The Supreme Court Strikes Down Railroad Regulation

During the “Gilded Age” of the 1880s and 1890s, the influence of large-scale corporations dominated not just the U.S. Congress but also the courts. Nowhere was this more evident than in the U.S. Supreme Court’s decision in the 1886 Wabash case, excerpted below. With Wabash, the Court overturned its 1879 decision (Munn v. Illinois) allowing states to regulate railroads. Perverting the original intent of the Fourteenth Amendment, the Court decreed that corporations were legally “persons” entitled to the Amendment’s protections. (Just three years earlier, the Court had ruled the Civil Rights Act of 1875 unconstitutional on the basis that the Fourteenth Amendment was binding only on states, not individuals, thereby severely jeopardizing the very rights—of freed slaves—the amendment was explicitly designed to protect.) The Wabash case barred states from regulating interstate commerce, asserting that only the federal government could do so. In 1887, Congress passed the Interstate Commerce Act, which railroad barons found more appealing than the more restrictive state laws.

Although the precise point presented by this case may not have been heretofore decided by this court, the general subject of the power of the State legislature to regulate taxes, fares, and tolls for passengers and transportation of freight over railroads within their limits has been very much considered recently. . . and the question how far such regulations, made by the States and under State authority are valid or void, as they may affect the transportation of goods through more than one State, in one voyage, is not entirely new here. The supreme court of Illinois, in the case now before us, conceding that each of these contracts was in itself a unit, and that the pay received by the Illinois railroad company was the compensation for the entire transportation from the point of departure in the State of Illinois to the city of New York, holds that, while the statute of Illinois is inoperative upon that part of the contract which has reference to the transportation outside of the State, it is binding and effectual as to so much of the transportation as was within the limits of the State of Illinois and undertaking for itself to apportion the rates charged over the whole route, decides that the contract and the receipt of the money for so much of it as was performed within the State of Illinois violate the statute of the State on that subject.

If the Illinois statute could be construed to apply exclusively to contracts for a carriage which begins and ends within the State, disconnected from a continuous transportation through or into other States, there does not seem to be any difficulty in holding it to be valid. For instance, a contract might be made to carry goods from Cairo to Chicago, or from Chicago to Alton. The charges for these might be within the competency of the Illinois Legislature to regulate. The reason for this is that both the charge and the actual transportation is such cases are exclusively confined to the limits of the territory of the State, and it is not commerce among the States, or interstate commerce, but it is exclusively commerce within the State. So far, therefore, as this class of transportation, as an element of commerce, is affected by the statute under consideration, it is not subject to the constitutional provision concerning commerce among the States. It has often been held in this court, and there can be no doubt about it, that there is a commerce wholly within the State which is not subject to the constitutional provision, and the distinction between commerce among the States and the other class of commerce between the citizens of a single State, and conducted within its limits exclusively, is one which has been fully recognized in this court, although it may not be always easy, where the lines of these classes approach each other, to distinguish between the one and the

other. . . .

It cannot be denied that the general language of the court in these cases [Munn v. Illinois, and others] upon the power of Congress to regulate commerce, may be susceptible of the meaning which the Illinois court places upon it. . . .

And it must be admitted that, in a general way, the court treated the cases before it as belonging to that class of regulations of commerce which, like pilotage, bridging navigable rivers, and many others, could be acted upon by the States in the absence of any legislation by Congress on the same subject. . . .

The applicability of this language [from Hall vs. De Cuir, 95 U.S. 485] to the case now under consideration, of a continuous transportation of goods from New York to Central Illinois, or from the latter to New York is obvious, and it is not easy to see how any distinction can be made. Whatever may be the instrumentalities by which the transportation from one point to the other is effected, it is but one voyage, as much so as that of the steamboat on the Mississippi River. It is not the railroads themselves that are regulated by this act of the Illinois Legislature so much as the charge for transportation, and in language just cited, if each one of the States through whose territories these goods are transported can fix its own rules for prices, for modes of transit, for times and modes of delivery, and all the other incidents of transportation to which the word “regulation” can be applied, it is readily seen that the embarrassments upon interstate transportation, as an element of interstate commerce, might be too oppressive to be submitted to. “It was,” in the language of the court cited above, “to meet just such a case that the commerce clause of the Constitution was adopted.”

It cannot be too strongly insisted upon that the right of continuous transportation from one end of the country to the other is essential in modern times to that freedom of commerce from the restraints which the State might choose to impose upon it, that the commerce clause was intended to secure. This clause, giving Congress the power to regulate commerce among the States and with foreign nations, as this court has said before, was among the most important of the subjects which prompted the formation of the Constitution. And it would be very feeble and almost useless provision, but poorly adapted to secure the entire freedom of commerce among the States which was deemed essential to a more perfect union by the framers of the Constitution, if, at every stage of the transportation of goods and chattels through the country, the State within whose limits a part of this transportation must be done could impose regulations concerning the price, compensation, or taxation, or any other restrictive regulation interfering with and seriously embarrassing this commerce. . . .

We must, therefore, hold that it is not, and never has been, the deliberate opinion of a majority of this court that a statute of a State which attempts to regulate the fares and charges by railroad companies within its limits, for a transportation which constitutes a part of commerce among the States, is a valid law. . . .

Of the justice or propriety of the principle which lies at the foundation of the Illinois statute it is not the province of this court to speak. As restricted to a transportation which begins and ends within the limits of the State, it may be very just and equitable, and it certainly is the province of the state legislature to determine that question. But when it is attempted to apply to transportation through an entire series of States a principle of this kind, and each one of the States shall attempt to establish its own rates of transportation, its own methods to prevent discrimination in rates, or to permit it, the deleterious influence upon the freedom of commerce among the States, and upon the transit of goods through those States, cannot be overestimated. That this species of regulation is one which must be, if established at all, of a general and national character, and cannot be safely and wisely remitted to local rules and local regulations, we think is clear from what has already been said. And if it be a regulation of commerce, as we think we have demonstrated it is, and as the Illinois court concedes it to be, it must be of that national character; and the regulation can only appropriately exist by general rules and principles, which demand that it should be done by the Congress of the United States under the commerce clause of the Constitution. The judgement of the Supreme Court of Illinois is therefore Reversed, and the case remanded to that court for further proceedings in conformity with this opinion.

Source: Wabash, St. Louis, and Pacific Railroad Company v. Illinois, 118 U. S. 557 (1886), 563–577.