Shreveport Rate Case
Encyclopedia
Houston E. & W. T. Ry. Co. v. United States, 234 U.S. 342
(1914), also known as Shreveport Rate Case, was a decision of the United States Supreme Court expanding the power of the Commerce Clause
of the Constitution of the United States. Justice Hughes's majority opinion stated that the federal government's power to regulate interstate commerce also allowed it to regulate purely intrastate commerce in cases where control of the former was not possible without control of the latter. Because the Supreme Court consolidated several related appeals, they are sometimes collectively known as the "Shreveport Rate Case
s" although the Supreme Court issued only one ruling.
and Marshall
, Texas
(on the eastern border of Texas), and Shreveport, Louisiana
. The freight shipping rates "on wagons" from Marshall to Dallas, a distance of 148 miles, was 36.8 cents, and the rate from Marshall to Shreveport, a distance of 42 miles, was 56 cents; the rates for other goods, and from other points in Texas, showed similar imbalance. Shreveport competed with Dallas for shipments from East Texas, but the skewed price structure (mandated by the Texas Railroad Commission), greatly favored shipments to and from Dallas over Shreveport. The Interstate Commerce Commission
, acting on a complaint from the Railroad Commission of Louisiana, found that "an unlawful and undue preference and advantage" was thereby given to the Texas cities, ordered the company to change the rate structure to end discriminatory pricing.
reserves for the states or the people all powers not specifically delegated to the federal government.
The Constitution gives Congress the power to regulate interstate commerce. Regulation of commerce completely within a state is not an enumerated power of the federal government. In effect, the Interstate Commerce Commission was attempting to set the rate that the railroad could charge from Dallas to Marshall, a section of rail line completely within the borders of Texas. The railroads argued that "Congress is impotent to control the intrastate charges of an interstate carrier."
, writing for the majority, rejected that argument, finding that congressional authority "necessarily embraces the right to control... operations in all matters having a close and substantial relation to interstate traffic, to the efficiency of interstate service, and to the maintenance of conditions under which interstate commerce may be conducted upon fair terms." Regulation of the intrastate line was a means to the end of regulating interstate commerce, and by the majority opinion was thereby allowed.
Two justices, Lurton
and Pitney
, dissented without issuing a written opinion.
, can in some way be related to interstate commerce. The Shreveport Rate Case was an early example of this expansion.
As a leading case in the ability of governments to regulate activities occurring only within single subdivisions, on the grounds that those activities affect regulation on a larger scale, the Shreveport Rate Cases have been cited in many subsequent rulings, both in the United States and in other countries.
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(1914), also known as Shreveport Rate Case, was a decision of the United States Supreme Court expanding the power of the Commerce Clause
Commerce Clause
The Commerce Clause is an enumerated power listed in the United States Constitution . The clause states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Courts and commentators have tended to...
of the Constitution of the United States. Justice Hughes's majority opinion stated that the federal government's power to regulate interstate commerce also allowed it to regulate purely intrastate commerce in cases where control of the former was not possible without control of the latter. Because the Supreme Court consolidated several related appeals, they are sometimes collectively known as the "Shreveport Rate Case
Rate case
A rate case is the formal process which industries that have the legal designation of public utility are mandated to go through in order to set the rate at which they are allowed to charge consumers for their service...
s" although the Supreme Court issued only one ruling.
The Facts
The Houston East and West Texas Railway Company managed an interstate railway line that ran through DallasDallas, Texas
Dallas is the third-largest city in Texas and the ninth-largest in the United States. The Dallas-Fort Worth Metroplex is the largest metropolitan area in the South and fourth-largest metropolitan area in the United States...
and Marshall
Marshall, Texas
Marshall is a city in Harrison County in the northeastern corner of Texas. Marshall is a major cultural and educational center in East Texas and the tri-state area. As of the 2010 U.S. Census, the population of Marshall was about 23,523...
, Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
(on the eastern border of Texas), and Shreveport, Louisiana
Shreveport, Louisiana
Shreveport is the third largest city in Louisiana. It is the principal city of the fourth largest metropolitan area in the state of Louisiana and is the 109th-largest city in the United States....
. The freight shipping rates "on wagons" from Marshall to Dallas, a distance of 148 miles, was 36.8 cents, and the rate from Marshall to Shreveport, a distance of 42 miles, was 56 cents; the rates for other goods, and from other points in Texas, showed similar imbalance. Shreveport competed with Dallas for shipments from East Texas, but the skewed price structure (mandated by the Texas Railroad Commission), greatly favored shipments to and from Dallas over Shreveport. The Interstate Commerce Commission
Interstate Commerce Commission
The Interstate Commerce Commission was a regulatory body in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads to ensure fair rates, to eliminate rate discrimination, and to regulate other aspects of common carriers, including...
, acting on a complaint from the Railroad Commission of Louisiana, found that "an unlawful and undue preference and advantage" was thereby given to the Texas cities, ordered the company to change the rate structure to end discriminatory pricing.
The Issue
The federal government is one of limited and enumerated powers. The Tenth AmendmentTenth Amendment to the United States Constitution
The Tenth Amendment to the United States Constitution, which is part of the Bill of Rights, was ratified on December 15, 1791...
reserves for the states or the people all powers not specifically delegated to the federal government.
The Constitution gives Congress the power to regulate interstate commerce. Regulation of commerce completely within a state is not an enumerated power of the federal government. In effect, the Interstate Commerce Commission was attempting to set the rate that the railroad could charge from Dallas to Marshall, a section of rail line completely within the borders of Texas. The railroads argued that "Congress is impotent to control the intrastate charges of an interstate carrier."
The Holding
Associate Justice Charles Evans HughesCharles Evans Hughes
Charles Evans Hughes, Sr. was an American statesman, lawyer and Republican politician from New York. He served as the 36th Governor of New York , Associate Justice of the Supreme Court of the United States , United States Secretary of State , a judge on the Court of International Justice , and...
, writing for the majority, rejected that argument, finding that congressional authority "necessarily embraces the right to control... operations in all matters having a close and substantial relation to interstate traffic, to the efficiency of interstate service, and to the maintenance of conditions under which interstate commerce may be conducted upon fair terms." Regulation of the intrastate line was a means to the end of regulating interstate commerce, and by the majority opinion was thereby allowed.
Two justices, Lurton
Horace Harmon Lurton
Horace Harmon Lurton was an American jurist who served for four years as a Justice of the Supreme Court of the United States. Appointed at the age of 65, Lurton was the oldest justice appointed to the Court.-Life:...
and Pitney
Mahlon Pitney
Mahlon Pitney was an American jurist and Republican Party politician from New Jersey, who served in the United States Congress and as an Associate Justice of the United States Supreme Court.-Biography:...
, dissented without issuing a written opinion.
Legacy
The Interstate Commerce Clause has been used to steadily expand the power of the federal government, as almost any aspect of life, especially after the industrial revolutionIndustrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
, can in some way be related to interstate commerce. The Shreveport Rate Case was an early example of this expansion.
As a leading case in the ability of governments to regulate activities occurring only within single subdivisions, on the grounds that those activities affect regulation on a larger scale, the Shreveport Rate Cases have been cited in many subsequent rulings, both in the United States and in other countries.