Industrial Railroads and Government Involvement

Wabash, St. Louis & Pacific Railway Company v. Illinois

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The logo for the Wabash Railroad
Wabash, St. Louis & Pacific Railway Company v. Illinois, otherwise known as the Wabash Case, was a Supreme Court decision that limited the rights of states to control interstate commerce.
  • There was a statute in Illinois that enacted that if any railroad company within a state charged more or the same amount for a shorter distance as it did for a longer distance, it could be penalized for unjust discrimination.
  • In this specific case, the railroad charged more for goods transported from Gilman, Illinois to New York than it did for goods transported from Peoria, Illinois to New York.  Gilman was eighty-six miles nearer to New York than Peoria and both were within state lines, so the legality was brought into question.
  • The case was taken to the Supreme Court from the state court.
  • The Supreme Court agreed with the state court in saying that "this Court follows the Supreme Court of Illinois in holding that the statute of Illinois must be construed to include a transportation of goods under one contract and by one voyage from the interior of the State of Illinois to New York" and that it "is national in its character, and its regulation is confided to Congress exclusively, by that clause of the Constitution which empowers it to regulate commerce among the states." (Wabash)
  • The court went on to rule that statutes which "intended to regulate or to tax or to impose any other restriction upon the transmission of persons or property or telegraphic messages from one state to another"  were not of the same level as laws passed by states in absence of a law from Congress, and that those statutes were void even for the part of the transmission that occurred within the state (Wabash).  
  • This seriously limited states rights in controlling interstate railroad commerce, because they could not pass anything to regulate the interstate transmissions.