Sugar Monopilies, Railroad Scams, & Lottery Tickets

Two weeks ago I introduced the Commerce Clause, which grants Congress the power to regulate trade. Today we'll look at three attempts to apply this power. We can view each case as a referendum on exactly how much discretion Congress has.

United States v. E.C. Knight Co. 156 U.S. 1 (1895)

Facts
American Sugar Refining Company purchased a controlling share in four Philadelphia refineries. With this purchase, American Sugar obtained almost complete control of refined sugar in America. This is recognized as a monopoly, and is illegal. Congress has the power to disintegrate monopolies. However, this lawsuit did not seek to break up American Sugar. The plaintiff only requested that the purchases of the Philadelphia refineries be voided.

Questions
1. Can Congress use this direct action to suppress a monopoly?

Holding
1. No

Reasoning
1. Technically, manufacturing is not commerce. Voiding the refinery purchases may uphold the spirit of the commerce clause, but is not congruent with the letter of the law.

Houston, East & West Texas Railway Co. v. United States 234 U.S. 342 (1914)

Facts
Louisiana made it extremely expensive to ship via railway into Texas. This had a negative affect on commerce in Texas. The Interstate Commerce Commission established a maximum rate for railway shipping across the state line.

Questions
1. Does Congress have the power to overrule the Louisiana state legislature.

Holding
1. Yes

Reasoning
1. When an intrastate legislative action has significant interstate consequences, it becomes a federal issue. Congress can and should step in.

Champion v. Ames 188 U.S. 321 (1903)

Facts
In 1895 Congress passed a law prohibiting the shipment of lottery tickets across state lines. Charles Champion was indicted for buying lottery tickets in Paraguay and shipping them to California and Texas. He appealed that the law was unconstitutional.

Questions
1. Congress has the power to regulate commerce, but can Congress prohibit commerce?

Holding
1. Yes

Reasoning
1. Congressional power to regulate includes the power to prohibit.

Notes
The first case is an example of Congress being restrained. The other two cases show SCOTUS expanding the legislative power. Dissenting opinions in these cases argued that if SCOTUS keeps granting Congress a longer leash, lawmakers will eventually run wild.

This point was rebuffed by one of the justices. He argued that SCOTUS would remain vigilant. Furthermore, if a senator or representative starting passing bad laws, the people would vote them out of office.