Interstate commerce
Interstate commerce refers to economic activities that occur across state lines in the United States. The U.S. Constitution provides Congress with the authority to regulate such commerce, ensuring that contracts made in one state are honored in another. This regulation is vital for maintaining a cohesive national economy, as it prevents states from enacting laws that might disrupt trade between them. Historically, the interpretation of the commerce clause has allowed Congress to exert significant influence over both interstate and intrastate commerce, a power that has been debated since the nation's founding.
The Interstate Commerce Act of 1887 established the first federal regulatory agency, the Interstate Commerce Commission, aimed at curbing the monopolistic practices of railroad companies. Conflicts often arise regarding the extent of federal versus state powers, particularly in light of the Tenth Amendment, which reserves powers not granted to the federal government for the states. While states cannot create their own trade agreements or enact measures that unfairly advantage their economies, the exact definition of commerce remains somewhat ambiguous, allowing for varying interpretations. Legal precedents, set by landmark Supreme Court cases, have further defined the scope of Congress's regulatory powers, balancing state interests with national economic needs.
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Interstate commerce
Interstate commerce refers to any economic activity that crosses state lines. Due to the commerce clause of the United States Constitution, states are required to honor contracts made in other states. Several government agencies oversee interstate commerce. The US Congress also has the power to regulate interstate commerce and to stop activities that may inhibit it.
Background
Government in the United States has many levels. Local governments manage towns, cities, counties, and districts; state governments manage states; and the federal government manages the entire nation. Federal laws are more powerful than state laws, and state laws are more powerful than local laws. This means that if two laws are in conflict, the more powerful law is the valid one.
Conflicts sometimes arise between the various levels of government. Some Americans support a stronger federal government, one that often exercises its power to regulate the states, and binds the United States into a more cohesive, unified nation. Others support a weaker federal government, granting individual states more power to govern themselves. One way in which the federal government exerts power over states is the control of interstate commerce.
The issue of who—federal or state government—should regulate interstate commerce has been debated since the early days of the United States. In 1887, Congress passed the Interstate Commerce Act in response to industrialist railroad corporations. The act established the Interstate Commerce Commission, the first regulatory agency in the United States. At the time, there was very little the government could do to reduce the railroad corporations' power. The federal government had no direct authority to regulate most domestic trade. That was a power held by the states. Many states participated in the Granger movement, which attempted to reduce the power of massive railroad corporations. Unfortunately, state regulations proved inadequate. In response to this realization, Congress passed the Interstate Commerce Act. This marked the first law that gave the federal government control over a private industry.
Overview
The US Constitution grants Congress the power to regulate trade between the United States, foreign nations, and Native American tribes. However, it also grants Congress the power to regulate trade between the individual states that make up America. Some political figures view this power as an important facet of a strong federal government. Others view it as a means to weaken states' rights and sovereignty.
What constitutes "commerce" is not defined by the Constitution. In many cases, commerce is simply defined as trade. However, others argue that Congress has power over anything that infringes upon any commercial or social exchange between states. Due to the supremacy clause of the Constitution, congressional law supersedes state law. This gives Congress the power to override state laws that conflict with interstate commerce.
Much of the issue surrounding Congress's regulation of interstate commerce stems from the Constitution's Tenth Amendment. The Tenth Amendment states that the powers not delegated to the US government by the Constitution, nor prohibited by it to the states, are reserved to the states. In a modern political environment, the Tenth Amendment guarantees states the right to manage their own affairs, including their laws, trade, and general commerce, as long as it does not conflict with existing federal law.
Congress has placed several restrictions on states' trade practices. Individual states are not allowed to initiate trade deals with other nations. That power belongs exclusively to the federal government. Additionally, individual states are not allowed to take any action that would give their economy a direct economic advantage over those of other states, or would stifle trade between states. In the most basic sense, this refers to the creation of taxes and tariffs on imported goods, raising the price of commodities from other states and unfairly encouraging local consumers to buy local goods. However, Congress has interpreted the statement to give representatives regulatory power over a great deal of other industries.
If Congress believes that an industry is important to the national interest, it may attempt to regulate that industry. If that attempt is fought, the courts will decide whether the commerce clause gives Congress the power to regulate a specific industry. When making that decision, the courts will weigh the issue's significance to the state against its significance to the nation as a whole. If the courts decide the issue is more important to the nation than the state, then the courts will declare it interstate commerce and grant Congress the authority over it.
In one prominent example in 1945, Arizona attempted to pass new safety regulations restricting the number of train cars that could be attached to a particular train. Arizona argued that as the laws only applied to railroads within the sovereign territory of a single state, Congress had no authority to restrict its laws. The court ruled that because trains from all other states would have to either conform to Arizona's regulations in advance, or specifically stop to rearrange their train cars before entering Arizona, the new safety restrictions placed an undue burden on interstate commerce. Once the court confirmed its authority in the matter, Congress struck down the law.
The courts followed that example, supporting Congress in growing its regulatory power, for decades afterward. In 1995, however, the US Supreme Court ruled that Congress had exceeded its power. In United States v. Lopez, multiple parties challenged Congress's right to pass the Gun-Free School Zones Act of 1990. This act prohibited the ownership or possession of firearms within one thousand feet of any school. While Congress argued that the firearm trade itself was interstate commerce, the Supreme Court ruled that the act was unconstitutional because it gave Congress authority to regulate firearm ownership. The decision rendered in United States v. Lopez was the first time in more than fifty years that the Supreme Court limited congressional power to legislate under the commerce clause.
Bibliography
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Koustas, William T., and John R. Fleder. "FDA Continues Efforts to Expand Power Over Intrastate Commerce." FDA Law Blog, 26 Oct. 2011, www.fdalawblog.net/fda‗law‗blog‗hyman‗phelps/2011/10/fda-continues-efforts-to-expand-power-over-intrastate-commerce.html. Accessed 21 Jan. 2025.
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"What Is the Difference between Interstate Commerce and Intrastate Commerce?" FMCSA, 20 May 2023, www.fmcsa.dot.gov/faq/what-difference-between-interstate-commerce-and-intrastate-commerce. Accessed 21 Jan. 2025.