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The Bill of Rights, 2nd Edition

E. C. Knight Company, United States v.

by Thomas Tandy Lewis

Citation: 156 U.S. 1

Announced: January 21, 1895

Issues: Antitrust law; Commerce Clause; Police powers of the states

Relevant Amendment: Tenth

Brief Summary: In its first decision concerning the Sherman Antitrust Act (1890), the U.S. Supreme Court held that Congress had no authority to suppress monopolies in the manufacturing of products, based on the theory that manufacturing was separate from the buying and selling of goods in interstate commerce. The opinion for the Court argued that the reserved powers of the states included police powers that were involved in regulating manufacturing.

In 1892, the American Sugar Company was acquiring the stock of the E.C. Knight Company and other competitors, resulting in the control of almost all the nation’s sugar refining industry. In an attempt to stop the acquisition, President Grover Cleveland’s administration filed suit under the Sherman Antitrust Act (1890). The Supreme Court had to answer the question: “Could the Sherman Antitrust Act suppress a monopoly in the manufacture of a good, as well as its distribution.”

By an 8-1 vote, the Court ruled that the statute was not applicable to a monopoly in manufacturing. In the opinion for the Court, Justice Melville W. Fuller wrote that the constitutional authority to regulate manufacturing belonged exclusively to the states under their police powers. The federal government’s regulatory authority—which only existed because of the the Commerce Clause—was limited to the articles that were actually in interstate commerce, not to activities that only affect commerce “incidentally and indirectly.” A product manufactured for sale in another state did not become an article of interstate commerce until it was actually transported as commerce. Drawing a sharp distinction between “the commercial power of the nation and the police powers of the States,” Fuller explained: “That which belongs to commerce is within the jurisdiction of the United States, but that which does not belong to commerce is within the jurisdiction of the police power of the State.” Fuller did not rule that the Sherman Act was unconstitutional, because he assumed that the statute had been framed according to the “well-settled principles” of dual federalism.

In a long, passionate dissent, Justice John Marshall Harlan denied that it was possible to draw a clear line between manufacturing and commence. He broadly defined interstate commerce to include control of markets as well as “such traffic or trade, buying, selling, and interchange of commodities, as directly affects or necessarily involves the interests of the People of the United States.” He wrote: “We have before us the case of a combination which absolutely controls, or may, at its discretion, control the price of all the refined sugar in the country.” From a practical perspective, the federal government was the only institution that “can adequately deal with a matter which directly and injuriously affects the entire commerce of the country.” The Constitution gives Congress “authority to enact all laws necessary and proper for carrying into execution the power to regulate commerce.” Regulation of commerce includes “the power to prescribe the rules by which it shall be governed, that is, the conditions upon which it shall be conducted.” This delegated power should not be “subjected to an interpretation so rigid, technical, and narrow, that those objects cannot be accomplished.”

Ten years later, the Court would endorse the “stream of commerce” doctrine in Swift and Co. v. United States (1905), which allowed the government to regulate monopolies that had a direct effect on commerce. In subsequent cases, the Court accepted that more and more steps of the manufacturing process were part of commerce. Harlan’s view of congressional authority to regulate the production of goods that might enter into interstates commerce was accepted in Wickard v. Filburn (1942).

Citation Types

Type
Format
MLA 9th
Lewis, Thomas Tandy. "E. C. Knight Company, United States V.." The Bill of Rights, 2nd Edition, edited by Thomas Tandy Lewis, Salem Press, 2017. Salem Online, online.salempress.com/articleDetails.do?articleName=BOR2e_0247.
APA 7th
Lewis, T. T. (2017). E. C. Knight Company, United States v.. In T. T. Lewis (Ed.), The Bill of Rights, 2nd Edition. Salem Press. online.salempress.com.
CMOS 17th
Lewis, Thomas Tandy. "E. C. Knight Company, United States V.." Edited by Thomas Tandy Lewis. The Bill of Rights, 2nd Edition. Hackensack: Salem Press, 2017. Accessed December 14, 2025. online.salempress.com.