Self-governing agreements among railroads, informal pools, or regional cartels had their limits in the context of a long-term depression and growing political hostility. To the issues of liberty as independence or autonomy and equality of opportunity were thus added the issues of competitive fairness and interregional balance, that is, of justice and equity (or rewards proportionate to effort among competitors). While railroads engaged in intrastate commerce (within one state) had lived with state regulation for decades and even tolerated state railroad commissions, as long as they served the railroads' interests, those railroads engaged in interstate commerce (between several states) found state regulation to be a nuisance. Accordingly, a number of these interstate, interregional railroads had decided to challenge state regulation in a series of court cases known collectively as the Granger cases. (Currie, 1985)
The Supreme Court in its majority opinion in the key Granger law case, Munn v. Illinois (1 March 1877, took a "yes -- but" stance: yes, corporate businesses had certain private rights that fell under judicial protection; but, railroads and warehouses, as quasi monopolies, were "clothed with a public interest." The community, through the legislature, had a right to regulate them and, until Congress acted to preempt interstate commerce control, the states could act, subject to review by the federal courts. In the short run, the Supreme Court had simply upheld traditional doctrine; in the long run, it had acknowledged a line of reasoning that could transcend the original meaning of the Fourteenth Amendment and elevate the "rights of economic liberty" as private property rights in the hierarchy of public core values. (Miller, 1971)
The Supreme Court in Wabash v. Illinois 1886 denied the right of Illinois to regulate interstate rates because that right was reserved for Congress under the commerce clause of the Constitution.....................
