TRANS-MISSOURI FREIGHT ASSOCIATION v. UNITED STATES 166 U.S. 290 (1897)

A 5–4 Supreme Court, holding that the sherman anti-trust act extended to railroads, rejected the rule of reason advanced by Justice edward d. white in dissent. In 1889, eighteen railroads had combined to form the Trans-Missouri Freight Association "for the purpose of mutual protection, by establishing and maintaining reasonable rates, rules and regulations [over their mutual] freight traffic." Any member's proposed rate reduction for a route shared with another member needed Association approval.

Justice rufus peckham, the Court's spokesman, found two questions: Did the Sherman Act apply to railroads and, if so, was the Freight Association agreement a violation of that act? He dismissed the railroads' claim of exemption on two grounds. Their business was commerce, and the lower courts and the dissenters had relied on a mistaken belief that the Sherman Act could not apply to railroads because the interstate commerce act already regulated carriers. He refused "to read into the act by way of judicial legislation an exception that is not placed there [by Congress]." Policy matters were not questions for judicial determination; any alteration of the law was for Congress to undertake. Peckham concluded that the Sherman Act prohibited all restraints of interstate commerce; adopting the rule of reason would "substantially … leave the question of reasonableness to the companies themselves." Endorsing free competition, the Court declared that intent need not be proved: the Association agreement clearly restrained commerce.

David Gordon
(1986)