The Illinois Community Currency Exchanges Act provides for the licensing, inspection, bonding and regulation of "currency exchanges" engaged in the business of issuing or selling money orders. It forbids them to do business on the premises of any other business; but it exempts from all of its provisions money orders sold or issued by the American Express Co., an old, established, world-wide enterprise of unquestioned solvency and high financial standing, which sells money orders through local drug and grocery stores. Appellees, a "currency exchange" issuing and selling money orders and its agent selling them in his own drugstore, sued to enjoin enforcement of the Act against them, on the ground of its unconstitutionality. Held: Application of the Act to appellees denies them the equal protection of the laws guaranteed by the Fourteenth Amendment. Pp. 458-470.

(a) The Equal Protection Clause does not require that every state regulatory statute apply to all in the same business; but a statutory discrimination must be based on differences that are reasonably related to the purposes of the statute. Smith v. Cahoon, 283 U.S. 553. Pp. 465-466.

(b) Moreover, a discrimination cannot be justified by different business characteristics when it has no reasonable relation to those differences. Hartford Co. v. Harrison, 301 U.S. 459. P. 466.

(c) The discrimination in favor of the American Express Co. here involved does not have a reasonable relation to the purposes of the Act or to different business characteristics. Pp. 466-467.

(d) The effect of the discrimination here involved is to create a closed class by singling out American Express money orders for exemption from the requirements of the Act. Pp. 467-468.

(e) The exemption of its money orders gives the American Express Co. important economic and competitive advantages over appellees. Pp. 468-469. [354 U.S. 457, 458]

(f) Taking these factors in conjunction, application of the Act to appellees deprives them of equal protection of the laws. P. 469.

(g) This case need not be remitted to the Illinois courts for a determination whether the exception can be severed from the Act under its severability clause, because the Supreme Court of Illinois has indicated rather clearly that the exception is not severable. Pp. 469-470.

William C. Wines, Assistant Attorney General of Illinois, argued the cause for appellants. With him on the brief were Latham Castle, Attorney General, Ben Schwartz, Assistant Attorney General, and Benjamin S. Adamowski.

G. Kent Yowell and John J. Yowell argued the cause and filed a brief for appellees.

MR. JUSTICE BURTON delivered the opinion of the Court.

This case concerns the validity of a provision in the Illinois Community Currency Exchanges Act, as amended,1 excepting money orders of the American Express Company from the requirement that any firm selling or issuing money orders in the State must secure a license and submit to state regulation. The objection raised is that this exception results in a denial of equal protection of the laws, guaranteed by the Fourteenth Amendment to the Constitution of the United States, to those who are subjected to the requirements of the Act. For the reasons hereafter stated, we hold that the Act is invalid as applied to them because of this discriminatory exception.

The appellees in this case are Doud, McDonald and Carlson, partners doing business as Bondified Systems, [354 U.S. 457, 459] and Derrick, their agent. The partnership has an exclusive right to sell "Bondified" money orders in Illinois, directly or through agents.2 It contemplates selling these money orders in Illinois through agents principally engaged in operating retail drug or grocery stores. Derrick is the proprietor of a drugstore in Illinois and operates a "Bondified" agency in that store.

Fearing enforcement against them