Brown v. Maryland , 6 L. Ed. 678 ( 1827 )

Mr. Justice Thompson

dissented. It' is- with some reluctance, and very considerable diffidence, that 1 have brought myself publicly to dissent from the opinion of the Court' in this case: and did it not involve.an important constitutional question relating to the relative powers of the general and State governments, I should silently acquiesce jn the judgment of the Court, although my own opinion might not accord with theirs.

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 the 23d of 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 pénalties 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 he authorized to sell such merchandise. The act does not require a license to import, or demand any thing 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 the offence 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 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, vP"ére dealing, both as importers and sellers. The indjctment 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 otjjer wholesale dealer in foreign merchandise, hut requires both to take out a license to sell; nor does it appear to me, that this law, in any manner, in-, fringes 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 Slates respectively before' the adoption of the constitution,and is nota 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 interna! 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. Rep. 194.) the Court, in speaking of the grant of the power of Congress to regulate commerce, say, “ 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 hot 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 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 afreet 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 ne? cessary 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 Slate itself.” And, again, (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, os 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, (5 Cranch, 368. 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 Ma¿ryland 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, with 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',

The compensation required by this law to he. 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 articl.es. 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, thelaw 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. Cán such a distinction, however, be 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 of duty on imports, It is the merchandise that is exempted from the imposition. The constitútion no where 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 o'f 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. when his neighbour, 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 oí the property of the country, and to be applied to domestic use, it loses this pretended privilege. But every one 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 woul‘d présent 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 neighbour who was selling by retail

It is laid down in No. 32 of the Federalist, (and 1 believiuniversally 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 fluty 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 lax 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 duly and lax are, iii 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 miist 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 same footing as a purchase of a privilege to sell in any other manner, as by retail, at auction, or as hawkers and pedlars, 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 m 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

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 oyer 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 taxés 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 hot effect the objects proposed. Whether this additional burden i&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 peo.ples 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 instrumentalityNf the one govern-, ment as the other.

The doctrine of the Court in the case of M'Culloch v. the State of Maryland, (4 Wheat. Rep. 316.) has been urged as having a bearing upon this question unfavourable 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 co-extensive 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 abject 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 np 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 cofrimon, 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 ih'ese objections do not apply to the law in question. The government ofthe 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 any thing 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 o'f the United States. And, indeed, the power of crippling the operations of the government, in the former, case, would not be go 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, cl 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, Ijale, 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 und 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 Bah timore, be reversed and annulled, and that the cause be -remanded to the said Court of Appeals, with directions to reVerse the same;