Swift and Co. v. United States 1905

AuthorDaniel Brannen, Richard Hanes, Elizabeth Shaw

Page 841

Appellant: Swift and Company

Appellee: United States

Appellant's Claim: That the Sherman Anti-trust Act of 1890 was vague and did not apply to businesses operating solely within a single state

Chief Lawyers for Appellant: John S. Miler and Merritt Starr

Chief Lawyers for Appellee: William H. Moody, U.S. Attorney General, and William A. Day

Justices for the Court: David J. Brewer,Henry B. Brown, William R. Day, Melville W. Fuller, John Marshall Harlan I, Oliver Wendell Holmes, Joseph McKenna, Rufus W. Peckham, Edward D. White

Justices Dissenting: None

Date of Decision: January 30, 1905

Decision: Ruled in favor of the United States by finding that the actions of Swift and Company affected interstate commerce and were an integral part of a larger interstate meat-packing industry.

Significance: This decision greatly expanded federal power under the Commerce Clause of the U.S. Constitution. The ruling held that even locally operating businesses that made products eventually sold in interstate markets could be subject to federal regulation.

Page 842

Before the birth of the United States, English common law restricted business activity very little. By the mid-nineteenth century. Congress and the courts began restricting certain business efforts, known as restraint of trade, which limited competition. But, if specific trade restraints were limited in the time they were used or carried out in a small area, they were often allowed. A laissez-faire approach to business conduct persisted meaning that little governmental interference existed over business practices.

The Rise of Trusts

A rapidly expanding national railroad network spurred increased industrialization (growth of large businesses manufacturing goods) in the 1870s and 1880s. Prospects of ever-increasing profits led many businesses to join together in business combinations with the intent of forcing other, usually smaller, competitors out of business. These businesses combinations were called trusts. The public considered many actions of the trusts unfair. Trusts rose to dominate certain industries including sugar, oil, steel, meat-packing, and tobacco.

To many, trusts threatened the idea of free-enterprise in which businesses freely compete with one another. Public demand for government intervention into trusts dramatically increased through the 1880's. States tried adopting various laws to control trust activities, but these proved inconsistent and could not apply to interstate commerce (business activity between states) in which the trusts largely operated. The Commerce Clause of the U.S. Constitution reserves the responsibility to regulate interstate commerce to Congress, not the states. Congress, responding to the public outcry against the power of trusts, passed the Sherman Antitrust Act in 1890. The act, the first...

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