Abstract
The majority of problems in this area centre round firstly, the extent to which interstate commerce may be regulated and still remain “free,” and secondly, the extent to which interstate commerce may be affected by taxation. Consequently, a fuller discussion will more appropriately be made below, under those headings. However, substantial problems may still have to be resolved as to whether it is the state or the federal legislature which may regulate commerce which has both interstate and intra-state elements “intermingled” or “commingled,” and those will be discussed here.
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References
156 U.S. 1, 13 (1895).
116 U.S. 517, 527 (1886).
Thus, for example, Mr. Justice Frankfurter for the Court in. Freeman v. Hewit, 329 U.S. 249, 255 (1946): “For some purposes, manufacture and the shipment of its products beyond a State may be looked upon as an integral transaction. But when accommodation must be made between state and national interests, manufacture within a State, though destined for shipment outside, is not a seamless web so as to prevent a State from giving the manufacturing part detached relevance for purposes of local taxation.”
262 U.S. 553, 600-601 (1923).
Id. at 605.
United States v. Butler, 297 U.S. 1, 64 (1936).
Hammer v. Dagenhart, 247 U.S. 251, 272 (1918).
United States v. Rock Royal Co-operative, 307 U.S. 533, 569 (1939).
United States v. Darby, 312 U.S. 100, 117 (1941), overruling Hammer v. Dagenhart, supra, note 7.
Mandeville Island Farms Inc. v. American Crystal Sugar Co., 334 U.S. 219, 229 (1948). See also Wickard v. Filburn, 317 U.S. 111, 123-24 (1942).
317 U.S. 341, 362 (1943).
Id. at 363.
12 How. 299 (1851).
93 Commw. L.R. 55 (1955).
Id. at 72. Similarly Dixon J. in Wragg v. New South Wales, 88 Commw. L.R. 353, 383 (1953) — “The economic interdependence of trade and commerce among the States cannot lead to a weakening of the legal distinction which the Constitution itself makes.” In its express terms, of course, the Constitution makes no such distinction.
[1930] A.C. 111, 121 (P.C.)
12 Wheat. 419, 441-42 (1827).
135 U.S. 100 (1890).
Supra, Chapter 2, page 17.
— as far as concerns the price to the consumer, at any rate, who will be obliged to bear the burden of the entrepreneur’s overheads, whether these be in the form of property taxes or licence taxes. There may, of course, be significance here in the degree of what might be termed “economic attractiveness” to the out-of-State exporter, where only he, and not the domestic entrepreneur, has to pay an additional sum for the privilege of doing business. The problem here usually resolves itself into one of whether the out-of-State exporter, who is subjected to a licence tax, is being asked to pay for more than the benefits he receives from the State into which he intrudes, i.e. whether he is “discriminated” against. In Canada the analogue of Article I:10:2 of the United States Constitution is Section 121 of the British North America Act, 1867, which in its terms applies to imports from sister-Provinces, and this application was judicially confirmed by the Privy Council in Atlantic Smoke Shops Ltd. v. Conlon, [1943] A.C. 550, 568-70 (P.C.). A similar situation exists under Section 90 of the Australian Constitution. The problem in Canada and Australia therefore becomes that of deciding whether a particular tax levied by a State or Province is equivalent to a customs duty or excise, or similar “indirect,” — and therefore forbidden — tax.
8 Wall. 123 (1869).
114 U.S. 622, 632 (1885).
Wragg v. New South Wales, 88 Commw. L.R. 353 (1953).
Id. at 387.
51 Commw. L.R. 108 (1934).
52 Commw. L.R. 189, 206 (1935).
Anderson, Freedom of Inter-state Trade: Essence, Incidence and Device under Section 92 of the Constitution, 33 Austl. L.J. 276, 294 (1959).
93 Commw. L.R. 127, 162 (1955).
250 U.S. 199, 203 (1919).
87 Commw. L.R. 1, 36 (1953).
Supra, note 23.
Supra, note 30.
322 U.S. 533 (1944).
87 Commw. L.R. 1, 15-16, 18 (1953).
Compare the following portions of the leading opinions in these two cases: — “[I]f either party finds it necessary to transmit money across … a boundary so that he may make a payment in pursuance of the obligation of the contract, the transmission of the money will be an act of inter-State commerce, but that will not make the performance of the contract an inter-State transaction.” — Hospital Provident Fund Pty. Ltd. v. Victoria, 87 Commw. L.R. at 15, per Dixon C.J. “[A] nationwide business is not deprived of its interstate character merely because it is built upon sales contracts which are local in nature.” — United States v. South-Eastern Underwriters Association, 322 U.S. at 547, per Black J. The Australian judges appear to have relied over-heavily on the dissenting opinions in the United States Supreme Court.
76 Commw. L.R. 1 (1948).
Id. at 381.
87 Commw. L.R. at 18-19.
80 Commw. L.R. 432, 498 (1950) per Fullagar J.
Cf. Hughes & Vale Pty. Ltd. v. New South Wales (No. 1), [1955] A.C. 241 (P.C.) (state statute requiring licence to be obtained to engage in transportation business held invalid as prohibitory) with Grannall v. Marrickville Margarine Pty. Ltd., 93 Commw. L.R. 55 (1955) (state statute prohibiting production of margarine beyond amount specified in licence required to be obtained held valid as regulatory).
See Mansell v. Beck, 30 Austl. L.J. 346 (1956) sustaining state statute prohibiting publication of advertisements etc., relating to lotteries. Per Dixon C.J. and Webb J. at 349: “To seize upon the general and abstract truth that communications and payments of money from one State to another fall within the description trade commerce or intercourse is to disregard the fact that in no such aspect are these things dealt with by such a provision. If the Federal Parliament were to enact that none of the means of communication or of paying money between States was to be employed for, or in furtherance of the conduct of, a lottery, then an attack upon the enactment upon the ground that it infringes s. 92 might be expected to fail. Indeed it may be supposed that the question would rather be whether in spite of Champion v. Ames … it should be regarded as a law with respect to trade and commerce within s. 51(i). But to say that it was such a law would not mean that by consequence it necessarily worked an impairment of the freedom of trade commerce and intercourse among the States. However no such question would arise on the kind of State law assumed. For it would operate, not by reference to inter-State commerce, but quite independently of the inter-State or commercial character of what was done.” (Emphasis supplied.)
Grannall v. Marrickville Margarine Pty. Ltd., supra note 40, 93 Commw. L.R. at 78. The Canadian Supreme Court came dangerously near to an “essential elements” test in Winner v. S.M.T. (Eastern) Ltd., [1951] Can. Sup. Ct. 887, aff’d. in part and rev’d. in part sub nom. A.-G. for Ontario v. Israel Winner, [1954] A.C. 541 (P.C.), in distinguishing between essential and incidental portions of an enterprise. On appeal, however, the Privy Council held quite firmly that “this method of approach results from a misapprehension of the true construction of section 92(10) (a) of the British North America Act. The question is not what portions of the undertaking can be stripped from it without interfering with the activity altogether; it is rather what is the undertaking which is in fact being carried on. Is there one undertaking ….” [1954] A.C. at 581.
Wickard v. Filburn, 317 U.S. 111, 125 (1942). A Canadian case analogous to the Australian Hospital Provident Fund case was disposed of much more shortly. A provision prohibiting the selling of the shares of Dominion Companies was held not to be ultra vires provincial legislation inasmuch as it did not preclude them from selling their shares unless they were registered, but merely subjected them to competent provisions applying to all persons trading in securities. Lymburn v. Mayland, [1932] A.C. 318, 324. (P.C.).
See, Nicholas, The Australian Constitution, 239 (2nd ed. 1952); Phillips, Trade Commerce and Intercourse in Else-Mitchell (Ed.), Essays on the Australian Constitution, 210, 236-37 (1952).
Supra, page 31.
See W. & A. McArthur Ltd. v. Queensland, 28 Commw. L.R. 530, 559, 560 (1920).
For example, R. v. Burgess: ex parte Henry, 55 Commw. L.R. 608, 672 (1936) per Dixon J.; Wragg v. New South Wales, 88 Commw. L.R. 353, 385 (1953), per Dixon C.J.
R. v. Burgess: ex parte Henry, supra note 47, 55 Commw. L.R. at 629 per Latham C.J.
Russell v. Walters, 96 Commw. L.R. 177 (1956).
Hughes v. Tasmania, 93 Commw. L.R. 113 (1955).
Brazil, Border Hopping and Section 92 of the Constitution, 34 Austl. L.J. 77, 86–87 (1960).
10 Wall. 557 (1870).
332 U.S. 218 (1946).
Id. at 228.
Federal Power Commission v. Natural Gas Pipeline Co., 315 U.S. 575, 582 (1942).
Houston, E. & W. T. R. Co. v. United States, (The Shreveport Case), 234 U.S. 342, 351-52, 353 (1914).
Supra, note 55, 315 U.S. at 582.
273 U.S. 83, 90 (1927).
252 U.S. 23 (1920).
The subsequent problems in this area centre round assessments of the “reasonableness” of state regulation, i.e. how far the state may regulate without unreasonably impairing the “freedom” of interstate commerce. See e.g. Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591 (1944).
[1936] Can. Sup. Ct. 398, 426.
R. v. Eastern Terminal Elevator Co., [1925] Can. Sup. Ct. 434, 448 per Duff J., citing Montreal v. Montreal Street Railway, [1912] A.C. 333. (P.C.).
Reference re The Farm Products Marketing Act, R.S.O. 1950, c. 131 as amended, [1957] Can. Sup. Ct. 198, 209 per Rand J.
Id. at 209-10.
317 U.S. 341, 362 (1943), discussed supra, page 24.
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© 1964 Martinus Nijhoff, The Hague, Netherlands
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Mackinnon, V.S. (1964). Inter-State or Intra-State? Where Does Interstate Commerce Begin and End?. In: Comparative Federalism. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-8910-1_3
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