The Illinois Community Currency Exchanges Act provides for the
licensing, inspection, bonding, and regulation of "currency
exchanges" engaged in the business of issuing or selling money
orders. It forbids them to do business on the premises of any other
business, but it exempts from all of its provisions money orders
sold or issued by the American Express Co., an old, established,
worldwide enterprise of unquestioned solvency and high financial
standing, which sells money orders through local drug and grocery
stores. Appellees, a "currency exchange" issuing and selling money
orders and its agent selling them in his own drugstore, sued to
enjoin enforcement of the Act against them on the ground of its
application of the Act to appellees denies them
the equal protection of the laws guaranteed by the Fourteenth
Amendment. Pp. 354 U. S.
(a) The Equal Protection Clause does not require that every
state regulatory statute apply to all in the same business, but a
statutory discrimination must be based on differences that are
reasonably related to the purposes of the statute. Smith v.
Cahoon, 283 U. S. 553
354 U. S.
(b) Moreover, a discrimination cannot be justified by different
business characteristics when it has no reasonable relation to
those differences. Hartford Co. v. Harrison, 301 U.
. P. 354 U. S.
(c) The discrimination in favor of the American Express Co. here
involved does not have a reasonable relation to the purposes of the
Act, or to different business characteristics. Pp. 354 U. S.
(d) The effect of the discrimination here involved is to create
a closed class by singling out American Express money orders for
exemption from the requirements of the Act. Pp. 354 U. S.
(e) The exemption of its money orders gives the American Express
Co. important economic and competitive advantages over appellees.
Pp. 354 U. S.
Page 354 U. S. 458
(f) Taking these factors in conjunction, application of the Act
to appellees deprives them of equal protection of the laws. P.
354 U. S.
(g) This case need not be remitted to the Illinois courts for a
determination whether the exception can be severed from the Act
under its severability clause, because the Supreme Court of
Illinois has indicated rather clearly that the exception is not
severable. Pp. 354 U. S.
146 F. Supp. 887 affirmed.
MR. JUSTICE BURTON delivered the opinion of the Court.
This case concerns the validity of a provision in the Illinois
Community Currency Exchanges Act, as amended, [Footnote 1
] excepting money orders of the American
Express Company from the requirement that any firm selling or
issuing money orders in the State must secure a license and submit
to state regulation. The objection raised is that this exception
results in a denial of equal protection of the laws, guaranteed by
the Fourteenth Amendment to the Constitution of the United States,
to those who are subjected to the requirements of the Act. For the
reasons hereafter stated, we hold that the Act is invalid as
applied to them because of this discriminatory exception.
The appellees in this case are Doud, McDonald and Carlson,
partners doing business as Bondified Systems,
Page 354 U. S. 459
and Derrick, their agent. The partnership has an exclusive right
to sell "Bondified" money orders in Illinois, directly or through
agents. [Footnote 2
contemplates selling these money orders in Illinois through agents
principally engaged in operating retail drug or grocery stores.
Derrick is the proprietor of a drug store in Illinois, and operates
a "Bondified" agency in that store.
Fearing enforcement against them of the provisions of the Act,
these four individuals instituted this suit in the United States
District Court for the Northern District of Illinois against the
appellants, who are the Auditor of Public Accounts of the State of
Illinois, the Attorney General of that State, and the State's
Attorney of Cook County. The complaint alleged that the Act
violated the Equal Protection Clause of the Fourteenth Amendment in
that it unlawfully discriminated against the complainants and in
favor of the American Express Company. An injunction against the
enforcement of the Act was sought. Since the complaint attacked the
validity of a state statute under the Constitution of the United
States, the case was heard by a three-judge District Court,
pursuant to 28 U.S.C. §§ 2281, 2284.
After hearing evidence, the District Court dismissed the
complaint on the ground that it lacked jurisdiction to determine
the constitutional question in the absence of an authoritative
determination of that question by the Supreme Court of Illinois.
Doud v. Hodge,
127 F. Supp. 853. On appeal, this Court
held that the District Court erred in dismissing the case for lack
of jurisdiction, and remanded it to the District Court.
350 U. S. 485
On remand, the District Court considered on the merits the
evidence previously heard, and unanimously held that
Page 354 U. S. 460
the Act violated the Equal Protection Clause, and that appellees
were entitled to the relief sought. 146 F. Supp. 887. [Footnote 3
] The decree enjoined
appellants from enforcing the Act against appellees so long as they
engage only in the business of issuing and selling money orders.
The case came here on direct appeal under 28 U.S.C. § 1253, and we
noted probable jurisdiction. Morey v. Doud,
During the early 1930's, the closing of many banks in the
Chicago area led to the development of simple banking facilities
called currency exchanges. The principal activities of these
exchanges were the cashing of checks for a fee and the selling of
money orders. The fact that many of these exchanges went into
business without adequate capital and without sufficient safeguards
to protect the public resulted in the enactment of the Illinois
Community Currency Exchanges Act in 1943.
This Act and its amendments provide a comprehensive scheme for
the licensing and regulation of currency exchanges. The operation
of a community currency exchange without a license is made a crime.
§ 32. An applicant for a license must submit specified information
and pay an investigation fee of $25. § 34. A license cannot be
issued unless the State Auditor determines that its issuance will
"promote the convenience and advantage of the community in which
the business of the applicant is proposed to be conducted. . . ." §
34.1. [Footnote 4
] A surety
bond of between $3,000 and $25,000, and an insurance policy of
between $2,500 and $35,000 must be
Page 354 U. S. 461
filed. §§ 35, 36. An annual license fee of $50 is required. §
A licensed exchange must maintain a minimum of $3,000 available
in cash for the uses and purposes of its business, plus an amount
of liquid funds sufficient to pay on demand all outstanding money
orders issued. § 37. Each exchange must be an entity, financed and
conducted as a separate business unit, and not conducted as a
department of another business. No community currency exchange
"hereafter licensed for the first time shall share any room with
any other business, trade or profession, nor shall it occupy any
room from which there is direct access to a room occupied by any
other business, trade or profession."
§ 38. Only one place of business may be maintained under one
license, although more than one license may be issued to a
licensee. § 43. Annual financial reports must be submitted, and the
State Auditor has a duty to investigate each exchange at least once
a year. A fee of $20 must be paid for each day or part thereof of
investigation. § 46.
The following definition of a "community currency exchange" is
crucial to this case:
"'Community currency exchange' means any person, firm,
association, partnership or corporation, except banks incorporated
under the laws of this State and National Banks organized pursuant
to the laws of the United States, engaged at a fixed and permanent
place of business, in the business or service of, and providing
facilities for, cashing checks, drafts, money orders, or any other
evidences of money acceptable to such community currency exchange,
for a fee or service charge or other consideration, or engaged
in the business of selling or issuing money orders under his or
their or its name, or any other money orders
United States Post Office money orders, American
Express Company money
Page 354 U. S. 462
Postal Telegraph Company money orders, or
Western Union Telegraph Company money orders), or engaged in both
such businesses, or engaged in performing any one or more of the
(Emphasis supplied.) § 31. [Footnote 5
As the activities of appellees concededly come within this
definition of a "community currency exchange," the partnership and
its druggist agent are subject to the licensing and regulatory
provisions of the Act. Consequently, since the Act bars the sale of
money orders as a part of another business, the partnership is
precluded from establishing outlets for the sale of "Bondified"
money orders in drug and grocery stores, and Derrick is unable to
secure a license for the sale of those money orders in his store. §
38. Even if the partnership establishes outlets which are not a
part of other businesses, those outlets will be licensed to sell
"Bondified" money orders only if they show that the "convenience
and advantage of the community" in which they propose to do
business will be promoted by the issuance of licenses to them. §
34.1. Finally, any "Bondified" outlets will each have to pay the
specified licensing and inspection fees, and each will have to
secure the required surety bond and insurance policy.
Page 354 U. S. 463
The American Express Company, on the other hand, because its
money orders are excepted, is relieved of these licensing and
regulatory requirements, and appears to be exempt from any
regulation in Illinois. The American Express Company, an
unincorporated joint stock association organized in 1868 under the
laws of the New York, conducts a worldwide business which includes
the sale of money orders. It sells money orders in Illinois in
substantially the same manner as is contemplated by the "Bondified"
partnership, through authorized agents located in drug and grocery
stores. Since American Express money orders are not subject to the
Act, they are sold legally in those stores as a part of their
business. American Express outlets may be established without
regard to the "convenience and advantage" of the community in which
they operate. Finally, those outlets need not pay licensing and
inspection fees, nor file surety bonds and insurance policies with
In determining the constitutionality of the Act's application to
appellees in the light of its exception of American Express money
orders, we start with the established proposition that the
"prohibition of the Equal Protection Clause goes no further than
the invidious discrimination." Williamson v. Lee Optical
Co., 348 U. S. 483
348 U. S. 489
The rules for testing a discrimination have been summarized as
"1. The equal protection clause of the Fourteenth Amendment does
not take from the State the power to classify in the adoption of
police laws, but admits of the exercise of a wide scope of
discretion in that regard, and avoids what is done only when it is
without any reasonable basis and therefore is purely arbitrary. 2.
A classification having some reasonable basis does not offend
against that clause merely because it is not make with mathematical
nicety, or because, in practice, it results in some inequality.
Page 354 U. S. 464
3. When the classification in such a law is called in question,
if any state of facts reasonably can be conceived that would
sustain it, the existence of that state of facts at the time the
law was enacted must be assumed. 4. One who assails the
classification in such a law must carry the burden of showing that
it does not rest upon any reasonable basis, but is essentially
Lindsley v. Natural Carbonic Gas Co., 220 U. S.
, 220 U. S.
To these rules we add the caution that
"Discriminations of an unusual character especially suggest
careful consideration to determine whether they are obnoxious to
the constitutional provision."
Louisville Gas & Electric Co. v. Coleman,
277 U. S. 32
277 U. S. 37
Hartford Steam Boiler Inspection & Insurance Co. v.
Harrison, 301 U. S. 459
301 U. S.
The Act creates a statutory class of sellers of money orders.
The money orders sold by one company, American Express, are
excepted from that class. There is but one "American Express
Company." If the exception is to be upheld, it must be on the basis
on which it is cast -- an exception of a particular business
entity, and not of a generic category.
The purpose of the Act's licensing and regulatory provisions
clearly is to protect the public when dealing with currency
exchanges. [Footnote 6
the American Express Company is a worldwide enterprise of
unquestioned solvency and high financial standing, the State argues
that the legislative classification is reasonable. It contends that
the special characteristics of the American Express Company justify
excepting its money orders from the requirements of an Act aimed at
local companies doing
Page 354 U. S. 465
local business, [Footnote 7
and that appellees are in no position to complain about competitive
disadvantages, since the "Fourteenth Amendment does not protect a
business against the hazards of competition," citing Hegeman
Farms Corp. v. Baldwin, 293 U. S. 163
293 U. S.
That the Equal Protection Clause does not require that every
state regulatory statute apply to all in the same business is a
truism. For example, where size is an index to the evil at which
the law is directed, discriminations between the large and the
small are permissible. [Footnote
] Moreover, we have repeatedly recognized that "reform may
take one step at a time, addressing itself to the phase of the
problem which seems most acute to the legislative mind."
Williamson v. Lee Optical Co., 348 U.
, 348 U. S. 489
On the other hand, a statutory discrimination must be based on
differences that are reasonably related to the purposes of the Act
in which it is found. [Footnote
] Smith v. Cahoon, 283 U. S. 553
involved a state statute which required motor vehicles, operating
on local highways as carriers for hire, to furnish bonds or
insurance policies for the protection of the public against
injuries received through negligence in these operations. Acts Fla.
1929 c. 13700. The Act excepted motor vehicles carrying specified
products. This Court held that
Page 354 U. S. 466
the exception violated the Equal Protection Clause, since the
statutory purpose of protecting the public could not reasonably
support a discrimination between the carrying of exempt products
like farm produce and of regulated products like groceries. "Such a
classification is not based on anything having relation to the
purpose for which it is made." Id.
at 283 U. S.
Of course, distinctions in the treatment of business entities
engaged in the same business activity may be justified by genuinely
different characteristics of the business involved. [Footnote 10
] This is so even where the
discrimination is by name. [Footnote 11
] But distinctions cannot be so justified if
the "discrimination has no reasonable relation to these
differences." Hartford Steam Boiler Inspection & Insurance
Co. v. Harrison, 301 U. S. 459
301 U. S. 463
In that case, this Court held that a state statute which permitted
mutual insurance companies to act through salaried resident
employees, but which excluded stock insurance companies from the
same privilege, violated the Equal Protection Clause.
The principles controlling in the Smith
are applicable here.
The provisions in the Illinois Act, such as those requiring an
annual inspection of licensed community currency exchanges by the
State Auditor, make it clear that the statute was intended to
afford the public continuing protection. The discrimination in
favor of the American Express Company does not conform to this
purpose. The exception of its money
Page 354 U. S. 467
orders apparently rests on the legislative hypothesis that the
characteristics of the American Express Company make it unnecessary
to regulate their sales. Yet these sales, by virtue of the
exception, will continue to be unregulated whether or not the
American Express Company retains its present characteristics. On
the other hand, sellers of competing money orders are subject to
the Act even though their characteristics are, or become,
substantially identical with those the American Express Company now
has. Moreover, the Act's blanket exception takes no account of the
characteristics of the local outlets that sell American Express
money orders, and the distinct possibility that they in themselves
may afford less protection to the public than do the retail
establishments that sell competing money orders. That the American
Express Company is a responsible institution operating on a
worldwide basis does not minimize the fact that when the public
buys American Express money orders in local drug and grocery stores
it relies in part on the reliability of the selling agents.
The effect of the discrimination is to create a closed class by
singling out American Express money orders. The singling out of the
money orders of one company is, in a sense, the converse of a case
like Cotting v. Kansas City Stock-Yards Co., 183 U. S.
, 183 U. S.
-115. See also, McFarland v. American Sugar
Refining Co., 241 U. S. 79
case this Court held that a regulatory statute
that in fact applied to only one stockyard in a State violated the
Equal Protection Clause. Although statutory discriminators creating
a closed class have been upheld, [Footnote 12
Page 354 U. S. 468
a statute which established a closed class was held to violate
the Equal Protection Clause where, on its face, it was
"an attempt to give an economic advantage to those engaged in a
given business at an arbitrary date as against all those who enter
the industry after that date."
Mayflower Farms, Inc. v. Ten Eyck, 297 U.
, 297 U. S. 274
The statute involved in that case granted a differential from the
regulated price at which dealers could sell milk to those dealers
in a specified class who were in business before April 10,
Unlike the American Express Company, appellees and others are
barred from selling money orders in retail establishments. Even if
competing outlets can successfully be established as separate
businesses, their ability to secure licenses depends upon a showing
of "convenience and advantage." Perhaps such a showing could not be
made because the unregulated American Express Company had already
established outlets in the community. And even if licenses were
secured, the licensees would be required to pay licensing and
investigatory fees and purchase surety bonds and insurance policies
-- costs that the American Express Company and its agents are not
required to bear. [Footnote
] The fact that the activities of the American Express
Company are far-flung does not minimize the impact on local affairs
and on competitors of its sale of money orders in Illinois. This is
not a case in which the Fourteenth Amendment is being invoked to
protect a business from the general hazards of competition.
Page 354 U. S. 469
The hazards here have their roots in the statutory
Taking all of these factors in conjunction -- the remote
relationship of the statutory classification to the Act's purpose
or to business characteristics, and the creation of a closed class
by the singling out of the money orders of a named company, with
accompanying economic advantages -- we hold that the application of
the Act to appellees deprives them of equal protection of the laws.
The State urges that, if the exception of American Express money
orders is unconstitutional, the case should be remitted to the
Illinois courts for a determination whether the exception can be
severed from the Act under its severability clause. § 56.3.
However, even if such
Page 354 U. S. 470
a procedure is otherwise appropriate, [Footnote 15
] we doom it unnecessary here, since the
Supreme Court of Illinois has indicated rather clearly that the
exception is not severable. [Footnote 16
] The State also contends that appellees do
not come into court with clean hands and have not demonstrated the
imminence of irreparable injury, and hence that they are not
entitled to equitable relief. These arguments are adequately
disposed of in the opinion of the District Court. [Footnote 17
The judgment of the District Court is affirmed.
Ill.Rev.Stat.1955, c. 16 1/2, §§ 30-56.3.
The registered trademark "Bondified" is owned by Checks,
Incorporated, a Minnesota corporation, and the partnership,
Bondified Systems, has acquired an exclusive license to use that
trademark in selling and issuing money orders.
In so holding, the District Court declined to follow the Supreme
Court of Illinois in sustaining the Act against a similar attack.
McDougall v. Lueder,
389 Ill. 141, 58 N.E.2d 899. It
accepted instead the precedent of a three-judge Federal District
Court in Wisconsin which had held unconstitutional an identical
provision of a Wisconsin statute. St.1947, § 218.05. Currency
Services, Inc., v. Matthews, 90 F.
See Gadlin v. Auditor of Public
Accounts, 414 Ill. 89
Appellees do not question the exception from the Act of the
money orders of the United States Post Office, the Postal Telegraph
Company, and the Western Union Telegraph Company. In Currency
Services, Inc. v. Matthews, 90 F. Supp.
, 43, a three-judge District Court upheld the exception of
these money orders from a similar Wisconsin statute. The court
concluded that the State was without authority to regulate the sale
of the United States Post Office money orders, and that the
exception of Western Union money orders was reasonable, since that
company was regulated both by the Federal Communications Commission
and by a state commission. It noted that the Postal Telegraph
Company has merged with the Western Union Telegraph Company.
See McDougall v. Lueder,
389 Ill. 141, 149-150, 58
N.E.2d 899, 903-904; Willis v. Fidelity & Deposit Co.,
345 Ill.App. 373, 384-385, 103 N.E.2d 513, 518-519.
See McDougall v. Lueder,
389 Ill. 141, 151, 58 N.E.2d
See Engel v. O'Malley, 219 U.
, 219 U. S. 138
(exception of businesses in which the average sum received for
safekeeping or transmission was more than $500 from licensing
requirements intended to protect the small depositor); see also
New York, N.H. & H. R. Co. v. New York, 165 U.
(exception of railroads less than 50 miles in
length from a statute regulating the heating of railroad passenger
cars and the placing of guards and guard posts on railroad
bridges); Miller v. Strahl, 239 U.
(exception of hotels with less than 50 rooms from
a statute requiring hotelkeepers to take certain fire
See F. S. Royster Guano Co. v. Virginia, 253 U.
, 253 U. S. 415
Louisville Gas & Electric Co. v. Coleman, 277 U. S.
, 277 U. S.
See German Alliance Ins. Co. v. Lewis, 233 U.
(exception of farmers' mutual insurance companies
doing only farm business from a statute establishing rate
regulation for fire insurance companies); Hoopeston Canning Co.
v. Cullen, 318 U. S. 313
(different regulatory requirements for reciprocals and mutual
See Erb v. Morasch, 177 U. S. 584
(exception of a named railroad from an ordinance limiting the speed
of trains in a city); cf. Williams v. Mayor, 289 U. S.
See Watson v. Maryland, 218 U.
(exception of physicians who practiced prior to a
specified date and treated at least 12 persons within a year prior
thereto from examination and certificate requirements); Sampere
v. New Orleans,
166 La. 776, 117 So. 827, aff'd per
279 U.S. 812 (exception of existing business
establishments from a zoning restriction); Stanley v. Public
Utilities Commission, 295 U. S. 76
(exception of carriers which had furnished adequate, responsible
and continuous service over a given route from a specified date in
the past from the requirement of showing public convenience and
necessity to secure a license).
See Currency Services, Inc. v. Matthews, 90 F. Supp.
, 44, note 2, to the effect that costs such as these may be
In Wedesweiler v. Brundage,
297 Ill. 228, 130 N.E. 520,
the Supreme Court of Illinois held that the Equal Protection Clause
was violated by a statute which excepted express, steamship and
telegraph companies from its prohibition against the transmission
of money to foreign countries by natural persons, firms or
partnerships. That court concluded that the discrimination
"has no reference to character, solvency, financial
responsibility, security, business or monetary facilities,
incorporation, method of doing business, public inspection,
supervision or report, or any other thing having any relation to
the protection of the public from loss by reason of the dishonesty,
incompetence, ignorance or irresponsibility of persons engaging in
297 Ill. at 237, 130 N.E. at 523. See also State on inf. of
Taylor v. Currency Services, Inc.,
358 Mo. 983, 218 S.W.2d
case was distinguished by the Supreme
Court of Illinois in McDougall v. Lueder,
389 Ill. 141,
150, 58 N.E.2d 899, 904, on the ground that in the earlier case the
regulated firms were "in direct competition" with the excepted
companies. Apparently the court treated the regulated firm in the
case as not being in direct competition with the
American Express Company, since the firm was engaged in the
business of cashing checks, as well as in that of selling money
orders, while the American Express Company merely sold money
orders. Such a distinction is not involved in the facts of this
case, and we express no opinion on it.
See Guinn v. United States, 238 U.
, 238 U. S. 366
Myers v. Anderson, 238 U. S. 368
238 U. S.
-381; Dorchy v. Kansas, 264 U.
, 264 U. S.
In McDougall v. Lueder,
389 Ill. 141, 151, 58 N.E.2d
899, 904, the Supreme Court of Illinois stated that
"The General Assembly would surely never have passed the act if
they had thought that the said companies [Western Union, Postal
Telegraph and American Express] would be made subject to its rules
This statement takes on added significance in the light of the
court's ruling in the same case that another provision of the Act,
which it held invalid, could be severed since "there is no
presumption that the General Assembly would not have enacted the
remainder of the statute without" the invalid provision. 389 Ill.
at 155, 58 N.E.2d at 906.
As the question of severability is a question of state law, the
judgment of the Supreme Court of Illinois is binding here. See
Dorchy v. Kansas, 264 U. S. 286
264 U. S. 290
Chas. Wolff Packing Co. v. Court of Industrial Relations,
267 U. S. 552
267 U. S.
See Doud v. Hodge,
146 F. Supp. 887, 889-890.
MR. JUSTICE BLACK, dissenting.
The Illinois statute involved here provides a statewide
regulatory plan to protect the public from irresponsible and
insolvent sellers of money orders. The Act specifically exempts the
American Express Company's money orders from its regulatory
provisions because, as the Court recognizes, that company "is a
Page 354 U. S. 471
of unquestioned solvency and high financial standing." I cannot
agree with the Court that this exemption denies actual and
potential competitors of the American Express Company equal
protection of the laws within the meaning of the Fourteenth
Amendment. Only recently, this Court held that "[t]he prohibition
of the Equal Protection Clause goes no further than the invidious
discrimination." Williamson v. Lee Optical of Oklahoma,
Inc., 348 U. S. 483
348 U. S. 489
And here, whatever one may think of the merits of this legislation,
its exemption of a company of known solvency from a solvency test
applied to others of unknown financial responsibility can hardly be
called "invidious." Unless state legislatures have power to make
distinctions that are not plainly unreasonable, then the ability of
the States to protect their citizens by regulating business within
their boundaries can be seriously impaired. I feel it necessary to
express once again my objection to the use of general provisions of
the Constitution to restrict narrowly state power over state
domestic economic affairs. [Footnote
I think state regulation should be viewed quite differently
where it touches or involves freedom of speech, press, religion,
petition, assembly, or other specific safeguards of the Bill of
Rights. It is the duty of this Court to be alert to see that these
constitutionally preferred rights are not abridged. [Footnote 2/2
] But the Illinois statute
Page 354 U. S. 472
does not involve any of these basic liberties. And since I
believe that it is not "invidiously discriminatory," I would not
hold it invalid.
my dissents in H. P. Hood & Sons v.
Du Mond, 336 U. S. 525
336 U. S.
-564; Magnolia Petroleum Co. v. Hunt,
320 U. S. 430
320 U. S. 462
Adamson v. California, 332 U. S. 46
332 U. S. 79
Cf. Tigner v. Texas, 310 U. S. 141
American Sugar Refining Co. v. Louisiana, 179 U. S.
, 179 U. S. 92
16 Wall. 36, 83 U. S.
Schneider v. State, 308 U. S. 147
308 U. S. 161
my dissenting opinions in Beauharnais v.
Illinois, 343 U. S. 250
343 U. S. 267
and Feldman v. United States, 322 U.
, 322 U. S. 494
Cf. Kotch v. Board of River Port Pilot Comm'rs,
330 U. S. 552
330 U. S. 556
and my concurring opinion in Oyama v. California,
332 U. S. 633
332 U. S.
MR. JUSTICE FRANKFURTER, whom MR. JUSTICE HARLAN joins,
The sole question before the Court is whether the Fourteenth
Amendment of the United States Constitution, in prohibiting a State
from denying any person "the equal protection of the laws," has
barred Illinois from formulating its domestic policy as it did in
an area concededly within the regulatory power of that State. As is
usually true of questions arising under the Equal Protection
Clause, the answer will turn on the way in which that clause is
conceived. It is because of differences in judicial approach that
the divisions in the Court in applying the clause have been
frequent and marked. It is, I believe, accurate to summarize the
matter by saying that the great divide in the decisions lies in the
difference between emphasizing the actualities or the abstractions
The more complicated society becomes, the greater the diversity
of its problems and the more does legislation direct itself to the
diversities. Statutes, that is, are directed to less than universal
situations. Law reflects distinctions that exist in fact or at
least appear to exist in the judgment of legislators -- those who
have the responsibility for making law fit fact. Legislation is
essentially empiric. It addresses itself to the more or less crude
outside world, and not to the neat, logical models of the mind.
Classification is inherent in legislation; the Equal Protection
Clause has not forbidden it. To recognize marked differences that
exist in fact is living law; to disregard practical differences and
concentrate on some abstract identities is lifeless logic.
Page 354 U. S. 473
The controlling importance of the difference in approach to a
problem arising under the Equal Protection Clause is sharply
illustrated by one's view of the decisions in cases like
Louisville Gas & Electric Co. v. Coleman, 277 U. S.
, and Hartford Steam Boiler Inspection &
Insurance Co. v. Harrison, 301 U. S. 459
Court relies on them. For me, they are false leads. Both these
decisions prevailed by the narrowest margin; both evoked powerful
dissents; both manifest the requirement of nondiscriminatory
classification as an exercise in logical abstractions. They breathe
the spirit of decisions like Connolly v. Union Sewer Pipe
Co., 184 U. S. 540
Colgate v. Harvey, 296 U. S. 404
which were respectively overruled in Tigner v. Texas,
310 U. S. 141
Madden v. Kentucky, 309 U. S. 83
last two cases heeded the admonition that
"it is important for this court to avoid extracting from the
very general language of the Fourteenth Amendment a system of
delusive exactness. . . ."
Louisville and Nashville R. Co. v. Barber Asphalt Co.,
197 U. S. 430
197 U. S.
In regulating its banking facilities, Illinois was drawing on
one of the oldest and most far-reaching of legislative powers. The
public needs to be protected in the issuing and selling of money
orders, and people with limited means are especially to be
safeguarded. If Illinois chose, the State itself could take over
the money order business. See Noble State Bank v. Haskell,
219 U. S. 104
219 U. S. 113
Just as it was found that there was nothing in the Constitution of
the United States to bar a State from engaging in the businesses of
manufacturing and marketing farm products and of providing homes
for its people, Green v. Frazier, 253 U.
, so, surely, there is nothing to prevent Illinois
from engaging in this business directly, or through a money
dispensary similar to the mode by which some States engage in the
liquor business. I know of nothing in the Fourteenth Amendment that
would bar the State from discharging its responsibility to
Page 354 U. S. 474
its citizens by having the business conducted by what the Court
recognizes to be "a worldwide enterprise of unquestioned solvency
and high financial standing," to-wit, the American Express Co.
I regretfully find myself unable to appreciate why the State,
instead of thus dealing with the problem, may not choose to allow
small units to carry on a business so fraught with public interests
under the regulations devised by the statute under review, while at
the same time it finds such measures of control needless in a case
of "a worldwide enterprise of unquestioned solvency and high
financial standing." The rational differentiation is, of course,
that the latter enterprise contains within itself, in the judgment
of Illinois, the necessary safeguards for solvency and reliability
in issuing money orders and redeeming them. Surely this is a
distinction of significance in fact that the law cannot view with a
But it is suggested that the American Express Co. may not
continue to retain "its present characteristics," while sellers of
competing money orders may continue to be subject to the Act, even
though their characteristics become "substantially identical with
those the American Express Co. now has." What is this but to deny a
State the right to legislate on the basis of circumstances that
exist because a State may not, in speculatively different
circumstances that may never come to pass, have such right? Surely
there is time enough to strike down legislation when its
constitutional justification is gone. Invalidating legislation is
serious business, and it ought not to be indulged in because, in a
situation not now before the Court nor even remotely probable, a
valid statute may lose its foundation. The Court has had occasion
to deal with such contingency more than once. Regulatory measures
have been sustained that later, in changed circumstances, were
found to be unconstitutional. Compare Willcox v. Consolidated
Gas Co., 212 U. S. 19
Page 354 U. S. 475
with Newton v. Consolidated Gas Co., 258 U.
, and Block v. Hirsh, 256 U.
, with Chastleton Corp. v. Sinclair,
264 U. S. 543
"Legislation which regulates business may well make distinctions
depend upon the degree of evil."
Heath & Milligan Mfg. Co. v. Worst, 207 U.
, 207 U. S.
-356. It is true, no doubt, that, where size is not
an index to an admitted evil, the law cannot discriminate between
the great and small. But, in this case, size is an index.
Engel v. O'Malley, 219 U. S. 128
219 U. S. 138
Neither the record nor our own judicial information affords any
basis for concluding that Illinois may not put the United States
Post Office, the Western Union Co., and the American Express Co. in
one class and all the other money order issuers in another.
Illinois may not the less relieve the American Express Co. from
regulations to which multitudinous small issuers are subject
because that company has its own reliabilities that may well be
different from those of the United States Post Office and the
Western Union Telegraph Co. The vital fact is that the American
Express Co. is decisively different from those money order issuers
that are within the regulatory scheme.
Sociologically, one may think what one may of the State's
recognition of the special financial position obviously enjoyed by
the American Express Co. Whatever one may think is none of this
Court's business. In applying the Equal Protection Clause, we must
be fastidiously careful to observe the admonition of Mr. Justice
Brandeis, Mr. Justice Stone, and Mr. Justice Cardozo that we do not
"sit as a super-legislature." (See
opinion in the ill-fated case of Colgate v. Harvey,
296 U. S. 404
296 U. S. 441
See also Asbury Hospital v. Cass County, 326 U.
, 326 U. S.