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But there was the power of Congress to regulate commerce also to be considered and harmonized if possible. That Federal power, said the Supreme Courtwhen the subjects of that power are national in their nature, is also exclusive. The Constitution does not provide that interstate commerce shall be free, but, by the grant of this exclusive power to regulate it, it was left free except as Congress might impose restraint. Therefore, has been determined that the failure of Congress to exercise this exclusive power in any case is an expression of its will that the subject shall be free from restrictions or impositions upon it by the several States *** and if a law passed by a State in the exercise of its acknowledged powers comes into conflict with that will, the Congress and the State cannot occupy the position of equal opposing sovereignties, because the Constitution declares its supremacy and that of the laws passed in pursuance thereof * * *. That which is not supreme must yield to that which is supreme (pp. 555-556).
Turning back to the State police powers, the Court said:
If * * * [the State had power to declare what should be an article of lawful commerce in the particular State; and, having declared that ardent spirits and wines were deleterious to morals and health, they had ceased to be commercial commodities there, and that then the police power attached, and consequently the powers of Congress could not interfere] then the paramount power of Congress to regulate commerce is subject to a very material limitation; for it takes from Congress, and leaves to the States, the power to determine the commodities, or articles of property, which are the subjects of lawful commerce. Congress may regulate, but the States determine what shall or shall not be regulated. Upon this theory the power to regulate commerce, instead of being paramount over the subject, would become subordinate to the State police power * * * (p. 558).
Thus far the Court had talked of powers, State and Federal, noting that if Congress did not pass a law to regulate commerce specifically, or in such a way as to allow the laws of the State to operate upon it, Congress had thereby indicated its will that such commerce should be free and untrammelled. This being so:
It followed as a corollary, that when Congress acted at all, the result of its action must be to operate as a restraint upon that perfect freedom which its silence insured.
Congress has now spoken (in enacting the Wilson Act, 26 Stat. 313), and declared that imported liquors or liquids shall, upon arrival in a State, fall within the category of domestic articles of a similar nature. Is the law open to constitutional objection? (pp. 559-560). The Supreme Court held that it was not.
The principle upon which local option laws, so called, have been sustained is, that while the legislature cannot delegate its power to make a law, it can make a law which leaves it to municipalities or the people to determine some fact or state of things, upon which the action of the law may depend * *
* * No reason is perceived why, if Congress chooses to provide that certain designated subjects of interstate commerce shall be governed by a rule which divests them of that character at an earlier period of time than would otherwise be the case, it is not within its competency to do so.
The framers of the Constitution never intended that the legislative power of the Nation should find itself incapable of disposing of a subject matter specifically committed to its charge. The manner of that disposition brought into determination upon this record involves no ground for adjudging the act of Congress inoperative and void (p. 562).
Accordingly, Congress may by law remove a constitutional impediment to the exercise by a State of its police powers. Later on you will note in C. S. v. Rio Grande Irrigation Co. that States ordinarily have the power to determine what shall be their water policy except,
as here, insofar as that State policy may conflict with the exercise of constitutional powers by Congress.
2. Butte City Water Co. v. Baker (196 U. S. 119. (1905)), inserted here for comparative purposes, involved a dispute between two locations on the same mining ground. Baker's location was adjuged invalid by the trial court, and its decision was affirmed by the Montana Supreme Court, on the ground of a failure to comply with certain Montana statutes. Those statutes contained regulations concerning the location of mining claims which were in addition to those prescribed by acts of Congress. Those acts of Congress, among other things, had declared all valuable mineral deposits in lands belonging to the United States to be open to explorationaccording to the local customs or rules of miners in the several mining districts so far as the same are applicable and not inconsistent with the laws of the United States (Rev. Stat. sec. 2319). Section 2322 gave the locators the exclusive right of possession and enjoyment of the surface so long as they comply with the laws of the United States, and with State. Territorial, and local regulations not in conflict with the laws of the United States govo erning their possessory title.
It was argued that the States could have no authority in the matter, because the Constitution vested in the Congress the power to dispose of the public lands. The following excerpts not only show the disposition of this argument by the Court, they show its reasoning:
Acting upon the belief that they were fully authorized, nearly all, if not all, the States in the mining regions have passed statutes prescribing additional regulations * * *
This court has in many cases recognized the validity of such State legislation * * * (p. 124).
The validity of such State legislation has been affirmed by the supreme court of several States * * *
What (then) is the ground upon which the validity of these supplementary regulations prescribed by a State is (now) challenged? It is insisted that the disposal of the public lands is an act of legislative power, and that it is not within the competency of a legislature to delegate to another body the exercise of its power; that Congress alone has the right to dispose of the public lands, and cannot transfer its authority to any State legislature or other body *** (p. 125).
* * * In other words, Congress is the body to which is given the power to determine the conditions upon which public lands shall be disposed of * * *. While the disposition of these lands is provided for by congressional legislation, such legislation savors somewhat of mere rules prescribed by an owner of property for its disposal. It is not a legislative character in the highest sense of the term, and as an owner may delegate to his principal agent the right to employ subordinates, giving them a limited discretion, so it would seem that Congress might rightfully entrust to the local legislature the determination of minor matters respecting the disposal of these lands.
Further, section 2324 distinctly grants to the miners of each mining district the power to make regulations, and the validity of this grant has been expressly affirmed by this court * * * (p. 126).
Now, if Congress has power to delegate to a body of miners the making of additional regulations respecting location, it cannot be doubted that it has equal power to delegate similar authority to a State legislature.
Finally, it must be observed that this legislation was enacted by Congress more than 30 years ago. It has been acted upon as valid through all the mining regions of the country. Property rights have been built on the faith of it. то strike it down would unsettle countless titles and work manifold injury to the great mining interests of the Far West. While, of course, consequences may not determine a decision, yet in a doubtful case the court may well pause before thereby it unsettles interests so many and so vast-interests which have been built up on the faith not merely of congressional action but also of judicial decisions of many
State coirts retaining it, and of a frequent recognition of its validity by this court. Whatever doitts might exist if this matter was wholly res integra, we hare Do berilation in boiding that the question must be considered as settled by prior adjudications and cannot now be reopened (p. 127).
3. Clark Distilling Co. v. Western Maryland R. Co. (242 U. S. 311 (1917)) involves the Webb-Kenyon Act (37 Stat. 699) which went further than the Wilson Act and in effect made interstate shipments of liquor subject to State control by specifically prohibiting shipments in violation of those laws. Congress had the power, according to the Supreme Court, to enact legislation making existing and future State prohibitions applicable. Said the Court:
* * * The mistaken assumption that the accidental considerations wbich cause a subject on the one hand to come under State control in the absence of congressional regulation, and other subjects on the contrary to be free from State control until Congress has acted, are the essential criteria by which to test the question of the power of Congress to regulate the mode in which the exertion of that power may be manifested. The two things are widely different, since the right to regulate and its scope and mode of exertion must depend upon the power possessed by Congress over the subject regulated. Following the unerring path pointed out by that great principle we can see no reason for saying that although Congress in view of the nature and character of intoxicants had a power to forbid their movement in interstate commerce, it had not the authority to so deal with the subject as to establish a regulation (which is what was done by the Webb-Kenyon law) making it impossible for one State to violate the prohibitions of the laws of another through the channels of interstate commerce. Indeed, we can see no escape from the conclusion that if we accepted the proposition urged, we would be obliged to announce the contradiction in terms that because Congress had exerted a regulation lesser in power than it was authorized to exert, therefore its action was void for excess of power. Or, in other words, stating the necessary result of the argument from a concrete consideration of the particular subject here involved, that because Congress in adopting a regulation had considered the nature and character of our dual system of government, State and Nation, and instead of absolutely prohibiting, had so conformed its regulation as to produce cooperation between the local and national forces of government to the end of preserving the rights of all, it had thereby transcended the complete and perfect power of regulation conferred by the Constitution. And it is well again to point out that this abnormal result to which the argument leads concerns a subject as to which both State and Nation in their respective spheres of authority possessed the supremest authority before the action of Congress which is complained of, and hence the argument: virtually comes to the assertion that in some undisclosed way by the exertion of congressional authority, power possessed has evaporated.
Before concluding, we come to consider what we deem to be arguments of inconvenience which are relied upon, that is, the dread expressed that the power by regulation to allow State prohibitions to attach to the movement of intoxicants lays the basis for subjecting interstate commerce in all articles to State control and therefore destroys the Constitution * * * (pp. 330-332).
4. Kentucky Whip and Collar Co. v. Illinois Central Railroad Co. (299 U. S. 334) (1937) was an application of the Ashurst-Summers Act which sought to assist States, in protecting their industry and labor, by prohibiting the shipment of convict-made goods through channels of interstate commerce into such States contrary to their laws. In line with the Webb-Kenyon [liquor] Act cases, the Supreme Court held that Congress could shape its policy in the light of the fact that this transportation in interstate commerce, if permitted, would aid in the frustration of valid State laws for the protection of persons and property. To aid the States in securing the full protection they desired, Congress brought into play its power to regulate interstate commerce (p. 349).
*** The pertinent point is that where the subject of commerce is one as to which the power of the States may constitutionally be exerted by restriction or prohibition in order to prevent harmful consequences, the Congress may, if it sees fit, put forth its power to regulate interstate commerce so as to prevent that commerce from being used to impede the carrying out of the State policy (p. 351).
The Congress in exercising the power confided to it by the Constitution is as free as the States to recognize the fundamental interests of free labor. Nor has the Congress attempted to delegate its authority to the States. The Congress has not sought to exercise a power not granted or to usurp the police powers of the States * * * (p. 352).
5. Prudential Insurance Co. v. Benjamin (328 U. S. 408 (1946)) could be said to have roots in Paul v. Virginia (8 Wall. 168 (1869)). For the purposes of this brief it can be said that the Supreme Court held that the business of insurance was not interstate commerce, Whatever its character in 1869, the Supreme Court held in U. S. v. Southeastern Underwriters Assoc. (322 U. S. 533 (1944)) that as then organized and carried on, the insurance business was interstate in character.
To prevent chaos, Congress passed a temporary law preserving the status quo under State regulation pending further study. After due deliberation, Congress passed the McCarran Act (59 Stat. 33) authorizing State regulation and taxation of the insurance business.
South Carolina thereafter imposed on out-of-State insurance companies, as a condition of doing business in South Carolina, an annual tax of 3 percent of the premiums from business done in that State. No similar tax was imposed on South Carolina companies.
Prudential insisted not only that the tax was invalid because it was discriminatory, but also that Congress could not by law validate the State regulation of commerce or the imposition of this form of taxation. Said the Court:
The commerce clause is in no sense a limitation upon the power of Congress over interstate and foreign commerce. On the contrary, it is, as Marshall declared in Gibbons v. Ogden, a grant to Congress of plenary and supreme authority over those subjects. The only limitation it places upon Congress power is in respect to what constitutes commerce, including whatever rightly may be found to affect it sufficiently to make congressional regulation necessary or appropriate. This limitation, of course, is entirely distinct from the implied prohibition of the commerce clause. The one is concerned with defining commerce, with fixing the outer boundary of the field over which the authority granted shall govern. The other relates only to matters within the field of commerce, once this is defined, including whatever may fall within the "affectation" doctrine. The one limitation bounds the power of Congress. The other confines only the powers of the States. And the two areas are not coextensive. The distinction is not always clearly observed, for both questions may and indeed at times do arise in the same case and in close relationship. But to blur them and thereby equate the implied prohibition with the affirmative endowment is altogether fallacious. There is no such equivalence (p. 423).
It is not necessary to spend much time with interpreting the McCarran Act. * * * Obviously Congress purpose was broadly to give support to the existing and future State systems for regulating and taxing the business of insurance. This was done in two ways. One was by removing obstructions which might be thought to flow from its own power, whether dormant or exercised, except as otherwise expressly provided in the act itself or in future legislation. The other was by declaring expressly and affirmatively that continued State regulation and taxation of this business is in the public interest and that the business and all who engage in it "shall be subject to” the laws of the several States in these respects.
Moreover, in taking this action Congress must have had full knowledge of the nationwide existence of State systems of regulation and taxation; of the fact that they differ greatly in the scope and character of the regulations imposed and of the taxes exacted; and of the further fact that many, if not all, include features which, to some extent, have not been applied generally to other interstate business. Congress could not have been unacquainted with these facts and its purpose was evidently to throw the whole weight of its power behind the State systems, notwithstanding these variations.
It would serve no useful purpose now to inquire whether or how far this effort was necessary, in view of the explicit reservations made in the majority opinion in the South-Eastern case. Nor is it necessary to conclude that Congress, by enacting the McCarran Act, sought to validate every existing State regulation or tax. For in all that mass of legislation must have lain some provisions which may have been subject to serious question on the score of other constitutional limitations in addition to commerce-clause objections arising in the dormancy of Congress' power. And we agree with Prudential that there can be no inference that Congress intended to circumvent constitutional limitations upon its own power.
But, though Congress had no purpose to validate unconstitutional provisions of State laws, except insofar as the Constitution itself gives Congress the power to do this by removing obstacles to State action arising from its own action or by consenting to such laws (H. Rept. No. 143, 79th Cong., 1st sess., p. 3), it clearly put the full weight of its power behind existing and future State legislation to sustain it from any attack under the commerce clausa to whatever extent this may be done with the force of that power behind it, subject only to the exceptions expressly provided for.
Two conclusions, corollary in character and important for this case, must be drawn from Congress' action and the circumstances in which it was taken. One is that Congress intended to declare, and in effect declared, that uniformity of regulation, and of State taxation, are not required in reference to the business of insurance by the national public interest, except in the specific respects otherwise expressly provided for. This necessarily was a determination by Congress that State taxes, which in its silence might be held invalid as discriminatory, do not place on interstate insurance business a burden which it is unable generally to bear or should not bear in the competition with local business. Such taxes were not uncommon among the States, and the statute clearly included South Carolina's tax now in issue.
That judgment was one of policy and reflected long and clear experience. * * *
* * * Prudential's case for discrimination must rest upon the idea either that the commerce clause forbids the State to exact more from it in taxes than from purely local business; or that the tax is somehow technically of an inherently discriminatory character or possibly of a type which would exclude or seriously handicap new entrants seeking to establish themselves in South Carolina. As to each of these grounds, moreover, the argument subsumes that Congress' contrary judgment, as a matter of policy relating to the regulation of interstate commerce cannot be effective, either “of its own force” alone or as operative in conjunction with and to sustain the State's policy.
In view of all these considerations, we would be going very far to rule that South Carolina no longer may collect her tax. To do so would flout the expressly declared policies of both Congress and the State. Moreover it would establish a ruling never heretofore made and in doing this would depart from the whole trend of decision in a great variety of situations most analogous to the one now presented. For, as we have already emphasized, the authorities most closely in point upon the problem are not, as appellant insists, those relating to discriminatory State taxes laid in the dormancy of Congress' power. They are rather the decisions which, in every instance thus far not later overturned, have sustained coordinated action taken by Congress and the States in the regulation of commerce.
The power of Congress over commerce exercised entirely without reference to coordinated action of the States is not restricted, except as the Constitution expressly provides, by any limitation which forbids it to discriminate against interstate commerce and in favor of local trade. Its plenary scope enables Congress not only to promote but also to prohibit interstate commerce, as it has done frequently and for a great variety of reasons. That power does not run down a one-way street or one of narrowly fixed dimensions. Congress may keep the way open, confine it broadly or closely, or close it entirely, subject only to the restrictions placed upon its authority by other constitutional provisions and the requirement that it shall not invade the domains of action reserved exclusively for the States.
This broad authority Congress may exercise alone, subject to those limitations, or in conjunction with coordinated action by the States, in which case limitations imposed for the preservation of their powers become inoperative and only those designed to forbid action altogether by any power of combination of powers in our governmental system remain effective. Here both Congress and South Caro