Munn v. Illinois

Summary

After the Civil War, Chicago became the greatest grain market in the world. Wheat and corn from the prairie states arrived by rail and were lifted by steam-powered elevators into enormous warehouses before shipment east. By 1874 fourteen such elevators, owned by about thirty people, were controlled by nine firms that agreed each year on common storage rates. Farmers organized in the Patrons of Husbandry, the Grange, pressed for regulation, and the Illinois Constitution of 1870 declared grain elevators public warehouses. An 1871 statute required their operators to obtain licenses and fixed maximum storage charges. Ira Munn and George Scott, who ran a Chicago elevator, refused to take out a license and charged their customary rates; they were convicted and fined, and the Illinois Supreme Court affirmed. The question was whether a state could fix the maximum charges a private business might collect for the use of its own property. Munn and Scott argued that the statute deprived them of property without due process of law under the Fourteenth Amendment, regulated interstate commerce reserved to Congress, and singled out Chicago warehouses for unequal treatment. Illinois replied that the elevators stood at a chokepoint through which nearly all the region's grain had to pass, that they operated as a virtual monopoly, and that the police power had always extended to such callings. On 1 March 1877 the Court upheld the law, seven to two. Chief Justice Waite drew on the seventeenth-century English jurist Lord Chief Justice Hale, who had written that property affected with a public interest ceases to be purely private. Ferries, wharves, common carriers, innkeepers and bakers had long been regulated under that principle in England and the United States. One who devotes property to a use in which the public has an interest grants the public an interest in that use and must submit to control for the common good. The elevators, standing in the very gateway of commerce, fit that description. Waite added that the reasonableness of the rates was for the legislature, not the courts, and that absent congressional action the state could regulate even though the business touched interstate commerce. Justice Field, joined by Justice Strong, dissented that grain storage was a private business, that Hale's principle applied only to property dedicated to public use or held under a public grant, and that the majority's test would leave all property and all business at the mercy of a legislative majority. The library text includes Waite's opinion and a portion of Field's dissent; footnote material is not reproduced. Munn was decided together with several Granger railroad cases. Later decisions made rates subject to judicial review for reasonableness, and in Nebbia v. New York (1934) the Court held that no special category of business affected with a public interest was required for price regulation.

Top Lessons

• When private property takes on a public character

  Waite borrows from Lord Hale the idea that some property, by the way it is used, becomes affected with a public interest and may be regulated as to its charges. The doctrine joined old common-law rules about ferries and wharves to the new economy of railroads and grain elevators.

• Reading the same authority two ways

  Field accepts Hale as an authority but reads him narrowly, as speaking only of property dedicated to the public or held under a royal grant. The disagreement shows how the meaning of a historical source can decide a constitutional case.

• Courts, legislatures and reasonable rates

  Waite holds that once a business may be regulated, the reasonableness of the rate is for the legislature and that the remedy for abuse is at the polls. Field replies that the use and fruits of property are protected as fully as its title. Later decisions moved toward judicial review of rates.

• Farmers, markets and the Granger movement

  The Illinois law came from an organized movement of farmers who believed that railroads and elevator operators held them captive. Waite notes that something had led the whole people to seek remedies against virtual monopolies; the elevator owners saw the same law as an interference with their capital and industry.

Verified Quotes

Medical Lens

The case concerns grain warehouse rates, the police power and the Fourteenth Amendment's protection of property; it has no medical or psychological content.