1. A municipal ordinance requiring that every person who goes
from place to place taking orders for goods for future delivery and
receives payment or any deposit of money in advance shall
Page 268 U. S. 326
a license by paying: a fee and filing a bond conditioned to make
final delivery of ordered goods held
interference with interstate commerce as applied to the solicitors
of a corporation engaged in manufacturing goods in another state
and selling them direct to consumers on orders taken by the
solicitors and sent to the home office of the corporation, the
customers making advance deposits which were retained by the
solicitors as their sole competition and were credited to the
customers on account of their purchases. P. 268 U. S.
2. An expressed purpose to prevent possible frauds is not enough
to justify legislation which really interferes with the free flow
of legitimate interstate commerce. P. 268 U. S. 336
297 F. 897 reversed.
Appeal from a decree of the circuit court of appeals which
affirmed a decree of the district court dismissing the bill in a
suit brought by the appellant corporation to enjoin the enforcement
of a city ordinance requiring its salesmen to take out licenses and
file bonds for security of customers.
Page 268 U. S. 334
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
Appellant is an Illinois corporation engaged in manufacturing
silk hosiery at Indianapolis, Indiana, and selling it throughout
the United States to consumers only. It employs duly accredited
representatives in many states who go from house to house
soliciting and accepting orders. When a willing purchaser is found,
the solicitor fills out and signs in duplicate a so-called "order
blank." This obligates appellant to make delivery of the specified
goods and, among other things, states:
"The mills require a deposit of $1.00 [or other specified sum]
on each box listed below. Your hosiery will be mailed you by parcel
post c.o.d., direct from the post office branch in our mills. Pay
the balance to the postman. As the entire business of the Real Silk
Hosiery Mills is conducted on the parcel post c.o.d. basis, our
representative cannot accept your order unless the deposit is made.
We do not accept full payment in advance. Do not pay more than
One of the copies is left with the purchaser; the other is first
sent to the local sales manager and then forwarded to the mills at
Indianapolis. In response thereto, the goods are packed and shipped
by parcel post c.o.d. direct to the purchaser. The solicitor
retains the cash deposit, and this constitutes his entire
The appellant employs 2,000 representatives who solicit in most
of the important cities and towns
Page 268 U. S. 335
throughout the Union, and has built up a very large business --
$10,000,000 per annum. Twenty operate in Portland, Oregon.
May 16, 1923, that city passed an ordinance which requires that
every person who goes from place to place taking orders for goods
for future delivery and receives payment or any deposit of money in
advance shall secure a license and file a bond. The license fee is
$12.50 quarterly for each person on foot and $25 if he uses a
vehicle. The bond must be in the penal sum of $500 and conditioned
to make final delivery of ordered goods, etc.
By a bill filed in the United States District Court for Oregon,
appellant challenged the ordinance and asked that its enforcement
be restrained upon the ground, among others, that it interferes
with and burdens interstate commerce and is repugnant to Art. I, §
8, federal Constitution. The trial court upheld the enactment and
sustained a motion to dismiss the bill. This was affirmed by the
circuit court of appeals. 297 F. 897.
Considering former opinions of this Court, we cannot doubt that
the ordinance materially burdens interstate commerce and conflicts
with the commerce clause. Robbins v. Shelby Taxing
District, 120 U. S. 489
120 U. S. 497
Brennan v. Titusville, 153 U. S. 289
Rearick v. Pennsylvania, 203 U. S. 507
Crenshaw v. Arkansas, 227 U. S. 389
Texas Transport Co. v. New Orleans, 264 U.
; Alpha Portland Cement Co. v.
Massachusetts, 268 U. S. 203
"The negotiation of sales of goods which are in another state,
for the purpose of introducing them into the state in which the
negotiation is made, is interstate commerce."
Manifestly, no license fee could have been required of
appellant's solicitors if they had traveled at its expense and
received their compensation by direct remittances from it. And we
are unable to see that the burden on interstate
Page 268 U. S. 336
commerce is different or less because they are paid through
retention of advance partial payments made under definite contracts
negotiated by them. Nor can we accept the theory that an expressed
purpose to prevent possible frauds is enough to justify legislation
which really interferes with the free flow of legitimate interstate
commerce. See Shafer v. Farmers' Grain Co., 268 U.
. The decree of the court below must be reversed.
The cause will be remanded to the district court for further
proceedings in harmony with this opinion.