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delivery of the same, shall be subject in so doing to all the police powers of the State or Territory into which such liquors are transported and delivered, and for this purpose in all cases of the sale of spirituous, vinous, malt, and intoxicating liquors of all kinds in interstate commerce, where the same is sold "Collect on delivery," the place of delivery shall be deemed and held the place of sale.

and that the caption be amended to read: "A bill to regulate in certain cases the transportation and sale of spirituous, malt, vinous, and intoxicating liquors of all kinds, in interstate commerce," and as so amended the committee recommends that the bill do pass.

In order to understand the purpose of and necessity for this proposed legislation, a brief review of the history of interstate commerce in liquor, as it has been written in the opinions of the Supreme Court and in the acts of Congress, is pertinent and proper.

Concisely stated, the Supreme Court decided, in Brown v. Maryland (12 Wheaton, 419), that a State could not exact a license fee from an importer of foreign merchandise as a condition precedent to such importer selling the imported merchandise in the original package, for until such sale was made the court held that the imported merchandise did not become commingled with the common mass of property in the State so as to become subject to its police power. This was in 1827.

In the License Cases, decided in 1847, and reported in Fifth Howard, 504, a citizen of New Hampshire was convicted of violating a State law in selling in the original package a barrel of gin received by him from Massachusetts without first having obtained a license from the State of New Hampshire. The conviction was sustained, and the license law of New Hampshire was held to be a valid exercise of its police power, as applied to an importation from another State that was sold in the original package. It will be noted that Brown v. Maryland related to a foreign importation or to foreign commerce, and that Pierce v. New Hampshire related to an importation from one State into another, or to commerce between the States.

The decision in Fifth Howard remained the law of the land until 1889, or for more than forty years, during all of which time each State regulated and controlled the sale of intoxicating liquors within its borders, whether such liquors were manufactured in the State or shipped therein from some other State. In 1889 the Supreme Court decided Leisy v. Hardin, reported in 125 U. S., 100. In this case, Pierce v. New Hampshire, in Fifth Howard, was overruled, and the rule laid down in Brown v. Maryland as applicable to foreign importotions, was made applicable to importations from one State into another, and it was held that liquor shipped into a State from another State could be sold in the original package in the State where received, regardless of the license laws or other restrictive laws or prohibitive laws of such State.

Following Leisy v. Hardin, and by reason thereof, Congress enacted in 1890 what is commonly known as the Wilson law. The same reads as follows:

That all fermented, distilled, or other intoxicating liquors or liquids transported into any State or Territory or remaining therein for use, consumption, sale, or storage therein, shall upon arrival in such State or Territory be subject to the operation and effect of the laws of such State or Territory enacted in the exercise of its police powers, to the same extent and in the same manner as though such liquids or liquors had been produced in such State or Territory, and shall not be exempt therefrom by reason of being introduced therein in original packages or otherwise.

The validity of this law was upheld in re Rahrer (140 U. S., 545), and later was again upheld and construed in the Rhodes case (170 U. S., 412). In the latter case the court held the words in the act "arrival in such State or Territory" meant arrival at the point of destination and delivery to the consignee.

The effect of this act, as construed, has been to restore the exact and identical situation existing for forty-two years prior to Leisy v. Hardin, so that now, as under Pierce v. New Hampshire, intoxicating liquors, whether manufactured in a State or shipped therein from another State, can not be legally sold in such State without a compliance with its laws. The effect of Leisy v. Hardin has been completely overcome, and there can not be any more "original package" saloons, nor is there any restriction upon the power of the State to restrict or to prohibit the sale.

The power of the States now being full and complete to regulate and control and prohibit the sale of all liquors within their respective borders, it becomes pertinent and proper to inquire why more legislation at the hands of Congress is needed, and what purpose it is proposed to accomplish by such legislation? It is properly within the scope of this report to answer these inquiries, but, first, attention is called to the particular bill under consideration, to wit, H. R. 16479. It has been discovered by reason of the decision of the Supreme Court in American Express Company v. Iowa (196 U. S., 133) that the Wilson law is defective in that it does not include and cover the operations of express companies and other common carriers engaged in handling C. O. D. liquors. In very many of the States, perhaps the most of them, a C. O. D. delivery is held to be a sale, and the place of delivery the place of sale. The C. O. D. liquor business is prohibited within many States.

Under American Express Company v. Iowa, if the C. O. D. liquor comes from without the State its delivery and the collection of the purchase price, in other words the sale, can not be prohibited or controlled through license or otherwise by the State. Under this ruling, while everyone else within the State is subject to its police power in the matter of selling liquors, the express companies are not. The result is that not only do the express companies sell in defiance of the State law, but this privilege of selling has been shown to be the means of inducing and encouraging many evasions of the State law and has given rise to very much of the demand for amendments to the Wilson law. As illustrating the view taken of C. O. D. transactions in interstate commerce in liquors by the State courts, an express company in such a transaction was convicted in the Georgia courts of violating the State law by delivering in Georgia a package of whisky shipped from the State of North Carolina and collecting from the consignee the purchase price. The State supreme court said, in Express Company v. State (114 Ga., 226):

The consignor could not have escaped the effect of the Wilson Act by shipping the package from North Carolina to an agent of his in Dalton, Ga., and through this agent delivering it there to some one else upon such third person paying a stipulated price for the whisky. Clearly in such a case when the package reached the hands of his agent at Dalton it would have arrived in Georgia. It seems to us that the principle is not changed by the mere fact that the consignor addressed the package directly to the party to whom he intended to sell it in Dalton and made the agent of the express com. pany at that point his agent to effect such sale. When the express company's agent at Dalton, acting for the consignor, sold the whisky to the person to whom

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the package was addressed it was in legal effect the same as if the consignor had himself made such sale in Dalton. We are of the opinion that when the express company, as the agent of the consignor, effected or completed the sale in Dalton, Ga., to the consignee it was not shielded by the interstate-commerce clause in the Constitution of the United States from the operation of a penal law of this State.

A similar ruling was made by the supreme court of the State of Iowa, but when same was appealed to the Supreme Court of the United States a reversal was directed (196 U. S., 133), and thus was created the necessity for further legislation, if express companies in the act of selling liquor are to be subjected to the police power of the States.

The purpose of H. R. 16479 is to meet this necessity and to so supplement and complete the Wilson law as that the States can subject to their police powers the sale within their respective territories of all liquors, by all persons. It is realized that it is rather a difficult matter to frame a law covering this particular subject that will stand the test of the courts. A reading of 196 U. S., 133; 187 U. S., 622, and 191 U. S., 441 explains some of the difficulty. Care must be taken to so frame the law that it will not run counter to the long-established principle that one State can not invalidate or prevent the execution of a valid legal contract made in another State. In this bill the act of transportation is separated from the act of sale, and only the latter act is placed under the police power of the State.

It is easy to understand how and why a contract made in Illinois with an express company to deliver a package of whisky in Iowa can not be interfered with by the State of Iowa. The transaction is one in interstate commerce, which the State of Iowa can not control, and the contract being valid in Illinois, the State of Iowa can not prevent its execution. No reason appears, however, why, if the express company should contract further that as to this particular shipment it would act as the agent of the consignor and sell the liquor for him after it reached Iowa, that in so doing it should not be subject to the police laws of Iowa. It is true that the entire contract is but one contract, and yet there are different undertakings in it, and the purpose of this bill is to separate these undertakings and to withdraw from the undertaking to sell the protection of the interstate commerce clause attaching to the whole contract. There must be some remedy for existing conditions, and it being settled that the States are powerless to furnish it, Congress alone can do so. The bill does not seek to authorize the States to interfere with the transportation and delivery of the liquor, for that constitutes interstate commerce in its fundamental aspect; it only seeks to empower the States to interfere with the sale, by removing the restriction that now prevents such interference.

In other words, it is the sale only that can properly come under the police power of the States, and the bill undertakes to go no further than to subject the sale, or rather that part of it actually taking place within the State, to the police power of the State. If the bill undertook to declare in general terms, as does the Littlefield bill, H. R. 13655, that "in all such shipments to be paid for on delivery, commonly called C. O. D. shipments, the sale shall be held to be made at the place of destination or where the money is paid or the goods delivered," a very grave question would be raised as to the constitutionality of the measure, for such an enactment would have the effect of giving an extraterritorial effect to the law of a State. If the

place of sale in a C. O. D. shipment is fixed at the place of delivery, then the laws of the place of delivery must of necessity reach back and cover all the ingredients and transactions going to make up the sale, including, of course, the contract to sell, which is an essential ingredient of the sale itself.

Thus the contract to sell being made in Illinois, and being valid by the laws of that State, would become a violation of the laws of the State of Iowa, and be not only invalid, but criminal under the Iowa laws. In other words, such an enactment would be in the teeth of what the Supreme Court says can not be done. The Court in 196 U. S., 143, said:

Beyond possible question the contract to sell and ship was completed in Illinois. The right of the parties to make a contract in Illinois for the sale and purchase of merchandise and in doing so fix by agreement the time when the condition on which the completed title should pass is beyond question. The shipment from the State of Illinois into the State of Iowa of the merchandise constituted interstate commerce.

To sustain, therefore, the ruling of the court below would require us to decide that the law of Iowa operated in another State, so as to invalidate a lawful contract as to interstate commerce made in such other State; and, indeed, would require us to go yet further and say, that although under the interstate commerce clause a citizen in one State had a right to have merchandise consigned him from another State, delivered to him in the State to which the shipment was made, yet that such right was so illusory that it only obtained in cases where in a legal sense the merchandise contracted for had been delivered to the consignee at the time and place of shipment.

Such an enactment as is proposed in the Littlefield bill would give to the State of Iowa control over the contract to sell made in Illinois and also over the shipment itself, both of which, the contract to sell and the shipment, entered into and formed a part of the sale. In other words, not only would the State of Iowa be empowered to regulate and control contracts to sell made in the State of Illinois, but would also be empowered to regulate and control the shipment, or in another word, the transportation of the liquor while actually in interstate commerce. If the sale should be illegal in Iowa, then the liquor while in process of delivery could be seized and the State of Iowa would thus regulate and control interstate commerce.

In discussing an ordinance of the city of Greensboro, N. C., exacting a license for the delivery of pictures, photographs, etc., sold by a nonresident on orders, which ordinance was declared invalid, the Supreme Court said (187 U. S., 632):

It would seem evident that if the vendor had sent the article by an express company which should collect on delivery, such a mode of delivery would not have subjected the transaction to State taxation. The same could be said if the vendor himself or by a personal agent had carried and delivered the goods to the purchaser. That the articles were sent as freight by rail and were received at the railroad station by an agent who delivered them to the respective purchasers in no wise changes the character of the commerce as interstate.

In another case from North Carolina, involving the sale in Chicago of a sewing machine to be collected for on delivery in North Carolina, the Supreme Court, in 191 U. S., 447, said:

A sale really consists of two separate and distinct elements-first, a contract of sale, which is completed when the offer is made and accepted, and, second, a delivery of the property, which may precede, be accompanied by, or follow the payment of the price, as may have been agreed upon between the parties. The substance of the sale is the agreement to sell and its acceptance. That possession shall be retained until payment of the price may or may not have been a part of the original bargain, but, in substance, it is a mere method of collection, and we have never understood that a license could be imposed upon this transaction except in connection with the prior agreement to sell, although in certain cases arising under the police

power it has been held that the sale is not complete until delivery, and sometimes until payment.

The court further said, on page 450:

The sewing machine was made and sold in another State, shipped to North Carolina in its original package for delivery to the consignee upon payment of the price. It had never become commingled with the general mass of property within the State. While technically the title of the machine may not have passed until the price was paid, the sale was actually made in Chicago, and the fact that the price was to be collected in North Carolina is too slender a thread upon which to hang an exception of the transaction from a rule which would otherwise declare the tax to be interference with interstate commerce.

It is perfectly clear from these opinions that the C. O. D. provision of the Littlefield bill, as quoted above, making the place of delivery the place of sale, is, in effect, to give to one State jurisdiction over the contract to sell made in another State, which contract to sell is "the substance of the sale;" would be to give extraterritorial effect. to the law of a State, and would be to give to the State the power to regulate interstate commerce in its fundamental aspect. None of these things can be constitutionally done. Another very serious effect of the Littlefield C. O. D. provision, and one that is entitled to very careful consideration, is, that under its operation, the act of a citizen in his own State, perfectly legal and proper under the laws of his State, would be criminal under the laws of another State; and not only criminal, but this very person, by the commission of an act lawful in his State, would actually be a criminal in another State without ever entering the territory of the latter State.

If the law of the land should be that the place of delivery is the place of sale, then the laws of the place of delivery must control the sale; therefore, if the State of Iowa prohibits the sale of liquor and its transportation, parties in Illinois agreeing there to sell and deliver in Iowa, upon the payment of the purchase price, are guilty of selling liquor in the State of Iowa. That this is not an overdrawn statement as to the effect of such an enactment we have but to refer to the O'Neil case, reported in 144 U. S., 323. O'Neil resided in New York and there conducted a liquor business. He received by mail and telegraph orders from Rutland, Vt., to ship to that point, to various parties, liquors, the purchase price to be collected on delivery. He filled the orders. He made no sale, except in New York. He was convicted in Vermont of selling without a license and fined $6,140 and costs aggregating $497.96, and if said fine and costs were not paid, he was sentenced to hard labor for 19,914 days, and this conviction and sentence was affirmed by the Supreme Court of the United States. True it is, that the Court has subsequently departed from it, or, rather, has differentiated it by holding that in the O'Neil case no Federal question was raised in the court below, and that the interstate commerce character of the transaction was not considered or passed upon. The case illustrates, however, and demonstrates the condition that would prevail, should the Littlefield provision, as to C. O. D. shipments in interstate commerce, prevail.

No one can advocate such a provision and claim an interest in protecting States rights, State sovereignty, or State police power. A State has no higher power or more solemn duty than to protect its citizens. Its power will all be gone if another State can invade with that State's laws, its territority, and make criminal the acts of its citizens that under its own laws are legal and not criminal. What

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