regulate INTERSTATE COMMERCE but that in the absence of conflicting federal regulations, the states had power to enact local police laws?inspection laws, quarantine laws, health laws, laws respecting turnpike roads and ferries?even though such laws might affect commerce. After Marshall's death the Justices were sharply divided between those advocating the position that exclusive power to regulate interstate commerce was vested in Congress and those, led by the new Chief Justice, ROGER B. TANEY, advocating the position that states had full power to regulate interstate commerce so long as Congress had not acted.

In 1851, in COOLEY V. BOARD OF WARDENS OF PHILADELPHIA, the Court arrived at a compromise of the conflicting views. In upholding a state law requiring vessels in interstate

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and FOREIGN COMMERCE to accept local pilots, the Court said that when the subjects being regulated "are in their nature national, or admit only of one uniform system, or plan of regulation" they "require exclusive legislation by Congress." On the other hand, when the subjects were local, as in the case of pilotage regulations attuned to individual conditions of the various ports, the states could regulate until Congress might intervene.

During the next half century the Court struggled to limit the negative implications of its notion of broad federal powers to regulate during a time when the federal government regulated little outside of water transportation. Some theory was needed to support the necessary state regulation of commerce. One way to do this was to narrow the definition of interstate commerce. In PAUL V. VIRGINIA (1868) the Court held that the insurance business was not commerce among the states and so could be regulated by the states. In KIDD V. PEARSON (1888) it upheld an Iowa statute forbidding the manufacture of intoxicating beverages as applied to a manufacturer who sold all his output in other states. The Court said that manufacturing was not commerce. If it were commerce, the Court assumed, "Congress would be invested, to the exclusion of the States, with the power to regulate not only the manufacturers, but also agriculture, horticulture, stock raising, domestic fisheries, mining?in short, every branch of human industry." In other cases the Court decided when an interstate journey began (when the goods had been actually shipped, or delivered aboard a common carrier for shipment, across state borders) and when it ended (when it came to rest at the end of its journey available for final disposition or use).

Toward the end of the century the Court devised another method for enabling states to regulate in areas Congress had not chosen to regulate. In Cooley the Court had said that a federal statute consenting to all present and future state pilotage regulations was invalid insofar as it incorporated future regulations because the division of power between state and nation was fixed in the Constitution and Congress could not change it. In LEISY V. HARDIN (1890) the Court held that one state could not forbid the sale of liquor brought in from another state while...

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