Mr. Assistant Attorney General Brown, for the United States. [250 U.S. 199, 200] Mr. Charles E. Hughes, of New York City, for defendants in error.
Mr. Chief Justice WHITE delivered the opinion of the Court.
The 24 counts of the indictment in this case were concerned with the commission of acts defined as criminal and punished by the forty-first section of the Act of August 29, 1916, entitled, 'An act relating to bills of lading in interstate and foreign commerce.' 39 Stat. 538, 544, c. 415 ( Comp. St. 8604u).
In the first count it was charged that the accused, in violation of the section, on or about the 14th day of August, 1917, in Cincinnati, Ohio--
A copy of the fabricated bill of lading was reproduced in the count. It was negotiable in form, following the standard approved by the Interstate Commerce Commission (Order No. 787, June 27, 1908). The bill acknowledged the receipt by the Cincinnati, Hamilton & Dayton Railway Company of corn in bulk at a designated place in Indiana, shipped to Cincinnati to the order of the shipper, and with directions to notify a person named. It contained all the [250 U.S. 199, 201] earmarks which would have been found in a genuine bill of lading.
The second count charged the knowing, willful, and felonious uttering of the bill of lading, and, with criminal intent and knowledge, obtaining money on it from the Second National Bank of Cincinnati by using it as collateral.
These first 2 counts are types of the remaining 22, except that the latter dealt with 11 other bills of lading as to each of which there were 2 counts, charging in the exact words used in the first and second counts, on the one hand the felonious fabricating and uttering of a bill of lading, and on the other hand the uttering and obtaining on the same bill of money from the Second National Bank of Cincinnati.
There was a motion to quash all the counts based upon alleged defects in pleading with which we are not concerned, and by demurrer the failure of the indictment to charge an offense was asserted on these grounds:
The demurrer was sustained and all the counts in the indictment were dismissed (256 Fed. 388). The court said: [250 U.S. 199, 202] 'It was agreed in the argument and assumed in the briefs of counsel that the so-called bills of lading were fictitious, in that there was no actual consignor or consignee and that they did not relate to any shipment or attempted shipment of corn whatsoever. This fact so agreed upon in open court is to be read into the indictments.'
Dealing with the case thus made, the court observed:
And upon these premises, after reviewing what were deemed to be the controlling authorities, it was concluded that the case--
Despite the hypothetical form in which this conclusion is expressed, the context of the opinion makes it certain that, reading the facts charged in the indictment in the light of the admissions made at the argument, the court construed the section of the statute as embracing such acts and decided that as thus construed it was void for repugnancy to the Constitution.
At the outset confusion in considering the issue may result unless obscurity begotten by the form in which the [250 U.S. 199, 203] contention is stated by dispelled. Thus both in the pleadings and in the contention as summarized by the court below it is insisted that, as there was and could be no commerce in a fraudulent and fictitious bill of lading, therefore the power of Congress to regulate commerce could not embrace such pretended bill. But this mistakenly assumes that the power of Congress is to be necessarily tested by the intrinsic existence of commerce in the particular subject dealt with, instead of by the relation of that subject to commerce and its effect upon it. We say mistakenly assumes, because we think it clear that if the proposition were sustained it would destroy the power of Congress to regulate, as obviously that power, if it is to exist, must include the authority to deal with obstructions to interstate commerce (In re Debs, 158 U.S. 564 , 15 Sup. Ct. 900) and with a host of other acts which, because of their relation to and influence upon interstate commerce, come within the power of Congress to regulate, although they are not interstate commerce in and of themselves. It would be superfluous to refer to the authorities which from the foundation of the government have measured the exertion by Congress of its power to regulate commerce by the principle just stated, since the doctrine is elementary and is but an expression of the text of the Constitution (article 1, 8, cl. 18). A case dealing with a somewhat different exercise of power, but affording a good illustration of the application of the principle to the subject in hand, is First National Bank v. Union Trust Co., 244 U.S. 416 , 37 Sup. Ct. 734, L. R. A. 1918C, 283, Ann. Cas. 1918D, 1169
Although some of the forms of expression used in the opinion below might serve to indicate that the error just referred to had found lodgment in the mind of the court, the context of the opinion makes it certain that such was not the case, since the court left no obscurity in its statement of the issue which it decided, saying 'They [the fictitious bills of lading] did not affect commerce directly or indirectly. They did not obstruct or interfere [250 U.S. 199, 204] with it in any manner and had nothing whatever to do with it, or with any existing instrumentality of it.'
This statement not only clearly and accurately shows the question decided, but also with precision and directness points out the single and simple question which we must consider and dispose of in order to determine whether the court below erred in holding that the authority of Congress to regulate commerce did not embrace the power to forbid and punish the fraudulent fabrication and use of fictitious interstate bills of lading.
That bills of lading for the movement of interstate commerce are instrumentalities of that commerce which Congress under its power to regulate commerce has the authority to deal with and provide for is too clear for anything but statement, as manifested not only by that which is concluded by prior decisions, but also by the exertion of the power by Congress. Nothing could better illustrate this latter view than do the general provisions of the act, the forty-first section of which is before us. See, also, Act of June 29, 1906, c. 3591, 7, 34 Stat. 584, 593 (U. S. Comp. St. 8604a, 8604aa); Act of June 18, 1910, 36 Stat. 546, c. 309, 7 (Comp. St. 8563); Almy v. California, 24 How. 169: Thames & Mersey Marine Ins. Co. v. United States, 237 U.S. 19, 26 , 35 S. Sup. Ct. 496, Ann. Cas. 1915D, 1087; Atchison, Topeka & Santa Fe Railway Co. v. Harold, 241 U.S. 371, 378 , 36 S. Sup. Ct. 665; Luckenbach v. McCahan Sugar Refining Co., 248 U.S. 139 , 39 Sup. Ct. 53; Missouri, Kansas & Texas Railway Co. v. Sealy, 248 U.S. 363 , 39 Sup. Ct. 97. That, as instrumentalities of interstate commerce, bills of lading are the efficient means of credit resorted to for the purpose of securing and fructifying the flow of a vast volume of interstate commerce upon which the commercial intercourse of the country, both domestic and foreign, largely depends, is a matter of common knowledge as to the course of business of which we may take judicial notice. Indeed, that such bills of lading and the faith and credit given to their genuineness and the value they represent are the producing and sustaining causes of the enormous number [250 U.S. 199, 205] of transactions in domestic and foreign exchange is also so certain and well known that we may notice it without proof.
With this situation in mind the question therefore is: Was the court below right in holding that Congress had no power to prohibit and punish the fraudulent making of spurious interstate bills of lading as a means of protecting and sustaining the vast volume of interstate commerce operating and moving in reliance upon genuine bills? To state the question is to manifest the error which the court committed, unless that view is overcome by the reasoning by which the conclusion below was sought to be sustained. What was that reasoning? That the bills were but 'pieces of paper fraudulently inscribed ... and did not affect commerce directly or indirectly ... and had nothing whatever to do with it or any existing instrumentality of it.' But this rests upon the unsustainable assumption that the undoubted power which existed to regulate the instrumentality, the genuine bill, did not give any power to prevent the fraudulent and spurious imitation. It proceeds further, as we have already shown, upon the erroneous theory that the credit and confidence which sustains interstate commerce would not be impaired or weakened by the unrestrained right to fabricate and circulate spurious bills of lading apparently concerning such commerce. Nor is the situation helped by saying that, as the manufacture and use of the spurious interstate commerce bills of lading were local, therefore the power to deal with them was exclusively local, since the proposition disregards the fact that the spurious bills were in the form of interstate commerce bills which in and of themselves involved the potentiality of fraud as far-reaching and all-embracing as the flow of the channels of interstate commerce in which it was contemplated the fraudulent bills would circulate. As the power to regulate the instrumentality was coextensive with interstate com [250 U.S. 199, 206] merce, so it must be, if the authority to regulate is not to be denied, that the right to exert such authority for the purpose of guarding against the injury which would result from the making and use of spurious imitations of the instrumentality must be equally extensive.
We fail to understand the danger to the powers of government of the several states which it is suggested must arise from sustaining the validity of the provisions of the act of Congress in question. On the contrary, we are of opinion that to deny the power asserted would be to depart from the text of the Constitution and to overthrow principles of interpretation which, as we have seen, have been settled since McCulloch v. Maryland, 4 Wheat. 316, and which in application have never been deviated from.
This conclusion remains unshaken despite an examination of the decided cases cited by the court below in its opinion or which were pressed upon our attention in argument, since in our judgment they all but express the general principles of interpretation which we have applied and which are decisive against the contention of want of power in Congress which was upheld below and is here insisted upon.
It follows that the judgment below was wrong. It must therefore be reversed, and the case be remanded for further proceedings in conformity with this opinion.
And it is so ordered.
Mr. Justice PITNEY dissents.