Bank of Augusta v. Earle

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In Bank of Augusta v. Earle, 38 U.S. (13 Pet.) 519 (1839), the U.S. Supreme Court emphasized that one of the primary purposes of the U.S. Constitution was to remedy this problem and ensure that there would be free and unrestricted trade among the States in the new federal union. "The great object of the Constitution was to erect a government for commercial purposes, for mutual intercourse, and mutual dealing. The prosperity of every state could alone be promoted and secured by establishing these on principles of reciprocity." Id. at 526.

This case is useful in arguing against taxes imposed by states on interstate commerce.

In addition, this decision held that "[corporations] can have no legal existence out of the boundaries of the sovereignty by which [they are] created." Id. at 588. As a result, "it became necessary to negotiate new treaties granting corporations legal status and the right to function abroad. A series of Treaties negotiated before World War II gave corporations legal status and access to foreign courts, 16 but it was not until the postwar Friendship, Commerce and Navigation Treaties that United States corporations gained the right to conduct business in other countries. The purpose of the Treaties was not to give foreign corporations greater rights than domestic companies, but instead to assure them the right to conduct business on an equal basis without suffering discrimination based on their alienage."[1]


  1. Sumitomo Shoji Am. v. Avagliano, 457 U.S. 176, 186-88 (1982) (footnote omitted).