Munn v. Illinois

The Court began with the presumption that a statute is constitutional unless its invalidity is clear. Due process protects property rights, but it does not make every regulation of the use or price of private property a deprivation of property. Longstanding legislation had regulated the charges of ferries, common carriers, innkeepers, millers, wharfingers, bakers, hack drivers, and similar businesses without being understood to violate constitutional property protections.

The governing common-law principle was that private property becomes "affected with a public interest" when its use is of public consequence and affects the community at large. A person who devotes property to such a use effectively gives the public an interest in that use. The owner may discontinue the use, but while continuing it, the owner must accept public control to the extent required for the common good.

The Court relied on Lord Hale's discussions of public ferries and wharves, as well as English warehouse cases. Those authorities recognized that an enterprise serving the public under conditions resembling a monopoly could not demand arbitrary or excessive charges. Its rates had to be reasonable because the public depended upon the service.

Chicago's grain elevators fit that principle. Enormous quantities of grain from the western States moved through Chicago on their way to eastern and foreign markets. The elevators stood at a crucial gateway between rail and water transportation, mixed grain from many owners, and issued negotiable receipts. Although fourteen facilities existed, nine firms controlled them, creating a potential virtual monopoly over a vital channel of trade.

The Court treated the question as one of legislative power rather than the wisdom of this particular rate schedule. Because conditions could exist that would justify regulation of a business so central to commerce and public use, the Court presumed that the Illinois legislature had acted on sufficient facts. Within constitutional limits, the legislature rather than the judiciary judges the need for regulation.

Once the State possessed authority to regulate the business, it also possessed authority to set a maximum charge. At common law, public employments were already subject to the requirement of reasonable rates. The statute did not create a new kind of property restriction; it replaced the common-law standard with a legislatively fixed ceiling. The possibility that legislators might abuse this power was a political problem to be addressed at the polls, not a basis for denying the power's existence.

The Court found no equal-protection problem in Illinois's decision to regulate warehouses of a particular kind and location. Just as Illinois could regulate hack or dray charges in Chicago without imposing identical rules throughout the State, it could regulate grain warehouses whose scale, function, and public importance made them distinct from other businesses.

The Court emphasized that not everything affecting commerce is a regulation of commerce in the constitutional sense. The warehouses were located in Illinois and conducted their storage business wholly within Illinois, even though grain passing through them often moved in interstate commerce.

The elevators were instruments used by interstate shippers, but they were not necessarily commerce itself. Their regulation concerned a domestic business and was therefore within Illinois's police power unless Congress acted to govern their interstate relationship or Illinois otherwise invaded Congress's exclusive domain. On the record before the Court, the statute's effect on interstate commerce was only indirect and did not amount to an unconstitutional state regulation of commerce.

Article I's prohibition on preferences among state ports is a restriction on federal legislative power. It does not constrain a State's regulation of its own domestic affairs, so it did not apply to Illinois's warehouse law.