The question whether or not the legislation of 1900 made Puerto Rico an integral part of the United States came before the Supreme court in the form of a group of commercial cases which turned on points testing the validity of the new colonial policy.
The first case was the suit of De Lima & Co., New York, sugar brokers, who imported sugar from Puerto Rico during the latter half of 1899 and were made to pay duty thereon. In this case the duty was paid under the tariff fixed by the President after the signing of the treaty of peace. It does not bring into question the constitutionality of the civil government law in any respect, but merely the broad general question as to whether the Island of Puerto Rico became an integral part of the United States upon the ratification of the treaty of peace.
This firm sued Collector Bidwell of New York to recover the duties. The case was dismissed in the lower court on a demurrer and from this an appeal went to the Supreme Court of the United States.
Counsel contended that while the form of the government in territory belonging to the United States might be either military or civil, the territory is for that reason none the less a part of the United States, and therefore, according to the Constitution, the duties must be uniform throughout. They must be kept so uniform throughout the United States, and it is a matter of entire indifference under what particular form of government any portion of the United States may be. It was further claimed that the Constitution strictly limited Congress, and the President as well, so that neither of them could lay duties between the mainland and the Island of Puerto Rico any more than either, or both of them, could lay duties between the District of Columbia and Virginia, and he closed with the declaration that if it was desirable to change this state of affairs, the only possible method of procedure would be by the people themselves, who have it in their power to amend the Constitution, and who could, if they so desired, relax some of the limitations they had themselves for their own protection put upon the power of the general government. It was further agreed that it had been sufficiently demonstrated that the term United States had been meant by the framers of the Constitution to include both States and Territories, or the entire outlying domain, under the jurisdiction of the United States, and that the Constitution itself showed that the term was used in this sense in the clause regarding the uniformity of taxation. Chief Justice Marshall so interpreted it as the equivalent of "the great American empire," and this meaning is the ordinary and general one in which the term is understood not only by American citizens but by people throughout the world. The American nation is sovereign. It can go where it wishes, act where it wishes, acquire territory where it wishes, treat inhabitants as it wishes, and its powers are only limited by the physical force which may be brought to bear against it by other sovereigns.
But the government is not sovereign. The great salient fact, which those who contend for the government's position now do not recognize, is that the people of the United States are sovereign and that the government is not, which is the great fact that distinguishes the constitutional law from that of most of the civilized nations of Europe. It did not make the United States a crippled nation, as the Attorney-General suggested, but a nation which has permanently protected itself against usurpations against its own agents.
In another of these test cases Ex-Secretary Carlisle appeared in support of the following contentions:
First, at all time since of the ratification of the treaty Puerto Rico has been a part of the United States.
Second, as a consequence of the treaty the entire sovereignty over Puerto Rico has become vested in the United States, but the executive and legislative departments of the Federal government have only such power in relation to Puerto Rico as is granted to them by the Constitution.
Third, the President had not the power, under the Constitution, to make or enforce the order of January 20, 1899, in so far as it imposed duties upon articles brought into Puerto Rico from other parts of the United States.
Fourth, Congress had not the power, under the Constitution, to impose the taxes or duties provided by the act of April 12, 1900, upon articles of merchandise brought into Puerto Rico from other parts of the United States or into other parts of the United States or into other parts of the United States from Puerto Rico. The second point, relating to sovereignty, is elaborated as follows:
It does not follow that because Spain has yielded her sovereignty Congress has unlimited sovereign powers. Congress has no powers whatsoever derived from any other source than the Constitution. It does not derive any additional powers from internal law or from "the fact that the United States is a sovereign nation," or from the fact that the exercise of such power may be deemed necessary in order to carry out the policy of a particular administration.
Ex-President Harrison took this or a substantially similar position in public address.
Replying on the general question, Attorney-General Griggs reviewed the action of the framers of the Constitution in dealing with the territory belonging to the United States.
He showed that when the Constitution was framed the ordinance of 1787 for the government of the Northwest Territory had been in effect three years; that the first Congress ratified that ordinance with modifications, only providing that reports should be made to the President instead of to Congress, and that appointments should be made by the President. It was not until 1790 that North Carolina ceded to the United States the territory not forming a part of North Carolina but belonging to North Carolina. This cession was made by a deed containing stipulations which were accepted by Congress in an act. One of these stipulations was that the government should be executed not in accordance with the Constitution of the United States but in accordance with the Constitution of the United States but in accordance with the government established for the Northwest Territory.
Mr. Griggs then quoted Thomas Benton's historical and legal examination of the Dred Scot case, in which Mr. Benton, referring to the history of the formation of the Constitution, showed that at no time were "Territories" referred to as parts of the United States, but always as property of the States, to be managed and dealt with accordingly. The laws, the administration, and the revenue of the Territories are subject to the absolute control of Congress, which may repeal the whole form of government existing in a Territory, may destroy the Legislature, vacate all the offices, and take over all the public funds and absorb them into the common treasury. It may appropriate out of the Federal Treasury all the money necessary to carry on a Territorial government, omitting all local taxation.
"Has Congress the right to go so far as to decree non-intercourse with a territorial possession?" asked Justice Harlan.
"Yes," replied the Attorney-General, who went on to show that Congress had repeatedly done so, by setting off parts of territory belonging to the United States as Indian reservations, and that in the case of the Prybiloff Islands a line has been drawn around them and they had been made a government reservation to which no one could go without a license from the government.
Taking up the argument of the appellants as to the rule of uniformity of taxation, the Attorney-General pointed out that if the rule applied to tariff taxation in the territory belonging to the United States it applied as well to the internal revenue laws. Aside from the obvious practical impossibility of extending the internal revenue laws of the United States to the newly acquired insular possessions, he claimed that if the contention of the appellants was correct the Puerto Rican law had operated to render the whole body of internal revenue laws of the United States void by destroying the uniformity required by the Constitution.
The Attorney-General denied that an act of the treaty-making power conferring vested vested rights on individuals could be repealed by act of Congress. He contended that territories must be governed differently according to different conditions.
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