as the whole or a part of the liquor produced was to be sent out of the state, its manufacture was one step in a transaction of interstate commerce. The Court refused to take this view, saying:

"We think the construction contended for by plaintiff in error would extend the words of the grant to Congress, in the Constitution, beyond their obvious import, and is inconsistent with its objects and scope. The language of the grant is: 'Congress shall have power to regulate commerce with foreign nations and among the several states,' etc. The words are used without any veiled or obscure signification. * *

"No distinction is more popular to the common mind, or more clearly expressed in economic and political literature, than that between manufactures and commerce. Manufacture is transformation-the fashioning of raw materials into a change of form for use. The functions of commerce are different. The buying and selling and transportation incidental thereto constitute commerce."

A contract entered into for the erection of a factory to be supervised and operated by the officers of a foreign corporation is not a transaction of interstate commerce in the constitutional sense, merely because of the fact that the products of the factory are largely sold and shipped to other localities.31

But where the contract for the making of an article calls for its delivery in another state, the transaction is one of interstate commerce.32 So, also, a shipment of merchandise C. O. D. from one state into another constitutes interstate commerce."

31 Diamond Glue Co. vs. U. S.

Glue Co., 103 Fed. Rep., 838
affirmed, 187 U. S., 611.

33 Addyston Pipe, etc., Co. vs.
United States, 175 U. S., 246.

"American Express Company vs. Iowa, 196 U. S., 143, reversing 118 Iowa, 447.

A State tax on money or exchange brokers is not in violation of the powers of Congress. This is true even in the case of a broker who deals exclusively in foreign bills of exchange. Foreign bills of exchange are instruments of commerce, but, not more so than are the products of agriculture or manufactures, over which the taxing power of a state extends until they are separated from the general mass of property by becoming exports.34

The power of the United States over commerce will not be allowed to invalidate state laws passed for the prevention of fraud.35

SECTION 70. THE POWER OF THE STATES OVER INTERSTATE COMMERCE.

The question more than on any other on which the respective powers of the Federal and State governments, has been the subject of litigation-has been that of the extent of the authority of each in the regulation of commerce. As above stated, the famous commerce clause of the Constitution gives Congress the power: "To regulate commerce with foreign nations and among the several states, and with the Indian tribes." This provision has never been held to entirely prohibit the states from making commercial regulations. The right of the states to completely regulate all commerce confined within its own limits, has never been disputed. On the other hand, it has been conceded that the power of Congress over

"Nathan vs. Louisiana, 8 Howard,

73.

"Plumbey vs. Massachusetts, 155

U.S., 461. This was an oleomar-
garine case, and the decision has
been criticised as being opposed
to the doctrine as laid down in
Leisy vs. Hardin, and as rest-

ing upon discrimination rather than law. For other oleomargarine cases, see, Schallenberger vs. Pennsylvania, 171 U. S., 1; Collins vs. New Hampshire, 121 U. S., 30; Powell vs. Pennsylvania, 127 U. S., 678.

interstate commerce is supreme. The doubtful border line has been created by the question whether the states could, in any instance, legislate on questions of interstate commerce, if such legislation did not conflict with any Federal statute.

SECTION 71. GIBBONS VS. OGDEN.

Gibbons vs. Ogden was the first case to come before the Supreme Court of the United States, which involved the question as to whether the federal power over interstate commerce was exclusive or only concurrent. This case grew out of the action of the Legislature of the State of New York in granting to Robert L. Livingston and Robert Fulton, the exclusive right of navigation in all the waters within the jurisdiction of the State, with boats moved by fire or steam, and authorizing the courts of the State to award an injunction to re

strain any other person whatever for navigating such

waters with boats of this description. This act was assailed by the appellant in the case as unconstitutional, as being in violation of the power of Congress over the interstate commerce. The decision of the particular question involved in this case was not a difficult one. In spite of the decision of the highest court of the State of New York, awarding the injunction asked against the infringement of this monopoly, it was very evident that if a State could pass laws of this character, the control of Congress over interstate commerce was a myth. The Supreme Court decided that the act of the State of New York was unconstitutional as infringing the power of Congress over interstate commerce. The simplicity of the decision of the point at issue in the case seems to have encouraged the Court to lay down 30 9 Wheaton, 1, decided 1824.

a sweeping generalization on the supremacy of Congress over all cases of interstate commerce. In their dicta in this case the Supreme Court took a position which, after occasioning trouble to the Supreme Court in later cases, finally had to be abandoned in part. The general principle here laid down was that the power of Congress over interstate commerce was not only supreme, but exclusive, and that any state legislation on the subject, even if only referring to points which had not been legislated upon by Congress, was therefore an infringement of the powers of Congress and unconstitutional.

SECTION 72. LATER CASES.

37

The position taken in Gibbons vs. Ogden, was soon reiterated in the case of Brown vs. Maryland," which decision involved the constitutionality of a statute of the State of Maryland imposing a license tax upon importers, for the privilege of selling imported goods. The Supreme Court decided this statute to be unconstitutional as violating two provisions in the Constitution, first, the clause that "no State shall, without the consent of Congress, lay any imposts, or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws;" and second, the clause giving Congress power over interstate commerce. The decision in this case is partially based upon the assumed fact that the commercial power is exclusive in Congress, even in cases where Congress had failed to exercise this power by legislating on the subject in question.

Only two years after the decision in Brown vs. Maryland, a case was presented to the Supreme Court * 12 Wheaton, 419, decided 1827.

which compelled that body to render a decision, which cannot be harmonized with the dicta in Gibbons vs. Ogden. This case of Willson vs. Blackbird Creek Marsh Company,38 involved the validity of a law of Delaware, authorizing the erection of a dam across Blackbird Creek, a small stream entirely within the territorial limits of the State of Delaware. There was no act of Congress which related to the subject. Chief Justice Marshall, in the course of his decision, said: "If Congress had passed an act which bore upon the case, any act in execution of the power to regulate commerce, the object of which was to control State legislation over those small navigable creeks into which the tide flows, and which abound throughout the lower country of the middle and southern states; we should feel not much difficulty in saying that a State law coming in conflict with such act would be void. But Congress has passed no such act. The repugnancy of the law of Delaware to the Constitution is placed entirely on its repugnancy to the power to regulate commerce with foreign nations and among the several states; a power which has not been so exercised as to affect the question.

"We do not think that the act empowering the Blackbird Creek Marsh Company to place a dam across the creek can, under all the circumstances of the case be considered as repugnant to the power to regulate commerce in its dormant state, or as being in conflict with any law passed on the subject."

The effect of this decision upon that in Gibbons vs. Ogden, has been the occasion of much dispute. No reference is made in the latter decision to the former one and the presumption would seem to be that the 2 Peters, 245, decided 1829.