The Shreveport Case (Houston, E. & W. Texas Ry. Co. v. United States), 234 U.S. 342; 34 S. Ct. 833; 58 L. Ed. 1341 (1914)

Facts—This case involved the power of Congress and its agent, the Interstate Commerce Commission, to control railroad rates between points within the same state. The commission had fixed rates between the city of Shreveport, Louisiana, and certain points in eastern Texas for which Shreveport is the natural trade center. Motivated by a natural desire to keep Texas trade safe for the Texans, the government of that state had endeavored to fix the rates between the eastern Texas points and such cities as Dallas and Houston so low that these eastern points would trade with the Texas cities even though they were farther away than was Shreveport. At this point the ICC ordered the intra-Texas rates raised to the same level as the interstate Texas-Louisiana rates.

Question—May Congress regulate local and intrastate commerce when such commerce impinges on interstate commerce?

Decision—Yes.

Reasons—J. Hughes (7–2). The Supreme Court upheld the right of the federal government to regulate the local or intrastate commerce in this case on the theory that it had such a close and substantial relation to interstate commerce that the satisfactory control of one required the simultaneous and identical control of the other. “Congress, in the exercise of its paramount power, may prevent the common instrumentalities of interstate and intrastate commercial intercourse from being used in their intrastate operations to the injury of interstate commerce. This is not to say that Congress possesses the authority to regulate the internal commerce of a state, as such, but that it does possess the power to foster and protect interstate commerce, and to take all measures necessary or appropriate to that end, although intrastate transactions or interstate carriers may thereby be controlled.”

Dissenting J. Lurton and J. Pitney did not explain the reason for their dissent.