Barriers Against Interstate Commerce

March 17, 1939

Report Outline
Menaces to Internal Free Trade in the United States
Tax Laws Which Interfere with Trade
Extra-Legal Obstacles to Interstate Commerce
Court Decisions on State Trade Barriers

Menaces to Internal Free Trade in the United States

Restrictions against commerce within the United Xv States originated before the adoption of the Constitution, and recognition of their menace to the general welfare was one of the chief reasons why the Constitution was finally adopted. Spasmodic attempts to discriminate in favor of intrastate commerce were made from time to time in the ensuing 140 years, but until the depression which began in 1929 most of them were either of minor importance or were struck down by the courts.

The problem of raising money for relief and caring for the unemployed in recent years has led many states to renew their efforts to “protect” business and jobs within their own borders, and to collect heavy taxes whenever possible upon business originating elsewhere. Ingenious new methods of getting around the constitutional prohibition against state trade barriers have been sufficiently successful to cause grave concern to those who realize that national prosperity is largely dependent upon internal free trade.

On April 5, 6 and 7 a conference will be held at Chicago under the auspices of the Council of State Governments for discussion of ways and means of removing the restrictions to interstate commerce at present in existence. The Fourth General Assembly of the Council, meeting at Washington last January, adopted a resolution declaring that “interstate trade barriers, under whatever guise, are detrimental to the economic welfare of the country.”

ISSUE TRACKER for Related Reports
Interstate Commerce
Mar. 17, 1939  Barriers Against Interstate Commerce
Jun. 26, 1935  Interstate Compacts
Apr. 19, 1933  Federal Incorporation of Interstate Business
Feb. 24, 1930  The States and Interstate Utility Problems
State, Local, and Intergovernmental Relations