to Louisville, the longer and interstate haul, at twelve cents per one hundred pounds. The twenty-five cent rate between Franklin and Louisville was conceded to be reasonable, but between Nashville and Louisville there was water competition, and a twenty-five cent charge would have destroyed the company's tobacco traffic between those two points. The Court of Appeals of Kentucky held that the provision was applicable, and that the shipper was entitled to recover the amount of the discrimination against him. The Supreme Court of the United States reversed this judgment, holding that the clause of the Constitution, in so far as construed to apply to the relationship between an intrastate and an interstate rate, directly affected interstate commerce and was invalid.

A case of the same nature, but which extended the principle farther, was Houston, etc. Texas R. R. v. United States.26 That was an action brought by the railroad companies to enjoin an order of the Interstate Commerce Commission directing that the roads cease to discriminate in rates against Shreveport, Louisiana, and in favor of Houston and Dallas, Texas. Acting under orders of the Railroad Commission of the State of Texas, the roads had fixed very materially lower rates on certain articles shipped from Houston and Dallas to interior Texas points than they were charging on the same articles shipped from Shreveport, Louisiana, to such points. The Interstate Commerce Commission fixed reasonable maximum rates for the interstate shipments and ordered that the roads cease discriminating in favor of the intrastate shipments. It was insisted that the Interstate Commerce Commission had no jurisdiction whatever over the intrastate rates, and that any order made affecting them was a nullity. This contention was overruled, the court holding that the intrastate rates directly affected the flow of interstate commerce, and that the order of the commission relieved the railroads from the duty of observing the orders of the state railroad commission. After citing many cases the court said:

"While these decisions sustaining the Federal power relate to measures adopted in the interest of the safety of persons and property, they illustrate the principle that Congress in the exercise of its paramount power may prevent the common instrumentalities of interstate and intrastate commercial intercourse from being used in their intrastate

26 234 U. S. 342 (1914).

This is not to say

operations to the injury of interstate commerce. that Congress possesses the authority to regulate the internal commerce of a State, as such, but that it does possess the power to foster and protect interstate commerce, and to take all measures necessary or appropriate to that end, although intrastate transactions of interstate carriers may thereby be controlled." 27

And again:

"It is immaterial, so far as the protecting power of Congress is concerned, that the discrimination arises from intrastate rates as compared with interstate rates. The use of the instrument of interstate commerce in a discriminatory manner so as to inflict injury upon that commerce, or some part thereof, furnishes abundant ground for Federal intervention. Nor can the attempted exercise of state authority alter the matter, where Congress has acted, for a State may not authorize the carrier to do that which Congress is entitled to forbid and has forbidden.”28

This language of the court would admit of a broad application, but it should be considered in connection with the facts to which it was actually applied.

The Minnesota Rate Cases 29 was an attack upon the orders of the Railroad and Warehouse Commission and the legislative acts of the state of Minnesota prescribing maximum rates for freight and a maximum fare of two cents a mile for passengers. It was insisted that as to certain localities the rates disturbed the relationship previously existing between interstate and intrastate rates, thus imposing a burden upon interstate commerce and causing discriminations against localities outside the state.

The court in effect held that in the absence of Congressional legislation the states have the power to establish for intrastate commerce rates which are reasonable, that is, rates which the state could constitutionally fix, regardless of their incidental effect upon interstate commerce, and that Congress had not undertaken to deprive them of that power in the enactment of the interstate commerce laws. But after mentioning the contentions of the railroad companies that the same facilities were used for the transportation of both interstate and intrastate traffic, and that the two classes of traffic were continually intermingled, and it was practically impossible to keep them separate, the court said:

"But these considerations are for the practical judgment of Congress in determining the extent of the regulation necessary under existing conditions of transportation to conserve and promote the interests of interstate commerce. If the situation has become such, by reason of the interblending of the interstate and intrastate operations of interstate carriers, that adequate regulation of their interstate rates cannot be maintained without imposing requirements with respect to their intrastate rates which substantially affect the former, it is for Congress to determine, within the limits of its constitutional authority over interstate commerce and its instruments the measure of the regulation it should supply."3

It was thus recognized that circumstances may exist under which Congress may regulate to an extent rates on intrastate traffic.

In Reagan v. Mercantile Trust Co.31 and Smyth v. Ames,32 the question was presented whether Congress could control intrastate commerce through the medium of a corporation organized under a charter granted by it. The insistence was that inasmuch as all of the franchises of the corporation had been derived from Congress, among which was the right to charge and collect tolls, the state had no power to limit or qualify them, and hence that Congress alone had the power to regulate the rates to be charged by the corporation. The court held in both cases that Congress had not by the act incorporating the company signified an intent to remove the corporation entirely from the control of the states, but passed over the question whether Congress had the power to do so or not. The evasion of this question by the court is somewhat surprising. It is difficult to understand how Congress can, through a corporation created by it, exercise a power which it does not constitutionally possess. Its authority to create a corporation organized for commercial purposes is derived from the commerce clause of the Constitution.33 And it certainly cannot confer upon a corporation power over commerce which it cannot exercise itself, but which has been reserved to the states.

The power of Congress to pass legislation which affects intrastate commerce is further illustrated by the Hours of Service Act,

California v. Central Pacific R. R., 127 U. S. 1, 39 (1888); Luxton v. North River Bridge Co., 153 U. S. 525, 529 (1894).

the safety appliance acts, the last Employers' Liability Act, and the Adamson Bill, and the decisions of the Supreme Court sustaining them. These cases show that the power which Congress may exercise under the commerce clause is very comprehensive. Yet is there any doubt that there exists in the states a power over railroad companies engaged in interstate commerce which Congress cannot destroy or impair?

That the existence of such power has always been recognized by the Supreme Court of the United States is manifest from numerous declarations of that body to that effect. Thus in Gibbons v. Ogden, in speaking of the commerce clause, it was said:

35

"The enumeration presupposes something not enumerated; and that something, if we regard the language or the subject of the sentence, must be the exclusively internal commerce of a State. . . . The completely internal commerce of a State, then, may be considered as reserved for the State itself."

In License Tax Cases 36 the court said:

“But very different considerations apply to the internal commerce or domestic trade of the States. Over this commerce and trade Congress has no power of regulation nor any direct control. This power belongs exclusively to the States."

In the Trade-Mark Cases 37 the court said:

"While bearing in mind the liberal construction, that commerce with foreign nations means commerce between citizens of the United States and citizens and subjects of foreign nations, and commerce among the States means commerce between the individual citizens of different States, there still remains a very large amount of commerce, perhaps the largest, which, being trade or traffic between citizens of the same State, is beyond the control of Congress."

In Northern Securities Co. v. United States,38 after citing the cases in which the state courts had held combinations in violation of state laws invalid, the court said:

"Is there, then, any escape from the conclusion that, subject only to such restrictions, the power of Congress over interstate and inter34 Baltimore & Ohio R. R. Co. v. Int. Com. Com'n, 221 U. S. 612 (1911); Southern Ry. Co. v. United States, 222 U. S. 20 (1911); Second Employers' Liability Cases, 223 U. S. 1 (1912).

5 Wall. (U. S.) 462, 470, 478 (1866).

193 U. S. 197, 342 (1904).

national commerce is as full and complete as is the power of any State over its domestic commerce?"

Like expressions occur in numerous other cases, among them those above cited which construe most broadly the commerce clause of the Constitution.

But if any doubt had arisen that because of the intimate association of interstate and intrastate commerce growing out of modern methods of transportation the United States could assume full control over all the business and activities of a carrier of interstate commerce, that doubt was put to rest by the decision of the Supreme Court in the first Employers' Liability Cases.39 The act there attacked was held unconstitutional because liability was made to rest on the mere fact that the employer was engaged in interstate commerce, and not upon the connection the act of negligence, upon which liability was predicated, had with interstate commerce. Upon this subject the court said:

"It remains only to consider the contention which we have previously quoted, that the act is constitutional, although it embraces subjects not within the power of Congress to regulate commerce, because one who engages in interstate commerce thereby submits all his business concerns to the regulating power of Congress. To state the proposition is to refute it. It assumes that because one engages in interstate commerce he thereby endows Congress with power not delegated to it by the Constitution, in other words, with the right to legislate concerning matters of purely state concern. . . . It is apparent that if the contention were well founded it would extend the power of Congress to every conceivable subject, however inherently local, would obliterate all the limitations of power imposed by the Constitution, and would destroy the authority of the States as to all conceivable matters which from the beginning have been, and must continue to be, under their control so long as the Constitution endures." 40

...

Four justices dissented on the ground that the act could and should have been so construed as to apply only to accidents directly connected with interstate commerce and to employees when engaged in such commerce. But all agreed that it was unconstitutional if the interpretation of the majority was correct.

The second Employers' Liability Act by express language applied to common carriers by railroad only "while engaging in