Article I, Section 8, Clause 3 — Meaning of Commerce

ArtI.S8.C3.2 Meaning of Commerce

While the etymology of the word “commerce” suggests that “merchandise,” or goods for sale, was integral to its original meaning,¹ Chief Justice John Marshall in Gibbons v. Ogden interpreted the Commerce Clause broadly.² Gibbons concerned whether the New York legislature could grant a monopoly to Aaron Ogden to operate steamships on New York waters and thereby prevent Thomas Gibbons from operating a steamship between New York and New Jersey pursuant to a license granted by Congress.³ In defending his New York-granted steamship monopoly, Ogden argued that transporting passengers did not constitute “commerce” under the Commerce Clause. Finding New York’s grant of a steamship monopoly violated the Commerce Clause, Chief Justice Marshall reasoned that commerce encompassed not only buying and selling but also, more generally, intercourse and consequently navigation. The Chief Justice wrote:

The subject to be regulated is commerce. The counsel for the appellee would limit it to

traffic, to buying and selling, or the interchange of commodities, and do not admit that

it comprehends navigation. This would restrict a general term, applicable to many

objects, to one of its significations. Commerce, undoubtedly, is traffic, but it is

something more—it is intercourse.⁴

Marshall further noted the general understanding of the meaning of commerce, the Article I, Section 9 prohibition against Congress granting any preference “by any regulation of commerce or revenue, to the ports of one State over those of another,” and Congress’s power to impose embargoes.⁵

In Gibbons, Marshall qualified the word “intercourse” with the word “commercial,” thus retaining the element of monetary transactions.⁶ Initially, the Court viewed activities covered by Congress’s interstate commerce clause power narrowly. Thus, the Court held the Commerce Clause did not reach mining or manufacturing regardless of whether the product moved in interstate commerce;⁷ insurance transactions crossing state lines;⁸ and baseball exhibitions between professional teams traveling from state to state.⁹ Similarly, the Court held that the Commerce Clause did not apply to contracts to insert advertisements in periodicals in another state¹⁰ or to render personal services in another state.¹¹

Later decisions treated the Commerce Clause more expansively. In 1945, the Court held in Associated Press v. United States that a press association gathering and transmitting news to client newspapers to be interstate commerce.¹² Likewise, in 1943, the Court held in American Medical Association v. United States that activities of Group Health Association, Inc., which serve only its own members, are “trade” and capable of becoming interstate commerce.¹³ The Court also held insurance transactions between an insurer and insured in different states to be interstate commerce.¹⁴ Most importantly, the Court held that manufacturing,¹⁵ mining,¹⁶ business transactions,¹⁷ and the like, which occur antecedent or subsequent to a move across state lines, are part of an integrated commercial whole and covered by the Commerce Clause. As such, Supreme Court case law on the meaning of “commerce” in “interstate commerce” covers movements of persons and things, whether for profit or not, across state lines;¹⁸ communications; transmissions of intelligence, whether for commercial purposes or otherwise;¹⁹ and commercial negotiations that involve transportation of persons or things, or flows of services or power, across state lines.²⁰