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§ 17 (16). When transit ends; the original package in interstate commerce.-The "original package" rule, which has been the subject of extended judicial discussion both in relation to the taxing power as well as the police power of the state, was irst declared in 1827, in Brown v. Maryland.1 This case involved the validity of a statute of Maryland, requiring every importer of foreign merchandise to take out a license, paying therefor fifty dollars. The court admitted the difficulty of setting a time when the taxing power of the state should begin, but fixed it an beginning when the original package in which the goods had been imported was broken up or sold, and thus was first laid down the "original package" rule. While the court has adhered to this rule in respect to state taxation of foreign importations, it has not been extended to interstate commerce, so that goods brought from one state into another are subject to the taxing power of the state, whether they are in the original package or not; that is to say, such goods which have reached their destination in the state may be taxed as property in common with the other property in the state, when the tax is levied without discrimination as between domestic and non-domestic goods.3
'There is a distinction, however, between the taxing power of a state and its police power with reference to the original packages in interstate shipments. In the absence of legislation by congress, commerce between the states must be free, and the right to sell goods imported is an inseparable incident of the right to import. Congress alone can act as to the admission of goods from one state to another, and its non-action means that the commerce must be free. This freedom of trans
112 Wheat. 419, 6 L. Ed. 678. Twenty years later Chief Justice Taney said in his opinion in the License Cages, 5 How. 1. c. 505, 12 L. Ed. 256, that be argued this case for the state of Maryland, but that since then matured reflection had convinced him that the rule laid down by the supreme court was a just and safe one. It was a very difficult question for the judicial mind, but he did not see how
the line could be drawn more accurately.
2 Woodruff v. Parham, 8 Wall. 123 (1868), 19 L. Ed. 382; Brown v. Houston, 114 U. S. 622 (1885), 29 L. Ed. 257; Pittsburg, etc. Coal Co. v. Bates, 156 U. S. 577 (1895), 39 L. Ed. 538.
8 American Steel & Wire Co. v. Speed, 192 U. S. 500, 48 L. Ed. 538 (1904).
4 Bowman v. Railway Co., 125
portation and of sale extends to goods in their original packages, when imported in packages. Thus, the original package first introduced in Brown v. Maryland, in reference to foreign importations, becomes material in interstate commerce in limiting the police power of the state. An original package in interstate commerce means the box or case in which the goods were shipped, and not the package in which they were placed by the manufacturer when manufactured and before they were placed in the larger boxes for shipment.1 The importation however must be made in the usual manner prevalent among honest dealers, and in a bona fide package usual for shipment."
The original package rule was one of convenience, is not defined in any statute of the United States, and is of course only applicable where property is imported in packages. As to other property, such as live stock, the commercial transit ends when it is delivered to the consignee. Thus a flock of sheep driven through a state is a subject of interstate commerce and protected by the federal power against state taxation, although the sheep were permitted to graze during their journey. Property in commercial transit, however transported, through a state or into a state, is not subject to the taxing power of a state, and this immunity extends until the termination of the shipment by the delivery to the consignee. Goods, to be ex
U. S. 465 (1888), 31 L. Ed. 700; Leisy v. Hardin, 135 U. S. 100 (1890), 34 L. Ed. 128, overruling, the License Cases, 5 How. 504 (1847), 12 L. Ed. 256; Lyng v. Michigan, 135 U. S. 161, 34 L. Ed. 150 (1890). The distinction between the state police power and the state taxing power in relation to "original packages" imported from other states is illus rated in two Iowa cases (January, 1905), decided by the supreme court. In Am. Exp. Co. v. Iowa, 196 U. S. 133, 49 L. Ed. 471, the police interference with a liquor importation was denied; while in Cook v. County of Marshall, 196 U. S. 261, 49 L. Ed. 471, tax on a cigarette importation was sustained.
empt, however, must be actually in commercial transit, that is, the transit must have commenced by the delivery to the carrier for shipment. It does not follow however that this immunity from the state taxing power would prevent the property from being subject of an illegal agreement of combination in violation of the anti-trust act (see infra, § 69). The termination of the transit means that the property is subject to taxation in common with other property; but it cannot be subjected to any discriminating regulations on account of its foreign origin.
18 (17). The Wilson bill of 1890.-The judicial application of the original package rule in interstate commerce to the police power of the state and the consequent inability of the state to exclude the importation of liquors resulted in the passage by congress in 1890 of the so-called Wilson bill,2-providing that liquors transported into any state or territory should, upon arriving in such state or territory, be subject to the operation and effect of its laws enacted in the exercise of its police powers to the same extent and in the same manner as though such liquors had been there produced, and should not be exempt therefrom by reason of being introduced in the original packages or otherwise.
This act made effective the state prohibition of the local traffic in imported liquors.
Its constitutionality was contested on the ground that congress could not delegate its control over interstate commerce to the states. It was sustained, however, by the supreme court. The court said that in surrendering their own power over interstate commerce the states did not secure absolute
tic Highlands, N. J., where they were delivered from the steamboats to complainant's wagons for delivery to the purchasers, and it Iwas held that the entire transaction constituted interstate commerce, and that the license tax thereon was invalid.
1 Coe v. Errol, 116 U. S. 517 (1886), 29 L. Ed. 715.
2 Act of August, 1890, and 26
Stats. 313, c. 728. The same principle was also applied in 1900, in making effective the game laws of the states. Act of May 25, 1900, 3 Comp. Stats. U. S. p. 3181, and in Act. of May 9, 1902, in making effective state laws as to "oleomargarine," "butterine" and other imitations of butter.
* In re Rahrer, 140 U. S. 545 (1891), 35 L. Ed. 572.
freedom in such commerce, but only the protection from enencroachment afforded by conforming its execution to congress.
The court held that liquors transported into the state and there sold after the passage of this act of August, 1890, became subject to the then existing laws of the state as to the sale of liquors; that congress did not use terms of permission for the state to act, but simply removed an impediment to the enforcement of state laws in respect to imported packages in their original condition created by the absence of a specific utterance on its part. It imparted no power to the state not then possessed, but allowed imported property to fall at once upon arrival within the local jurisdiction.
19. The limitations of the state control of the liquor traffic. While the Wilson Act is effective in enabling a state to control the sale of liquors imported from other states, it does not prevent the importation and consumption by the consignee. This is because the term "arrival" as used in the Wilson bill, has been construed by the supreme court to mean the completion of the shipment by delivery by the consignee in the state and not by the arrival at the station of the carrier.1 The court said that the act was not intended to, and did not, cause the power of the state to attach to an interstate commerce shipment whilst the merchandise was in transit under such shipment and until its arrival at the point of destination and delivery there to the consignee. It is immaterial that the packages of liquor are shipped by a c. o. d. interstate shipment, and the agent of the express company agrees to hold the shipment to suit the convenience of the consignee in paying for the liquor and taking it away. Neither can intoxicating liquors sshipped c. o. d. into a state from another state be seized while in the hands of the express company on the ground that the sale to the consignee was consummated at the time of shipment so that the merchandise was at his risk. Nor can the agent of an express company be prosecuted for violation of a state statute for furnishing knowingly intoxicating liquor to
1 Rhodes v. Iowa, supra.
Adams Express Co. v. Kentucky, 206 U. S. 129, 51 L. Ed. 987,
reversing the Court of Appeals of Ky., 87 S. W. 1111.
• American Express Co. v. Iowa, 196 U. S. 133, 49 L. Ed. 417 (1905).
an inebriate, from another state, the agent paying the express charges," as the statute construed to cover such case was held to be an attempt to regulate interstate commerce.
The liquor law of South Carolina was held void because it imposed conditions upon the shipment into South Carolina from other states of liquor to a consumer who had purchased it for his own use, and not for sale, as the Wilson Act, while giving to the state plenary power to regulate the sale of liquors, did not permit the state to prevent an individual from ordering liquors from outside of the state for his own consumption.
A state, in the exercise of its police powers within the meaning of the Wilson Act, may lawfully impose an inspection fee upon beer or other malted liquors shipped from other states into the State and held for consumption therein; and it was held immaterial that such an act was denominated as an "inspection law" and did not provide an adequate inspection.3 A state may also exact a license fee for the sale of liquors within the state on board a ferry boat engaged in interstate commerce and making landings at a port of the state.*
§ 20 (18). A state cannot tax interstate commerce.-Although the necessity for the regulation of commerce was the great moving force in the adoption of the constitution, and was thoroughly discussed in the proceedings of the convention and in the Federalist, there is in neither any reference to any possible interference with the taxing power of the state growing out of such regulation. The law of federal restraints upon state taxation has been developed upon the fundamental principle of the supremacy of the federal authority. The exemp
1 Adams Express Co. v. Kentucky, 214 U. S. 218, 53 L. Ed. 972 (1909).
2 Vance v. Vandercook, 170 U. S. 438, 42 L. Ed. 1100; Crescent Liquor Co. v. Platt, 148 Fed. 894, C. C. W. V., holding invalid Act of West Va. In U. S. ex rel. Friedman v. U. S. Express Co., 180 Fed. 1006, the Circuit Court of West. Dist. of Ark. held that petitioner was entitled to writ of mandamus
to compel the express company to receive shipments of liquor for delivery to customers in Oklahoma under Interstate Commerce Act.
3 Pabst Brewing Co. v. Crenshaw, 198 U. S. 17, 49 L. Ed. 925.
4 Fobpiano v. Speed, 199 U. S. 501, 50 L. Ed. 288, affirming 113 Tenn. 167. See also Meyer et al. v. Mobile, 147 Fed. 843, C. C. of Ala., holding valid a liquor ordinance under the Wilson Act.