The Chief Justiceship of Melville W. Fuller, 1888-1910

5. Defending the National Market

5 DEFENDING THE NATIONAL MARKET Fuller's tenure marked a watershed in the development of affirmative congressional power under the commerce clause. Prior to his chiefjusticeship , the Supreme Court was called upon primarily to decide whether state laws usurped congressional authority with respect to interstate commerce. By the late nineteenth century, however, Congress began actively to exercise its authority over commerce. The Interstate Commerce Act of 1887 was subject to extensivejudicial construction, but there was no dispute about congressional power to regulate railroads engaged in interstate transportation. In contrast, the second important exercise of commerce power by Congress, the Sherman Anti-Trust Act of 1890, raised questions about the extent of congressional authority to regulate commerce. Congress also started to assert a federal police power through control of interstate commerce. Moreover, increased attempts by the states to regulate and tax business activity threatened to obstruct commerce across state lines. Accordingly, the Fuller Court wrestled with the commerce clause in light of the new industrial order. The judicial response to federal regulation reflected unresolved societal tensions between the needs of a national industrial market and the persistence of localism and states' rights sentiments. Considerations of federalism and federal jurisdiction were thus closely linked to substantive issues over the scope of the commerce power. In effect Fuller and his colleagues allocated power between the federal government and the states by defining the concept of commerce. They endeavored to find an appropriate balance between federal and state spheres. Since the justices were committed both to preserving a role for the states in economic life and to protecting commerce against state interference, their efforts were often unsure and contradictory. Consequently there was a measure of doctrinal confusion in the Fuller Court's delineation of the commerce power. The Court gingerly expanded federal authority, but large areas 127 128 THE CHIEF JUSTICESHIP OF MELVILLE W. FULLER, 1888-1910 ofeconomic activity remained outside the power of Congress. Consistent with the original constitutional design of a limited federal government, the justices insisted that the commerce clause was not a comprehensive grant of power. THE SHERMAN ANTI-lRUST ACT One of the most conspicuous features of rapid industrial growth was the emergence of large-scale corporate enterprise that conducted multistate business operations. In order to stabilize volatile markets, many businesses employed a variety of devices, such as mergers, trust arrangements , and holding companies, to control the marketing of goods and to fix prices. Such business consolidations were perceived as diminishing economic competition and thus aroused long-standing antimonopoly sentiments among the public. Many people feared that concentrated economic power in private hands posed a threat to political liberty, productive efficiency, and economic opportunity. There was a widespread demand for some type of regulation to restrain these huge corporations and preserve competition. Congress responded to this pressure by near unanimous enactment of the Sherman Anti-Trust Act in 1890. In some respects the legislation was rather traditional in outlook. The act built upon the common-law concept that conspiracies in restraint of trade were against public policy. Further , it did not create an administrative agency to enforce its provisions but relied upon judicial interpretation and enforcement through both government and private litigation. The measure was premised on the notion that the prohibition of wrongful practices would permit competition to determine prices and regulate economic activity. It was a symbolic affirmation of the ideal of free markets.I Beyond this, however, there was little agreement among proponents of the Sherman Act as to what the law was expected to accomplish. As one scholar has noted, the act "hardly reflected any coherent economic theory at all."2 The Sherman Act was a compromise written in ambiguous language that provided no guidance as to practical application. It outlawed "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states or with foreign nations." The .statute also made it a crime "to monopolize or attempt to 1. Kermit 1. Hall, The Magic Mirror: Law in American History (New York: Oxford University Press, 1989), 206-207. 2. Lawrence M. Friedman, A History of American Law, 2nd ed. (New York: Simon and Schuster, 1985), 465. DEFENDING THE NATIONAL MARKET 129 monopolize, or combine or conspire ... to monopolize any part of the trade or commerce among the several states." With these vague words Congress virtually invited the Supreme Court to give meaning to...