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plies, to regulate the earnings of the railways from traffic moved wholly within a state, it has the power to take over regulation of such local earnings. It has power to do the same thing should it find exercise of that power necessary to prevent discriminations as between transportation local to a state and transportation with foreign nations and among the states; in other words, to prevent the government scheme of rates from being broken down by inconsistent local state rates.

It is thought that these propositions are settled by the decisions of the Supreme Court.

This flows necessarily from what the court decided in Brown v. Maryland, where it was said:

"It has been observed, that the powers remaining with the states may be so exercised as to come in conflict with those vested in congress. When this happens, that which is not supreme must yield to that which is supreme. This great and universal truth is inseparable from the nature of things, and the constitution has applied it to the often interfering powers of the general and state governments, as a vital principle of perpetual operation.”

Recurring to the doctrine held in Monongahela Navigation Co. v. United States," that the power of Congress is as far-reaching over the railways as over the natural highways by water, let us see what the court has decided with respect to the power of Congress over waters.

In The Daniel Ball & the power of Congress was sustained to regulate a steamboat plying on water wholly within the state of Michigan but carrying goods coming from and going to points beyond the state. Congress has assumed exclusive jurisdiction of water highways;' has required all steam vessels running on navigable waters of the United States to be licensed regardless of whether they carry commerce among the states; 10 has regulated the contractual relations of employer and employee; 11 and of owners and shippers. 12 It was held in Gibbons v. Ogden,13 and this holding was followed in 12 Wheat. 419, 448 (1827).

7 148 U. S. 312 (1892). 10 Wall. 557 (1870). 9 Wisconsin v. Duluth, 96 U. S. 379, 387 (1877).

10 The Daniel Ball, supra; The Hazel Kirke, 25 Fed. 601 (1885); The Oyster Police Steamers, 31 Fed. 763 (1887).

11 Patterson v. Bark Eudora, 190 U. S. 169 (1902). 12 In re Garnett, 141 U. S. 1 (1890).

9 Wheat. 1 (1824).





Brown v. Maryland,14 that the power of Congress over commerce is complete and acknowledges no limitations other than those prescribed by the Constitution; that the power is coextensive with the subject on which it acts, and cannot be stopped at the external boundary of a state, but may enter its interior.

It was said in the Minnesota Rate Cases: 15

"There is no room in our scheme of government for the assertion of state power in hostility to the authorized exercise of Federal power. The authority of Congress extends to every part of interstate commerce, and to every instrumentality or agency by which it is carried on; and the full control by Congress of the subjects committed to its regulation is not to be denied or thwarted by the commingling of interstate and intrastate operations. This is not to say that the Nation may deal with the internal concerns of the State, as such, but that the execution by Congress of its constitutional power to regulate interstate commerce is not limited by the fact that intrastate transactions may have become so interwoven therewith that the effective government of the former incidentally controls the latter. This conclusion necessarily results from the supremacy of the national power within its appointed sphere."

The Minnesota Rate Cases establish that a state may lawfully fix local rates within its borders until Congress acts; but that when Congress finds it proper to take over regulation of local rates, in order efficiently and completely to regulate commerce with foreign nations and among the states, there is no defect in congressional power.

The principle of the Minnesota Rate Cases was followed in Houston & West Texas Railway Co. v. United States, 16 which must be considered to have settled beyond further controversy: that the authority of Congress is at all times adequate to meet varying exigencies and protect national interests, and necessarily includes the right to control operations of carriers in all matters having such a close and substantial relation to commerce among the states that control is essential or appropriate to regulation of such commerce; that transportation by carriers local within states cannot derogate from the complete and paramount authority of Congress, or preclude the federal power from preventing local operations being used as a means of injury to what has been confided to federal authority; that it is for Congress to say, and not the states, what is necessary for com

12 Wheat. 419, at 446 (1827).

U. S. 352, at 399 (1912). 234 U. S. 342 (1913).





plete control of commerce among the states, and that Congress, in order to perfect and protect that control, may regulate transportation wholly within a state.

It has therefore been determined that Congress, under its power to regulate commerce, may itself build railways or provide for government railways by delegation of power to corporations. The government may also provide for transportation of its mails, its armies, and its property by any means it chooses to select. Under these ample powers it may provide its own instrumentalities of transportation or may make use of existing instrumentalities.

In determining the method of exercise of either of the powers referred to, Congress is subject to no limitations except those expressed or implied in the Constitution of the United States. Neither the existence of the states nor any state power imposes such limitation. The power of Congress is as ample as if there were no states.

Congress may therefore adopt the means of chartering new federal incorporations; it may by that means or by direct action build a system of government railways throughout the United States; it may provide for condemnation of existing railways. The broad and unlimited power being granted, there seems to be no difficulty in Congress making the existing railways federal incorporations with such powers and rights as it chooses to confer. The non-consent of the states certainly is not a valid objection. We have long been familiar with the act of Congress under which state banks by specified vote of stockholders may convert themselves into national banks. This transmutation may be made against the will of the state. It may be made against the will of minority stockholders. Casey v. Galli 17 holds that no consent of the state is necessary because “it was as competent for Congress to authorize the transmutation as to create such institutions originally.” And if the transmutation may be made against the objection of a minority of stockholders it may be made without vote or consent of any stockholder. It would seem to be a conclusive answer to a stockholder's objection that he went into the enterprise subject to the possible exercise of lawful governmental authority.18

Charles W. Bunn. ST. PAUL, MINN.



94 U. S. 673 (1876). 18 Louisville & Nashville R. Co. v. Mottley, 219 U. S. 467, 480 (1910).

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ORE than thirty years ago federalism was referred to as a

"discovery or invention in the art of constitutional architecture," and as "a curious and complicated piece of legal mechanism."1 The leading characteristics of federalism were then defined as (1) the supremacy of the constitution; (2) the distribution of the different powers of government among bodies with limited and coördinate authority; (3) the authority of the courts to act as interpreters of the constitution. Three federations familiar to the publicists at this time were the United States, Canada, and Switzerland; the Argentine federation, although formed in the middle of the nineteenth century, was practically unknown outside of South America. The constitutional system of the United States was looked upon as embodying to the fullest extent the three principles of federalism.

Since the appearance of Professor Dicey's analysis of the fundamentals of federalism this form of government has had an interesting growth not only among the South and Central American republics but also in the formation of the Australian Commonwealth and in the recently established South African Union.

In the enactment of the British North America Act and in its interpretation by Canadian courts and the Privy Council, Canada has developed a form of federalism in marked contrast with that of the United States.? Switzerland also has not accepted federalism according to American notions. The federal legislature, in the first place, is made the final interpreter of the Constitution and, consequently, the position of the Supreme Court is greatly decreased in importance. Moreover, under the Swiss system the executive exercises extensive powers within the scope of administrative law, which leaves a somewhat restricted field for the legislature and for the courts and which results in the absence of a separation of powers such as is in vogue in other federal systems. Finally, the necessity of a referendum on constitutional questions and the direct method of procedure for the submission of such questions render some of the fundamental concepts of federalism inapplicable. It remained for the Australasian federal conventions to enact a constitution in which an effort was made to reproduce the principles of federalism in accordance with the American model.

i Professor A. V. Dicey, “Federal Government,” 1 L. QUART. REV. 80. ? See “Judicial Review of Legislation in Canada,” 28 Harv. L. REV. 565.

One year after the Convention met in Philadelphia and prepared the Constitution of the United States, Captain Phillips with a band of convicts landed in New South Wales and laid the foundation which later developed into the unique and interesting form of government known as the Commonwealth of Australia. Owing to the general policy of colonial government at the time and the peculiar character of Captain Phillip's settlement the colony he established was governed for more than forty years by autocratic governors. Gradually it became necessary to nominate a council to advise the Governor and then to arrange for the election of certain members of the council, thus laying the basis for a representative legislative body. As an outgrowth of remonstrances and opposition to autocratic power the home government was finally prevailed upon to grant responsible government, with one or both houses elective, to New South Wales, Tasmania, South Australia, and Queensland. About the same time that the grant of selfgovernment was made the colonies themselves began the movement for federation which culminated in the establishment of the Commonwealth before the close of the nineteenth century.

The federation movement made little progress for more than twenty years and it did not become a vital issue of the colonies until the appearance of France, Germany, and the United States as rival colonizing countries. In 1883 the first Australian convention met in Sydney and announced an Australian doctrine similar to the Monroe Doctrine, to wit: The further acquisition of dominion in the Pacific south of the equator by any foreign power would be highly detrimental to the safety and well-being of the British possessions in Australasia and injurious to the interests of the empire. An outgrowth of this convention was the Federal Council of Australasia — the forerunner of the present federation. The experience gained through the council as well as a controversy over

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