Illinois, it was ruled that "no state can exercise any control over commerce which passes beyond its limits." This ruling completely reversed previously enacted legislation. ![]() The inability of a state government to hold companies to its regulations made the need for federal legislation painfully apparent. However, the laws that were developed to protect the states' right to control businesses were largely ineffectual. Furthermore, the court said that "until Congress makes use of its power, a state might act even if in so doing it may indirectly operate upon commerce outside its jurisdiction."įor a few years, the states controlled the railroad industry. The consequence of this case was the setting of a precedent that states have the right to regulate interstate commerce. The court ruled that the warehouse business was sufficiently "clothed with public interest" to justify public control. ![]() The Chicago warehouse of Munn and Scott protested, believing that they were being denied property without due process of law. Illinois questioned the validity of an Illinois law fixing maximum rates for storage of grain. In 1877, the Supreme Court case of Munn v. A group of organized farmers, known as the Grangers, lobbied for regulation of the industry, to save themselves from the unfair prices and practices of the railroad companies. As corporations began to form, the danger of monopolies quickly became apparent. Throughout the Nineteenth Century, the railroad industry developed at a furious pace. The first cases of regulation occurred around the late 1870s, with regard to the railroad industry. The government has not always interfered with corporations, however. ![]() In most areas that involve the public interest, there is at least some specter of national regulation. Today, the federal government controls several aspects of private business.
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