CHAPTER X.

WHAT TO DO WHEN A LICENSE IS REQUIRED.

NOT

OT infrequently a Representative going into an incorporated town or city to ply her work is confronted by the proposition that she must secure a License. She is usually intimidated with the threat that if she does not take out a License permitting her to solicit orders or make sales, she will be subjected to arrest and fine.

In a great many cases where an attempt is made to collect such license fees, the act is illegal-in others it is not. Much depends upon the peculiar manner in which you conduct your work and also in the residing place of business of the Company whom you represent.

"The laws of every state give certain municipalities and communities police power to regulate the selling of merchandise in their midst. This purpose is sometimes accomplished by a mercantile tax, by special tax upon sales, by license, or otherwise. The laws of certain states also provide that foreign corporations must register within the state before they are permitted to do business therein. There is a long line of decisions.

supporting the proposition that no foreign corporation can be compelled to register in a state unless the corporation is actually doing business within the state which seeks to require registration.

"The words 'doing business' have been interpreted to mean, in the case of a manufacturing corporation, the opening of its manufacturing establishment and the manufacture of its goods. A corporation that does not exercise its franchise power by such acts in any state other than the state of its creation is not 'doing business' in any foreign state. The selling of goods in a state outside of that in which the corporation is organized and in which it is manufacturing its goods is not 'doing business' but is engaged in Interstate Commerce." If, therefore, the company which you represent has its place of business outside the state in which license is demanded and is engaged in Interstate Commerce and is not subject to registration in the state where license is demanded, the payment of the same cannot be enforced.

"Any state has the right under its police power to pass acts regulating the commerce within its borders, provided such acts do not discriminate against the merchandise of foreign manufacturers, and provided there is no interference with Interstate Commerce, the regulation of which commerce is subject exclusively to

Federal jurisdiction. It has been definitely decided that a tax on the occupation of selling an article inported only for sale is a tax on the article itself. Any tax or duty which would be repugnant to the Constitution of the United States when levied on an article itself, is equally repugnant when imposed upon the occupation of selling that article."

If the merchandise which you are selling is manufactured outside the state in which the solicitation for order is made, you simply soliciting orders from house to house, and forwarding those orders to your House for manufacture in a state not the one in which the order was taken, then you are not amenable for any legal License violation. It is evident that the merchandise shipped to you in this way cannot be interpreted as forming an integral part of the general property of the state in which the order was taken. Besides, each separate order taken has been secured with the definite purpose in view of supplying it to a specific purchaser.

"The Supreme Court of the United States has unqualifiedly laid down the law that a representative of a foreign principal who negotiates sales by sample or otherwise from house to house making executory contracts of sale for goods manufactured in other states is engaged in Interstate Commerce and not liable for the

payment of a license tax imposed by the authority of

the state.

"The International Correspondence School of Scranton, Pa., has had this matter tested within the last two or three years in Kansas, Missouri, Wisconsin, Minnesota, Illinois, and Colorado, and in every case the court has held that the company is engaged in Interstate Commerce and as such it is not amenable to the laws and regulations of any community, relative to license."

Test cases are being constantly tried out in different territories, usually resulting in a victory for the defendant. Several months ago a Representative of the Chicago Portrait Company was arrested upon such a charge in a prominent Kansas city. A fine was imposed which he refused to pay. The authorities confined him, but he brought action against the city and won his case.

We quote herewith several test cases decided in favor of the Representative which can be of valuable use to you in interpreting the law to any local officials who may seek to frighten you into paying an unwarrantable license. Copy these so that you have them in manuscript form for instant reference, should you be molested. Defy them in the face of these established

precedents to interfere with your work, and generally they will let you alone.

The leading cases in which this decision has been made and affirmed are as follows:

Robbins vs. The Shelby County Taxing District, 120 U. S., 489 S. C., 8 Supreme Court Rep. 592.

Corson vs. Maryland, 120 U. S., 502 S. C., 7 Supreme Court Rep. 655.

Ex parte Insley, 33 Fed. Rep. 680.

Simmons Hardware Co. vs. McGuire, Second Southern Rep., 592.

State vs. Pratt, 9 Atl. Rep. 556.