Charles Evans Hughes : biography
The most important of these federalism-related decisions were the Minnesota Rate Cases of 1913. In these, Hughes enhanced state regulation of railroads by reviving the Cooley doctrine of "concurrent powers." To persuade his colleagues, Hughes composed a detailed and carefully argued opinion. He began with the generally accepted proposition that Minnesota and the other states had the authority, using their police powers, to regulate commerce within their bounds. He then extended this logic to include rate-regulation when such internal commerce was intermeshed with interstate traffic to towns in bordering states.
Even as Hughes expanded the regulatory power of the states, he took a nationalist stance with respect to the authority of Congress over commerce, including that within the various states. Thus, in the important Shreveport Cases of 1914, Hughes sustained a decision of the Interstate Commerce Commission voiding intrastate rates set by the Railroad Commission of Texas. The Texas rates encouraged the development of Dallas and Houston by blatantly discriminating against Texas shippers who marketed their goods via Shreveport, Louisiana. In striking down these rates as an interference with interstate commerce, Hughes recognized that the logic of his argument would permit federal regulation of any action that affected commerce. Thus, it might be used to challenge the sharp distinction made in United States v. E. C. Knight Co. (1895) between commerce, which was subject to federal regulation, and manufacturing, which was not. Reluctant to infringe upon precedent, he inserted language that sought to limit the decision’s reach to railroad carriers: "the agencies of interstate commerce." By leaving Knight intact, the associate justice restricted the authority of the federal government over local businesses or factories whose raw materials or products were part of interstate commerce. Yet the logic of his argument pointed to the position he would espouse during the constitutional crisis of 1937.
In cases involving the controversial issue of anti-trust regulation, the Supreme Court was divided. The faction led by John Marshall Harlan and Rufus Peckham embraced a small-producer ethic and a fully competitive market; these justices used the Sherman Act’s prohibition of "restraint of trade" to outlaw price fixing by businesses. A second group, headed by Chief Justice Edward D. White and Oliver Wendell Holmes, Jr., stood for "reasonable" market regulation, managed either by private agreements among producers (long permitted under common law) or by public administrative agencies. Preferring administrative regulation to the play of market forces, Hughes usually voted with White and Holmes in anti-trust cases.
In three other sets of cases, Hughes also authored opinions that bolstered the regulatory powers of state legislatures and administrative bodies. In the first line of decisions, he gave a narrow interpretation to the "contract clause" of the United States Constitution, which prohibits states from enacting any law "impairing the obligation of contracts." Refusing to give a literal reading to the state-granted charter of the Southern Pacific Railroad, which specified that the company could "collect and receive such tariffs … as it may prescribe, Hughes contended that this clause "necessarily implies that the charges shall be reasonable and does not detract from the power of the State … to prescribe reasonable rates."
In a second set of opinions, Hughes favored regulation over certain claims of individual rights. Thus, in Wilson v. U.S. (1911), he asserted that corporate officers could not resist a subpoena for company records by invoking the Fifth Amendment’s privilege against self-incrimination. This decision made corporations more vulnerable to prosecution by limiting the rights of individuals as delineated in Boyd v. U.S. (1886). The Court’s reasoning in Boyd had extended "the personal security of the citizen" guaranteed by the Fourth and Fifth Amendments to include an individual’s personal papers. Sensing danger to Boyd’s broad definition of individual rights, Justice McKenna dissented in Wilson, declaring that Hughes’s distinction between personal and corporate papers was "a limitation by construction" on an important "constitutional security for personal liberty." For his part, Hughes was unwilling to construe individual rights so that they frustrated the government’s efforts to achieve a legitimate regulatory goal.