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 of interstate carriers may thereby be controlled. Congress is entitled to keep the highways of interstate communication open to interstate traffic upon fair and equal terms. That an unjust discrimination in the rates of a common carrier, by which one person or locality is unduly favored as against another under substantially similar conditions of traffic, constitutes an evil is undeniable; and where this evil consists in the action of an interstate carrier in unreasonably discriminating against interstate traffic over its line, the authority of Congress to prevent it is equally clear. It is immaterial, so far as the protecting power of Congress is concerned, that the discrimination arises from intrastate rates as compared with interstate rates.
A complaint was filed against the railroads, alleging that the railroads were discriminating against interstate commerce by charging higher rates for interstate travel than for intrastate travel. The commission ordered the railroads to cease the discriminatory practice among interstate and intrastate travel. On appeal, the railroads argued that because they engaged in intrastate as well as interstate commerce, congress lacked the power to regulate its rates.
Does congress lack the power to regulate a railroad's differing intra-state and inter-state rates?
The court upheld the commerce court's order, rejecting the railroads' claims that because they engaged in intrastate as well as interstate commerce, congress lacked the power to regulate its rates. The court further held that congress had delegated the commission to act on its behalf in ensuring that the railroads' rate did not discriminate against interstate commerce. The court also rejected the railroads' claims that because their rate practices were caused by conditions wholly beyond their control, congress lacked the authority to regulate the practices.