OCTOBER TERM, 1944.
Syllabus. 324 U.S.
HOOVEN & ALLISON CO. v. EVATT, TAX COMMISSIONER OF OHIO
CERTIORARI TO THE SUPREME COURT OF OHIO.
No 38. Argued November 7, 8, 1944.--Decided April 9, 1945.
1. Where, upon review here of state court decisions, the existence of an asserted federal right or immunity depends upon the appraisal of undisputed facts of record, or where reference to the facts is necessary to the determination of the prices meaning of the federal right or immunity, as applied, this Court is free to reexamine the facts as well as the law in order to determine for itself whether the asserted right or immunity is to be sustained. P. 659.
2. Since it appears on consideration of petitioner's course of business and of the circumstances attending the importation that petitioner was the inducing and efficient cause of bringing the fibers into the country, which is importation, petitioner, not the foreign sellers or the agents, was the importer of fibers brought from the Philippine Islands and other places outside the United States, and the constitutional immunity from state taxation of the imported fibers survived their delivery to petitioner. Pp. 659, 664.
3. For the purpose of determining whether petitioner was the importer in the constitutional sense, it is immaterial whether title to the merchandise vested in the petitioner at the time of shipment or only after its arrival in this country. P. 662.
4. When merchandise is brought here from another country, the extent of its immunity from state taxation turns on the essential nature of the transaction, considered in the light of the constitutional purpose, and not on the formalities with which the importation is conducted or on the technical procedures by which it is effected. P. 663.
5. The purpose of the constitutional prohibition of state taxes on imports is to protect the exclusive power of the national government to tax imports and to prevent what in matter of substance would amount to the imposition of additional import duties by States in which the property might be found or stored before its sale or use. P. 664.
6. The constitutional immunity of the imports from state taxation was not lost by their storage (in the original packages) in warehouses  at petitioner's factory, pending their use in petitioner's manufacturing operations for which they were imported. Pp. 664, 668.
7. For the purpose of the constitutional immunity, it is immaterial
whether the imported merchandise is stored (in the original packages) in the
importer's warehouse at the port of entry or in an interior State. P. 664.
8. Upon the record in this case, there is no reason to consider whether,
for purposes of the constitutional immunity, the mere presence of some fibers
in the factor was so essential to current manufacturing requirements that they
could be said to have entered the process of manufacture, and hence were
already put to the use for which they were imported. P. 667.
9. Such discriminations as there may be against domestic and in favor of
foreign producers of goods in this situation are implicit in the
constitutional provision and in its purpose to protect imports from state
taxation. P. 667.
10. The difficulty of ascertaining in particular cases when an original
package is broken arises out of the original package rule itself. P. 668.
11. Reconciliation of the competing demands of the constitutional immunity
of imports and the states' power to tax is an extremely practical matter. P.
12. In view of the constitutional authority of Congress to consent to state
taxation of imports and hence to lay down is own test for determining when the
immunity ends, there is no convincing practical reason for abandoning the
original package rule, or, if it is to be retained in the case of imports for
sale, for rejecting it in the case of imports for manufacture. P. 668.
13. Articles brought from the Philippine Islands into the United States are
imports subject to the constitutional provisions relating to imports, -- both
because they are brought into the United States and because the place whence
they are brought is not a part of the United States in the constitutional
sense to which the provisions with respect to imports are applicable. Pp.
142 Ohio St. 235, 51 N.E.2d 723, reversed.
CERTIORARI, 321 U.S. 762, to review a judgment sustaining an assessment of
COUNSEL FOR PARTIES.
Messrs. Luther Day and Curtis C. Williams, Jr., with whom Mr. Frederick
Woodbridge was on the brief, for petitioner.
Aubrey A. Wendt, Assistant Attorney General of Ohio, with whom Thomas J.
Herbert, Attorney General, was on the brief, for respondent.
OPINION OF THE COURT.
MR. CHIEF JUSTICE STONE delivered the opinion of the court.
Respondents, a tax official of the State of Ohio, has assessed for state ad
valorem taxes certain bales of hemp and other fibers belonging to petitioner.
The fibers had been brought from the Philippine Islands or from other places
outside the United States. When assessed for the tax, they were stored in the
original packages in which they had been imported, in petitioner's warehouse
at its factory at Xenia, Ohio, preliminary to their use by petitioner in the
manufacture of cordage and similar products.
The State Board of Tax Appeals sustained the assessment for the three years
in question, 1938, 1939, and 1940. Petitioner then brought the present
proceeding in the Supreme Court of Ohio to review the Board's determination.
That court rejected petitioner's contention that the fibers are imports,
immune from state taxation under Article I, Sec. 10, Cl. 2, of the
Constitution, which prohibits state taxation of imports or exports; and it
sustained the tax. 142 Ohio St. 235, 51 N.E.2d 723.
The State Court recognized that Brown v. Maryland, 12 Wheat. 419,
established the rule that imports in their original packages may not be taxed
by a state. But it thought that the present case fell within the
qualification upon that rule laid down in Waring v. The Mayor, 8 Wall. 110.
The Waring case held that since a purpose of importation is sale, imports are
immune from state taxation only so long as they are in the hands of the
importer, and lose their immunity upon being sold by him. The Supreme Court
of Ohio held that petitioner acquired title to merchandise here taxed after
its arrival in this country. It concluded from this that the foreign 
sellers or their agents, and not petitioner, we the importers, and that the
merchandise, after the sale to petitioner, had ceased to be an import
constitutionally immune from state taxation.
In any case, the Ohio court thought that even if petitioner were the
importer and the merchandise were immune from taxation on its receipt by
petitioner, it nevertheless ceased to be an import, and lost its immunity as
such, upon its storage at petitioner's warehouse, awaiting its use in
manufacturing. The Court thought that Brown v. Maryland, supra, laid down a
rule applicable only to imports for the purpose of sale, and that imports for
use became, upon storage, even if still in the original package, so
intermingled with the common mass of property within the state as to be
subject to the state power of taxation. *1* The Court found it unnecessary to
decide whether the fibers brought from the Philippine Islands, which are not a
foreign country, could be imports within the meaning of the constitutional
immunity, since they would be taxable in any event upon the two grounds
We granted certiorari, 321 U.S. 762, because of the novelty and importance
of the constitutional questions raised. The questions for decision are (1)
whether, with respect to the fibers brought from foreign countries, petitioner
was their importer; if so (2) whether, as stored in petitioner's warehouse,
they continued to be imports at the time of the tax assessment; and (3)
whether the fibers brought from the Philippine Islands, despite the place of
their origin, are likewise imports rendered immune from taxation by the
The Constitution confers on Congress the power to lay and collect import
duties, Art. I, Sec. 8, and provides that "No  State shall, without the
Consent of the Congress, lay any Imposts or Duties on Imports or Exports,
except what may be absolutely necessary for executing it's inspection Laws .
. ." Art. I, Sec. 10, Cl. 2. These provisions were intended to confer on
the national government the exclusive power to tax importations of goods into
the United States. That the constitutional prohibition necessarily extends to
state taxation of things imported, after their arrival here and so long as
they remain imports, sufficiently appears from the language of the
constitutional provision itself and its exposition by Chief Justice Marshall
in Brown v. Maryland, supra. We do not understand anyone to challenge that
rule in this case.
It is obvious that if the states were left free to tax things imported after
they are introduced into the country and before they are devoted to the use
for which they are imported, the purpose of the constitutional prohibition
would be defeated. The fears of the framers, that importation could be
subjected to the burden of unequal local taxation by the seaboard, at the
expense of the interior states, would be realized, as effectively as though
the states had been authorized to lay import duties.*2* It is evident, too,
that if the tax immunity of imports, commanded by the Constitution, is to be
reconciled with the right of the states to tax goods after their importation
has become complete and they have become a part of the common mass of property
within a state, "there must be a point of time when the prohibition ceases,
and the power of the state to tax commences." Brown v. Maryland, supra, 441.
In Brown v. Maryland, supra, the state sought to impose a license tax on
the sale by the importer of goods stored in his warehouse in the original
packages in which they  were imported. In holding the levy to be a
prohibited tax on imports, Chief Justice Marshall said (pp.441-442): "It is
sufficient for the present to say, generally, that when the importer has so
acted upon the thing imported, that it has become incorporated and mixed up
with the mass of property in the country, it has, perhaps, lost its
distinctive character as an imported, and has become subject to the taxing
power of the state; but while remaining the property of the importer, in his
warehouse, in the original form or package in which it was imported, a tax
upon it is too plainly a duty on imports, to escape the prohibition in the
Although one Justice dissented in Brown v. Maryland, supra, from that day
to this, this Court has held, without a dissenting voice, that things imported
are imports entitled to the immunity conferred by the Constitution; that that
immunity survives their arrival in this country and continues until they are
sold, removed from the original package, or put to the use for which they are
imported. Waring v. The Mayor, supra, 122-123; Low v. Austin, 13 Wall. 29,
23-33; Cook v. Pennsylvania, 97 U.S. 566, 573; May v. New Orleans, 178 U.S.
496, 501, 507-508; Burke v. Wells, 208 U.S.14, 21-22, 24; Gulf Fisheries Co.
v. MacInerney, 276 U.S.124, 126-127; McGoldrick v. Gulf Oil Corp., 309 U.S.
All the taxed fibers, with the exemption of those brought from the
Philippine Islands, which will presently be separately considered, were
brought to this country from foreign lands and were undoubtedly imports,
clothed as such with a tax immunity which survived their importation, until
the happening of some event sufficient to alter their character as imports.
As we have said, the Supreme Court of Ohio found such events in what it deemed
to be a sale of the merchandise to petitioner after it had been landed in the
United States, and in the further  circumstance that by storing the
merchandise in the warehouse at petitioner's factory, it had become a part of
the common mass of property subject to state taxation and so could no longer
be regarded as an import.
Resolution of either point in favor of respondent is decisive of the case.
Hence we must first consider whether petitioner, rather than the foreign
producers or shippers acting through their American agents, was the importer.
If so, the tax immunity of the imported merchandise survived its receipt by
petitioner and we must determine the further question whether petitioner's
subsequent treatment of the merchandise deprived it of its character, and
hence its immunity, as an import.
Petitioner's relationship to the merchandise at the time of importation and
afterward is of significance only in determining whether, as the state court
has found, the relationship was so altered after importation that it can be
said that the purpose of the importation had been fulfilled. If it had, there
was no longer either occasion or reason for the further survival of the
immunity from taxation. That relationship is to be ascertained by reference
to al the circumstances attending the importation, particularly as shown by
the long established course of business by which petitioner's supply of fibers
has been brought into the country for use in manufacturing its finished
The state introduced no evidence, and there is no dispute in point of
substance as to petitioner's evidence. the latter consists of the oral
testimony of petitioner's general manager, some examples of the contracts by
which petitioner procured the merchandise to be brought to this country, and
two stipulations containing statements, admitted to be true, which were made
by the American agents of the producers and shippers of the merchandise.
 Both the Board of Tax Appeals and the state court, without specially
finding some of the facts which we regard as of controlling significance,
contented themselves with stating the facts generally. They inferred from
these facts that petitioner technically was but a purchaser of the
merchandise, after it had been imported into this country. They concluded
that petitioner was not the importer, and the fibers had ceased to be imports
after the sale to petitioner.
In all cases coming to us from a state court, we pay great deference to its
determinations of fact. But when the existence of an asserted federal right
or immunity depends upon the appraisal of undisputed facts of record, or
where reference to the facts is necessary to the determination of the precise
meaning of the federal right or immunity, as applied, we are free to reexamine
the facts as well as the law in order to determine for ourselves whether the
asserted right or immunity is to be sustained. Kansas City Southern R. Co.
v. Albers Commission Co., 223 U.S.S 573, 591; Truax v. Corrigan, 257 U.S.
312, 325; First National Bank v. Hartford, 273 U.S. 548, 552, and cases
cited; Fiske v. Kansas, 274 U.S. 380, 385-386; Norris v. Alabama, 294 U.S.
In this case it appears without contradiction that petitioner, in the
regular course of its business, contracts for its manufacturing requirements
of hemp, jute, sisal and other fibers, before their shipment to this country,
and sometimes even before they are produced in the various foreign countries
of their origin. Petitioner's negotiations for the purchase are carried on
with brokers located in New York City, who represent the foreign producers.
After an agreement as to price, petitioner enters into a firm contract to
purchase the fibers. A standard form of contract is executed in duplicate or
triplicate by petitioner and the broker who signs as agent for or "for account
of" his named principal. The contract specifies  the kind and amount of
fibers purchased, the time of shipment, the American port to which the
shipment is to be made, and frequently the steamship company, designated by
petitioner, upon whose vessel the merchandise is to be shipped. While the
contract gave the seller the option to make deliveries from merchandise
warehoused in the United States, no such deliveries were made of any of the
merchandise here in question.
The price is a "landed price, " which includes as its components the
contract cost of the goods at point of origin, the normal charges for ocean
freight, marine and war risk insurance and United States customs clearance
(including customs duties in the case of hemp, which alone of the purchased
merchandise is subject to import duties), and the expense of arranging for
transshipment from the port of entry to petitioner at Xenia, Ohio. Any
variation from the normal rates for these components (other than the contract
cost of the goods at point of origin) is for account of petitioner. "Extra
value" insurance covering any increase in value of the merchandise over the
contract price during the voyage, is effective, if petitioner requests, at its
Upon shipment the merchandise is consigned to the broker in this country or
to a banker, either on an order or a straight bill of lading, in either case
with directions to "Notify the Hooven & Allison Co." When the bales of
purchased merchandise are loaded for shipment on board vessel at the point of
origin, they are given distinctive markings referable to petitioner's
contract. A declaration is then cabled to the New York broker referring to
the contract upon which the shipment is made, stating the name of the vessel,
the approximate number of bales shipped, their identification marks, and the
approximate date of arrival in the United States. The broker communicates
this information to petitioner and sometimes follows it before arrival of the
shipment at the port of entry, with  a pro forma invoice, which states
the approximate tonnage and value of the shipment. Petitioner then gives
instructions to the broker for the shipment from the port to Xenia.
The broker enters the shipment at the custom house in its own name as an
accommodation to the petitioner, which has no facilities for clearance of the
goods through the customs. The broker then ships the merchandise upon a
straight bill of lading to Xenia, where it is delivered by the carrier to
petitioner. At that time petitioner pays the freight, and ten to fifteen days
after the receipt of the final invoice, it pays the purchase price to the
broker. It is stipulated that the sale is upon the unsecured credit of
petitioner and it does not appear that there is any retention of a security
title either by the foreign seller, the broker, or any intervening banker, to
secure payment by petitioner of the purchase price.
From all this it is clear that from the beginning, after the contract of
purchase is signed, the foreign producer is obligated to sell the merchandise
on credit, to ship it to an American port and deliver it to petitioner, which
is obligated to accept and pay for it. Performance of the contract calls for,
and necessarily results in, importation of the merchandise from its country of
origin to the United States. Petitioner's contracts of purchase are the
inducing and efficient cause of bringing the merchandise into the country,
which is importation. Examination of the documents and consideration of the
course of business can leave no doubt that the petitioner not only causes the
importation but that the purpose and necessary consequence of it are to supply
petitioner with the raw material for its manufacture or cordage at its factory
From the moment of shipment the taxed merchandise was identified and
appropriated to the purchase contract and to that ultimate purposes, by both
the seller and the buyer. Petitioner could resell the merchandise while it
 was in transit. The risk of loss from change in market value was on
petitioner, save as it might insure against such loss at its own expense. The
right to demand, receive and use the merchandise, subject only to the payment
of the contract "landed price," was in petitioner. And obviously if the
possibility of the seller's right of stoppage in transitu, the carrier's lien
or the necessity of payment of customs duties are to be regarded as
inconsistent with importers in the constitutional sense. For there are few
who are not subject to some or all of these contingencies.
Here it is agreed that the sale was on credit. So far as appears in those
instances where the merchandise was consigned to a banker, it was for the
purpose of financing the producer or shipper, pending receipt of the
merchandise and payment for it by petitioner, which appears always to have
purchased on credit and to have received the merchandise before payment, and
never to have given security for its payment. There was therefore no occasion
for an implied reservation of a security "title" as against petitioner in
either the sellers or their agents, or the banker in those cases where the
goods were consigned on shipment to a banker.
For the purpose of determining whether petitioner was the importer in the
constitutional sense, it is immaterial whether the title to the merchandise
imported bested in him who caused it to be brought to this country at the time
of shipment or only after its arrival here.*3* Decision in Waring v. The
Mayor, supra, upon which the Supreme Court of Ohio relied, did not turn on
technical questions [ 663] of passage of title.*4* For in determining the
meaning and application of the constitutional provision, we are concerned with
matters of substance, not of form. When the merchandise is brought from
another country to this, the extent of its immunity from state taxation turns
on the essential nature of the transaction, considered in the light of the
constitutional purpose, and not on the formalities with which the importation
is conducted or on the technical procedures by which it is effected. It is
common knowledge to lawyers and businessmen that vast quantities of
merchandise are annually imported into this country by purchasers resident
here, for sale or manufacture here. Sometimes the buyer completes the
purchase abroad, in person, and ships to this country; sometimes, as in this
case, the purchase is on unsecured credit, but more often it is under
contracts by which the vendor reserves in himself or his agent or a banker a
lien or title as security for payment of the purchase price on or after
arrival. To say that the purchaser is any the less an importer in the one
case than in others, is to ignore  the constitutional purpose and
substitute form for substance.
As we have said, the constitutional purpose is to protect the exclusive
power of the national government to tax imports and to prevent what in matter
of substance would amount to the imposition of additional import duties by
states in which the property might be found or stored before its sale or use.
It is evident that the constitutional prohibition envisages the present
transaction, quite as much as if the petitioner had sent his own agent abroad
where he had purchased and paid for the merchandise and shipped it to
petitioner in this country. The purpose and result of the transaction are the
same in either case. The apprehended evils of the local taxation of imports
after their arrival here are the same.
It is enough for present purposes that the merchandise in this case was
imported; and that petitioner was the efficient cause of its importation, the
purpose and effect of which was petitioner's acquisition of the merchandise
for its manufacture into finished goods. We conclude that petitioner was the
importer, and that the merchandise in its hands was entitled to the
constitutional tax immunity, surviving delivery of the imports to it.
We turn now to the question whether the immunity was lost by the storage of
the merchandise in the original packages in petitioner's warehouse at its
factory, pending its use in petitioner's manufacturing operations. For the
purpose of the immunity has not been thought, nor is there reason for
supposing, that it matters whether the imported merchandise is stored in the
original package in the importer's warehouse at the port of entry or in an
interior state. The reason for the original package doctrine, as fully
expounded in Brown v. Maryland, supra, is that  unless the immunity
survives to some extent the arrival of the merchandise in the United States,
the immunity itself would be destroyed. For there is no purpose of taxing
importation, itself, even its ultimate suppression, which could not be equally
accomplished by laying a like tax on things imported after their arrival and
while they are in the hands of the importer.
On the other hand, the immunity is adequately protected and the state power
to tax is adequately safeguarded if, as has been the case ever since Brown v.
Maryland, supra, an imported is deemed to retain its character as such "while
remaining the property of the importer, in his warehouse, in the original form
or package in which it was imported," see Brown v. Maryland, supra, 442, or
until put to the use for which it was imported. Chief Justice Marshall , in
Brown v. Maryland, supra, pp. 442-443, rejected the suggestion that "an
importer may bring in goods, as plate, for his own use, and thus retain much
valuable property exempt from taxation." Plainly if and when removed from the
package in which they are imported or when used for the purpose for which they
are imported, they cease to be imports and their tax exemption is at an end.
It is quite another matter to say, and Chief Justice Marshall did not say,
that because they may be taxed when used, the importer may not hold them tax
free until the original packages are broken or until they are put to the use
for which they are imported. He said, p. 443: "The same observations [i.e.,
the importer has mixed the goods with the common mass of property, rendering
them taxable] apply to plate, or other furniture used by the importer."
We have often indicated the difference in this respect between the local
taxation of imports in the original package and the like taxation of goods,
either before or after their shipment in interstate commerce. In the one case
 the immunity derives from the prohibition upon taxation of the imported
merchandise itself. In the other the immunity is only from such local
regulation by taxation, as interferes with the constitutional power of
Congress to regulate the commerce, whether the taxed merchandise is in the
original package or not. The regulatory effect of a tax, otherwise
permissible, is not in general affected by retention of the merchandise in the
original package in which it has been transported. Woodruff v. Parham, 8
Wall. 123' Brown v. Houston, 114 U.S. 622; American Steel & Wire co. v.
Speed, 192 U.S. 500, 521; Sonneborn Bros. v. Cureton, 262 U.S. 506,
508-513; Baldwin v. Seelig, 294 U.S. 511, 526-527.
This Court has pointed out on several occasions that imports for manufacture
cease to be such and lose their constitutional immunity from state taxation
when they are subjected to the manufacture for which they were imported, May
v. New Orleans, supra, 501; Gulf Fisheries Co. v. MacInerney, supra, 126;
McGoldrick v. Gulf Oil Corp., supra, 423, or when the original packages in
which they were imported are broken, Low v. Austin, supra, 34; May v. New
Orleans, supra, 508-509. But no opinion of this Court has ever said or
intimated that imports held by the importer in the original package and before
they were subjected to the manufacture for which they were imported, are
liable to state taxation. ON the contrary, Chief Justice Taney, in affirming
the doctrine of Brown v. Maryland, in which he appeared as counsel for the
State, declared, as we now affirm: "Indeed, goods imported, while they remain
in the hands of the importer, in the form and shape in which they were brought
into the country, can in no just sense be regarded as a part of that mass of
property in the state usually taxed for the support of state government."
License Cases, 5 How. 504, 575.
 In Brown v. Maryland, supra, the imported merchandise held in
original packages in the importer's warehouse for sale, was deemed tax immune.
We do not perceive upon what grounds it can be thought that imports for
manufacture lose their character as imports any sooner or more readily than
imports for sale. The constitutional necessity that the immunity, if it is to
be preserved at all, survive the landing of the merchandise in the United
States and continue until a point is reached, capable of practical
determination, when it can fairly be said that it has become a part of the
mass of taxable property within a state, is the same in both cases.
It cannot be said that the fibers were subject to manufacture when they were
placed in petitioner's warehouse in their original packages. And it is
unnecessary to decide whether, for purposes of the constitutional immunity,
the presence of some fibers in the factory was so essential to current
manufacturing requirements that they could be said to have entered the process
of manufacture, and hence were already put to the use for which they were
imported, before they were removed from the original packages. Even though
the inventory of raw material required to be kept on hand to meet the current
operational needs of a manufacturing business could be thought to have then
entered the manufacturing process, the decision of the Ohio Supreme Court did
not rest on that ground, and the record affords no basis for saying that any
part of petitioner's fibers, stored in its warehouse, were required to meet
such immediate current needs. Hence we have no occasion to consider that
It is said that our decision will result in discrimination against domestic
and in favor or foreign producers of goods. But such discriminations as there
may be are implicit in the constitutional provision and in its purpose 
to protect imports from state taxation. It is also suggested that it will be
difficult to ascertain in particular cases when an original package is
broken,a difficulty which arises, not out of the present decision, but out of
the original package rule itself, which we do not understand to be challenged
here. Moreover, this supposed difficulty does not seem to have baffled
judicial decision in any case in the more than a hundred years which have
followed the decision in Brown v. Maryland, supra.
As was emphasized in Brown v. Maryland, supra, the reconciliation of the
competing demands of the constitutional immunity and of the state's power to
tax, is an extremely practical matter. In view of the fact that the
Constitution gives Congress authority to consent to state taxation of imports
and hence to lay down its own test for determining when the immunity ends, we
see no convincing practical reason for abandoning the test which has been
applied for more than a century, or why, if we are to retain it in the case of
imports for sale, we should reject it in the case of imports for manufacture.
Unless we are to ignore the constitutional prohibition we cannot say that
imports for manufacture are not entitled to the immunity which the
Constitution commands, and we see no theoretical or practical grounds for
saying, more than in the case of goods imported for sale, that the immunity
ends while they are in the original package and before they are devoted to the
purpose for which they were imported.
There remains the question whether the fibers which petitioner brought from
the Philippine Islands and stored in its warehouse in the original packages
are also imports, constitutionally immune from state taxation.
Respondents argue that the Philippine Islands are not a foreign country and
that only articles brought here  from foreign countries are imports
within the meaning of the constitutional provision. Goods transported from
one state to another are not imports, since they are articles originating in
the United States and not brought into it. Woodruff v. Parham, supra;
Sonneborn Bros. v. Cureton, supra; Baldwin v. Seelig, supra. It is
petitioner's argument that merchandise brought from the Philippines to the
United States is an import because it is brought into the United States from a
place without, even though not from a foreign country. Implicit in this
argument is the contention that the Philippines, while belonging to the United
States as a sovereign, are not part of it; and that merchandise brought from
the Philippines is an import because it originates outside of and is brought
into the territory comprising the several states which are united under and by
the Constitution, territory in which the constitutional prohibition against
the state taxation of imports, is alone applicable.
The Constitution provides us with no definition of the term "imports" other
than such as is implicit in the word itself. Imports were defined by Chief
Justice Marshall in Brown v. Maryland, supra, 437, as "things imported" and
"articles brought into a country." He added: "If we appeal to usage for the
meaning of the word, we shall receive the same answer. They are the articles
themselves which are brought into the country."
He thus defined imports by reference not to their foreign origin but to the
physical fact that they are articles brought into the country from some place
without it. Since most imports originate in foreign countries, courts have
not unnaturally fallen into the habit of referring to imports as things
brought into this country from a foreign country. Waring v. The Mayor,
supra; Woodruff v. Parham, supra; Pittsburgh & Southern Coal Co. v.
Louisiana, 156 U.S. 590, 600; Patapsco Guano Co. v. North Carolina, 
171 U.S. 345, 350; May v. New Orleans, supra.*5* But the Constitution says
nothing of the foreign origin of imports, and in none of these cases was it
necessary to decision to formulate the rule in terms of origin in a foreign
country. In each case the result would have been the same if the Court had
treated imports merely as articles brought into the country from a point without.
Chief Justice Marshall's definition has received support in cases holding or
suggesting that fish caught in the open sea and brought into this country are
imports entitled to the constitutional protection, although they did not come
from a foreign country. Gulf Fisheries Co. v. Drouzet, 17 F.2d 374, 376;
Booth Fisheries Corp. v. Case, 182 Wash. 392, 395, 47 P.2d 834. In Gulf
Fisheries Co. v. MacInerney, supra, we found it unnecessary to decide the
point. In that case the fish had been subjected to a manufacturing process
after their arrival in port and before they were taxed. Hence, even if
originally imports, they had ceased to be such and were no longer immune from
the challenged state tax. See also Fishermen's Cooperative Assn. v. State,
198 Wash. 413, 88 P.2d 593. The definition of imports as articles brought
into the country finds support also in the circumstance that it has never been
seriously doubted that merchandise brought into the United States from without
is subject to the power of Congress to impose customs and duties, even though
the merchandise is not of foreign origin. And the occasion for protecting the
 power of the national government to lay and collect customs duties upon
such merchandise, is precisely the same as in the case of that of foreign
origin. Hence it is plain that such importations, although not of foreign
origin, are within the design and purpose of the constitutional prohibition
against the local taxation of imports.
We find it impossible to say that merely because merchandise, brought into
the country from a place without, does not come from a foreign country, it is
not import envisaged by the words and purpose of the constitutional
prohibition against the local taxation of imports.
The interpretation in Brown v. Maryland, supra, the occasional
judicial decisions that foreign origin is not a necessary characteristic of
imports so long as they are brought into the country from a place without it,
and the purpose of the constitutional prohibition, are alike persuasive that
there may be imports in the constitutional sense which do not have a foreign
The fact that the merchandise here in question did not come from a foreign
country, if the contention be accept that the Philippines are not to be
regarded as such, is therefore without significance. It is material only
whether it came from a place without the "country." Hence, in determining what
are imports for constitutional purposes, we must ascertain the territorial
limits of the "country" into which they are brought. Obviously, if the
Philippines are to be regarded as a part of the United States in this sense,
merchandise brought from the Philippines to the United States would not be
brought into the United States from a place without, and would not be imports,
more than articles transported from one state to another.
The term "United States" may be used in any one of several senses. It may be
merely the name of a sovereign occupying the position analogous to that of
other sovereigns in the family of nations. It may designate the territory
over which the sovereignty to the United States  extends, or it may be
the collective name of the states which are united by and under the
When Brown v. Maryland, supra, was decided, the United States was without
dependencies or territories outside its then territorial boundaries on the
North American continent, and the Court had before it only the question
whether foreign articles brought into the State of Maryland could be subjected
to state taxation. It seems plain that Chief Justice Marshall, in his
reference to imports as articles brought into the country, could have had
reference only to articles brought into a state which is one of the states
united by and under the Constitution, and in which alone the constitutional
prohibition here involved is applicable.
The relation of the Philippines to the United States, taken as the
collective name of the states which are united by and under the Constitution,
is in many respects different from the status of those areas which, when the
Constitution was adopted, were brought under the control of Congress and which
were ultimately organized into states of the United States. See Balzac v.
Porto Rico, 258 U.S. 298, 304-305, and cases cited. Hence we do not stop to
inquire whether articles brought into such territories or brought from such
territories into a state, could have been regarded as imports,
constitutionally immune from state taxation. WE confine the present
discussion to the question whether such articles, brought from the Philippines
and introduced into the United States, are imports so immune.
We have adverted to the fact that the reasons for protecting from
interference, by state taxation, the  constitutional power of the
national government to collect customs duties, apply equally whether the
merchandise brought into the country is of foreign origin or not. The
Constitution has not made the foreign origin of articles imported the test of
importation, but only their origin in a place over which the Constitution has
not extended its commands with respect to imports and their taxation. Hence
our question must be decided, not by determining whether the Philippines are a
foreign country, as indeed they have been held not to be within the meaning of
the general tariff laws of the United States, Fourteen Diamond Rings v.
United States, 183 U.S.176; cf. De Lima v. Bidwell, 182 U.S.1; Dooley v.
United States, 182 U.S. 22; and within the scope of other general laws, Faber
v. United States, 22 U.S. 649; cf. Huus v. New York & P.R.S.S. Co., 182
U.S. 392; Gonzales v. Williams, 192 U.S.1; West India Oil Co. Domenech, 311
U.S. 20, but by determining whether they have been united governmentally with
the United States by and under the Constitution.
That our dependencies, acquired by cession as the result of our war with
Spain, are territories belonging to, but not a part of, the Union of states
under the Constitution, was long since established by a series of decision in
this Court beginning with the The Insular Tax Cases in 1901; De Lima v.
Bidwell, supra; Dooley v. United States, supra, 182 U.S. 222; Downes v.
Bidwell, 182 U.S. 244; Dooley v. United States, 183 U.S.151; and see also
Public Utility Commissioners v. Ynchausti & Co., 251 U.S. 401, 406-407;
Balzac v. Porto Rico, supra. This status has ever since been maintained in
the practical construction of the Constitution by all the agencies of our
government in dealing with our insular possessions. It is no longer doubted
that the United States may acquire territory by conquest or by treaty, and may
govern it through the exercise of the power of Congress conferred by Sec. 3
or Article IV if the Constitution "to dispose of and make all needful Rules
and  Regulations respecting the Territory or other Property belonging to
the United States." Dooley v. United States, supra, 183 U.S. at 157; Dorr v.
United States, 195 U.S.138, 149; Balzac v. Porto Rico, supra, 305; Cincinnati
Soap Co. v. United States, 301 U.S. 308, 323.
In exercising this power, Congress is not subject to the same constitutional
imitations, as when it is legislating for the United States. See Downes v.
Bidwell, supra; Hawaii v. Mankichi, 190 U.S.197; Dorr v. United States,
supra; Dowdell v. United States, 221 U.S. 325, 332; Ocampo v. United
States, 234 U.S. 91, 98; Public Utility Commissioners v. Ynchausti & Co.,
supra, 406-407; Balzac v. Porto Rico, supra. And in general the guaranties
of the Constitution, save as they are limitations upon the exercise of
executive and legislative power when exerted for or over our insular
possessions, extend to them only as Congress, in the exercise of its
legislative power over territory belonging to the United States, has made
those guaranties applicable. See Balzac v. Porto Rico, supra. The
constitutional restrictions on the power of Congress to deal with articles
brought into or sent out of the United States, do not apply to articles
brought into or sent out of the Philippines. Despite the restrictions of
Sections 8 and 9 or Article I of the Constitution, such articles may be taxed
by Congress and without apportionment. Downes v. Bidwell, supra. It follows
that articles brought from the Philippines into the United States are imports
in the sense that they are brought from territory, which is not a part of the
United States, into the territory of the United States, organized by and under
the Constitution, where alone the import clause of the Constitution is
The status of the Philippines as territory belonging to the United States,
but not constitutionally united with it, has been maintained consistently in
all the governmental relations between the Philippines and the United 
States. Following the conquest of the Philippines, they were governed for a
period under the war power. After annexation by the Treaty of Paris of
December 10, 1898, military government was succeeded by a form of executive
government. By the Spooner Amendment to the Army Appropriation Bill of March
2, 1901, c. 803, 31 Stat. 895, 910, it was provided that "all military,
civil, and judicial powers necessary to govern the Philippine Islands . . .
shall, until otherwise provided by congress, be vested in such person and
persons and shall be exercised in such manner as the President of the United
States shall direct, for the establishment of civil government and for
maintaining and protecting the inhabitants of said islands in the free
enjoyment of their liberty, property, and religion . . ." On July 1, 1902
Congress provided for a complete system of civil government by the original
Philippine Organic Act, c. 1369, 32 Stat. 691. Step by step Congress has
conferred greater powers upon the territorial government, and those of the
federal government have been diminished correspondingly, although Congress
retains plenary power over the territorial government until such time as the
Philippines are made independent. This process culminated in the Act of March
24, 1934, c. 84, 48 Stat. 456, providing for the independence of the
islands. The adoption by the Philippines and approval by the United States of
a constitution for the Commonwealth of the Philippine Islands, as provided by
the Act, have prepared the way for their complete independence.
The Act of 1934 made special provisions for the relations between the two
governments pending the final withdrawal of sovereignty of the United States
from the Philippines and in particular provided for a limit on the number and
amount of articles produced or manufactured in the Philippine Islands that
might be "exported" to the United States free of duty. Section 6. It
provided for the complete withdrawal and surrender of all right of possession,
 supervision, jurisdiction, control or sovereignty of the United States
over the Philippines on the 4th of July following the expiration of ten years
from the date of the inauguration of the new government, organized under the
Constitution provided for by the Independence Act.*7* Section 10 (1). The new
Philippine Constitution was adopted on February 8, 1935, and the new
government under it was inaugurated on November 14, 1935. By the provisions
of the Independence Act, the United States retained certain powers with
respect to our trade relations with the Islands, with respect to their
financial operations and currency, and the control of their foreign relations.
The power of review by this Court of Philippine cases is continued and
extended to all cases involving the Constitution of the Commonwealth of the
Philippine Islands. Section 7 (6). Thus by the organization of the new
Philippine government under the constitution of 1935, the Islands have been
given, in many aspects, the status of an independent government, which has
been reflected in its relations as such with the outside world.*8*
 In the meantime, and ever since The Insular Tax Cases, supra, Congress
has often treated as imports, articles brought to the United States from the
Philippines. By the Act of August 29, 1916, c. 416, 39 Stat. 548, 48 U.S.C.
Sec. 1040, the territorial government of the Philippines was authorized to
enact tariff laws. The Sugar Quota Law, 7 U.S.C. Sec. 608a (1), defined as
imports the amounts of sugar permitted to be brought into the United States
from the Philippines, and prohibited such importation in excess of prescribed
quotas. the Act of June 14, 1935, c. 240, 49 Stat. 340, 48 U.S.C. Sec.
1236a, provided for restriction of the amount of hard fibers and its products
which could be brought annually from the Philippines to the United States.
See also 48 U.S.C. Sec. 1236. And the Independence Act, supra, 48 U.S.C.
Sec. 1236 (a) (b), also regulated the amount of "export tax" which might be
levied by the Philippines on the articles shipped to the United States from
the Philippine Islands.*9*
The Independence Act, while it did not render the Philippines foreign
territory, Cincinnati Soap Co. v. United States, supra, 318-320, treats the
Philippines as a foreign country for certain purposes. In 48 U.S.C. Sec.
1238 (a) (1), it established immigration quotas for Filipinos coming to the
United States, as if the Philippines were a separate country, and in that
connection extended to Filipinos the immigration laws relating to the
exclusion of expulsion of aliens. It is also provided, 48 U.S.C Sec. 1238
(a) (2), that citizens of the Philippine Islands who are not citizens of the
United States shall be considered as if they were aliens. For purposes of 8
U.S.C. Sections 154 and 156, relating to deportation, the Philippine Islands
are declared to be a foreign country. 48 U.S.C. Sec. 1238 (a) (4). Foreign
 service officers of the United States may be assigned to the
Philippines, and are to be considered as stationed in a foreign country. 48
U.S.C. Sec. 1238a. And the Independence Act, Sec. 6, 48 Stat. 456, 460,
provides that "when used in this section in a geographical sense, the term
`United States' includes all Territories and possessions of the United States,
except the Philippine Islands, the Virgin Islands, American Samoa, and the
island of Guam." AS we have said, the Philippines have frequently dealt with
other countries as a sovereignty distinct from the United States.
The United States acquired the Philippines by cession without obligation to
admit them to statehood or incorporate them in the Union of states or to make
them a part of the United States, as distinguished from merely belonging to
it. As we have seen, they are not a part of the United States in the sense
that they are subject to and enjoy the benefits or protection of the
Constitution, as do the states which are united by and under it. In
particular, the constitutional provisions governing imports and exports and
their taxation, do not extend to articles brought into or out of the
Philippines. The several acts of Congress providing for the government of the
Philippines have not altered their status in these respects, and Congressional
legislation governing trade relations of the United States with the
Philippines has not only been consistent with that status, but has often
treated articles brought from the Philippines to the United States as imports.
Our tariff laws in their practical operation have in general placed
merchandise brought from the Philippines into the United States in the same
relationship to the constitutional taxing power of the national government and
the states as articles brought here from foreign countries.
The national concern in protecting national commercial relations, by
exempting imports from state taxation, would seem not to be essentially
different or less in the  case of merchandise brought from the
Philippines, which are not included in the territory organized under the
Constitution, but for which we have assumed a national responsibility, than in
the case of articles originating on the high seas or in foreign countries. As
we have said, the reasons for protecting from state taxation articles thus
brought into the territorial United States are the same in either case. the
advantages and disadvantages, if any, which result from the tax immunity, are
inherent in the import clause. But those advantages and disadvantages in the
case of the Philippines are no more beyond the reach of Congress than in the
case of other imports. Congress is left free by the terms of the import
clause to remove the prohibition of state taxation of imports and with it the
advantages or disadvantages, whatever they may be, arising from the tax
immunity. Congress, through the commerce clause, possesses the same power of
control of state taxation of all merchandise moving in interstate or foreign
commerce. And Congress is free, as in the case of other imports, to regulate
the flow of merchandise from the Philippines into the United States by the
imposition of either customs duties or internal revenue taxes.
We conclude that practical as well as theoretical considerations and the
structure of our constitutional system require us to hold that articles
brought from the Philippines into the United States are imports, subject to
the constitutional provisions relating to imports both because, as was said in
Brown v. Maryland, they are brought into the United States, and because the
place from whence they are brought is not a part of the United States in the
constitutional sense to which the provisions with respect to imports are
*1* The Supreme Court of Washington has held contrary to the decision of the
Ohio Court. See Washington Chocolate Co. v. King County, 21 Wash. 2d 630, 152
P. 2d 981.
*2* See Madison, Debates in the Federal Convention of 1787, August 28, 1787
(Hunt & Scott ed.).
*3* Section 1483 (1) of 19 U. S. C. provides that merchandise imported into
the United States 'shall be held to be the property of the person to whom the
same is consigned." We do not deem this provision to be significant here,
since it is designed merely to identify the person liable for the payment of
customs duties, and since, as we have said, the time when title passes to
petitioner is immaterial to decision.
*4* In the Waring case, the purchaser, claiming tax immunity as the
importer, purchased the merchandise, after its shipment from abroad, from the
American consignee, sometimes before and sometimes after its arrival in the
port of entry. Risk of loss was to be on the seller until the merchandise was
entered at the customhouse and delivered from the vessel into the purchaser's
lighters alongside. The Court thought it immaterial whether the purchase
contract was entered into before or after arrival. Since the risk of loss
remained on the shipper until the customhouse entry and delivery to the
purchaser, it held that the shipper or the consignee was the importer; that
the purchaser's sale of the goods, which was taxed, was the second sale after
importation, and for that reason was not free of tax. In these circumstances
it is clear that the purchaser had no control over or right to demand the
merchandise before arrival in port and that the foreign shipper, who bore the
risk to control it until its delivery to petitioner, was the importer.
*5* In Dooley v. United States, 183 U.S. 151, the Court sustained under the
Foraker Act of April 12, 1900, c. 191, 31 Stat. 77, the levy and collection of
a tax in Puerto Rico upon goods brought there from New York. The tax was held
to be a valid exercise of the power of Congress to enact laws for the
government of a dependency acquired by treaty, see Downes v. Bidwell, 182 U.S.
244. The Court stated also as an alternative ground, but one unnecessary for
decision, that the levy was not a prohibited tax on exports, since Puerto Rico
was not a foreign country.
*6* See Langdell, "The Status of our New Territories," 12 Harv. L. Rev. 365,
371; see also Thayer, "Our New Possessions," 12 Harv. L. Rev. 464; Thayer,
"The Insular Tariff Cases in the Supreme Court," 15 Harv. L. Rev. 164;
Littlefield, "The Insular Cases," 15 Harv. L. Rev. 169, 281.
*7* Since the war with Japan and that country's temporary occupation of the
Philippines, Congress has provided that the date of the independence of the
Philippines may be advanced by the President of the United States, upon his
proclamation of their liberation and the restoration of the normal functions
of government. Act of June 29, 1944, c. 322, 58 Stat. 625.
*8* The Philippine Commonwealth participated as a signatory in the following:
- Agreement and Protocol Regarding Production and Marketing of Sugar of May 6, 1937;
- Universal Postal Convention of May 23, 1939;
- Declaration by United Nations of January 1, 1942 (the Philippines signed the Declaration on June 14, 1942);
- Agreement for United Nations Relief and Rehabilitation Administration of November 9, 1943;
- United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, of July 1, to 22, 1944;
- The Protocol Prolonging the International Agreement Regarding the Regulation of Production and Marketing of Sugar of August 31, 1944;
- The International Civil Aviation Conference of November 1 to December 7, 1944.
*9* This Court has referred to goods brought here from the Philippines as "imports." See Cincinnati Soap Co. v. United States, 301 U.S. 308, 320.
MR. JUSTICE REED, dissenting in part.
My disagreement with the Court is confined to that potion of the opinion
which determines that the Philippine  Islands is not a part of this
"country" as that word is defined in the opinion.
The practical effect of the decision is to place the products of those
territories and possessions which have not been incorporated into our
"country" as integral parts thereof--Puerto Rico, the Philippines, Guam, Canal
Zone, and perhaps other territories or possessions--at a considerable
advantage over the competing products of states of the continental United
States. It enables importers, whether for manufacture or sale, from these
possessions to keep on hand, tax free, quantities of non-taxable original
packages of imported goods, such as clothing, embroideries, liquors, tobacco,
sugars, vegetables oils and fibres. Freedom from taxation has today become an
appreciable advantage. Furthermore this freedom from state taxation is gained
through an interpretation of Constitutional power and therefore is beyond the
reach of equalization by the states alone in all circumstances and by the
Congress except by complex tariff legislation which would only reach
warehoused imports from dependencies. The Congressional relief to producers
of the several states of the Union, therefore, is an awkward approach, which
will create irritation with the importing territories by reason of
countervailing tariff increases.
These are only practical disadvantages of today's decisions which should not
override a Constitutional requirement; but as it does not seem to me the
Constitution clearly calls for this sacrifice of markets by producers in the
states, I would not construe the Constitution to put the Philippines entirely
beyond the pale of the American economic union. I do not see the necessity
for such a ruling and, in fact, I think the Constitution calls for precisely
the opposite conclusion for the following reasons.
(1) In the consideration of the taxability by Ohio of shipments from the
Philippines which have completed  their journey from the Philippines but
remain intact in their original packages, the significant Constitutional
provision is Article I, Section 10, Clause 2, which reads as follows:
"No State shall, without the Consent of the Congress, lay any Imposts or
Duties on Imports or Exports, except what may be absolutely necessary for
executing it's inspection Laws: and the net Produce of all Duties and
Imposts, laid by any State on Imports or Exports, shall be for the Use of the
Treasury of the United States; and all such Laws shall be subject to the
Revision and Countroul of the Congress."
The Constitution contains no definition of the word "imports" and nothing
appears in its history or in the decisions of this Court which indicates that
the word was used otherwise in this section than in its normal meaning of a
thing brought into the limits of the nation which possesses power over the
external commerce which may flow into a state or states which are subject to
the prohibition of the quoted Constitutional provision. Normally these
imports are from foreign countries.*1*
Lands are either within the sovereign power of the United States or are
outside and beyond that power. When conquest ripens into cession, lands lose
their  foreign character and become a part of the territories of the
victor.*2* The United States has been content to leave its possessions with a
large measure of self-government. To the Philippines it has promised full
independence but the time for fulfillment of that promise has not arrived.
Until that date, the United States has responsibilities toward the Philippines
and has exercised power unilaterally to make further concessions to the
Islands.*3* Until complete independence is reached, the citizens of the
Philippines owe allegiance to the United States and every Philippine official
recognizes this duty. 48 Stat. 456. The interrelation between the United
States and the Philippines is for both a basis for amicable relations after
complete dissolution of the existing ties.*4*
(2) This Court, however, determines that an import under Article I, Section
10, Clause 2, is a commodity brought into this "country" and that the
Philippines is not a part of this "country" within the meaning which the Court
attributes to that word. The Court is of the view that this "country"
includes only those sections of the lands under our jurisdiction which have
been so incorporated into our system by act of Congress as to be entitled to
government under all provisions of the Constitution rather than by Clause 2,
Section 3, Article IV, regarding "Territory . . . belonging to the United
States." Downes v.  Bidwell, 182 U.S. 244. As a basis for this
distinction, the Court depends upon a statement in Brown v. Maryland, 12
Wheat. at 437, that a "duty on imports is a custom or a tax levied on
articles brought into a country." The Court must make this argument to support
its position as of course the Philippines is not a foreign country.
Cincinnati Soap Co. v. United States, 301 U.S. 308, 319.
There are a number of reasons why I think that this reliance on this
language of Brown v. Maryland leaves the opinion without supports in its
conclusion that shipments from the Philippines are imports. In the first
place, in Brown v. Maryland, there was no occasion to distinguish between
articles brought into the country and articles brought from foreign places.
The words used are descriptive of commerce from foreign lands. Secondly,
Woodruff v. Parham, 8 Wall. 123, interprets the meaning of "brought into the
country" as used in Brown v. Maryland as follows, pp.131-32:
"In the case of Brown v. Maryland, the word imports, as used in the clause
now under consideration, is defined, both on the authority of the lexicons and
of usage, to be articles brought into the country; an impost is there said to
be a duty, custom, or tax levied on articles brought into the country. In the
ordinary use of these terms at this day, no one would, for a moment, think of
them as having relation to any other articles than those brought from a
country foreign to the United States, and at the time the case of Brown v.
Maryland was decided--namely, in 1827--it is reasonable to suppose that the
general usage was the same, and that in defining imports as articles brought
into the country, the Chief Justice used the word country as a synonyme for
United States." See also American Steel & Wire Co. v. Speed, 192 U.S. 500,
520. Thirdly, the writer of the opinion in Brown v. Maryland referred, p.
439, to the purpose of the prohibition against state taxation of imports as a
thing  desirable "to preserve . . . our commercial connexions with
foreign nations." The dissent referred repeatedly to foreign merchandise as
did counsel in their argument. Fourthly, the suggestion that the Court's view
is supported by the decisions that sea products are imports seems to me
unfounded. Deep-sea products from from waters beyond national sovereignty or
jurisdiction and hence are imports under any definition. American fisheries
even may require, unless American bottoms are American territory, legislation
to relieve their catch of general tariff charges. Procter & Gamble Mfg. Co.
v. United States, 19 C. C. P. A. (Customs) 415. The required conclusion,
it seems to me, is that an import is an article brought from beyond the
sovereignty or jurisdiction of the United States. De Lima v. Bidwell, 182
(3) Land within the jurisdiction of the United States cannot export to the
United States under Section 10, Article I, any more than one state can export
to or import from another state. 192 U.S. at 520. When the Insular Cases
determined that articles from the lands Spain ceded to us were subject to
tariff duties at the will of Congress, the decisions were based on the power
of Congress to impose duties unequally, ie., without uniformity, despite
Article I, Section 8, Clause 1, of the Constitution,*5* on the commodities
from lands under our flag because these lands had not been incorporated by act
of Congress into the Union as an integral part of the United States. Downes
v. Bidwell, 182 U.S. 244, 298 et seq.; Dorr v. United States, 195 U.S.139,
149; Balzac v. Porto Rico, 258 U.S. 298, 305. The question as to the
meaning of imports or imported was  not discussed. Whether or not the
articles were imports, so long as the lands of their origin were not an
integral part of the United States, the Congress could put such duties as it
chose on the products. It does not follow that because the Philippines is not
an integral part of the United States its shipments are imports under Article
I, Section 10, unless the view of the Court's opinion of today is adopted than
an import is an article brought into the United States as that country is
defined in the Court's opinion. The argument advanced by the Court to sustain
it declaration that the articles brought from the Philippines are imports
would have made shipments from the Louisiana Purchase, Downes v. Bidwell, 182
U.S. 244, 322-33; Florida, id. pp. 333-34, and Hawaii, Hawaii v. Mankichi,
190 U.S.197, 219, also imports until these territories were incorporated into
the United States. History refutes such a position.
We are thus left to define the word import as used in Section 10, Article I,
in its normal sense to accomplish the purpose of the section. It may have had
several purposes. Brown v. Maryland, supra, at p. 439. Whether it was to
grant the Union a source of revenue, to preserve harmony among its members or
to avoid state tariffs which would affect relations with foreign governments
the purpose is not advanced by molding Philippine shipments into imports in
the Constitutional sense. Revenue may be exacted by the federal government
from Philippine products brought into the states and a state cannot collect a
duty from such articles if they are not imports. Downes v. Bidwell, 182 U.S.
244; Woodruff v. Parham, 8, Wall. 123, 133; Coe v. Errol, 116 U.S. 517,
526. No light can come from history of the adoption of the section. The idea
of an American possession was not in being. But since the Founding Fathers
were creating a commercial as well as a political entity, it seems more
consonant with their purpose to define imports under the section as things
 brought into the territory under the jurisdiction of sovereignty of the
(4) Such a conclusion probably meant little to the Philippines. congress
has provided for their early independence. but the principle established by
this decision will persist for the other lands which became American by the
Treaty of Paris. The Court's opinion disclaims determination of any rights
beyond the Philippines but the basis upon which the decision rests supports
similar rights for all lands covered by the Treaty of Paris. Similar articles
covered all the ceded lands.*6* Puerto Rico is in the same status as the
Philippines. Balzac v. Porto Rico, 258 U.S. 298, 305. Today's decision
thus assumes a continuing importance which justifies setting out my reasons
*1* Products of the sea brought in as imports are a minor variation.
Tariff Act of 1930, 46 Stat. 590, provides that dutiable articles are those
"imported from any foreign country." The Philippines is not a foreign country
under a tariff act which prohibits importation from a foreign country of goods
made by convict labor. 28 Op. Atty. Gen. 422. The Philippines is not foreign
country under the tariff laws. De Lima v. Bidwell, 182 U.S. 1, 197; Fourteen
Diamond Rings v. United States, 183 U.S. 176; Dooley v. United States, 182
U.S. 222, 234; Dooley v. United States, 183 U.S. 151; American Steel & Wire
Co. v. Speed, 192 U.S. 500, 520.
*2* American Insurance Co. v. Canter, 1 Pet. 511, 542; Fleming v. Page, 9
How. 603, 614; Dooley v. United States, 182 U.S. 222, 223.
*3* Philippine Independence Act of March 24, 1934, 48 Stat. 456; amending
the Philippine Independence Act as to trade the financial relations and rights
of Philippine citizens in the United States and all places subject to its
jurisdiction, act of August 7, 1939, 53 Stat. 1226; suspending the export tax
on Philippine products, act of December 22, 1941, 55 Stat. 852; Filipino
Rehabilitation Commission Act of June 29, 1944, 58 Stat. 626.
*4* Address of President Sergio Osmena on the occasion of the
Reestablishment of the Commonwealth Government in Manila, February 27, 1945.
*5* Article I, Section 8, Clause 1: "The Congress shall have Power To lay
and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide
for the common Defence and general Welfare of the United States; but all
Duties, Imposts and Excises shall be uniform throughout the United States; . . ."
*6* Treaty of Paris, December 10, 1898, 30 Stat. 1754:
"Article II. Spain cedes to the United States the island of Porto Rico and
other islands now under Spanish sovereignty in the West Indies, and the island
of Guam in the Marianas or Ladrones.
"Article III. Spain cedes to the United States the archipelago known as
the Philippine Islands, and comprehending the islands lying within the
following line: . . ."
MR. JUSTICE BLACK, dissenting.
In Brown v. Maryland, 12 Wheat. 419, 442, Marshall, C.J., pointedly
rejected the argument that the rule announced in that case would permit an
importer "to bring in goods . . . for his now use, and thus retain much
valuable property exempt from taxation."*1* Today, this Court,  in
holding that an Ohio manufacturer may escape payment of a non-discriminatory
state ad valorem tax on goods imported from abroad and held for use in its
factory, interprets Marshall's opinion in a manner which squarely conflicts
with his own interpretation of the rule he announced.
It has, from the very beginning, been recognized that ". . . there must
be a point of time when the prohibition [to tax] ceases, and the power of the
state to tax commences"; although the task of drawing this line is so
difficult that no general rule "universal in its application" can be stated,
yet that line nevertheless ". . . exists, and must be marked as the cases
arise." Brown v. Maryland, supra, 441. The Court did there draw an arbitrary
line of demarcation marking the boundary of a state's power to tax property
"imported for sale." It held that, as to property imported for sale, "while
remaining the property of the importer, in his warehouse, in the original form
or package in which it was imported, a tax upon it is too plainly a duty on
imports to escape the prohibition in the Constitution." Brown v. Maryland,
supra, at 442. The right to sell, it was their said, was an element of the
right to import, and thus a state tax imposed before, or as a condition upon,
the sale, would substantially impair the right of sale granted by the
government to importers. The Court reinforced its conclusion by referring to
its belief that a state tax on the importer would increase the cost to the
ultimate domestic purchasers, and that the effect of this would be to enable
the great seaport states indirectly to levy tribute upon consumers of imported
articles living in the nonseaport states, a practice which the constitutional
clause here invoked was intended to prevent.*2*
 While the rule announced in Brown v. Maryland has at times been
severely criticized, see e.g. License Case, 5 How. 504, opinion of Mr.
Justice Daniel, 615-617, and has in some cases been narrowly restricted in its
application,*3* it has been, and still is, the general rule of decision in
this Court, as regards imports for sale from foreign countries. But neither
the rule nor the reasoning in Brown v. Maryland, nor any of the cases which
followed it, support the Court's holding that one who imports an article for
his own use or consumption can enjoy the full benefits of ownership, and
simultaneously claim an immunity from state taxation on the ground that it is
still an import. The Court, in Brown v. Maryland, was in reality treating
goods in the hands of an importer for sale, as though they were still in
transit until the first sale had been made. This was in accord with the
interpretation of the rule by Chief Justice Taney in the License Cases, supra,
575. He there said that while imported articles "are in the hands of the
importer for sale . . . they may be regarded as merely in transitu, and on
their way to the distant cities, villages and country for which they are
destined, and where they are expected to be used and consumed, and for the
supply of which they were in truth imported."
But the fibers here were not in transitu in any possible sense of the
phrase. Every conceivable relationship they had once borne to the process of
importation had ended. They were at rest in the petitioner's factory along
with its other raw materials, having arrived at the point where they were "to
be used and consumed" in current production,  and kept as a "backlog" to
assure constant operation of the plant.
Brown v. Maryland and the cases which followed it stand for the rule that
one who pays import duties on goods intended for sale thereby purchases the
right to sell the goods, free from state taxation so long as the goods are
held in the original package. Until today, none of this Court's decisions
have ever held or even intimated that one who imports goods for his own use
purchases from the federal government, by payment of import duties, a right to
hold them free from liability for state taxes, after they have reached the end
of their import journey and are being held for use in the importer's factory.
Neither the "purchase-of-a-right-to-sell" argument nor any of the other
reasons deemed relevant to support the "import-for-sale-original-package"
doctrine call for its extension to goods imported for use.
It is clear under the doctrine of Brown v. Maryland, that after sale by an
importer, imported goods are subject to state taxation. The opinion of the
Court today, holding that goods held for use are immune from state taxation,
results in this rather odd situation: One who imports goods himself and holds
them for his own use in his factory is not liable to state taxes on such
goods; but if he bought the goods from one engaged in the business of
importing he would be liable to taxation on the same goods. The artificiality
of this tax distinction suggests grave reasons to question the soundness of
the Court's interpretation of the rule. Furthermore, implicit in Marshall's
opinion is a recognition of the importance of protecting goods imported for
sale from discrimination in the form of taxes. The net effect of today's
opinion is to accomplish just such discrimination, in favor of goods imported
for use, and against goods imported for sale.
Again, state taxation of previously imported goods held for use in
manufacturing does not afford the great seaport  states an opportunity to
tax imports to the detriment of other states. This was one of the apprehended
evils which the "import for sale" rule in Brown v. Maryland was fashioned to
prevent. The most fertile imagination would be hard put to prove that it
would injure or threaten any other state for Ohio to collect its
non-discriminatory ad valorem tax on fibers held for use in that state.
Certainly the Court advances no persuasive argument in this respect. On the
contrary, it does appear that Ohio, as well as other states, will be injured
by a constitutional interpretation which denies Ohio the right to collect the
tax. Ohio is injured by the Court's new rule because it cannot apportion its
tax fairly upon all who carry on business under the protection of Ohio's laws.
The rule announced by the Court also discriminates against other states.
Their products held for use are subject to state taxation. Products from
abroad are not. Wines offer an illustration. Wines, stocked in one's private
cellar, produced from California or New York grapes, are held for future use
in the original package or otherwise, are subject to state taxation. Today's
rule renders a state wholly powerless to tax wines imported from abroad and
held for future use side by side with taxable wines made in the United States.
Thus, through constitutional interpretation, all foreign products are granted
a tax subsidy at the expense of the individual states affected. If I thought
the Constitution required such tax discriminations against American products,
I should agree to the Court's opinion. The whole history of events leading up
to the Constitution, and this Court's opinions in construing it, persuade me
that no such consequence was ever contemplated by those who wrote or approved
A final word as to today's new constitutional doctrine. Precisely how it is
to be applied the Court does not tell  us. From one part of the Court's
opinion it appears that the state can never tax until they "are subjected to
the manufacture for which they were imported." Another part of the opinion
indicates they can be taxed when the original package is broken. Previous
opinions of this Court have indicated the difficulties and defects of an
original package doctrine.*4* Are these fibers to be taxed when the "reed"
which covers them is removed, or must the state wait until it can prove one of
the steel bands has been broken? Other questions suggest themselves in regard
to wine imported for use and stored in one's private cellar for individual
consumption. When, if at all, can a state tax it? Is it when the wine
reaches the cellar or must the state withhold its taxing hand until the wine
is "subjected to the [consumption] for which it was imported"? Or can the
state tax each create when the owner, or someone for him, removes the crate's
top with a crowbar? If the wine is imported in large casks, does it become
taxable when the stopper is removed from the bunghole or only when a part of
all of it has been consumed? The states are entitled to have a definite
answer to these practical questions.
MR. JUSTICE DOUGLAS, MR. JUSTICE MURPHY, and MR. JUSTICE RUTLEDGE join in
this opinion. MR. JUSTICE DOUGLAS is of the view that, accepting the Court's
ruling that these products are "imports," the rule should be applied without
discrimination against the Philippines.
MR JUSTICE MURPHY, concurring in part.
With MR. JUSTICE BLACK'S view that whatever constitutional tax immunity the
merchandise in question may have had was lost by virtue of its storage in
petitioner's  warehouse pending its use in petitioner's manufacturing
operations I agree. But the Court holds otherwise on that issue. We
therefore are met with the further issue as to whether the fact that the
merchandise was shipped from the Philippine Islands to the United States made
the merchandise an import within the meaning of Article I, Section 10, Clause
2 of the Constitution and therefore immune from state taxation. As to that
problem I am convinced that the affirmative answer given by the CHIEF JUSTICE
is the correct one and I concur in that portion of his opinion.
That affirmative answer, in my estimation, is compelled in good measure by
practical considerations. The moral and legal obligations owed the Philippine
Islands by the United States are, so far as I am aware, matchless and unique.
The United States is committed to a policy of granting complete independence
to the Philippines. It has already granted their people and their officials a
large measure of autonomy. but until the sovereignty of the United States is
finally withdrawn, the United States retains plenary and unrestricted powers
over them and is responsible for their welfare.
We have as a nation exhibited an ideal and a selfless concern for the
well-being of the Philippine people, a concern that has been deepened by the
devastation that war has brought to their land. Since the Islands were ceded
to us, we have at once fostered their economic development through
preferential trade agreements and encouraged their desires for freedom and
independence. Their industries and their agriculture have gradually been
adjusted in contemplation of their eventual sovereign independence. But war
has stricken their land and their peoples. Their growing economy has been
largely decimated by over three years of ruthless invasion and occupation.
Filipinos in countless numbers have yielded  not only their property but
their lives and their liberties. Their economic and social structure has
fallen about them in ruins.
Now, with the Islands liberated, our moral and legal obligations are greater
than ever before. Our responsibility for providing urgent relief and
rehabilitation has been readily assumed. But the more complex and difficult
duty of helping to reconstruct the Philippine economic structure remains to be
fulfilled. It is clear that the Philippines cannot safely be thrown into the
world market and left to shift for themselves. For the foreseeable future, at
least, their economy must be closely linked to that of the United States,
without either country abandoning or retreating from the common ideal of
independence for the Philippines.
Accordingly it is my view that if it is reasonably possible to do so we
should avoid a construction of the term "imports," as used in Article I,
Section 10, Clause 2 of the Constitution, that would place Philippine products
at a disadvantage on the American market to the advantage of products from
other countries or that might be a means of impeding the economic
rehabilitation of the Philippines. If we can justifiably construe that term
to prohibit state taxation on shipments from the Philippines we shall to that
extent have conformed to the national policy of aiding the Philippine
reconstruction. Any taxation or tariff on Philippine shipments that may be
felt to be necessary from the standpoint of the United States would then
become a matter solely for Congress, which could properly balance any
conflicting interests of the two nations.
Such a construction, in my estimation, is entirely fair and reasonable.
There are, to be sure, statements by this Court to the effect that the term
"imports" refers only to those goods brought in from a country foreign to the
United States. Woodruff v. Parham, 8 Wall. 123, 136;  Dooley v.
United States, 183 U.S.151, 154. But such statements, as pointed out by the
Court today, were unnecessary to the decision of the issues there involved and
cannot control the problem presented here. It has also been held that the
Philippine Islands are not a foreign country within the meaning of tariff laws
specifically referring to any "foreign country." Fourteen Diamond Rings v.
United States, 183 U.S.176; De Lima v. Bidwell, 182 U.S.1. The
inapplicability of these cases is obvious.
It further appears that Congress has usually avoided the use of the term
"imports" in the enactment of legislation affecting trade with the Philippines
and other dependencies and that the term has been regarded by certain
government agencies as inapplicable to articles coming from the Philippines.
But such usage clearly cannot affect our interpretation of a constitutional
As appears more fully in the Court's opinion, there is thus no controlling
authority requiring us to hold that shipments from the Philippines are not
imports within the meaning of Article I, Section 10, Clause 2 of the
Constitution. Under such circumstances the interpretation of this
constitutional provision adopted by the CHIEF JUSTICE is a permissible one.
And, in view of what I conceive to be the practical considerations, it is a
highly necessary and desirable one. Only under that interpretation can this
part of the Constitution be consistent with our duties as trustee for the
*1* Counsel for Maryland had argued that to permit state tax immunity in
that case would result in granting immunity to "an importer who may bring
goods, as plate, for his own use, and thus retain much valuable property
exempt from taxation." In reply to this argument, Marshall rejected the
assumption that the principles then announced would grant state tax exemptions
to imports that had reached their ultimate destination and were being used or
held for use by the importer. "The tax," he said, "finds the article already
incorporated with the mass of property by the act of the importer. He has
used the privilege [i.e., of sale] he had purchased, and has himself mixed
them up with the common mass, and the law may treat them as it finds them.
The same observations apply to plate, or other furniture used by the
importer." p. 443.
*2* To the same effect, see Woodruff v. Parham, 8 Wall. 123, 134-136.
*3* See e.g. May v. New Orleans, 178 U.S. 496; Burke v. Wells, 208 U.S. 14;
Sonneborn Bros. v. Cureton, 262 U.S. 506; Gulf Fisheries Co. v. MacInerney,
276 U.S. 124; Baldwin v. Seelig, 294 U.S. 511, 526. See also Mexican Petroleum
Corp. v. South Portland, 121 Maine 128, 115 A. 900, 26 A.L.R. 965, 971-980;
Tres Ritos Ranch Co. v. Abott, 44 N. Mex. 556, 105 P.2d 1070.
*4* Note 3, supra.