The act of the Legislature of Kentucky of March 2, 1860, "to
regulate agencies of foreign express companies," which provides
that the agent of an express company not incorporated by the laws
of that state shall not carry on business there without first
obtaining a license from the state, and that preliminary thereto he
shall satisfy the auditor of the state that the company he
represents is possessed of an actual capital of at least $150,000,
and that if he engages in such business without license he shall be
subject to fine, is a regulation of interstate commerce so far as
applied to a corporation of another state engaged in that business,
and is to that extent repugnant to the Constitution of the United
States.
The case was stated by the Court as follows:
This case arose at Frankfort, Franklin County, Kentucky, upon an
indictment found against Crutcher, the plaintiff in error, in the
Franklin Circuit Court, for acting and doing business as agent for
the United States Express Company, alleged to be an express company
not incorporated by the laws of Kentucky, but trading and doing
business as a common carrier by express of goods, merchandise,
money, and other things of value in and through the county and
state aforesaid, without having any license so to do either for
himself or the
Page 141 U. S. 48
company. Crutcher, being arrested and brought before the court,
tendered a special plea setting forth the facts with regard to his
employment and the business of the company, and, among other
things, that said company was a joint-stock company, incorporated
and having its principal office in the City of New York in the
State of New York, which plea was refused. He then pleaded not
guilty, and the parties filed an agreed statement of facts, and by
consent the matters of law and fact were submitted to the court,
and the defendant was found guilty and sentenced to pay a fine of
one hundred dollars and the costs of prosecution. The agreed
statement of facts was as follows:
"It is agreed that the defendant is agent of the United States
Express Co., a foreign corporation doing the business ordinarily
done by express companies in this country, of carrying goods and
freight for hire not only from points in this state to other points
in this state, but also of carrying same character of freight from
points within this state to points without this state, in divers
parts of the United States and vice versa. And defendant, agent at
Frankfort, Kentucky, never obtained any license to do such
business, nor did said express company obtain any license from the
State of Kentucky. The proportion of business done by the said
company within and without this state for the month of November,
1888, is shown by a statement herewith filed, market 'X,' and the
same proportion of business within and without this state,
approximately, is generally done by said company."
The detailed statement referred to, market "X," showed the total
amount of business done by the company at the Frankfort office in
November, 1888, to have been $226.71, of which $56.14, or not quite
one-fourth of the whole, was business done entirely within the
state, and the remainder, $170.57, was done partly within and
partly without the state -- that is, the goods were brought into
the state from places without the state, or were carried from the
state to places without the state. Of course, the latter, or
largest, portion was comprised within the category of interstate
commerce. The defendant upon these facts moved for a new trial,
Page 141 U. S. 49
which was refused, and also for an arrest of judgment, which was
denied, and a bill of exceptions was taken. The case was then
appealed to the Court of Appeals of Kentucky, and the judgment was
affirmed. The ground taken for reversing the judgment was that the
statute of Kentucky under which the indictment was found was
repugnant to the power given to Congress by the Constitution of the
United States to regulate commerce among the several states.
The law in question was passed in 1860, and is as follows:
"An act to regulate agencies of foreign express companies:"
"SECTION 1.
Be it enacted by the General Assembly of the
Commonwealth of Kentucky that it shall not be lawful after the
first day of May, 1860, for any agent of any express company not
incorporated by the laws of this commonwealth to set up, establish,
or carry on the business of transportation in this sate without
first obtaining a license from the auditor of public accounts to
carry on such business."
"SEC. 2. Before the auditor shall issue such license to any
agent of any company incorporated by any state of the United
States, there shall be filed in his office a copy of the charter of
such company, and a statement made, under oath of its president or
secretary showing its assets and liabilities and distinctly showing
the amount of its capital stock, and how the same has been paid,
and of what the assets of the company consist, the amount of losses
due and unpaid by said company, if any, and all other claims
against said company or other indebtedness, due or not due, and
such statement shall show that the company is possessed of an
actual capital of at least $150,000, either in cash or in safe
investment, exclusive of stock notes. Upon the filing of the
statement above provided and furnishing the auditor with
satisfactory evidence of such capital, it shall be his duty to
issue license to such agent or agents as the company may direct to
carry on the business of expressing or transportation in this
state."
"SEC. 3. Before the auditor shall issue license to any agent of
any express or transportation company incorporated by any
Page 141 U. S. 50
foreign government or any association or partnership acting
under the laws of any foreign government, there shall be filed in
his office a statement setting forth the act of incorporation or
charter, or the articles of association, or bylaws under which they
act, and setting forth the matters required by the preceding
section of this act to be specified, and satisfactory evidence
shall be furnished to the auditor that such company has on deposit
in the United States, or has invested in the stock of some one or
more of the United States, or in some safe dividend paying stocks
in the United States, the sum of $150,000, which statement shall be
verified by the oath of the president of such company, its general
agent in the United States, or the agent applying for such license,
and upon the due filing of such statement and furnishing the
auditor with satisfactory evidence of such deposit or in vestment,
it shall be his duty to issue such license to the agent or agents
applying for the same."
"SEC. 4. The statements required by the foregoing sections shall
be renewed in each year thereafter either in the months of January
or July, and the auditor, on being satisfied that the capital or
deposit, consisting of cash securities or investments as provided
in this act, remain secure to the amount of $150,000, shall renew
such license."
"SEC. 8. Any person who shall set up, establish, carry on, or
transact any business for any transportation or express company not
incorporated by the law of this state without having obtained
license as by this act required, or who shall in any way violate
the provisions of this act shall be fined for every such offense
not less than one hundred nor more than five hundred dollars, at
the discretion of a jury, to be recovered as like fines in other
cases."
"SEC. 9. For any license issued by the auditor under this act,
and for each renewal thereof, he shall be allowed the sum of $2.50,
to be paid by the agent or company taking out such license."
An amendatory act passed in 1866 raised the license fee to $5,
and imposed a fee of $5 for filing copy of charter, and $10 for
filing an original or annual
Page 141 U. S. 51
statement. The Supreme Court of Kentucky, in disposing of the
case, gave the following opinion (
Crutcher v.
Commonwealth, 12 S.W. 141):
"It seems to us that the case of
Woodward v.
Commonwealth, 7 S.W. 613, in which the statute appears in
full, decided by this Court at its last term, determines the
question now presented. Counsel for the appellant now claims that
the statute of this state is invalid, as its effect is to regulate
commerce among the several states. The agent of the express company
was fined for not paying to the auditor a fee of five dollars, or
rather for failing to take out a license required by the act
regulating the agencies of foreign express companies, passed in
March, 1860, and amended by the act of 1866. That the company of
which the appellant is agent is a corporation created by the laws
of New York, doing business in this state as a carrier of goods,
wares, and merchandise, is conceded, and that it transports goods,
etc., out of the state into other states, and all other species of
property usually incident to such transportation, is admitted, both
into the state and out of it. It appears that at least fifty
percent of the business done by this agent consists in the carrying
of goods from the place of his agency, Frankfort, to other states.
That the carrying and transportation of goods from one state to
another is a branch of interstate commerce is not controverted, but
it is claimed that there is nothing in the legislation imposing on
those who desire to act as the agents of this foreign corporation
the burden of paying to the auditor the fee of five dollars for
recording his agency, or, rather, for issuing him his license to
act as such. \"
"The statute was enacted for the benefit of the citizens of the
state, under which the auditor is required to have satisfactory
evidence of the ability and solvency of the corporation to do that
which it has undertaken to do by virtue of its act of
incorporation. Those who entrust to its custody the transportation
of their property are entitled to some security that its
undertaking will be performed, and we find no law of
Page 141 U. S. 52
Congress or any constitutional provision that would deny to the
state the right to impose such a burden upon those who undertake
the discharge of such responsible duties. There is no
discrimination made between corporations doing a like business, and
the state, although the appellant's company is a foreign
corporation, has the same right to license the business and calling
of this agent as it would that of the lawyer or merchant whose
business is confined to the state alone."
The court then referred to the cases of
Smith v.
Alabama, 124 U. S. 465, and
to
Nashville, Chattanooga &c. Railway v. Alabama,
128 U. S. 96, and
concluded as follows:
"We cannot perceive how any burden has been placed by the state
upon interstate commerce by the provisions of the enactment in
question, and must therefore affirm the judgment. "
Page 141 U. S. 56
MR. JUSTICE BRADLEY, after stating the case, delivered the
opinion of the Court.
We regret that we are unable to concur with the learned Court of
Appeals of Kentucky in its views on this subject. The law of
Kentucky which is brought in question by the case requires from the
agent of every express company not incorporated by the laws of
Kentucky a license from the auditor of public accounts before he
can carry on any business for said company in the state. This, of
course, embraces interstate business as well as business confined
wholly within the state. It is a prohibition against the carrying
on of such business without a compliance with the state law. And
not only is license required to be obtained by the agent, but a
statement must be made and filed in the auditor's office showing
that the company is possessed of an actual capital of $150,000
either in cash or in safe investments, exclusive of stock notes. If
the subject was one which appertained to the jurisdiction of the
state legislature, it may be that the requirements and conditions
of doing business within the state would be promotive of the public
good. It is clear, however, that it
Page 141 U. S. 57
would be a regulation of interstate commerce in its application
to corporations or associations engaged in that business, and that
is a subject which belongs to the jurisdiction of the national, and
not the state, legislature. Congress would undoubtedly have the
right to exact from associations of that kind any guarantees it
might deem necessary for the public security, and for the faithful
transaction of business, and as it is within the province of
Congress it is to be presumed that Congress has done or will do all
that is necessary and proper in that regard. Besides, it is not to
be presumed that the state of its origin has neglected to require
from any such corporation proper guarantees as to capital and other
securities necessary for the public safety. If a partnership firm
of individuals should undertake to carry on the business of
interstate commerce between Kentucky and other states, it would not
be within the province of the state legislature to exact conditions
on which they should carry on their business, nor to require them
to take out a license therefor. To carry on interstate commerce is
not a franchise or a privilege granted by the state; it is a right
which every citizen of the United States is entitled to exercise
under the Constitution and laws of the United States, and the
accession of mere corporate facilities, as a matter of convenience
in carrying on their business, cannot have the effect of depriving
them of such right unless Congress should see fit to interpose some
contrary regulation on the subject.
It has frequently been laid down by this Court that the power of
Congress over interstate commerce is as absolute as it is over
foreign commerce. Would anyone pretend that a state legislature
could prohibit a foreign corporation -- an English or a French
transportation company, for example -- from coming into its borders
and landing goods and passengers at its wharves, and soliciting
goods and passengers for a return voyage, without first obtaining a
license from some state officer and filing a sworn statement as to
the amount of its capital stock paid in? And why not? Evidently
because the matter is not within the province of state legislation,
but within that of national legislation.
Inman
Steamship Co.
Page 141 U. S. 58
v. Tinker, 94 U. S. 238. The
prerogative, the responsibility, and the duty of providing for the
security of the citizens and the people of the United States in
relation to foreign corporate bodies or foreign individuals with
whom they may have relations of foreign commerce belong to the
government of the United States, and not to the governments of the
several states, and confidence in that regard may be reposed in the
national legislature without any anxiety or apprehension arising
from the fact that the subject matter is not within the province or
jurisdiction of the state legislatures. And the same thing is
exactly as true with regard to interstate commerce as it is with
regard to foreign commerce. No difference is perceivable between
the two.
Telegraph Co. v. Texas, 105 U.
S. 460;
Gloucester Ferry Co. v. Pennsylvania,
114 U. S. 196,
114 U. S. 205,
114 U. S. 211;
Phila. Steamship Co. v. Pennsylvania, 122 U.
S. 326,
122 U. S. 342;
McCall v. California, 136 U. S. 104,
136 U. S. 110;
Norfolk & Western Railroad v. Pennsylvania,
136 U. S. 114,
136 U. S. 118.
As was said by MR. JUSTICE LAMAR in the case last cited:
"It is well settled by numerous decisions of this Court that a
state cannot, under the guise of a license tax, exclude from its
jurisdiction a foreign corporation engaged in interstate commerce,
or impose any burdens upon such commerce within its limits."
We have repeatedly decided that a state law is unconstitutional
and void which requires a party to take out a license for carrying
on interstate commerce, no matter how specious the pretext may be
for imposing it.
Pickard v. Pullman Southern Car Co.,
117 U. S. 34;
Robbins v. Shelby County Taxing District, 120 U.
S. 489;
Leloup v. Mobile, 127 U.
S. 640;
Asher v. Texas, 128 U.
S. 129;
Stoutenburgh v. Hennick, 129 U.
S. 141;
McCall v. California, 136 U.
S. 104;
Norfolk & Western Railroad Co. v.
Pennsylvania, 136 U. S. 114. As
a summation of the whole matter, it was aptly said by the present
CHIEF JUSTICE in
Lyng v. Michigan, 135 U.
S. 161,
135 U. S.
166:
"We have repeatedly held that no state has the right to lay a
tax on interstate commerce in any form, whether by way of duties
laid on the transportation of the subjects of that commerce, or on
the receipts derived from that transportation, or on the occupation
or business of carrying it on, for the reason
Page 141 U. S. 59
that taxation is a burden on that commerce, and amounts to a
regulation of it, which belongs solely to Congress."
We do not think that the difficulty is at all obviated by the
fact that the express company, as incidental to its main business,
which is to carry goods between different states, does also some
local business by carrying goods from one point to another within
the State of Kentucky. This is probably quite as much for the
accommodation of the people of that state as for the advantage of
the company. But whether so or not, it does not obviate the
objection that the regulations as to license and capital stock are
imposed as conditions on the company's carrying on the business of
interstate commerce, which was manifestly the principal object of
its organization. These regulations are clearly a burden and a
restriction upon that commerce. Whether intended as such or not,
they operate as such. But taxes or license fees, in good faith
imposed exclusively on express business carried on wholly within
the state, would be open to no such objection. The case is entirely
different from that of foreign corporations seeking to do a
business which does not belong to the regulating power of Congress.
The insurance business, for example, cannot be carried on in a
state by a foreign corporation without complying with all the
conditions imposed by the legislation of that state. So with regard
to manufacturing corporations, and all other corporations whose
business is of a local and domestic nature, which would include
express companies whose business is confined to points and places
wholly within the state. The cases to this effect are numerous.
Bank of Augusta v.
Earle, 13 Pet. 519;
Paul v.
Virginia, 8 Wall. 168;
Liverpool
Insurance Company v. Massachusetts, 10 Wall. 566;
Cooper Manufacturing Company v. Ferguson, 113 U.
S. 727;
Phila. Fire Association v. New York,
119 U. S. 110.
But the main argument in support of the decision of the Court of
Appeals is that the act in question is essentially a regulation
made in the fair exercise of the police power of the state. But it
does not follow that everything which the legislature of a state
may deem essential for the good order
Page 141 U. S. 60
of society and the wellbeing of its citizens can be set up
against the exclusive power of Congress to regulate the operations
of foreign and interstate commerce. We have lately expressly
decided in the case of
Leisy v. Hardin, 135 U.
S. 100, that a state law prohibiting the sale of
intoxicating liquors is void when it comes in conflict with the
express or implied regulation of interstate commerce by Congress
declaring that the traffic in such liquors as articles of
merchandise between the states shall be free. There are undoubtedly
many things which in their nature are so deleterious or injurious
to the lives and health of the people as to lose all benefit of
protection as articles or things of commerce, or to be able to
claim it only in a modified way. Such things are properly subject
to the police power of the state. Chief Justice Marshall, in
Brown v.
Maryland, 12 Wheat. 419,
25 U. S. 443,
instances gunpowder as clearly subject to the exercise of the
police power in regard to its removal and the place of its storage,
and he adds:
"The removal or destruction of infectious or unsound articles is
undoubtedly an exercise of that power, and forms an express
exception to the prohibition we are considering. Indeed, the laws
of the United States expressly sanction the health laws of a
state."
Chief Justice Taney, in the
License Cases,
5 How. 504,
46 U. S. 576,
took the same distinction when he said:
"It has indeed been suggested that if a state deems the traffic
in ardent spirits to be injurious to its citizens, and calculated
to introduce immorality, vice, and pauperism in to the state, it
may constitutionally refuse to permit its importation
notwithstanding the laws of Congress, and that a state may do his
upon the same principles that it may resist and prevent the
introduction of disease, pestilence, and pauperism from abroad. But
it must be remembered that disease, pestilence, and pauperism are
not subjects of commerce, although sometimes among its attendant
evils. They are not things to be regulated and trafficked in, but
to be prevented, as far as human foresight or human means can guard
against them. But spirits and distilled liquors are universally
admitted to be subjects of ownership and property, and are
therefore subjects of exchange, barter,
Page 141 U. S. 61
and traffic, like any other commodity in which a right of
property exists."
But while it is only such things as are clearly injurious to the
lives and health of the people that are placed beyond the
protection of the commercial power of Congress, yet when that
power, or some other exclusive power of the federal government, is
not in question, the police power of the state extends to almost
everything within its borders -- to the suppression of nuisances;
to the prohibition of manufactures deemed injurious to the public
health; to the prohibition of intoxicating drinks, their
manufacture or sale; to the prohibition of lotteries, gambling,
horse racing, or anything else that the legislature may deem
opposed to the public welfare.
Bartemeyer v.
Iowa, 18 Wall. 129;
Beer Company v.
Massachusetts, 97 U. S. 25;
Fertilizing Co. v. Hyde Park, 97 U. S.
659;
Stone v. Mississippi, 101 U.
S. 814;
Foster v. Kansas, 112 U.
S. 201;
Mugler v. Kansas, 123 U.
S. 623;
Powell v. Pennsylvania, 127 U.
S. 678;
Kidd v. Pearson, 128 U. S.
1;
Kimmish v. Ball, 129 U.
S. 217. It is also within the undoubted province of the
state legislature to make regulations with regard to the speed of
railroad trains in the neighborhood of cities and towns; with
regard to the precautions to be taken in the approach of such
trains to bridges, tunnels, deep cuts, and sharp curves; and
generally with regard to all operations in which the lives and
health of people may be endangered -- even though such regulations
affect to some extent the operations of interstate commerce. Such
regulations are eminently local in their character, and, in the
absence of congressional regulations over the same subject, are
free from all constitutional objections, and unquestionably
valid.
In view of the foregoing considerations, and of the well
considered distinctions that have been drawn between those things
that are and those things that are not within the scope of
commercial regulation and protection, it is not difficult to arrive
at a satisfactory conclusion on the question now presented to us.
The character of police regulation, claimed for the requirements of
the statute in question, is certainly not
Page 141 U. S. 62
such as to give them a controlling force over the regulations of
interstate commerce which may have been expressly or impliedly
adopted by Congress, or such as to exempt them from nullity when
repugnant to the exclusive power given to Congress in relation to
that commerce. This is abundantly shown by the decisions to which
we have already referred, which are clear to the effect that
neither licenses nor indirect taxation of any kind, nor any system
of state regulation, can be imposed upon interstate, any more than
upon foreign, commerce, and that all acts of legislation producing
any such result are, to that extent, unconstitutional and void. And
as, in our judgment, the law of Kentucky now under consideration,
as applied to the case of the plaintiff in error, is open to this
objection, it necessarily follows that the judgment of the Court of
Appeals must be reversed.
The judgment is reversed accordingly, and the cause remanded
for further proceedings not inconsistent with this
opinion.
THE CHIEF JUSTICE and MR. JUSTICE GRAY dissented.
MR. JUSTICE BROWN, not having been a member of the Court when
the case was argued, took no part in the decision.
