United States Vs Ec Knight Company Case Study

Emily DePasquale

PSC 312

Professor Parker

25th October 2017

United States vs. EC Knight Co.

In the case of United States vs. EC Knight Co. (1895), the issue of commerce power came to rise. Commerce power at the time was determined by methods of broad interpretation, seeing as the Supreme Court didn’t rule any definitive decisions until later. As a result, conflicts of commerce existed between small instate businesses and larger interstate businesses holding monopolies over certain industries. As a result of these business monopolies and relating health issues, Congress created a commerce clause to help regulate existing issues. This clause was opposed for controlling intrastate activity rather than interstate activities, bringing into question

EC Knight Co., the sugar refining industry was monopolized by a handful of companies. When the American Sugar Refining Company completed a business agreement with a collection of other refineries, the company gained complete control over the industry. As a result, the United States government sued the sugar trust under the standing that the business agreement was in violation of the Sherman Act. The sugar companies held the opinion that they weren’t in violation because the agreement was made under the purpose of manufacturing that is in state control, opposed to federally controlled commerce. Chief Justice Fuller and the court decided in favor of the appellee, or E.C. Knight Co. under the idea that the Sherman Act wasn’t intended to limit manufacturing. Therefore, the restriction of the refining companies wasn’t within the power of the commerce clause. Since the sugar companies’ involved intrastate commerce instead of interstate commerce, there was no violation of the constitution at this time. The Sherman Act in general was upheld as constitutional, pertaining to interstate commerce, which was defined to be within Congress’s jurisdiction. This case set the precedent that manufacturing was outside the jurisdiction of interstate commerce

Knight would be found to be unconstitutional, seeing as monopolies were found to be against the regulations of commerce after the industrial era. This is why I disagree with the ruling made by the Fuller court. The Sherman Act should have had the power to regulate manufacturing, because in my opinion, manufacturing and other related components directly impact interstate commerce as a whole. As a result, the Federal government should have the power to regulate these actions of manufacturing or other business related concerns. In the example of E.C. Knight, the monopolization of the sugar refining industry had a more national impact. Seeing as the sugar refining business had come to be controlled by one company within one region of the country, there would certainly be more nationwide consequences on the economy and commerce as a whole, as competitors from other regions of the country were eliminated. Because of this, I believe it is within the power of Congress to disband these types of monopolies with antitrust legislations, such as the Sherman Act attempted. In the current laws outlined by the U.S. Department of Justice, the Sherman Act has evolved and still stands as a regulatory legislation. According to the language of the Act, “It outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade, including agreements for fixed prices, rig bids, and allocate customers, which are