Current of Commerce Concept and 1905 Swift Case

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Article I, Section 8, Clause 3:

[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .

In Swift & Co. v. United States, Justice Oliver Wendell Holmes referred to a “current of commerce” in providing a more expansive interpretation of the Commerce Clause. Swift concerned some thirty firms that bought livestock at stockyards, processed it into fresh meat, and then sold and shipped the fresh meat to purchasers in other states. The government alleged that the defendants had agreed, among other things, not to bid against each other in local markets, to fix prices, and to restrict meat shipments. On appeal to the Supreme Court, the defendants contended that some of the acts they were charged with were not acts in interstate commerce and consequently not covered by the Sherman Act. The Court ruled in favor of the government on the ground that the Sherman Act covered the “scheme as a whole” and that the local activities alleged were part of this general scheme.1 Explaining why Congress’s Commerce Clause power extended to acts that occurred within a single state, Justice Oliver Wendell Holmes reasoned:

Commerce among the States is not a technical legal conception, but a practical one, drawn from the course of business. When cattle are sent for sale from a place in one State, with the expectation that they will end their transit, after purchase, in another, and when in effect they do so, with only the interruption necessary to find a purchaser at the stockyards, and when this is a typical, constantly recurring course, the current thus existing is a current of commerce among the States, and the purchase of the cattle is a part and incident of such commerce.2

Likewise, the Court held that, even if title passed at the slaughterhouses, the sales were to persons in other states and shipments to such states were part of the transaction.3 Thus, in Swift, the Court deemed sales to be part of the stream of interstate commerce if they enabled the manufacturer “to fulfill its function” although ten years earlier the Court had held in United States v. E. C. Knight Co (Sugar Trust Case)4 that such sales were immaterial.

Thus, in Swift, the Court appeared to return to Chief Justice John Marshall’s concept of commerce as traffic, which he had explored in Gibbons v. Ogden. As a result, activities that indirectly affected interstate trade could be deemed interstate commerce. The Swift Court stated: “But we do not mean to imply that the rule which marks the point at which state taxation or regulation becomes permissible necessarily is beyond the scope of interference by Congress in cases where such interference is deemed necessary for the protection of commerce among the States.” 5 The Court also held that combinations of employees who engaged in intrastate activities such as manufacturing, mining, building, construction, and distributing poultry could be subject to the Sherman Act because of the effect, or intended effect, of these activities on interstate commerce.6

1: Swift & Co. v. United States, 196 U.S. 375, 396 (1905).
2: Id. at 398–99.
3: Id. at 399–401.
4: 156 U.S. 1 (1895).
5: Swift, 196 U.S. at 400. See also Houston & Tex. Ry. v. United States (The Shreveport Rate Case), 234 U.S. 342 (1914).
6: Loewe v. Lawlor (The Danbury Hatters Case), 208 U.S. 274 (1908); Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921); Coronado Co. v. United Mine Workers, 268 U.S. 295 (1925); United States v. Bruins, 272 U.S. 549 (1926); Bedford Co. v. Stone Cutters Ass’n, 274 U.S. 37 (1927); Local 167 v. United States, 291 U.S. 293 (1934); Allen Bradley Co. v. Union, 325 U.S. 797 (1945); United States v. Employing Plasterers Ass’n, 347 U.S. 186 (1954); United States v. Green, 350 U.S. 415 (1956); Callanan v. United States, 364 U.S. 587 (1961).