U.S. Supreme Court case that established that states may regulate business for the public good.
In 1875, the Illinois legislature set the maximum rates that
grain elevator operators could charge in Illinois cities of
100,000 or more. This action was in response to a movement
among farmers known as the Grange that had asked lawmakers in Illinois and other Midwestern states to regulate the
rates grain elevator operators and railroads could charge
farmers; they charged low rates to large corporations but high
rates to small farmers. Illinois grain elevator operators challenged the constitutionality of the 1875 law. The case came
before the Supreme Court, and lawyers for the operators argued that Illinois had surpassed the police power granted to
it under the Constitution. They also argued that the law gave
the state control over interstate commerce and deprived grain
elevator operators of their private property without due
process as guaranteed in the Fourteenth Amendment.
Chief Justice Morrison Waite ruled in favor of Illinois in a
7 to 2 decision. Citing England’s Lord Chief Justice Sir
Matthew Hale, renowned common-law jurist, Waite argued
that private property ceases to be exclusively private when it
is affected with a public interest. When private property is
used in a public way, a state may regulate the property to protect its citizens. Waite admitted that states might abuse their
police power over private property, but the best recourse was
at the polls and not in the courts. He also dismissed the claim
that the law interfered with interstate commerce since the relationship between farmers and grain elevators occurred primarily within the borders of Illinois. Although this decision
and those from four other Granger cases set a precedent for
future government regulation, most related decisions in the
next 60 years followed the dissent of Justice Field, who argued
that the Illinois law violated the Fourteenth Amendment.
—Mary Stockwell
References
Paine, Arthur Elijah. The Granger Movement in Illinois.
Urbana: University of Illinois Press, 1904.