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Stafford v. Wallace

Defining And Expanding The Concept

The stockyards, Taft stated, "are not a place of rest or final destination" in interstate commerce; rather, they are "but a throat through which the current flows, and the transactions which occur there are only incident to this current from the West to the East, and from one state to another." The sale of stock within a yard could not therefore be

merely local transactions. They create a local change of title, it is true, but they do not stop the flow; they merely change the private interests in the subject of the current, not interfering with, but, on the contrary, being indispensable to, its continuity.

The stockyards act, therefore, treated the yards as "great national public utilities to promote the flow of commerce from the ranges and farms of the West to the consumers in the East." As to whether the yards should be under federal jurisdiction, that question had been decided in Munn v. Illinois (1877). Similarly, United States v. Union Stock Yards Co. (1912) established the yards as an agency of interstate commerce inasmuch as they received livestock by rail. At issue in Stafford, then, was the highly focused question of "whether the business done in the stockyards, between the receipt of the live stock in the yards and the shipment of them therefrom, is a part of interstate commerce." To make that determination required a closer look at the 1905 Swift case.

After reviewing the bill in equity brought in 1905 "against substantially the same packing firms as those against whom this legislation is directed," the Court upheld the bill. Justice Holmes wrote for the majority, "the scheme as a whole seems to us to be within reach of the law." As for the monopoly allegedly engaged in by Swift, it was surely interstate in character: "Although the combination alleged embraces restraint and monopoly of trade within a single state, its effect upon commerce among the states is not accidental, secondary, remote, or merely probable." In the final analysis, "commerce among the states is not a technical legal conception, but a practical one, drawn from the course of business." Given this solid practical understanding, Taft wrote, the Court refused to involve itself in an "inquiry into the noninterstate character of . . . incidents and facilities" that constituted part of an interstate transaction, and which "when considered alone and without reference" to other elements could appear to be outside interstate commerce.

The next year, in 1923, Taft reiterated his admiration for the Swift ruling with a decision in which he said that the earlier case "was a milestone in the interpretation of the commerce clause of the Constitution." Meanwhile, in Stafford he wrote that "the principles of the Swift Case have become a fixed rule of this Court in the construction and application of the commerce clause." As an example he cited the Court's ruling in Lemke v. Farmer's Grain Co. earlier in 1922, a challenge involving the sale of wheat from North Dakota granaries to Minnesota merchants.

Taft devoted the remainder of his opinion to closing up any further areas of contention on the part of Stafford. Hence, he noted that the ruling in question was not a bill in equity, as it had been in Swift, or a conspiracy indictment, but a law passed by Congress, and Taft stated that "this Court [would] certainly not substitute its judgment for that of Congress in such a matter unless the relation of the subject to interstate commerce and its effect upon it [were] clearly nonexistent." He made special note of Hopkins v. United States and Anderson v. United States, two related 1898 cases involving commission merchants and stockyards, as well as several others which might have seemed to bear on Stafford, but did not. Therefore, he affirmed the orders of the district court, an opinion to which Justice McReynolds dissented without filing a written opinion.

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Law Library - American Law and Legal InformationNotable Trials and Court Cases - 1918 to 1940Stafford v. Wallace - Significance, Stockyards In The Stream Of Commerce, Taking On The Monopolies, Defining And Expanding The Concept