(Houston, East and West Texas Railway Co. v. United States, Texas and Pacific Railway Co. v. United States), 234 U.S. 342 (1914), argued 28–29 Oct. 1913, decided 8 June 1914 by vote of 7 to 2; Hughes for the Court, Lurton and Pitney in dissent (without opinion). These cases are among many that reveal the Supreme Court's willingness to accept the revitalization of the Interstate Commerce Commission (ICC) during the Progressive era. Following mandates of the state railroad commission, Texas railroads imposed rates that discriminated against out-of-state shippers who were located the same distance from markets in Texas as shippers within the state. The intrastate rates were set significantly lower than the federal interstate rates. Thus, freight costs from Shreveport, Louisiana, to points in east Texas were much higher than those from Dallas or Houston to the same locations. The ICC found that the lower intrastate rate had an injurious effect on interstate commerce and ordered it superseded by the higher interstate rates. The Texas railroads made an appeal on the grounds that Congress, through the ICC, lacked the power to control intrastate rates of interstate carriers. The Court sustained the ICC order that set intrastate rates of interstate carriers and asserted that such regulation was within the scope of federal commerce power. Recognizing the interconnected nature of local and interstate commerce, the Court held that the lower, intra-Texas rate had a negative impact on interstate commerce.
Richard F. Hamm