An act of a state legislature, requiring all importers of
foreign goods by the bale or package, &c., and other persons
selling the same by wholesale, bale, or package, &c., to take
out a license, for which they shall pay fifty dollars, and in case
of neglect or refusal to take out such license subjecting them to
certain forfeitures and penalties is repugnant to that provision of
the Constitution of the United States which declares that
"No state shall, without the consent of Congress, lay any impost
or duty on imports or exports, except what maybe absolutely
necessary for executing its inspection laws,"
and to that which declares that Congress shall have power "to
regulate commerce with foreign nations, among the several states,
and with the Indian tribes."
The power to regulate commerce, given to Congress by the
Constitution, is coextensive with the subject on which it acts, and
cannot be stopped at the external boundary of a state, but must
enter its interior. If the power reaches the interior of a state,
and may be there exercised, it must be capable of authorizing the
sale of those articles it introduces. Commerce is intercourse; one
of its most ordinary ingredients is traffic. It is inconceivable
that the power to authorize this traffic, when given in the most
comprehensive terms, with the intent that its efficacy shall be
complete, should cease
at the point when its continuance is indispensable to its value.
To what purpose should the power to allow importation be given
unaccompanied with the power to authorize a sale of the thing
imported. Sale is the object of importation, and it is an essential
ingredient of that intercourse of which importation constitutes a
part. It is as essential an ingredient, as indispensable to the
existence of the entire thing, as the importation itself. It must
be considered as a component part of the power to regulate
commerce. Congress has not only a right to authorize importation
but to authorize the importer to sell.
This was an indictment in the City Court of Baltimore against
the plaintiffs in error upon the second section of an act of the
Legislature of the State of Maryland, passed in 1821, entitled, "An
act supplementary to the act laying duties on licenses to retailers
of dry goods, and for other purposes." The second section of the
act provides
"That all importers of foreign articles, or commodities, of dry
goods, wares, or merchandises by bail or package, or of wine, rum,
brandy, whiskey, and other distilled spirituous liquors, &c.,
and other persons selling the same by wholesale,
Page 25 U. S. 420
bale, or package, hogshead, barrel, or tierce, shall, before
they are authorized to sell, take out a license as by the original
act is directed, for which they shall pay fifty dollars, and in
case of neglect or refusal to take out such license, shall be
subject to the same penalties and forfeitures as are prescribed by
the original act, to which this is a supplement."
The penalties and forfeitures prescribed by the original act,
which was passed in 1819, were, a forfeiture of the amount of the
license tax and a fine of $100, to be recovered by indictment.
The defendants having demurred to the indictment, a judgment was
rendered upon the demurrer against them in the city court which was
affirmed in the Court of Appeals, and the case was brought, by writ
of error, to this Court.
Page 25 U. S. 436
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court.
This is a writ of error to a judgment rendered in the Court of
Appeals of Maryland affirming a judgment of the City Court of
Baltimore on an indictment found in that court against the
plaintiffs in error for violating an act of the Legislature of
Maryland. The indictment was founded on the second section of that
act, which is in these words:
"And be it enacted that all importers of foreign articles or
commodities, of dry goods, wares, or merchandise, by bale or
package, or of wine, rum, brandy, whiskey and other distilled
spiritous liquors, &c., and other persons selling the same by
wholesale, bale or package, hogshead, barrel, or tierce, shall,
before they are authorized to sell, take out a license, as by the
original act is directed, for which they shall pay fifty dollars,
and in case of neglect or refusal to take out such license, shall
be subject to the same penalties and forfeitures as are prescribed
by the original act to which this is a supplement."
The indictment charges the plaintiffs in error with having
imported and sold one package of foreign dry goods without having
license to do so. A judgment was rendered against them on demurrer
for the penalty which the act prescribes for the offense, and that
judgment is now before this Court.
The cause depends entirely on the question whether the
legislature of a state can constitutionally require the importer of
foreign articles to take out a license from the state before he
shall be permitted to sell a bale or package so imported.
It has been truly said that the presumption is in favor of every
legislative act, and that the whole burden of proof lies on him who
denies its constitutionality. The plaintiffs
Page 25 U. S. 437
in error take the burden upon themselves, and insist that the
act under consideration is repugnant to two provisions in the
Constitution of the United States.
1. To that which declares 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."
2. To that which declares that Congress shall have power "to
regulate commerce with foreign nations, and among the several
states, and with the Indian tribes."
1. The first inquiry is into the extent of the prohibition upon
states "to lay any imposts or duties on imports or exports." The
counsel for the State of Maryland would confine this prohibition to
laws imposing duties on the act of importation or exportation. The
counsel for the plaintiffs in error give them a much wider
scope.
In performing the delicate and important duty of construing
clauses in the Constitution of our country which involve
conflicting powers of the government of the Union and of the
respective states, it is proper to take a view of the literal
meaning of the words to be expounded, of their connection with
other words, and of the general objects to be accomplished by the
prohibitory clause or by the grant of power.
What, then, is the meaning of the words, "imposts, or duties on
imports or exports?"
An impost, or duty on imports is a custom or a tax levied on
articles brought into a country, and is most usually secured before
the importer is allowed to exercise his rights of ownership over
them, because evasions of the law can be prevented more certainly
by executing it while the articles are in its custody. It would
not, however, be less an impost or duty on the articles, if it were
to be levied on them after they were landed. The policy and
consequent practice of levying or securing the duty before or on
entering the port does not limit the power to that state of things,
nor consequently the prohibition, unless the true meaning of the
clause so confines it. What, then, are "imports?" The lexicons
inform us they are "things imported." If we appeal to usage for the
meaning of the word, we shall receive the same answer. They are the
articles themselves which are brought into the country. "A duty on
imports," then, is not merely
Page 25 U. S. 438
a duty on the act of importation, but is a duty on the thing
imported. It is not, taken in its literal sense, confined to a duty
levied while the article is entering the country, but extends to a
duty levied after it has entered the country. The succeeding words
of the sentence which limit the prohibition show the extent in
which it was understood. The limitation is "except what may be
absolutely necessary for executing its inspection laws." Now the
inspection laws, so far as they act upon articles for exportation,
are generally executed on land, before the article is put on board
the vessel; so far as they act upon importations, they are
generally executed upon articles which are landed. The tax or duty
of inspection, then, is a tax which is frequently, if not always,
paid for service performed on land, while the article is in the
bosom of the country. Yet this tax is an exception to the
prohibition on the states to lay duties on imports or exports. The
exception was made because the tax would otherwise have been within
the prohibition.
If it be a rule of interpretation to which all assent that the
exception of a particular thing from general words proves that, in
the opinion of the lawgiver, the thing excepted would be within the
general clause had the exception not been made, we know no reason
why this general rule should not be as applicable to the
Constitution as to other instruments. If it be applicable, then
this exception in favor of duties for the support of inspection
laws goes far in proving that the framers of the Constitution
classed taxes of a similar character with those imposed for the
purposes of inspection, with duties on imports and exports, and
supposed them to be prohibited.
If we quit this narrow view of the subject, and passing from the
literal interpretation of the words, look to the objects of the
prohibition, we find no reason for withdrawing the act under
consideration from its operation.
From the vast inequality between the different states of the
confederacy as to commercial advantages, few subjects were viewed
with deeper interest or excited more irritation than the manner in
which the several states exercised, or seemed disposed to exercise,
the power of laying duties on imports. From motives which were
deemed sufficient by
Page 25 U. S. 439
the statesmen of that day, the general power of taxation,
indispensably necessary as it was and jealous as the states were of
any encroachment on it, was so far abridged as to forbid them to
touch imports or exports, with the single exception which has been
noticed. Why are they restrained from imposing these duties?
Plainly because, in the general opinion, the interest of all would
be best promoted by placing that whole subject under the control of
Congress. Whether the prohibition to "lay imposts or duties on
imports or exports" proceeded from an apprehension that the power
might be so exercised as to disturb that equality among the states
which was generally advantageous or that harmony between them which
it was desirable to preserve, or to maintain unimpaired our
commercial connections with foreign nations, or to confer this
source of revenue on the government of the Union, or whatever other
motive might have induced the prohibition, it is plain that the
object would be as completely defeated by a power to tax the
article in the hands of the importer the instant it was landed as
by a power to tax it while entering the port. There is no
difference in effect between a power to prohibit the sale of an
article and a power to prohibit its introduction into the country.
The one would be a necessary consequence of the other. No goods
would be imported if none could be sold. No object of any
description can be accomplished by laying a duty on importation
which may not be accomplished with equal certainty by laying a duty
on the thing imported in the hands of the importer. It is obvious
that the same power which imposes a light duty can impose a very
heavy one, one which amounts to a prohibition. Questions of power
do not depend on the degree to which it may be exercised. If it may
be exercised at all, it must be exercised at the will of those in
whose hands it is placed. If the tax may be levied in this form by
a state, it may be levied to an extent which will defeat the
revenue by impost, so far as it is drawn from importations into the
particular state. We are told that such wild and irrational abuse
of power is not to be apprehended, and is not to be taken into view
when discussing its existence. All power may be abused, and if the
fear of its abuse is to constitute an argument against its
Page 25 U. S. 440
existence, it might be urged against the existence of that which
is universally acknowledged, and which is indispensable to the
general safety. The states will never be so mad as to destroy their
own commerce or even to lessen it.
We do not dissent from these general propositions. We do not
suppose any state would act so unwisely. But we do not place the
question on that ground.
These arguments apply with precisely the same force against the
whole prohibition. It might with the same reason be said that no
state would be so blind to its own interests as to lay duties on
importation which would either prohibit or diminish its trade. Yet
the framers of our Constitution have thought this a power which no
state ought to exercise. Conceding to the full extent which is
required that every state would, in its legislation on this
subject, provide judiciously for its own interests, it cannot be
conceded that each would respect the interests of others. A duty on
imports is a tax on the article which is paid by the consumer. The
great importing states would thus levy a tax on the nonimporting
states, which would not be less a tax because their interest would
afford ample security against its ever being so heavy as to expel
commerce from their ports. This would necessarily produce
countervailing measures on the part of those states whose situation
was less favorable to importation. For this among other reasons,
the whole power of laying duties on imports was, with a single and
slight exception, taken from the states. When we are inquiring
whether a particular act is within this prohibition, the question
is not whether the state may so legislate as to hurt itself, but
whether the act is within the words and mischief of the prohibitory
clause. It has already been shown that a tax on the article in the
hands of the importer is within its words, and we think it too
clear for controversy that the same tax is within its mischief. We
think it unquestionable that such a tax has precisely the same
tendency to enhance the price of the article as if imposed upon it
while entering the port.
The counsel for the State of Maryland insist with great reason
that if the words of the prohibition be taken in their utmost
latitude, they will abridge the power of taxation,
Page 25 U. S. 441
which all admit to be essential to the states, to an extent
which has never yet been suspected, and will deprive them of
resources which are necessary to supply revenue and which they have
heretofore been admitted to possess. These words must therefore be
construed with some limitation, and if this be admitted, they
insist that entering the country is the point of time when the
prohibition ceases and the power of the state to tax commences.
It may be conceded that the words of the prohibition ought not
to be pressed to their utmost extent; that in our complex system,
the object of the powers conferred on the government of the Union,
and the nature of the often conflicting powers which remain in the
states, must always be taken into view, and may aid in expounding
the words of any particular clause. But while we admit that sound
principles of construction ought to restrain all courts from
carrying the words of the prohibition beyond the object the
Constitution is intended to secure, that there must be a point of
time when the prohibition ceases and the power of the state to tax
commences, we cannot admit that this point of time is the instant
that the articles enter the country. It is, we think, obvious that
this construction would defeat the prohibition.
The constitutional prohibition on the states to lay a duty on
imports, a prohibition which a vast majority of them must feel an
interest in preserving, may certainly come in conflict with their
acknowledged power to tax persons and property within their
territory. The power and the restriction on it, though quite
distinguishable when they do not approach each other, may yet, like
the intervening colors between white and black, approach so nearly
as to perplex the understanding, as colors perplex the vision in
marking the distinction between them. Yet the distinction exists
and must be marked as the cases arise. Till they do arise, it might
be premature to state any rule as being universal in its
application. It is sufficient for the present to say generally that
when the importer has so acted upon the thing imported that it has
become incorporated and mixed up with the mass of property in the
country, it has
Page 25 U. S. 442
perhaps lost its distinctive character as an import and has
become subject to the taxing power of the state; but while
remaining the property of the importer in his warehouse in the
original form or package in which it was imported, a tax upon it is
too plainly a duty on imports to escape the prohibition in the
Constitution.
The counsel for the plaintiffs in error contend that the
importer purchases, by payment of the duty to the United States, a
right to dispose of his merchandise as well as to bring it into the
country, and certainly the argument is supported by strong reason
as well as by the practice of nations, including our own. The
object of importation is sale; it constitutes the motive for paying
the duties, and if the United States possesses the power of
conferring the right to sell as the consideration for which the
duty is paid, every principle of fair dealing requires that it
should be understood to confer it. The practice of the most
commercial nations conforms to this idea. Duties, according to that
practice, are charged on those articles only which are intended for
sale or consumption in the country. Thus, sea stores, goods
imported and reexported in the same vessel, goods landed and
carried over land for the purpose of being reexported from some
other port, goods forced in by stress of weather and landed but not
for sale are exempted from the payment of duties. The whole course
of legislation on the subject shows that in the opinion of the
legislature, the right to sell is connected with the payment of
duties.
The counsel for the defendant in error have endeavored to
illustrate their proposition that the constitutional prohibition
ceases the instant the goods enter the country by an array of the
consequences which they suppose must follow the denial of it. If
the importer acquires the right to sell by the payment of duties,
he may, they say, exert that right when, where, and as he pleases,
and the state cannot regulate it. He may sell by retail, at
auction, or as an itinerant peddler. He may introduce articles, as
gunpowder, which endanger a city into the midst of its population;
he may introduce articles which endanger the public health, and the
power of self-preservation is denied. An importer may
Page 25 U. S. 443
bring in goods, as plate, for his own use, and thus retain much
valuable property exempt from taxation.
These objections to the principle, if well founded, would
certainly be entitled to serious consideration. But we think they
will be found on examination not to belong necessarily to the
principle, and consequently not to prove that it may not be
resorted to with safety as a criterion by which to measure the
extent of the prohibition.
This indictment is against the importer for selling a package of
dry goods in the form in which it was imported without a license.
This state of things is changed if he sells them, or otherwise
mixes them with the general property of the state, by breaking up
his packages and traveling with them as an itinerant peddler. In
the first case, the tax intercepts the import, as an import, in its
way to become incorporated with the general mass of property, and
denies it the privilege of becoming so incorporated until it shall
have contributed to the revenue of the state. It denies to the
importer the right of using the privilege which he has purchased
from the United States until he shall have also purchased it from
the state. In the last cases, the tax finds the article already
incorporated with the mass of property by the act of the importer.
He has used the privilege he had purchased, and has himself mixed
them up with the common mass, and the law may treat them as it
finds them. The same observations apply to plate or other furniture
used by the importer.
So if he sells by auction. Auctioneers are persons licensed by
the state, and if the importer chooses to employ them, he can as
little object to paying for this service as for any other for which
he may apply to an officer of the state. The right of sale may very
well be annexed to importation without annexing to it also the
privilege of using the officers licensed by the state to make sales
in a peculiar way.
The power to direct the removal of gunpowder is a branch of the
police power, which unquestionably remains and ought to remain with
the states. If the possessor stores it himself out of town, the
removal cannot be a duty on imports, because it contributes nothing
to the revenue. If he prefers placing it in a public magazine, it
is because he stores
Page 25 U. S. 444
it there, in his own opinion, more advantageously than
elsewhere. We are not sure that this may not be classed among
inspection laws. 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.
The principle, then, for which the plaintiffs in error contend,
that the importer acquires a right not only to bring the articles
into the country but to mix them with the common mass of property,
does not interfere with the necessary power of taxation which is
acknowledged to reside in the states, to that dangerous extent
which the counsel for the defendants in error seem to apprehend. It
carries the prohibition in the Constitution no further than to
prevent the states from doing that which it was the great object of
the Constitution to prevent.
But if it should be proved that a duty on the article itself
would be repugnant to the Constitution, it is still argued that
this is not a tax upon the article, but on the person. The state,
it is said, may tax occupations, and this is nothing more.
It is impossible to conceal from ourselves that this is varying
the form without varying the substance. It is treating a
prohibition which is general as if it were confined to a particular
mode of doing the forbidden thing. All must perceive that a tax on
the sale of an article imported only for sale is a tax on the
article itself. It is true the state may tax occupations generally,
but this tax must be paid by those who employ the individual or is
a tax on his business. The lawyer, the physician, or the mechanic
must either charge more on the article in which he deals or the
thing itself is taxed through his person. This the state has a
right to do because no constitutional prohibition extends to it. So
a tax on the occupation of an importer is in like manner a tax on
importation. It must add to the price of the article and be paid by
the consumer or by the importer himself in like manner as a direct
duty on the article itself would be made. This the state has not a
right to do, because it is prohibited by the Constitution.
Page 25 U. S. 445
In support of the argument that the prohibition ceases the
instant the goods are brought into the country, a comparison has
been drawn between the opposite words export and import. As to
export, it is said, means only to carry goods out of the country,
so to import means only to bring them into it. But suppose we
extend this comparison to the two prohibitions. The states are
forbidden to lay a duty on exports, and the United States is
forbidden to lay a tax or duty on articles exported from any state.
There is some diversity in language, but none is perceivable in the
act which is prohibited. The United States has the same right to
tax occupations which is possessed by the states. Now suppose the
United States should require every exporter to take out a license,
for which he should pay such tax as Congress might think proper to
impose; would government be permitted to shield itself from the
just censure to which this attempt to evade the prohibitions of the
Constitution would expose it by saying that this was a tax on the
person, not on the article, and that the legislature had a right to
tax occupations? Or suppose revenue cutters were to be stationed
off the coast for the purpose of levying a duty on all merchandise
found in vessels which were leaving the United States for foreign
countries; would it be received as an excuse for this outrage were
the government to say that exportation meant no more than carrying
goods out of the country, and as the prohibition to lay a tax on
imports, or things imported, ceased the instant they were brought
into the country, so the prohibition to tax articles exported
ceased when they were carried out of the country?
We think, then, that the act under which the plaintiffs in error
were indicted is repugnant to that article of the Constitution
which declares, that "no state shall lay any impost or duties on
imports or exports."
2. Is it also repugnant to that clause in the Constitution which
empowers "Congress to regulate commerce with foreign nations and
among the several states and with the Indian tribes?"
The oppressed and degraded state of commerce previous to the
adoption of the Constitution can scarcely be forgotten. It was
regulated by foreign nations with a single view to
Page 25 U. S. 446
their own interests, and our disunited efforts to counteract
their restrictions were rendered impotent by want of combination.
Congress indeed possessed the power of making treaties, but the
inability of the federal government to enforce them had become so
apparent as to render that power in a great degree useless. Those
who felt the injury arising from this state of things, and those
who were capable of estimating the influence of commerce on the
prosperity of nations, perceived the necessity of giving the
control over this important subject to a single government. It may
be doubted whether any of the evils proceeding from the feebleness
of the federal government contributed more to that great revolution
which introduced the present system than the deep and general
conviction that commerce ought to be regulated by Congress. It is
not, therefore, matter of surprise that the grant should be as
extensive as the mischief and should comprehend all foreign
commerce and all commerce among the states. To construe the power
so as to impair its efficacy would tend to defeat an object in the
attainment of which the American public took, and justly took, that
strong interest which arose from a full conviction of its
necessity.
What, then, is the just extent of a power to regulate commerce
with foreign nations and among the several states?
This question was considered in the case of
Gibbons v.
Ogden, 9 Wheat. 1, in which it was declared to be
complete in itself and to acknowledge no limitations other than are
prescribed by the Constitution. The power is coextensive with the
subject on which it acts, and cannot be stopped at the external
boundary of a state, but must enter its interior.
We deem it unnecessary now to reason in support of these
propositions. Their truth is proved by facts continually before our
eyes, and was, we think, demonstrated, if they could require
demonstration, in the case already mentioned.
If this power reaches the interior of a state and may be there
exercised, it must be capable of authorizing the sale of those
articles which it introduces. Commerce is intercourse; one of its
most ordinary ingredients is traffic. It is inconceivable that the
power to authorize this traffic,
Page 25 U. S. 447
when given in the most comprehensive terms with the intent that
its efficacy should be complete, should cease at the point when its
continuance is indispensable to its value. To what purpose should
the power to allow importation be given unaccompanied with the
power to authorize a sale of the thing imported? Sale is the object
of importation and is an essential ingredient of that intercourse,
of which importation constitutes a part. It is as essential an
ingredient, as indispensable to the existence of the entire thing,
then, as importation itself. It must be considered as a component
part of the power to regulate commerce. Congress has a right not
only to authorize importation, but to authorize the importer to
sell.
If this be admitted, and we think it cannot be denied, what can
be the meaning of an act of Congress which authorizes importation
and offers the privilege for sale at a fixed price to every person
who chooses to become a purchaser? How is it to be construed, if an
intent to deal honestly and fairly, an intent as wise as it is
moral, is to enter into the construction? What can be the use of
the contract, what does the importer purchase, if he does not
purchase the privilege to sell?
What would be the language of a foreign government, which should
be informed that its merchants, after importing according to law,
were forbidden to sell the merchandise imported? What answer would
the United States give to the complaints and just reproaches to
which such an extraordinary circumstance would expose them? No
apology could be received or even offered. Such a state of things
would break up commerce. It will not meet this argument to say that
this state of things will never be produced -- that the good sense
of the states is a sufficient security against it. The Constitution
has not confided this subject to that good sense. It is placed
elsewhere. The question is where does the power reside? not how far
will it be probably abused. The power claimed by the state is, in
its nature, in conflict with that given to Congress, and the
greater or less extent in which it may be exercised does not enter
into the inquiry concerning its existence.
Page 25 U. S. 448
We think, then, that if the power to authorize a sale exists in
Congress, the conclusion that the right to sell is connected with
the law permitting importation as an inseparable incident is
inevitable.
If the principles we have stated be correct, the result to which
they conduct us cannot be mistaken. Any penalty inflicted on the
importer for selling the article in his character of importer must
be in opposition to the act of Congress which authorizes
importation. Any charge on the introduction and incorporation of
the articles into and with the mass of property in the country must
be hostile to the power given to Congress to regulate commerce,
since an essential part of that regulation and principal object of
it is to prescribe the regular means for accomplishing that
introduction and incorporation.
The distinction between a tax on the thing imported and on the
person of the importer can have no influence on this part of the
subject. It is too obvious for controversy that they interfere
equally with the power to regulate commerce.
It has been contended that this construction of the power to
regulate commerce, as was contended in construing the prohibition
to lay duties on imports, would abridge the acknowledged power of a
state to tax its own citizens or their property within its
territory.
We admit this power to be sacred, but cannot admit that it may
be used so as to obstruct the free course of a power given to
Congress. We cannot admit that it may be used so as to obstruct or
defeat the power to regulate commerce. It has been observed that
the powers remaining with the states may be so exercised as to come
in conflict with those vested in Congress. When this happens, that
which is not supreme must yield to that which is supreme. This
great and universal truth is inseparable from the nature of things,
and the Constitution has applied it to the often interfering powers
of the general and state governments, as a vital principle of
perpetual operation. It results necessarily from this principle
that the taxing power of the states must have some limits. It
cannot reach and restrain the action of the national government
within its proper sphere. It cannot reach the administration of
Page 25 U. S. 449
justice in the courts of the Union or the collection of the
taxes of the United States or restrain the operation of any law
which Congress may constitutionally pass. It cannot interfere with
any regulation of commerce. If the states may tax all persons and
property found on their territory, what shall restrain them from
taxing goods in their transit through the state from one port to
another, for the purpose of reexportation? The laws of trade
authorize this operation and general convenience requires it. Or
what should restrain a state from taxing any article passing
through it from one state to another for the purpose of traffic or
from taxing the transportation of articles passing from the state
itself to another state for commercial purposes? These cases are
all within the sovereign power of taxation, but would obviously
derange the measures of Congress to regulate commerce and affect
materially the purpose for which that power was given. We deem it
unnecessary to press this argument further or to give additional
illustrations of it, because the subject was taken up and
considered with great attention in
McCulloch
v. Maryland, 4 Wheat. 316, the decision in which
case is, we think, entirely applicable to this.
It may be proper to add that we suppose the principles laid down
in this case to apply equally to importations from a sister state.
We do not mean to give any opinion on a tax discriminating between
foreign and domestic articles.
We think there is error in the judgment of the Court of Appeals
of the State of Maryland in affirming the judgment of the Baltimore
City Court because the act of the Legislature of Maryland imposing
the penalty for which the said judgment is rendered is repugnant to
the Constitution of the United States, and consequently void. The
judgment is to be
Reversed and the cause remanded to that court with
instructions to enter judgment in favor of the appellants.
MR. JUSTICE THOMPSON dissented.
It is with some reluctance and very considerable diffidence that
I have brought myself publicly to dissent from the opinion of the
Court in this case, and did it not involve an important
constitutional
Page 25 U. S. 450
question relating to the relative powers of the general and
state governments, I should silently acquiesce in the judgment of
the Court although my own opinion might not accord with its.
The case comes before this Court on a writ of error to the Court
of Appeals of the State of Maryland upon a judgment rendered in
that court against the defendants. The proceedings in the court
below were upon an indictment against the defendants, merchants in
the City of Baltimore, trading under the firm of Alexander Brown
& Sons, and to recover against them the penalty alleged to have
been incurred for a violation of an act of the legislature of that
state by selling a package of foreign dry goods without having a
license for that purpose as required by said act, and the only
question which has been made and argued is whether the act referred
to is in violation of the Constitution of the United States.
The act in question was passed on 23 February, 1822, and is
entitled "A supplement to the act laying duties on licenses to
retailers of dry goods, and for other purposes." By the second
section, under which the penalty has been recovered, it is
enacted
"That all importers of foreign articles or commodities, of dry
goods, wares, or merchandise, by bale or package, or of wine, rum,
brandy, whiskey, and other distilled spiritous liquors, &c.,
and other persons selling the same by wholesale, bale, or package,
hogshead, barrel, or tierce, shall, before they are authorized to
sell, take out a license as by the original act is directed, for
which they shall pay fifty dollars, and in case of neglect or
refusal to take out such license, shall be subject to the same
penalties and forfeitures as are prescribed by the original act to
which this is a supplement."
By the original act, passed in 1819, retail dealers in foreign
merchandise are required to take out a license, and the
supplemental act requires that wholesale dealers should likewise
take out a license to sell. These acts, being
in pari
materia, are to be taken together, and their effect and
operation manifestly is nothing more than to require retail and
wholesale dealers in foreign merchandise to take out a license
before they should be authorized to sell such merchandise.
Page 25 U. S. 451
The act does not require a license to import or demand anything
more of the importer than is required of any other dealer in the
article imported. The license is for selling, and is general,
applying to all persons -- that all importers, and other persons
selling by wholesale, bale, or package, &c., shall, before they
are authorized to sell, take out a license, &c.
I understand it to be admitted that these laws, so far as they
relate to retail dealers, are not in violation of the Constitution
of the United States, and if so the question resolves itself into
the inquiry whether a distinction in this respect between a retail
and wholesale dealer in foreign merchandise can exist under any
sound construction of the Constitution.
The parts of the Constitution which have been drawn in question
on the discussion at the bar, and with which the law in question is
supposed to be in conflict, are that which gives to Congress the
power to regulate commerce with foreign nations and among the
several states and that which declares 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.
It is very obvious that this law can in no manner whatever
affect the commercial intercourse between the states; it applies
purely to the internal trade of the State of Maryland. The
defendants were merchants, trading in the City of Baltimore. The
indictment describes them as such and alleges the sale to have been
in that place, and nothing appears to warrant an inference that the
package of goods sold was not intended for consumption at that
place, and the law has no relation whatever to goods intended for
transportation to another state. It is proper here to notice that
although the indictment alleges that the defendants did import and
sell, yet the district attorney, in framing the indictment, very
properly considered offense to consist in the selling, and not in
the importation without a license. No one will pretend that if the
indictment had only alleged that the defendants did import a
package of foreign dry goods without a license, it could have been
sustained. The
Page 25 U. S. 452
act applies to the importer, and other persons selling by
wholesale, and the allegation that the defendants did import is
merely descriptive of the double character in which they were
dealing, both as importers and sellers. The indictment would
undoubtedly have been good had it merely alleged that the
defendants sold the package without a license. So that neither the
act nor the form in which the complaint is presented makes any
discrimination between the importer and any other wholesale dealer
in foreign merchandise, but requires both to take out a license to
sell; nor does it appear to me that this law in any manner
infringes or conflicts with the power of Congress to regulate
commerce with foreign nations. It is to be borne in mind that this
was a power possessed by the states respectively before the
adoption of the Constitution, and is not a power growing out of the
establishment of the general government. It is to be viewed,
therefore, as the surrender of a power antecedently possessed by
the states, and the extent of the surrender must receive a fair and
reasonable interpretation with reference to the object for which
the surrender was made. This was principally with a view to the
revenue, and extended only to the external commerce of the United
States, and did not embrace any portion of the internal trade or
commerce of the several states. This is not only the plain and
obvious interpretation of the terms used in the Constitution,
commerce with foreign nations, but such has been the construction
adopted by this Court. In the case of
Gibbons
v. Ogden, 9 Wheat. 194, the Court, in speaking of
the grant of the power of Congress to regulate commerce, said
"It is not intended to comprehend that commerce which is
completely internal, which is carried on between man and man in a
state, or between different parts of the same state and which does
not extend to or affect other states; such a power would be
inconvenient, and is certainly unnecessary. The enumeration of the
particular classes of commerce to which the power was to be
extended would not have been made had the intention been to extend
the power to every description. The enumeration presupposes
something not enumerated, and that something, if we regard the
language on the subject of the sentence must be the exclusively
internal
Page 25 U. S. 453
commerce of a state. The genius and character of the whole
government seems to be that its action is to be applied to all the
external concerns of the nation and to those internal concerns
which affect the states generally, but not to those which are
completely within a particular state, which do not affect other
states, and with which it is not necessary to interfere for the
purpose of executing some of the general powers of the government.
The completely internal commerce of a state, then, may be
considered as reserved for the state itself."
And again, p.
22 U. S. 208,
"The acknowledged power of a state to regulate its police, its
domestic trade, and to govern its own citizens may enable it to
legislate on this subject [commerce] to a considerable extent."
If such be the division of power between the general and state
governments in relation to commerce, where is the line to be drawn
between internal and external commerce? It appears to me that no
other sound and practical rule can be adopted than to consider the
external commerce as ending with the importation of the foreign
article, and the importation is complete as soon as the goods are
introduced into the country according to the provisions of the
revenue laws, with the intention of being sold here for consumption
or for the purpose of internal and domestic trade, and the duties
paid or secured. And this is the light in which this question has
been considered by this and other courts of the United States,
9 U. S. 5 Cranch
368;
13 U. S. 9 Cranch
104; 1 Mason 499. This, it will be perceived, does not embrace
foreign merchandise intended for exportation and not for
consumption, nor articles intended for commerce between the states,
but such as are intended for domestic trade within the state, and
it is to such articles only that the law of Maryland extends. I
cannot therefore think that this law at all interferes with the
power of Congress to regulate commerce; nor does it, according to
my understanding of the Constitution, violate that provision which
declares 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.
Page 25 U. S. 454
The compensation required by this law to be paid for a license
to sell cannot be considered an impost or duty within the sense and
meaning of these terms as used in the Constitution. They refer to
the foreign duty, and not to any charge that may grow out of the
internal police of the states. It may indirectly fall on the
imported articles, and enhance the price in the sale, but even this
is not an expense imposed on the importer or other seller, but is
borne ultimately by the consumer.
But the broad principle has been assumed on the argument that
the payment of the foreign duty is a purchase of the right and
privilege not only of introducing the goods into the country, but
of selling them free from any increased burden imposed by the
states, and unless this principle can be sustained, the law in
question is not in violation of the Constitution.
The counsel, however, aware that the principle thus broadly laid
down, if practically carried out to its full extent, would lead to
consequences so obviously untenable that it would at once show the
unsoundness of the principle itself, have limited its application
to the first wholesale disposition of the merchandise. Can such a
distinction, however, by sustained? There is nothing certainly in
the letter of the Constitution to support it, nor does it fall
within any reasonable intendment growing out of the nature of the
subject matter of the provision. The prohibition to the states is
against laying any impost or duty on imports. It is the merchandise
that is exempted from the imposition. The Constitution nowhere
gives any extraordinary protection to the importer. So that if the
law was confined to the importer only, he could find no exemption
from the operation of state laws. Nor is there, according to my
judgment, any rational grounds upon which the Constitution may be
considered as extending such exemption to wholesale, and not to
retail dealers. If the payment of the foreign duty is the purchase
of the privilege to sell as well as to introduce the article into
the country, where can be the difference whether this privilege is
exercised in the one way or the other? The retail merchant often
imports his own goods, and why should he be compelled to take out a
license to sell
Page 25 U. S. 455
when his neighbor, who imports and sells by wholesale, is
exempted? But the distinction is altogether fruitless, and does not
effect the object supposed to have been intended,
viz., to
take from the states the power of imposing burdens upon foreign
merchandise, that might tend to lessen or entirely prevent the
importation, and thereby diminish the revenue of the United States.
It is very evident that no such purpose can be accomplished by
limiting the protection to the first sale. It was admitted that
after the first sale, and the article becomes mixed and
incorporated in the general mass of the property of the country,
and to be applied to domestic use, it loses this pretended
privilege. But everyone knows that whatever charge or burden is
imposed upon the retail sale affects the wholesale indirectly as
much as if laid directly upon the wholesale. The retail dealer
takes this charge into calculation in the purchase from the
wholesale merchant, and which, of course, equally affects the
importation. Suppose the fifty dollars required to be paid by the
wholesale dealer was imposed on the retail merchant, would it not
equally affect the importation? It would equally increase the
burden and enhance the expense of the article when it comes into
the hands of the consumer, and on whom all the charges ultimately
fall. And if these charges are so increased by the state
governments in any stages of the internal trade as to check their
sale for consumption, it will necessarily affect the importation.
So that nothing short of a total exemption from state charges or
taxes, under all circumstances, will answer the supposed object of
the Constitution. And to push the principle to such lengths would
be a restriction upon state authority not warranted by the
Constitution.
It certainly cannot be maintained that the states have no
authority to tax imported merchandise. But the same principle of
discrimination between the wholesale and retail dealer as to a
license to sell would seem to me, if well founded, to extend to
taxes of every description. And it would present a singular
incongruity to exempt a wholesale merchant from all taxes upon his
stock of goods and subject to taxation the like stock of his
neighbor who was selling by retail.
Page 25 U. S. 456
It is laid down in No. 32 of the Federalist (and I believe
universally admitted)
"That the states, with the sole exception of duties on imports
and exports, retain authority to tax in the most absolute and
unqualified sense, and any attempt on the part of the national
government to abridge them in the exercise of it would be a violent
assumption of power unwarranted by any article or clause in the
Constitution."
Although an impost or duty may be considered a tax in its most
enlarged sense, yet every tax cannot be understood to mean an
impost or duty in the sense of the Constitution. As here used, it
evidently refers to the foreign duty imposed by revenue laws. It
would be a singular use of the term "impost" to apply it to a tax
on real estate, and no one, I presume, would contend that all
imported articles upon which the duties have been paid are exempt
from all state taxation in the hands of the consumer. And yet this
would follow if duty and tax are in all respects synonymous, for
the Constitution declares that no state shall lay any duty on
imports,
viz., the article imported. To avoid these
consequences, which are certainly inadmissible, the inhibition to
the states must be understood as extending only to foreign duties,
and not to taxes imposed by the states after the imports become
articles of internal trade and for domestic use and consumption;
they then become subject to state jurisdiction.
This law seems to have been treated as if it imposed a tax or
duty upon the importer or the importation. It certainly admits of
no such construction. It is a charge upon the wholesale dealer,
whoever he may be, and to operate upon the sale, and not upon the
importation. It requires the purchase of a privilege to sell, and
must stand on the some footing as a purchase of a privilege to sell
in any other manner, as by retail, at auction, or as hawkers and
peddlers, or in whatever way state policy may require. Whether such
regulations are wise and politic is not a question for this Court.
If the broad principle contended for on the part of the plaintiffs
in error that the payment of the foreign duty is a purchase of the
privilege of selling be well founded, no limit can be set by the
states to the exercise of this privilege. The first sale may be
made in defiance of all state
Page 25 U. S. 457
regulation, and all state laws regulating sales of foreign goods
at auction and imposing a duty thereupon are unconstitutional so
far, at all events, as the sale may be by bale, package, hogshead,
barrel or tierce, &c. And indeed if the right to sell follows
as an incident to the importation, it will take away all state
control over infectious and noxious goods whilst unsold in the
hands of the importer. The principle, when carried out to its full
extent, would inevitably lead to such consequences.
It has been urged with great earnestness upon the Court that if
the states are permitted to lay such charges and taxes upon
imports, they may be so multiplied and increased as entirely to
stop all importations. If this argument presents any serious
objection to the law in question, the answer to it, in my judgment,
has already been given: that the limitation, as contended for, of
state power, will not effect the objects proposed. Whether this
additional burden is imposed upon the wholesale or retail dealer,
it will equally affect the importation, and nothing short of a
total exemption from all taxation and charges of every description
will take from the states the power of legislating so as in some
way may indirectly affect the importation.
But arguments drawn against the existence of a power from its
supposed abuse are illogical, and generally lead to unsound
conclusions. And this is emphatically so when applied to our system
of government. It supposes the interest of the people, under the
general and state governments, to be in hostility with each other,
instead of considering the two governments as parts only of the
same system and forming but one government for the same people,
having for its object the same common interest and welfare of
all.
If the supposed abuse of a power is a satisfactory objection to
its existence, it will equally apply to many of the powers of the
general government, and it is as reasonable to suppose that the
people would wish to injure or destroy themselves through the
instrumentality of the one government as the other.
The doctrine of the court in the case of
McCulloch
v. Maryland, 4 Wheat. 316, has been urged
Page 25 U. S. 458
as having a bearing upon this question unfavorable to the
validity of the law. But it appears to me that that case warrants
no such conclusion. It is there admitted that the power of taxation
is an incident of sovereignty, and is coextensive with that to
which it is an incident. And that all subjects over which the
sovereign power of a state extends are objects of taxation. The
Bank of the United States could not be taxed by the states, because
it was an instrument employed by the government in the execution of
its powers. It was called into existence under the authority of the
United States, and of course could not have previously existed as
an object of taxation by the states. Not so, however, with respect
to imports; they were in existence and under the absolute
jurisdiction and control of the states before the adoption of the
Constitution. And it is therefore as to them a question of
surrender of power by the states and to what extent this has been
given up to the United States. And it is expressly admitted in that
case that the opinion did not deprive the states of any resources
they originally possessed, nor to any tax paid by the real property
of the bank in common with the other real property within the
state, nor to a tax imposed on the interest which the citizens of
Maryland may hold in the institution in common with other property
of the same description throughout the state. But the tax was held
unconstitutional because laid on the operations of the bank, and
consequently a tax on the operation of an instrument employed by
the government of the Union to carry its powers into execution, and
this instrument, created by the government of the Union. But these
objections do not apply to the law in question. The government of
the Union found the states in the full exercise of sovereign power
over imports. It was one of the sources of revenue originally
possessed by the states. The law does not purport to act directly
upon anything which has been surrendered to the general government,
viz., the external commerce of the state. It may operate
indirectly upon it to some extent, but cannot be made essentially
to impede or retard the operations of the government; not more so
than might be effected by a tax on the stock held by individuals in
the bank of the United States. And indeed the power
Page 25 U. S. 459
of crippling the operations of the government in the former case
would not be so practicable as in the latter, for it has the whole
range of the property of its citizens for taxation, and to provide
the means for carrying on its measures. So that it would be beyond
the reach of the states materially to affect the operations of the
general government by taxing foreign merchandise, should they be
disposed so to do.
I am accordingly, of opinion that the judgment of the Court of
Appeals of the State of Maryland ought to be affirmed.
JUDGMENT. This cause came on, &c., on consideration whereof
this Court is of opinion that there is error in the judgment
rendered by the said Court of Appeals in this, that the judgment of
the City Court of Baltimore condemning the said Alexander Brown,
George Brown, John. A. Brown, and James Brown to pay the penalty
therein mentioned ought not to have been so rendered against them,
because the act of the Legislature of the State of Maryland
entitled "An act supplementary to the act laying duties on licenses
to the retailers of dry goods, and for other purposes," on which
the indictment on which the said judgment was rendered is founded,
so far as it enacts,
"that all importers of foreign articles of dry goods, wares, or
merchandise, by bale or package, or of wine, rum, brandy, whiskey,
or other distilled spiritous liquors, &c., selling the same by
wholesale, bale, or package, hogshead, barrel, or tierce, shall,
before they are authorized to sell, take out a license as by the
original act is directed, for which they shall pay fifty dollars,
and in case of neglect or refusal to take out such license, shall
be subject to the same penalties and forfeitures as are prescribed
by the original act to which this is a supplement"
is repugnant to the Constitution of the United States and void;
wherefore the said Court of Appeals, before whom the said judgment
of the said City Court of Baltimore was brought by appeal, ought
not to have affirmed, but should have reversed the same. Wherefore
it is CONSIDERED by this Court that the said judgment of the said
Court of Appeals affirming the said judgment of the City Court of
Baltimore
Page 25 U. S. 460
be REVERSED and ANNULLED, and that the cause be remanded to the
said Court of Appeals, with directions to reverse the same.