The first Constitution of the United States mishandled commerce among the separate States. Each state was totally sovereign with respect to taxes and trade. Thus each was able to establish tariff and trade restrictions against all other states. They all beggared their neighbors and commercial results worsened among them all. States were unable to keep up their payments on their war debt, so they increased property taxes, leading to property foreclosures. Making matters worse, there was no uniform system of currency established in the Constitution. The new Constitution presumed to get trade right in one simple sentence. Article I, Section 8, Clause 3 contains what is known as “The Commerce Clause,” and reads: “The Congress shall have Power to regulate Commerce among the several States.”
The twelve words of the Commerce clause have a lot of meaning. They establish a constraint on states from interfering with interstate commerce, and delegate to Congress sole power to regulate interstate commerce. Chief Justice John Marshall wrote in Gibbon v. Ogden (1824) the legal interpretation of the law: “The completely internal commerce of a state is reserved for the state itself. All other commerce of the United States is part of the general powers of the United States.” This simple explication of the law is the most litigated clause of the Constitution.
As early as the 1870s two political constituencies asked Congress to provide relief for farmers and labor. Both formed political associations to state their political needs. Farmers established the Farmers Alliance and The Grange to plead for relief from exorbitant railroad rates and need for cheaper currency (not having gold as a basis). Similarly for labor, unions were politically important to redress labor problems: higher pay, better working conditions and access to housing. The labor/farmer alliance provided strong delivery of votes to the Populist Party and the political system responded.
After the Civil War industry returned to peacetime business bigger and stronger than before. Simultaneously, there was an impetus for cartelization of large industries aided by oligarchic investment banks. Wealth accumulated in numerous families. In the 1870s and 80s children of wealthy families, went to Europe and obtained PhDs mostly from German Universities. They were particularly attracted to Bismarck’s accomplishments with the Prussian State. These highly educated, unemployed, elite Republican, men and women, focused their energies on human conditions. In particular they focused on immigration(“poor” houses), industrialization(child labor and work conditions), and political corruption(party bosses). By the time of Theodore Roosevelt’s presidency they had become leaders in many different civic and charitable organizations and were willing to support Roosevelt’s progressive political leadership. The government provided employment in new Federal agencies and these new progressive adherents became bureaucrats in civil service positions for the rest of their lives.
The Supreme Court’s basis for making substantive Constitutional changes was Chief Justice Marshall’s opinion upholding the constitutionality of the Second Bank of the United States as a “necessary and proper means” of administering Treasury functions (McCulloch vs. Maryland 1819). Eighty years later the case of Addyston Pipe & Steel Co v. United States (1899) settled that price fixing and market schemes engaged in by companies were “in commerce” and thus reached by Congress to regulate. Thereafter constitutional changes were regular. Any activity crossing interstate lines was reachable by Congress, even for moral or other non-economic purposes (Champion v. Ames, 1903). The Pure Food and Drug Act gained constitutional approval by Hipolite Egg Co. v. United States (1911). Congress could regulate purely intrastate commercial activity as long as it had a substantial effect on interstate commerce (Shreveport Rate Case – 1914). Finally, a case originating in the 1930s, decided in 1941 established there were no limits remaining on Congress’ use of the Commerce Clause. In Wickard v. Filburn the Court said a farmer planting more grain than what was allowed to be sold, was illegal because the extra grain, even if for a farmer’s personal use, nevertheless affected interstate commerce. No De minimis ruleapplied. In the 70 years between Wickard and NFIB v. Sebelius in 2012, the Supreme Court found only two narrow laws to lie beyond Congress’ constitutionally enumerated powers.
Publiustoo.com October 5, 2019
The Unmeaning of the Commerce Clause