1. A license tax required for the sale of goods is in effect a
tax upon the goods themselves.
2. A statute of Missouri which requires the payment of a license
tax from persons who deal in the sale of goods, wares, and
merchandise which are not the growth, produce, or manufacture of
the state by going from place to place to sell the same in the
state, and requires no such license tax from persons selling in a
similar way goods which are the growth, produce, or manufacture of
the state, is in conflict with the power vested in Congress to
regulate commerce with foreign nations and among the several
states.
3. That power was vested in Congress to insure uniformity of
commercial regulation against discriminating state legislation. It
covers property which is transported as an article of commerce from
foreign countries or among the states from hostile or interfering
state legislation until it has mingled with and become a part of
the general property of the country, and protects it even after it
has entered a state from any burdens imposed by reason of its
foreign origin.
4. The nonexercise by Congress of its power to regulate commerce
among the several states is equivalent to a declaration by that
body that such commerce shall be free from any restrictions.
Welton was indicted, tried, and convicted in the Circuit Court
for the County of Henry in the State of Missouri for selling goods
without a license.
The first section of the statute under which the indictment was
found is as follows:
"Whoever shall deal in the selling of patent or other medicines,
goods, wares, or merchandise, except books, charts, maps, and
stationery, which are not the growth, produce, or manufacture of
this state, by going from place to place to sell the same is
declared to be a peddler."
The other sections prohibit a person dealing as a peddler
without license and impose a penalty therefor, and prescribe the
rate of charge for such license. No license is required for selling
"by going from place to place," the growth, produce, or manufacture
of the state.
The supreme court, on appeal, affirmed the decision of the
circuit court, on the ground that the statute applied solely to the
internal commerce of the state, and made no discrimination against
citizens of other states, but merely imposed a tax upon
Page 91 U. S. 276
a calling or a profession, and neither directly nor indirectly
upon property.
For errors in this judgment the case is brought here.
Page 91 U. S. 277
MR. JUSTICE FIELD delivered the opinion of the Court.
This case comes before us on a writ of error to the Supreme
Court of Missouri, and involves a consideration of the validity of
a statute of that state, discriminating in favor of goods, wares,
and merchandise which are the growth, product, or manufacture of
the state and against those which are the growth, product, or
manufacture of other states or countries in the conditions upon
which their sale can be made by traveling dealers. The plaintiff in
error was a dealer in sewing machines which were manufactured
without the State of Missouri, and went from place to place in the
state selling them without a license for that purpose. For this
offense he was indicted and convicted in one of
Page 91 U. S. 278
the circuit courts of the state, and was sentenced to pay a fine
of fifty dollars, and to be committed until the same was paid. On
appeal to the supreme court of the state, the judgment was
affirmed.
The statute under which the conviction was had declares that
whoever deals in the sale of goods, wares, or merchandise, except
books, charts, maps, and stationery, which are not the growth,
produce, or manufacture of the state, by going from place to place
to sell the same, shall be deemed a peddler, and then enacts that
no person shall deal as a peddler without a license, and prescribes
the rates of charge for the licenses, these varying according to
the manner in which the business is conducted, whether by the party
carrying the goods himself on foot, or by the use of beasts of
burden, or by carts or other land carriage, or by boats or other
river vessels. Penalties are imposed for dealing without the
license prescribed. No license is required for selling in a similar
way, by going from place to place in the state, goods which are the
growth, product, or manufacture of the state.
The license charge exacted is sought to be maintained as a tax
upon a calling. It was held to be such a tax by the supreme court
of the state -- a calling, said the court, which is limited to the
sale of merchandise not the growth or product of the state.
The general power of the state to impose taxes in the way of
licenses upon all pursuits and occupations within its limits is
admitted, but, like all other powers, must be exercised in
subordination to the requirements of the federal Constitution.
Where the business or occupation consists in the sale of goods, the
license tax required for its pursuit is in effect a tax upon the
goods themselves. If such a tax be within the power of the state to
levy, it matters not whether it be raised directly from the goods
or indirectly from them through the license to the sealer; but if
such tax conflict with any power vested in Congress by the
Constitution of the United States, it will not be any the less
invalid because enforced through the form of a personal
license.
In the case of
Brown v.
Maryland, 12 Wheat. 419,
25 U. S. 444,
the question arose whether an act of the Legislature of
Maryland,
Page 91 U. S. 279
requiring importers of foreign goods to pay the state a license
tax before selling them in the form and condition in which they
were imported, was valid and constitutional. It was contended that
the tax was not imposed on the importation of foreign goods, but
upon the trade and occupation of selling such goods by wholesale
after they were imported. It was a tax, said the counsel, upon the
profession or trade of the party when that trade was carried on
within the state, and was laid upon the same principle with the
usual taxes upon retailers or innkeepers, or hawkers and peddlers,
or upon any other trade exercised within the state. But the court
in its decision replied that it was impossible to conceal the fact
that this mode of taxation was only varying the form without
varying the substance; that a tax on the occupation of an importer
was a tax on importation, and 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. Treating the
exaction of the license tax from the importer as a tax on the goods
imported, the Court held that the Act of Maryland was in conflict
with the Constitution, with the clause prohibiting a state, without
the consent of Congress, from laying any impost or duty on imports
or exports, and with the clause investing Congress with the power
to regulate commerce with foreign nations.
So, in like manner, the license tax exacted by the State of
Missouri from dealers in goods which are not the product or
manufacture of the state, before they can be sold from place to
place within the state, must be regarded as a tax upon such goods
themselves, and the question presented is whether legislation thus
discriminating against the products of other states in the
conditions of their sale by a certain class of dealers is valid
under the Constitution of the United States. It was contended in
the state courts, and it is urged here, that this legislation
violates that clause of the Constitution which declares that
Congress shall have the power to regulate commerce with foreign
nations and among the several states. The power to regulate
conferred by that clause upon Congress is one without limitation,
and to regulate commerce is to prescribe rules by which it shall be
governed -- that is, the conditions
Page 91 U. S. 280
upon which it shall be conducted; to determine how far it shall
be free and untrammeled, how far it shall be burdened by duties and
imposts, and how far it shall be prohibited.
Commerce is a term of the largest import. It comprehends
intercourse for the purposes of trade in any and all its forms,
including the transportation, purchase, sale, and exchange of
commodities between the citizens of our country and the citizens or
subjects of other countries, and between the citizens of different
states. The power to regulate it embraces all the instruments by
which such commerce may be conducted. So far as some of these
instruments are concerned, and some subjects which are local in
their operation, it has been held that the states may provide
regulations until Congress acts with reference to them; but where
the subject to which the power applies is national in its character
or of such a nature as to admit of uniformity of regulation, the
power is exclusive of all state authority.
It will not be denied that that portion of commerce with foreign
countries and between the states which consists in the
transportation and exchange of commodities is of national
importance, and admits and requires uniformity of regulation. The
very object of investing this power in the general government was
to insure this uniformity against discriminating state legislation.
The depressed condition of commerce and the obstacles to its growth
previous to the adoption of the Constitution, from the want of some
single controlling authority, has been frequently referred to by
this Court in commenting upon the power in question. "It was
regulated," says Chief Justice Marshall in delivering the opinion
in
Brown v. Maryland,
"by foreign nations with a single view to 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 became 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.
Page 91 U. S. 281
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."
12 Wheat.
25 U. S.
446.
The power which insures uniformity of commercial regulation must
cover the property which is transported as an article of commerce
from hostile or interfering legislation until it has mingled with
and become a part of the general property of the country, and
subjected like it to similar protection, and to no greater burdens.
If at any time before it has thus become incorporated into the mass
of property of the state or nation it can be subjected to any
restrictions by state legislation, the object of investing the
control in Congress may be entirely defeated. If Missouri can
require a license tax for the sale by traveling dealers of goods
which are the growth, product, or manufacture of other states or
countries, it may require such license tax as a condition of their
sale from ordinary merchants, and the amount of the tax will be a
matter resting exclusively in its discretion.
The power of the state to exact a license tax of any amount
being admitted, no authority would remain in the United States or
in this Court to control its action, however unreasonable or
oppressive. Imposts operating as an absolute exclusion of the goods
would be possible, and all the evils of discriminating state
legislation, favorable to the interests of one state and injurious
to the interests of other states and countries, which existed
previous to the adoption of the Constitution, might follow, and the
experience of the last fifteen years shows would follow, from the
action of some of the states.
There is a difficulty, it is true, in all cases of this
character, in drawing the line precisely where the commercial power
of Congress ends and the power of the state begins. A similar
difficulty was felt by this Court in
Brown v. Maryland in
drawing the line of distinction between the restriction upon the
power of the states to lay a duty on imports, and their
acknowledged power to tax persons and property, but the Court
observed that the two, though quite distinguishable when they do
not approach each other, may yet, like the intervening
Page 91 U. S. 282
colors between white and black, approach so nearly as to perplex
the understanding, as colors perplex the vision in marking the
distinction between them; but that, as the distinction exists, it
must be marked as the cases arise. And the Court, after observing
that it might be premature to state any rule as being universal in
its application, held that when the importer had so acted upon the
thing imported that it had become incorporated and mixed up with
the mass of property in the country, it had lost its distinctive
character as an import, and become subject to the taxing power of
the state, but that while remaining the property of the importer in
his warehouse in the original form and package in which it was
imported, the tax upon it was plainly a duty on imports prohibited
by the Constitution.
Following the guarded language of the Court in that case, we
observe here, as was observed there, that it would be premature to
state any rule which would be universal in its application to
determine when the commercial power of the federal Government over
a commodity has ceased, and the power of the state has commenced.
It is sufficient to hold now that the commercial power continues
until the commodity has ceased to be the subject of discriminating
legislation by reason of its foreign character. That power protects
it, even after it has entered the state, from any burdens imposed
by reason of its foreign origin. The act of Missouri encroaches
upon this power in this respect, and is therefore, in our judgment,
unconstitutional and void.
The fact that Congress has not seen fit to prescribe any
specific rules to govern interstate commerce does not affect the
question. Its inaction on this subject, when considered with
reference to its legislation with respect to foreign commerce, is
equivalent to a declaration that interstate commerce shall be free
and untrammeled. As the main object of that commerce is the sale
and exchange of commodities, the policy thus established would be
defeated by discriminating legislation like that of Missouri.
The views here expressed are not only supported by the case of
Brown v. Maryland, already cited, but also by the case of
Woodruff v.
Parham, 8 Wall. 123, and the case of the
State Freight
Tax, 15 Wall. 232. In the case of
Woodruff v.
Parham, MR. JUSTICE MILLER, speaking for the Court, after
observing
Page 91 U. S. 283
with respect to the law of Alabama then under consideration that
there was no attempt to discriminate injuriously against the
products of other states or the rights of their citizens, and the
case was not, therefore, an attempt to fetter commerce among the
states or to deprive the citizens of other states of any privilege
or immunity, said,
"But a law having such operation would, in our opinion, be an
infringement of the provisions of the Constitution which relate to
those subjects, and therefore void."
The judgment of the Supreme Court of the State of Missouri
must be reversed and the cause remanded with directions to enter a
judgment reversing the judgment of the circuit court and directing
that court to discharge the defendant from imprisonment and suffer
him to depart without day.