In its first decision under the Sherman Antitrust Act (1890), the Supreme Court found that the framers of the act had not intended for it to apply to the manufacturing process.

During the 1890’s, the American Sugar Company was a large monopoly controlling 98 percent of the refining industry. Responding to a public outcry, President Grover Cleveland’s administration filed suit against the monopoly under the Sherman Antitrust Act (1890). By an 8-1 vote, the Supreme Court ruled that the law was not applicable because it had not been designed to prevent a monopoly in manufacturing. In the opinion for the majority, Justice Melville W. FullerFuller, Melville W.E. C. Knight Co., United States v.[E. C. Knight Co., United States v.] wrote that the power to regulate manufacturing belonged exclusively to the states under their police powersPolice powers and that the regulatory authority of the federal government was limited to interstate commerce.Interstate commerce An article manufactured for sale in another state did not become an article of interstate commerce until it was actually transported as commerce. Fuller did not rule on the constitutionality of the Sherman Act because he assumed that the act had been framed according to the “well-settled principles” of dual federalism.Manufacturing, regulation ofCommerce, regulation ofSherman Antitrust Act;E. C. Knight Co., United States v.[E. C. Knight Co., United States v.]Manufacturing, regulation ofCommerce, regulation of

In a strong dissent, Justice John Marshall HarlanHarlan, John MarshallE. C. Knight Co., United States v.[E. C. Knight Co., United States v.] broadly defined commerce so that it included the buying and selling of goods. He argued that the U.S. Congress could constitutionally regulate some manufacturers and that it had intended to do so in the Sherman Antitrust Act. He insisted, moreover, that only the federal government had the capacity to deal with large business combinations. Although the Court would accept the stream of commerce theory in Swift and Co. v. United States (1905),[case]Swift and Co. v. United States[Swift and Co. v. United States] it did not fully accept Harlan’s view of congressional authority over sugar refineries until Mandeville Island Farms v. American Crystal Sugar Co. (1948).[case]Mandeville Island Farms v. American Crystal Sugar Co.[Mandeville Island Farms v. American Crystal Sugar Co.][case]E. C. Knight Co., United States v.[E. C. Knight Co., United States v.]

Commerce, regulation of

Federalism

Hammer v. Dagenhart

Sherman Antitrust Act

Swift and Co. v. United States