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Houston, East & West Railway Company v. United States

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Brief Fact Summary. The government brought suit against railway companies in Texas, who were maintaining vastly different rate structures for shipments from Shreveport than from similar points within Texas.

Synopsis of Rule of Law. Congress may affect intrastate commerce, where the transactions of intrastate and interstate commerce are so related that the preservation of interstate commerce must involve intrastate instrumentalities as well.

Points of Law - Legal Principles in this Case for Law Students.

Wherever the interstate and intrastate transactions of carriers are so related that the government of the one involves the control of the other, it is Congress, and not the State, that is entitled to prescribe the final and dominant rule, for otherwise Congress would be denied the exercise of its constitutional authority and the State, and not the Nation, would be supreme within the national field.

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Facts. Shreveport, Louisiana lies just east of the border with Texas. Railways in Texas were charging much more for shipment of goods westward into Texas than they were charging for a shipment from Dallas and Houston eastward. The Interstate Commerce Commission brought suit, alleging that the rate differences negatively impacted interstate commerce.

Issue. May the federal government regulate carriers engaged in intrastate commerce where the same carriers engage in interstate commerce?

Held. Yes. Court of appeals ruling affirmed.
The Supreme Court of the United States (Supreme Court) argues that where a carrier is involved in intrastate and interstate traffic, the Congress may regulate the interstate commerce in which the carrier engages.
The Supreme Court also argues that Congress may regulate the intrastate commerce of those carriers when the intrastate actions act as a hindrance to interstate commerce.

Discussion. This holding seems somewhat inconsistent with the holdings in Carter Coal, 298 U.S. 238 (1936) and A.L.A. Schechter Poultry, 295 U.S. 495 (1935), but illustrates the generally inconsistent conceptualization of the Commerce Clause during this period.

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