United States v. E. C. Knight Co.

Facts of the case

Congress passed the Sherman Anti-Trust Act in 1890 as a response to the public concern about the growth of giant corporations controlling transportation, industry, and commerce. The Act aimed to stop the concentration of wealth and economic power in the hands of the few. It outlawed "every contract, combination...or conspiracy, in restraint of trade" or interstate commerce, and it declared every attempt to monopolize any part of trade or commerce to be illegal. The E.C. Knight Company was such a combination controlling over 98 percent of the sugar-refining business in the United States.

Question

Did Congress exceed its constitutional authority under the Commerce Clause when it enacted the Sherman Anti-Trust Act?

Conclusion

The Act was constitutional but it did not apply to manufacturing. Manufacturing was not commerce, declared Fuller for the majority; the law did not reach the admitted monopolization of manufacturing (in this case, refining sugar). Although American Sugar had monopolized manufacturing, the Court found no violation of the Sherman Act because the acquisition of the Philadelphia refineries involved intrastate commerce. The trust did not lead to control of interstate commerce and so "affects it only incidentally and indirectly."

Supreme Court of the United States

156 U.S. 1, 39 L. Ed. 325, 15 S. Ct. 249, 1895 U.S. LEXIS 2118, SCDB 1894-074

No. 675

1895-01-21

This book, and all H2O books, are Creative Commons licensed for sharing and re-use with the exception of certain excerpts. Any excerpts from the Restatements of the Law, Principles of the Law, and the Model Penal Code are copyright by The American Law Institute. Excerpts are reproduced with permission, not as part of a Creative Commons license.