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demands of such a supervision would require, not uniform legislation generally applicable throughout the United States, but a swarm of statutes only locally applicable and utterly inconsistent. Any movement toward the establishment of rules of production in this vast country, with its many different climates and opportunities, could only be at the sacrifice of the peculiar advantages of a large part of the localities in it, if not of every one of them. On the other hand, any movement toward the local, detailed and incongruous legislation required by such interpretation would be about the widest possible departure from the declared object of the clause in question. Nor this alone. Even in the exercise of the power contended for, Congress would be confined to the regulation, not of certain branches of industry, however numerous, but to those instances in each and every branch where the producer contemplated an interstate market. These intances would be almost infinite, as we have seen; but still there would always remain the possibility, and often it would be the case, that the producer contemplated a domestic market. In that case the supervisory power must be executed by the State; and the interminable trouble would be presented, that whether the one power or the other should exercise the authority in question would be determined, not by any general or intelligible rule, but by the secret and changeable intention of the producer in each and every act of production. A situation more paralyzing to the State governments, and more provocative of conflicts between the general government and the States, and less likely to have been what the framers of the Constitution intended, it would be difficult to imagine." And see Veazie v. Moor, 14 How. 568, 574. *
Contracts, combinations, or conspiracies to control domestic enterprise in manufacture, agriculture, mining, production in all its forms, or to raise or lower prices or wages, might unquestionably tend to restrain external as well as domestic trade, but the restraint would be an indirect result, however inevitable and whatever its extent, and such result would not necessarily determine the object of the contract, combination, or conspiracy.
Again, all the authorities agree that in order to vitiate a contract or combination it is not essential that its result should be a complete monopoly; it is sufficient if it really tends to that end and to deprive the public of the advantages which flow from free competition. Slight reflection will show that if the national power extends to all contracts and combinations in manufacture, agriculture, mining, and other productive industries, whose ultimate result may affect external commerce, comparatively little of business operations and affairs would be left for State control.
It was in the light of well-settled principles that the act of July 2, 1890, was framed. Congress did not attempt thereby to assert
the power to deal with monopoly directly as such; or to limit and restrict the rights of corporations created by the States or the citizens of the States in the acquisition, control, or disposition of property; or to regulate or prescribe the price or prices at which such property or the products thereof should be sold; or to make criminal the acts of persons in the acquisition and control of property which the States of their residence or creation sanctioned or permitted. Aside from the provisions applicable where Congress might exercise municipal power, what the law struck at was combinations, contracts, and conspiracies to monopolize trade and commerce among the several States or with foreign nations; but the contracts and acts of the defendants related exclusively to the acquisition of the Philadelphia refineries and the business of sugar refining in Pennsylvania, and bore no direct relation to commerce between the States or with foreign nations. The object was manifestly private gain in the manufacture of the commodity, but not through the control of interstate or foreign commerce. It is true that the bill alleged that the products of these refineries were sold and distributed among the several States, and that all the companies were engaged in trade or commerce with the several States and with foreign nations; but this was no more than to say that trade and commerce served manufacture to fulfill its function. Sugar was refined for sale, and sales were probably made at Philadelphia for consumption, and undoubtedly for resale by the first purchasers throughout Pennsylvania and other States, and refined sugar was also forwarded by the companies to other States for sale. Nevertheless it does not follow that an attempt to monopolize, or the actual monopoly of, the manufacture was an attempt, whether executory or consummated, to monopolize commerce, even though, in order to dispose of the product, the instrumentality of commerce was necessarily invoked. There was nothing in the proofs to indicate any intention to put a restraint upon trade or commerce, and the fact, as we have seen, that trade or commerce might be indirectly affected was not enough to entitle complainants to a decree. The subject-matter of the sale was shares of manufacturing stock, and the relief sought was the surrender of property which had already passed and the suppression of the alleged monopoly in manufacture by the restoration of the status quo before the transfers; yet the act of Congress only authorized the Circuit Courts to proceed by way of preventing and restraining violations of the act in respect of contracts, combinations, or conspiracies in restraint of interstate or international trade or commerce.
The Circuit Court declined, upon the pleadings and proofs, to grant the relief prayed, and dismissed the bill, and we are of opinion that the Circuit Court of Appeals did not err in affirming that decree. Decree affirmed.
PAUL v. VIRGINIA.
8 WALLACE, 168. 1868.
A statute of Virginia enacted that insurance companies of other States must, before issuing policies in Virginia, take out a license and deposit with the State Treasurer bonds to a large amount. One Samuel B. Paul, the agent of several New York companies, was convicted of issuing policies of insurance in the State without having complied with this statute. He appealed from the decision of the highest State court sustaining his conviction to the Supreme Court of the United States.
Paul claimed among other things that the Virginia statute, so far as his transactions were concerned, was unconstitutional as a regulation of interstate commerce.
MR. JUSTICE FIELD delivered the opinion of the court:
"It is undoubtedly true * * * that the power conferred upon Congress to regulate commerce, includes as well commerce carried on by corporations as commerce carried on by individuals."
There is, therefore, nothing in the fact that the insurance companies of New York are corporations, to impair the force of the argument of counsel. The defect of the argument lies in the character of their business. Issuing a policy of insurance is not a transaction of commerce. The policies are simple contracts of indemnity against loss by fire, entered into between the corporations and the assured, for a consideration paid by the latter. These contracts are not articles of commerce in any proper meaning of the word. They are not subjects of trade and barter offered in the market as something having an existence and value independent of the parties to them. They are not commodities to be shipped or forwarded from one State to another, and then put up for sale. They are like personal contracts between parties which are completed by their signature and the transfer of consideration: Such contracts are not interstate transactions, though the parties may be domiciled in different States. The policies do not take effectare not executed contracts-until delivered by the agent in Virginia. They are, then, local transactions, and are governed by the local law. They do not constitute a part of the commerce between States any more than a contract for the purchase and sale of goods in Virginia by a citizen of New York whilst in Virginia would constitute a portion of such commerce.
* * * *
We perceive nothing in the statute of Virginia which conflicts with the Constitution of the United States; and the judgment of the Supreme Court of Appeals of that State must, therefore, be Affirmed.
Note.-In Blumenstock Bros. Advertising Agency v. Curtis Publishing Co., 252 U. S. 436, (1920), the advertising agency brought an action for treble
damages under the Sherman Anti-Trust Act claiming that the publishing company refused to accept advertising matter from it unless it would allow the publishing company to control the amount of advertising it gave to other publishing companies and asserted that it had suffered $25,000 in damages. The lower court dismissed the case for want of jurisdiction. The Supreme Court affirmed the opinion of the lower court holding that there was no ground for the contention that the transactions which were the basis of the suit, concerning advertising in journals to be subsequently distributed in interstate commerce, are contracts which directly affect such commerce.
CHAMPION v. AMES.
188 U. S., 321. 1902.
The Act of Congress of March 2, 1895, prohibited the carriage of lottery tickets in the United States mails or in interstate commerce, and made it a punishable offence to introduce such tickets in the mails or in interstate commerce. Charles F. Champion violated the act by shipping a box containing two lottery tickets via the WellsFargo Express Company, from Dallas, Texas, to Fresno, California, for which offence he was indicted under the act and taken into custody by United States Marshal John C. Ames. Thereupon he sued out a writ of habeas corpus in the Circuit Court for the Northern District of Illinois, upon the ground that the act of 1895, under which it was proposed to try him was void, under the Constitution of the United States, as the carrying of lottery tickets did not constitute "commerce" among the States. The Circuit Court denied him the writ of habeas corpus, whereupon he appealed the case to the Supreme Court of the United States.
MR. JUSTICE HARLAN delivered the opinion of the majority of the court:
"It was said in argument that lottery tickets are not of any real or substantial value in themselves, and therefore are not subjects of commerce. If that were conceded to be the only legal test as to what are to be deemed subjects of commerce that may be regulated by Congress, we cannot accept as accurate the broad statement that such tickets are of no value. Upon their face they showed that the lottery company offered a large capital prize, to be paid to the holder of the ticket winning the prize at the drawing advertised to be held at Asuncion, Paraguay. Money was placed on deposit in different banks in the United States to be applied by the agents representing the lottery company to the prompt payment of prizes. These tickets were the subject of traffic; they could have been sold; and the holder was assured that the company would pay to him the amount of the prize drawn. That the holder might not have been
able to enforce his claim in the courts of any county making the drawing of lotteries illegal, and forbidding the circulation of lottery tickets, did not change the fact that the tickets issued by the foreign country represented so much money payable to the person holding them and who might draw the prizes affixed to them. Even if the holder did not draw a prize, the tickets, before the drawing, had a money value in the market among those who chose to sell or buy lottery tickets. * * We are of the opinion that lottery tickets are subjects of traffic, and therefore are subjects of commerce, and the regulation of the carriage of such tickets from State to State, at least by independent carriers, is a regulation of commerce among the several States. That under its power to regulate commerce among the several States Congresssubject to the limitations imposed by the Constitution on the exercise of the powers granted-has plenary authority over such commerce, and may prohibit the carriage of such tickets from State to State; and that legislation to that end, and of that character is not inconsistent with any limitation or restriction imposed upon the exercise of the powers granted to Congress.
The judgment of the Circuit Court quashing the writ of habeas corpus must be Affirmed.
3. When Commerce is Interstate or Foreign.
COE v. ERROL.
116 U. S., 517. 1885.
Edward S. Coe was the owner of certain logs which had been cut in New Hampshire and were deposited on the banks of the Androscoggin River in the town of Errol, New Hampshire, to be floated down stream into Maine when a convenient opportunity should arrive. The Androscoggin River starts in Maine, but, after running a distance through that State, crosses the line and runs a distance through the State of New Hampshire, and then back into the State of Maine. Coe owned certain other logs which had been cut in Maine and were being floated down this stream in New Hampshire to Lewiston, Maine, but were detained on account of low water at Errol. The town officials of Errol assessed a certain tax on all these logs while they thus remained in the town. Coe filed a petition in the State court to have the tax abated. The State court abated the tax as far as it affected the logs which had floated down the stream from Maine and were on their way to Lewiston. Coe appealed the case to the United States Supreme Court on the ground that the tax was an interference with interstate commerce.