May we not also inquire whether there is any urgent reason why implied liens for necessaries should longer be recognized? The law which we administer was developed at a time when news travelled slowly. Today when communication can readily be effected with all parts of the world, do "the necessities of commerce" still demand the enforcement of the ancient rule?

Within the present century two bills have been introduced into Congress for the purpose of amending the law of the country with respect to materialmen's liens. The first, drafted by a committee of the Maritime Law Association of the United States, is generally consistent with existing American theories. The bill, however, did not meet with universal approval, and consequently a second measure, containing features which can be traced to the French law, was introduced in the Senate the following year.2 Nothing further has been accomplished, apparently because of the disagreement among those interested in the subject, but it ought not to be difficult to draft a statute satisfactorily correcting the most vital defects in the law, and securing uniformity throughout the country. Could the doctrine of Ferry Co. v. Beers be included as one of these defects and the voice of the case silenced in a constitutional manner, thus finally disposing of the rights of the states in the premises, the achievement would be complete.3

The authority of Congress to legislate with respect to liens on domestic vessels seems to be generally assumed, at least, it has never been seriously questioned. The Supreme Court, however, has frequently asserted that under the Constitution the scope of the admiralty and maritime jurisdiction is a matter for the federal courts alone and cannot be affected by either the states or Congress. Inasmuch, therefore, as the highest federal court has but just reiterated that an agreement to build a vessel is not maritime, it may be doubted whether Congress could attach a maritime lien to the contract and make it enforceable in the admiralty courts.

1 Senate Bill No. 6488; House Bill No. 15803, introduced Dec. 9, 1902. 2 Senate Bill No. 160, Nov. II, 1903.

3 Note the opportunity for conflict between the state and federal courts under the present anomalous conditions. Lummus, Liens, § 214.

See Mr. Justice Bradley in The Lottawanna, 21 Wall. (U. S.) 577-8, 580-1 ; Hammond, J., in The Rapid Transit, 11 Fed. 326, 330; Hughes, Adm., 102.

5 The St. Lawrence, 1 Black (U. S.) 522, 527 (cf. The Lottawanna, 21 Wall. (U. S.) 575-6, Bradley, J.); The Belfast, 7 Wall. (U. S.) 624, 640-1; The Roanoke, 189 U. S. 198. Note also Mr. Justice Brown in The Blackheath, 195 U. S. 361, 369.

• The Winnebago, 205 U. S. 354.

But the situation is indeed unfortunate if, for the reason that the Supreme Court has declined to disturb a ruling founded upon a narrower view of the limits of the admiralty jurisdiction than is recognized in continental Europe, we are powerless to incorporate into the law of the United States an ancient provision of the maritime law of continental countries generally considered wise and correct in theory.1

In any event it is hoped that some action will at once be taken, and if this article serve to reawaken interest in the subject to the end that Congress be induced to rescue the law from its present state if only in part-it will have accomplished its full purpose.

BOSTON.

Fitz-Henry Smith, Jr.

1 See Holmes, J., writing the opinion of the court in The Blackheath, 195 U. S. 364. And compare The Lottawanna, 21 Wall. (U. S.) 576-7; The Roanoke, 189 U. S. 198; The Chusan, 2 Story (U. S. C. C.) 462.

HARVARD LAW REVIEW.

Published monthly, during the Academic Year, by Harvard Law Students.

3

STATE TAXATION OF THE PROCEEDS OF THE SALE OF IMPORTS. - The federal government has exclusive jurisdiction over interstate and foreign commerce whenever the national welfare requires uniformity of regulation.1 And it is clear that the importation of goods from foreign countries and from one state to another is a subject of national importance. While a state may indirectly affect such importation in the exercise of its police power, as in the enacting of reasonable regulations for inspection and quarantine,2 any direct restriction is invalid. The mere form of the regulation is immaterial whether a direct tax upon the goods or a privilege tax. It is the substance and not the form which constitutes the test. The right of importation would, however, be valueless if as soon as the goods were within the state's jurisdiction they or the proceeds of their sale could be made subject to a discriminating tax in favor of domestic products. The case which established this principle declared unconstitutional a statute which discriminated against importers of foreign goods by requiring them to take out a license for the privilege of sale. Curiously enough, this case, which merely denied the right of a state to tax imports as imports, was later relied on to establish the principle that foreign goods were entirely exempt from taxation until sold or used by the importer, or until taken from the original package and thus incorporated with the general mass of property in the state. This doctrine of the original package does more than protect foreign

1 Cooley v. Board of Wardens, 12 How. (U. S.) 299.

2 Morgan's S. S. Co. v. La. Board of Health, 118 Ú. S. 455.

3 Welton v. Missouri, 91 U. S. 275.

4 Postal Tel. & Cable Co. v. Adams, 155 U. S. 688, 698.

5 Brown Maryland, 12 Wheat. (U. S.) 419. Nor can a state discriminate against products of another state by exempting domestic products from taxation. Darnell v. Memphis, U. S. Sup. Ct., Jan. 20, 1908.

goods from discrimination. It denies to the state the right to tax these goods in common with domestic goods, and in fact results in discrimination in favor of foreign and against domestic products.

The unfortunate consequences of this mistaken theory have caused it to be limited. The meaning of the term "original package" has been restricted to the narrowest possible construction," and the extension of the principle to goods brought from one state into another has been refused. Moreover, the Supreme Court has recently upheld the constitutionality of a state tax upon the proceeds of the sale of goods imported in the original package, when those proceeds were retained in the state in the form of bank deposits and bills for collection and remitted to the foreign principal only after the import duties and the expenses of importation and sale had been paid therefrom. People v. Wells, Jan. 6, 1908. Apart from the nature of the goods, such a tax upon cash and notes as capital employed in a business within the state is undoubtedly valid. And in this case, while the court admitted that the proceeds are not directly taxable, it held that they obtained a situs in the state, since they were retained for purposes of the business, and were thereby mingled with other goods in the state, and that they accordingly became subject to taxation. Unless, therefore, such proceeds are in transit, their immunity from taxation ceases. It is interesting to note that a similar tax upon amounts receivable on bills given for sales of goods in the original package was held unconstitutional by a state court on the ground that it was a tax upon the proceeds of the sale, before the proceeds themselves had been realized. 10 The result of the present case, however, seems eminently sound. It is virtually a tax upon the business of importation. But there is no reason why such a business should not bear its proportionate share of the burden of taxation. Moreover the tax is in no way discriminatory against foreign commerce, and consequently is not a regulation of it.

NAM.

EXTRA-TERRITORIAL EXTENT OF A STATE'S JURISDICTION IN PERSOWhere a notice, a statutory substitute for a subpœna duces tecum, is served on a foreign corporation doing business within a state to produce certain corporation books formerly kept there, but at that time in another state, the very nature of jurisdiction seems to be involved. For the state, as sovereign, is in effect ordering the doing of an act in a foreign jurisdiction. The Supreme Court has recently decided, without discussion, however, that the state by its judicial officers is entirely competent to order this extra-territorial act and therefore can rightly punish disobedience as contempt. Consolidated Rendering Co. v. Vermont, 207 U. S. 541. This case is not alone in its readiness to assume that a state, as sovereign, has such a right. If it exists as a right, however, it must be as part of the

1

9 Cook v. Pennsylvania, 97 U. S. 566.

10 Paul Gelpi & Bro. v. Treasurer, 48 La. Ann. 1535.

1 State v. United Copper Co., 30 N. J. L. J. 309. Copies of Books or Entries: Erwin v. Oregon, etc., Co., 22 Hun (N. Y.) 566; Nat'l, etc., Co. v. Van Emden, 105 N. Y. Supp. 657. Partnership Books: Fleischmann v. Fleischmann, 31 N. Y. Misc. 216; Holly Mfg. Co. v. Venner, 86 Hun (N. Y.) 42. Cf. United States v. Tilden, 28 Fed. Cas. 174; Snow, etc., Co. v. Snow-Church Surety Co., 80 N. Y. Supp. 512.

5

sovereign's jurisdiction in personam. And since that jurisdiction is ordinarily administered by the sovereign himself in equity,2 it would seem that the limits of jurisdiction in equity are also the limits of jurisdiction in personam. In equity, then, it is clear that when the parties are before the court the sovereign has the right, if the equity is clear, to order the defendant to convey land situated in a foreign jurisdiction; to order the removal of a cloud on foreign title; to require the cancellation and discharge of a void foreign mortgage; or the strict foreclosure of a mortgage on foreign land; or to order a sale of foreign land under a mortgage, if the person who has the power of sale is before the court. It is to be observed that the jurisdiction in personam is valid in these cases because the person and the act ordered are intra-territorial. The act affects foreign land only because the sovereign of the situs has consented that a deed shall pass title, wherever made. Equity courts would not have jurisdiction in any of these cases if livery of seisin were necessary by the law of the situs. Equity may also enjoin the defendant who is served within the territory of the sovereign from trespassing on foreign realty and from prosecuting an unconscionable foreign suit. Whether this jurisdiction is by virtue of the implied consent of the foreign sovereign, or is a relic of personal jurisdiction, or exists because no affirmative act is commanded on foreign territory, does not seem clear. But equity may not by reason of the inherent right of the sovereign order a positive act in a foreign jurisdiction.10

To explain this limitation of the sovereign's personal jurisdiction, it has been suggested that it is self-imposed because the sovereign will act only in cases where his power can be exercised effectively, and that the area of effectiveness is the territory of the sovereign." This explanation contains a half-truth, but it errs in its conception of jurisdiction. Power is not the test of jurisdiction, it is only attendant on jurisdiction. Jurisdiction over persons and things gives the sovereign power to make and administer decrees and laws concerning them within his territory. If jurisdiction were merely a question of power, its extent would be simply a question of fact; it would be commensurate with the physical power of the sovereign. But continual usurpation and aggression would mean the disorganization of legal systems; for law connotes order and stability, neither of which is possible unless nations sanction the inherent right of sovereigns to exercise jurisdiction over persons, things, and acts within their recognized territorial boundaries.12

But, as the mutual benefit of nations is promoted by intercourse, sovereigns are often willing to relax their complete territorial jurisdiction and consent to give effect to an act ordered by a foreign sovereign.12 Moreover, in the American states the fact of federal union, the relinquishment of

2 Langdell, Brief Survey of Equity Jurisd., 23.

See Fall v. Fall, 113 N. W. 175 (Neb.).

4 See Hart v. Sansom, 110 U. S. 151, 155.

Williams v. Fitzhugh, 37 N. Y. 444.

6 House v. Lockwood, 40 Hun (N. Y.) 532.

7 Muller v. Dows, 94 U. S. 444.

8 See 20 HARV. L. REV. 382, 392.

9 See 15 HARV. L. REV. 579; Ames, Cas. on Equity Jurisd., 28n.

10 Port Royal R. R. v. Hammond, 58 Ga. 523. See Picquet v. Swan, 5 Mason (U. S. C. C.) 35.

11 Dicey, Conf. of Laws, 40.

12 See Schooner Exchange v. M'Faddon, 7 Cranch (U. S.) 116. Cf. Picquet v. Swan, supra.