broadcasting involving intrastate activity may be
subject to local taxation.
A state may impose a nondiscriminatory tax
for the use of its highways by motor vehicles
in interstate commerce if the charge bears a
fair relation to the cost of the construction,
maintenance, and regulation of its highways.
The commerce clause does not prohibit a
state from imposing a tax on a natural resource
that is produced within its borders and that is
sold primarily to residents of other states. In
Commonwealth Edison Co. v. Montana, 453 U.S.
609, 101 S. Ct. 2946, 69 L. Ed. 2d 884 (1981),
the U.S. Supreme Court upheld a 30 percent
SEVERANCE tax levied by Montana on the
production of coal, the bulk of which was
exported for sale to other states. The amount of
the tax was challenged as an unconstitutional
burden on interstate commerce. The Court
reasoned that the commerce clause does not
give the residents of one state the right to obtain
resources from another state at what they
consider a reasonable price, for that right would
enable one state to control the development and
depletion of natural resources in another state.
If that right were recognized, state and federal
courts would be forced to formulate and to
apply a test for determining what is a reasonable
rate of taxation on legitimate subjects of
taxation, tasks that rightfully belong to the
legislature.

545 U.S. 429, 125 S. Ct. 2419, 162 L. Ed. 2d 407
[2005]).
In a 2008 decision the Court ruled that
the commonwealth of Kentucky could exempt
its residents from payin g tax on the interest
of municipal
BONDS issued by the common-
wealth and its cities, counties, and other
political subdivisions, while taxing them for
interest on municipal b onds issu ed by oth er
states (Department of Revenue of K entucky v.
Davis, ___ U.S. ___, 128 S. Ct. 1801, 1 70 L.
Ed. 2d 6 85 [2008]). The Court determined that
this long-standing practice was justified in
ways that did not implicate the commerce
clause.
Crimes Involving Commerce
Congress may punish any conduct that inter-
feres with, obstructs, or prevents interstate and
foreign commerce, whether it occurs within one
state or involves a number of states. The
MANN
ACT
, which outlaws the transportation of any
woman or girl in interstate or foreign commerce
for the purpose of
PROSTITUTION, debauchery, or
other immoral acts, is a constitutional exercise
of the power of Congress to regulate commerce
(18 U.S.C.A. §§ 2421-2424 [1910]). The

criminal prosecution pursuant to the National
Stolen Property Act (18 U.S.C.A. § 2311 et seq.
[2000]).
FURTHER READINGS
Cauthorn, Kim. 1995. “Supreme Court Interprets Scope of
Congressional Authority under Interstate Commerce
Clause.” Houston Lawyer 33-AUG (July-August).
Conant, Michael. 2008. The Constitution and Economic
Regulation: Objective Theory and Critical Commentary.
New Brunswick, N.J.: Transaction.
McJohn, Stephen M. 1995. “The Impact of United States v.
Lopez: The New Hybrid Commerce Clause.” Duquesne
Law Review 34.
Prentice, E. Parmalee, and John G. Egan. The Commerce
Clause of the Federal Constitution. Littleton, Colo.: F. B.
Rothman.
Ramaswamy, M. 1948. The Commerce Clause in the Con-
stitution of the United States. New York: Longmans,
Green.
Weaver, Russell L. 2009. Inside Constitutional Law: What
Matters and Why. New York: Aspen.
CROSS REFERENCES
Civil Rights; Federalism; Interstate Commerce Commission;
Preemption; States’ Rights; Telecommunications.
COMMERCE DEPARTMENT
The DEPARTMENT OF COMMERCE (DOC) is an
agency of the
EXECUTIVE BRANCH of the federal
government that promotes international trade,
economic growth, and technological advance-

of the federal government and other selected
executive officials.
Although the activities of the Department
of Commerce are not always prominent in
the American consciousness, the department’s
efforts in administering economic programs
have a major effect on the average citizen.
Under the administration of President
GEORGE
H
.W. BUSH, the Department of Commerce admi-
nistered a number of programs designed to
enhance economic growth and to stimulate
economic progress in the wake of a recession.
Economics and Statistics
Administration
The Econo mics and Statistics Administration
(ESA), supervised by the undersecretary for
economic affairs, advises the presi dent on
economic developments and macroeconomic
and microeconomic policy. It also makes
economic forecasts and presents curre nt eco-
nomic data to the public through the National
Trade Data Bank and the Economic Bulletin
Board. The office oversees the Bureau of the
Census and the Bureau of Economic Analysis.
The Bureau of the Census was officially
established as a permanent office on March 6,
1902 (32 Stat. 51), although the ESA remains its
parent agency. Its major duties are authorized

available through numerous media and pub-
lications, including the monthly Survey of
Current Business.
Bureau of Industry and Security
The Bureau of Industry and Security, with its
offices of Export Administration and of Export
Enforcement, directs the nation’s export control
Department of Commerce
Secretary
Deputy Secretary
Chief of Staff
Chief
Economist
Under Secretary
and Administrator
Under Secretary for
International Trade
International Trade
Administration
Under Secretary for
Industry and Security
Bureau of
Industry and Security
Under Secretary for
Economic Affairs
Economics and
Statistics
Administration
Director
National Institute of

Administration
Assistant
Secretary for
Export
Enforcement
National Director
Minority Business
Development Agency
Assistant
Secretary
for
Manufacturing
and Services
Assistant Secretary for
Economic Development
Economic Development
Administration
Assistant Secretary
for Communications
and Information
National Telecommunications
and Information Administration
Director
National
Technical
Information
Service
Director
Bureau of
the Census

CREATIVE RESOURCES.
REPRODUCED BY
PERMISSION OF GALE,
A PART OF CENGAGE
LEARNING.
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3
RD E DITION
10 COMMERCE DEPARTMENT
policy, including the processing of export
license and applications as well as treaty
compliance. It assesses whether export controls
should be imposed upon specific products,
with particular regard for the potential danger
to U.S. national security that may result if the
products are exported. This office works with
U.S. allies to advocate for better ways of
controlling strategic exports. Export Enforc e-
ment investigates violatio ns of export-control
laws, including possible diversions of exports to
countries that are forbidden to receive particu-
lar products.
Economic Development Administration
The Economic Development Adm inistration,
established in 1965, works to generate economic
and job growth in the United States, including
developing the economies of distressed areas
and/or local communities experiencing high
unemployment; low income levels; or sudden,
severe economic hardship. It funds public-
works projects for public, private nonprofit,

and entrepreneurs.
National Oceanic and Atmospheric
Administration
The National Oceanic and Atmospheric Ad-
ministration (NOAA) was formed in 1970. It is
authorized to explore and to map the global
ocean and its living resources; to analyze and
predict conditions of the atmosphere, ocean,
sun, and space; to monitor and issue warnings
regarding destructive natural events such as
hurricanes, tsunamis, and tornadoes; and to
assess the changing condition of the environ-
ment. Included in this wide mandate are
such activities as protection of marine species;
preparation of nautical and aeronautical charts
and geodetic surveys; prediction of ocean tides
and currents; satellite observation of the atmo-
sphere and oceans; and management of ocean
coastal zones. Offices of the NOAA include the
National Weather Service; the National Marine
Fisheries Service; the National Environmental
Satellite, Data, and Information Service; the
National Ocean Service; and the Office of
Oceanic and Atmospheric Research.
National Telecommunications and
Information Administration
The National Telecommunications and Infor-
mation Administration (NTIA) was formed in
1978. It is responsible for advising the president
on telecommunications policy; developing and

ening
INTELLECTUAL PROPERTY protection world-
wide; and maintains a roster of qualified patent
agents and attorneys.
National Technical Information Service
The National Technical Information Service
helps businesses to develop tech nology that
will increase their competitiveness in the
marketplace. It identifies and attempts to
remove governmental barriers to the commer-
cialization of U.S. science and technology; helps
to identify priority technologies; monitors
foreign competitors’ progress in technology;
advises the president on issue s concerning
commercial technology and related policy; and
promotes joint efforts among business, govern-
ment, educational institutions, and nonprofit
organizations.
It also collects and distributes scientific
and technical information generated by the
U.S. government and foreign sources. Its
collection comprises over two million works.
The NTIS Bibliographic Database is available
on CD-ROM or online through commercial
vendors. The Technology Administration
produces the Federal Research in Progress
Database, a summary listing of 140,000 federally
funded research projects in progress. The NTIS
also licenses government-owned inventions,
operates the FedWorld computer system, and

U.S. Travel and Tourism Administration
Established in 1981, the U.S. Travel and
Tourism Administration formulates and imple-
ments national policy relating to travel and
tourism. It develops trade and statistical re-
search programs to assist the tourism industry,
and aids small- and medium-sized travel and
tourist businesses. It operates regional offices in
Amsterdam, Frankfurt, London, Mexico City,
Milan, Paris, Sydney, Tokyo, and Toronto, as
well as a Miami office that services South
American markets.
Web site: />FURTHER READINGS
Commerce Department. 2008. “Commerce Department FY
2009 Budget Highlights the President’s Priorities and
Commitments.” White House. Office of Public Affairs.
Available online at />PROD01_005145; website home page: http://www.
commerce.gov/ (accessed August 5, 2009)
U.S. Government Manual Website. Available online at www.
gpoaccess.gov/gmanual (accessed March 5, 2010).
United States Department of Commerce. 2008. Department
of Commerce: Condensed History, Duties, and Practical
Operation. Charleston, SC: BiblioBazaar.
COMMERCE, ELECTRONIC
Electronic commerce includes any sales trans-
action that takes place via computer or over the
Internet.
In 1990 nobody would have predicted that
by the end of the twentieth century people
could conduct nearly all of their commercial

The introduction of the Internet in the mid
1990s opened electronic processing to compa-
nies of all sizes; anyone with a computer could
connect to a global system that reached into
countless businesses and homes.
The first major so-called virtual company to
appear on the Internet was Amazon.com,
founded by Jeff Bezos in Seattle . Amazon.com
began
DOING BUSINESS in July 1995. Its premise
was simple: People could purchase books online
through Amazon.com for less money than the
same books would cost at a local bookstore.
Because Amazon.com had no actual retail stores
(the books were stored in a warehouse), it could
afford to keep prices lower than the competi-
tion. If Amazon.com had a buyer’s order in
stock in its warehouse, it could be delivered
within two to three days. In some bookstores, a
special order for an out-of-stock book could
take weeks. Amaz on.com has since expanded
and currently offers a wide variety of products
in addition to books.)
Not long afterward, in September 1995,
Pierre Omid yar and Jeff Skoll founded eBay, an
online auction service. Basically, eBay allows
sellers and potential buyers to deal online; as
with a live auction, various buyers bid for an
item, and the seller accepts the highest bid.
In the ensuing years, Amazon.com, eBay,

Revenue estimates (in millions of dollars)
Industry
Publishing
Telecommunications
a
Online information services
a
Travel arrangement and
reservation services
Motor vehicles and
parts dealers
Electronics and
appliance stores
Clothing and clothing
accessory stores
Sporting goods, hobby,
book, and music stores
Electronic shopping and
mail order houses
$18,581
$4,435
$4,637
$7,308
$23,600
$1,301
$2,115
$1,686
$88,915
SOURCE: U.S. Census Bureau, E-Stats, “Measuring the Electric Economy,”
available online at (accessed

a lot.
Thanks to improved technology that allows
information to be encrypted when it is sent
from one computer to another, it is extremely
difficult for an unauthorized person to obtain a
consumer’s credit card number or
SOCIAL
SECURITY
number. (Proponents of e-commerce
argue that it is no more dangerous to send one’s
credit card number over the Internet than it is
to have it on a receipt that can be read by
countless people.)
As for missing out on the experience of
actually seeing and touching an object before
purchasing it, many web sites now have detailed
information as well as photographs of the
merchandise being offered for sale. Even
retailers that do not offer electronic purchases
can do this. Lenscrafters, the large optical chain
that is famous for its one-hour glasses service,
clearly cannot sell its wares over the Internet.
The Lenscrafters web site has pictures of many
of its frames, as well as a guide to help visitors
determine their facial shape and which frame
would look best on them. (According to the
2003 UCLA study, many Internet shoppers
browse through their local retail stores to
examine a product, and after that they look
on the computer to see whether they can order

DEPARTMENT OF
COMMERCE
issued a white paper that called for
the creation of a not-for-profit corporation to
help manage the Internet’s infrastr ucture. This
corporation became known as the Internet
Corporation for Assigned Names and Numbers
(ICANN). The best known function of ICANN
is its coor dination of the
DOMAIN Name Service
(DNS). In other words, ICANN is responsible
for overseeing the technology that allows
Internet users to type in domain names (i.e.,
www.domainname.com) instead of long strings
of numbers. This technology mak es it easier for
users to type in names of retail stores or online
commerce sites. ICANN also oversees the
Uniform Domain-Name Dispute Resolution
Policy (URDP). This policy governs the meth-
ods by which corporate entities can choose and
protect their domain names. All URDP cases are
arbitrated through the World
INTELLECTUAL
PROPERTY
Organization (WIPO), a group created
in 1970 to safeguard intellectual property rights.
Companies whose names are trademarked or
who are well-known organizations are some-
times forced to contend with individuals who
try to use a similar domain name. This practice

years in 2001. Despite efforts by the National
Governors Association (NGA) to have Congress
repeal the physical presence requirement, by
2009 no legislation had passed Congress. The
NGA first introduced the Streamlined
SALES
TAX
Project (SSTP) in 2000 to adopt uniform tax
rates among the 50 states. By 2009, 23 states had
signed on, awaiting congress ional approval.
FURTHER READINGS
Kharif, Olga. 2009. “The State of the Internet Sales Tax.”
Business Week, April 20.
Secretariat on Electronic Commerce. 1997. The Emerging
Digital Economy. Washington, D.C.: U.S. Department
of Commerce.
UCLA Center for Communication Policy. 2009. The 2009
UCLA Internet Report: Surveying the Digital Future. Los
Angeles: UCLA.
CROSS REFERENCES
Justice Department; Internet; Taxation; Telecommuni-
cations
COMMERCIAL CODE
A colloquial designation for the body of law
known as the Uniform Commercial Code (UCC),
which governs the various business transactions
that are integral parts of the U.S. system of
commerce. The UCC has been adopt ed in virtually
all of the states.
COMMERCIAL LAW

transactions. For instance, although Article 4 of
the UCC governs bank deposits, federal law in
the form of statutes and regulations prescribe
requirements for
BANKS AND BANKING in general.
Likewise, federal law governs such issues related
to commercial law as
BANKRUPTCY and debt
collection. Many of the federal laws related to
commercial transactions are codified in title 15
of the
U.S. CODE.
Although the UCC controls most aspects of
domestic commercial law, the
COMMON LAW of
contracts, as well as other state laws, still applies
to some types of transactions that arise in
business, such as contracts for services.
INTERNA-
TIONAL LAW
is likewise an important component
of this area. For instance, the
UNITED NATIONS
Convention on Contracts for the International
Sale of Goods has been ratified by approxi-
mately 62 nations, representing two-thirds of
the world’s trade.
Though the business world undergoes
constant change, commercial laws generally
have remained static. The

COURSE OF DEALING
among its members and among the profession
at large, to promote uniformity of legislation in
matters affecting commercial law, and to foster
among its members a feeling of fraternity and
mutual confidence. Its members are lawyers,
commercial agencies, and law list publishers.
The Commercial Law League of America is
the national association supporting and advo-
cating for the interests of professionals practic-
ing commercial law. It is an organization of
attorneys and other professionals actively en-
gaged in the fields of commercial law,
BANKRUPTCY,
collections, finance, and
INSOLVENCY. The League
has been a pioneer in standardizing commercial
practice. It continues to maintain and expand
its program of activities in such areas as
creditors’ rights, commercial laws and legisla-
tion, and bankruptcy and reorganization. In
March 2003, the CLLA presented testimony and
a formal position paper before a U.S. Congress
subcommittee for meaningful bankruptcy re-
form, relative to the pending Bankruptcy Abuse
Prevention and
CONSUMER PROTECTION Act of
2003, H.R. 975, 108th Cong., 1st Sess.
The CLLA maintains more than 40 com-
mittees covering various areas of commercial

Miller, Judith Greenstone. 2003. “Bankruptcy Abuse
Prevention and Consumer Protection Act of 2003.”
FDCH Congressional Testimony. (March 4).
CROSS REFERENCES
Bankruptcy; Uniform Commercial Code.
COMMERCIAL PAPER
Commercial paper is a written instrument or
document such as a check, draft, promissory note,
or a certificate of deposit, that manifest s the pledge
or duty of one individual to pay money to another.
COMMERCIAL PAPER is ordinarily used in
business transactions, since it is a reliable and
expedient means of dealing with large sums of
money and minimizes the risks inherent in
using cash, such as the increased possibility of
theft.
One of the most significant aspects of
commercial paper is that it is negotiable, which
means that it can be freely transferred from
one party to another, either through endorse-
ment or delivery. The terms commerc ial paper
and
NEGOTIABLE INSTRUMENT can be used inter-
changeably.
Since commercial paper constitutes
PERSONAL
PROPERTY
, it is transferable by sale or gift and can
be loaned, lost, stolen, and taxed. Commercial
paper is a specific type of property primarily

time, whereas a time note has a date for payment
on its face that establishes the date when the
holder will have an enforceable right to receive
payment under it. There is no obligation to pay
a time note until the date designat ed on its face.
The ordinary purpose of a promissory note
is to borrow money. Promissory notes should
not be confused with credit or loan agreements,
which are separate instruments that are usually
signed at the same time as promissory notes,
but which merely describe the terms of the
transactions.
A promissory note serves as
DOCUMENTARY
EVIDENCE
of a debt. It can be endorsed and sold
at a discount to other parties, and each
subsequent endorser becomes secondarily liable
for the amount specified on the face of the
instrument. A number of
CONSUMER CREDIT
dealings are funded through the use of promis-
sory notes.
Certain types of promissory notes are sold at
a discount, such as U.S. savings bonds and
corporation bonds. Such an instrument is sold
for an amount below its
FACE VALUE and can
subsequently be redeemed on the due date or
date of maturity for the entire face amount. The

payment as soon as possible. The procedure
ordinarily followed in such instances is that
upon shipment of the goods, the seller receives a
BILL OF LADING from the carrier. The bill of lading
Checks are considered
a type of commercial
paper, as well as a
specific kind of bank
draft.
DENNIS DEGNAN/
CORBIS.
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3
RD E DITION
COMMERCIAL PAPER 17