![]() ![]() In this case, the SCOTUS unanimously held that Congress is allowed to regulate the wages of local lumber workers. Rather the court found that Congress could prohibit local actives that “burden or obstruct,” that is, have a direct effect, on interstate commerce. The majority did not reject the distinction between direct and indirect effects. “The scope of the power to regulate intrastate activity must be considered in the light of our dual system of government, and may not be extended so as to embrace effects upon interstate commerce so direct and remote that to embrace them in view of our complex society would essentially obliterate the distinction between what is national and what is local and create a completely centralized government.” He added “The question is necessarily one of degree.” However, he qualified this holding with a limiting principle. Hughes held that Congress may “Regulate all local activity that has such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions.” He acknowledged that the federal government could not regulate “all labor relations,” but only what may be deemed to burden or obstruct commerce.” This test allowed Congress to protect interstate commerce from burdens and obstructions. ![]() Chief Justice Hughes wrote the majority opinion. The Jones and Laughlin Steel Corporation argued that the NLRA was “an attempt to regulate all industry, thus invading the reserved powers of the States over their local concerns.” On this question the court split 5-4. This statute gave the National Labor Relations Board (NLRB) the power to punish “unfair labor practices affecting commerce.” In 1935, FDR signed into law the National Labor Relations Act (NLRA). NLRB v Jones and Laughlin Steel Corp (1937) These cases are still considered “good law.” In three cases the Court held that Congress could regulate activity that had a substantial effect on interstate commerce - NLRB v Jones & Laughlin Steel Corp. However, in 1937, the new deal Court replaced the direct-effect test with the new substantial-effects test. Dagenhart (1918) and Schecter Poultry (1935), the court held that Congress could only regulate commerce that had a direct effect on interstate commerce. During the progressive era, the court used to so-called direct-effects test. Throughout the twentieth century, the Supreme Court adopted different tests to determine what kinds of intrastate commerce Congress can regulate. For example, Congress cannot regulate activity that is not “among” one state and another. However, the Supreme Court has erroneously found that the commerce clause, working in conjunction with the necessary and proper clause, allows Congress to regulate certain types of intrastate activity. But the Commerce Clause was never intended to give the federal government the power to regulate manufacturing, agriculture, labor laws, health care, or a host of other activities claimed by progressives. Commerce power also extended to regulation of the transportation system, shipping, and interstate and international waterways. At the time of the drafting of the Constitution, commerce was understood top pertain to trade, or the act of exchanging goods. As originally understood, the power was rather limited. The commerce clause delegates to Congress the power to regulate interstate commerce. ![]() Over the years, the SCOTUS has used the clause to vastly expand federal power. Despite the words that make up the commerce clause and necessary and proper clause remaining constant over the past two centuries, the Supreme Court’s interpretation of their meaning and reach has not. ![]()
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