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Exploring the Constitution, Part 8: Regulating Interstate Commerce

Copyright 1997 by David W. Neuendorf

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In the last installment of this series, we looked at Article I of the Constitution, wherein we the people created the US Congress and granted some limited powers to that body. This time we will consider the commerce clause, found in Section 8 of Article I. Misuse of the commerce clause has been one of the favorite methods used by those who want to circumvent the Constitution’s limits on government power.

When the states were considering whether to ratify the Constitution, most statesmen recognized a need for uniform treatment of interstate commerce throughout America. Under the Articles of Confederation, the states often treated each other as if they were foreign countries. They had all kinds of discriminatory taxes, licensing provisions, port regulations, and the like. Trade arrangements with foreign countries also varied from state to state.

Alexander Hamilton described the problem thus: "The interfering and unneighbourly regulations of some States, contrary to the true spirit of the Union, have in different instances given just cause of umbrage and complaint to others...we may reasonably expect...that the citizens of each, would at length come to be considered and treated by the others in no better light than that of foreigners and aliens."

James Madison further explained as follows: "It will be a principal object to guard against smuggling...We are now obliged to defend against those lawless attempts, but from the interfering regulations of different States, with little success...New York levies money from New Jersey by her imposts. In New Jersey, instead of cooperating with New York, the Legislature favors violations on her regulations."

To solve the problem of trade war among the states, the Constitution gives Congress the power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes." The word "regulate" meant, at that time, to make regular, or uniform. The clear intent was to give Congress the power to prevent the kind of discriminatory trade practices among the states noted above. As Madison added to his comments previously quoted, "This will not be the case when uniform regulations will be made."

Early uses of the commerce clause were consistent with these purposes. For example, a man named Thomas Gibbons obtained a federal license to operate steamboats along the east coast. His business conflicted with the monopoly granted by New York state to another man, Aaron Ogden. The Supreme Court decided that the federal law superceded the state law in this case, because Congress had the power to regulate commerce between the states. This legitimate use of the commerce clause has continued to the present day. As recently as February of 1996, the Supreme Court struck down a North Carolina intangibles tax because it discriminated against businesses located in other states.

Unfortunately, there will always be people who try to increase their power over the lives of others. Many of those we elect to represent us in Washington fit this description. Soon after the birth of our nation, politicians were poking around for loopholes in the Constitutional safeguards against the growth of federal power. With the commerce clause they hit the jackpot.

The Supreme Court tried to stem the tide by holding legislation to the limits defined by the enumerated powers. Pressure from Congress and presidents gradually overcame the resistance of the courts. The first big crack in the defense appeared in 1889, when the Supreme Court ruled that the commerce clause was a positive grant of power to regulate the economy. They actually came out and said that "The reasons which may have caused the framers of the Constitution to repose the power to regulate commerce in Congress do not...affect or limit the extent of the power itself." Once the reasoning of the writers of the law is ignored, any interpretation becomes possible.

From 1889 to 1941, the Court maintained some restraint on Congress, holding them to regulation of activities that directly involved interstate commerce. The laws they upheld still did not conform to the enumerated powers, but at least the justices were careful to look for some real connection with interstate commerce.

In 1941, the Supreme Court opened the floodgates completely. A farmer named Filburn was fined by the federal government for growing 461 bushels of wheat, when the Agriculture Adjustment Act allowed him only 222 bushels. Even though Filburn used the excess only on his own farm for feed and for his families needs, the Court ruled that he affected interstate commerce, and therefore came under Congress’ regulatory jurisdiction.

Since the courts had obviously abandoned any attempts to limit the regulatory spree of Congress, government control over the economy and other aspects of American life grew like a malignancy. Even when Congress didn’t actually mention the commerce clause in a law’s text, the Justice Department used it in arguments before the courts to defend laws favored by the current administration. As a result, government which consumed 3 percent of the economy’s output at the start of the Depression now consumes about 25 percent. The genie of big government had been released after 150 years of being trapped in the bottle; and he has no intention of being bottled up again.

Things were looking pretty hopeless for American liberty. Then came the election of 1994, with the unexpectedly strong support among voters for bringing the government back under control. Even more surprising was the 1996 Supreme Court decision in United States v. Lopez. We’ll examine this hopeful sign of a return to sanity in the next installment.