After the Civil War, railroads and huge corporations built a national economy. Congress responded with the Interstate Commerce Act (1887) and the Sherman Antitrust Act (1890). From about 1887 to 1936 the Court read the commerce power through a set of categories that let much of that economy escape federal reach, while upholding other laws. Read the era as doctrine, not just as a list of struck-down laws.
| Case | Law | Result and reasoning |
|---|---|---|
| United States v. E. C. Knight Co. (1895), 8 to 1 | Sherman Act applied to a sugar-refining trust controlling about 98 percent of U.S. refining | Not reached. Manufacturing is not commerce; its effect on commerce was only "indirect." Justice Harlan dissented. |
| Champion v. Ames (1903) | Federal ban on carrying lottery tickets across state lines | Upheld. Congress may prohibit the interstate movement of things it judges harmful. |
| Hammer v. Dagenhart (1918), 5 to 4 | Ban on interstate shipment of goods made with child labor (Keating-Owen Act, 1916) | Struck down. The goods were harmless; the law really regulated manufacturing, a state matter. Justice Holmes dissented. |
| Schechter Poultry Corp. v. United States (1935), 9 to 0 | National Industrial Recovery Act codes applied to a Brooklyn poultry business | Struck down. Local business with only indirect effects; also an unlawful delegation (see Nondelegation). |
| Carter v. Carter Coal Co. (1936) | Wage and hour rules for coal mining | Struck down. Mining is production, not commerce; effects on commerce were indirect. |
Why it works
Key idea
Worked example: Champion and Hammer side by side
- Champion: lottery tickets were themselves seen as harmful, so stopping their movement regulated commerce.
- Hammer: the goods made by children were harmless; the majority said the real aim was to regulate working conditions in factories, a matter for the states.
- Justice Holmes, dissenting in Hammer, said the power to regulate interstate commerce includes the power to prohibit it, whatever Congress's motive.
Answer: The majority looked at the law's purpose and the nature of the goods. Darby (1941) later adopted Holmes's view and overruled Hammer.
Worked example: Direct or indirect?
- The workers are engaged in production, not commerce (E. C. Knight, Carter Coal).
- Wages affect interstate commerce only indirectly, through prices and output.
- So the law would likely fall, as in Carter Coal.
Answer: Struck down under the narrow-era doctrine. The same law would be upheld after 1937.
Common mistake
Historians and scholars still debate the era. Some see judges protecting liberty of contract and their own economic views; others see a sincere effort to keep the enumerated-powers line that the framers drew. You will meet the due process side of the era in Constitutional Law II.