The issue in United States v. E. C. Knight Company (1895) was whether the Sherman Antitrust Act, enacted in 1890 to prohibit monopolistic business practices in interstate commerce, could be applied against the E. C. Knight Company, which controlled 98 percent of the sugar business in the United States. The Court said that it could not, drawing a careful distinction between manufacturing, which preceded commerce, and commerce itself. Manufacturing, the Court held, had only an “indirect” effect upon interstate commerce, and was therefore beyond the reach of federal authority under the Commerce Clause. This “direct-indirect” distinction, which exempted agriculture, manufacturing, and mining from federal regulation, dominated the Court’s thinking about the Commerce Clause until it was finally rejected in 1937 in National Labor Relations Board v. Jones and Laughlin Steel Corporation.
SEE ALSO: Commerce among the States; National Labor Relations Board v. Jones and Laughlin Steel Corporation; Tenth Amendment
