U.S. Supreme Court case that established that states may regulate business for the public good.
In 1875, the Illinois legislature set the maximum rates that grain elevator operators could charge in Illinois cities of 100,000 or more. This action was in response to a movement among farmers known as the Grange that had asked lawmakers in Illinois and other Midwestern states to regulate the rates grain elevator operators and railroads could charge farmers; they charged low rates to large corporations but high rates to small farmers. Illinois grain elevator operators challenged the constitutionality of the 1875 law. The case came before the Supreme Court, and lawyers for the operators argued that Illinois had surpassed the police power granted to it under the Constitution. They also argued that the law gave the state control over interstate commerce and deprived grain elevator operators of their private property without due process as guaranteed in the Fourteenth Amendment.
Chief Justice Morrison Waite ruled in favor of Illinois in a 7 to 2 decision. Citing England’s Lord Chief Justice Sir Matthew Hale, renowned common-law jurist, Waite argued that private property ceases to be exclusively private when it is affected with a public interest. When private property is used in a public way, a state may regulate the property to protect its citizens. Waite admitted that states might abuse their police power over private property, but the best recourse was at the polls and not in the courts. He also dismissed the claim that the law interfered with interstate commerce since the relationship between farmers and grain elevators occurred primarily within the borders of Illinois. Although this decision and those from four other Granger cases set a precedent for future government regulation, most related decisions in the next 60 years followed the dissent of Justice Field, who argued that the Illinois law violated the Fourteenth Amendment.
