94 U.S. 113 (1877)
In 1862 the defendants constructed a warehouse and elevator in Chicago on leased ground and began receiving and storing grain for hire at rates they set annually by agreement with other elevator owners and published each January.1
The structures held between 300,000 and 1,000,000 bushels, were divided into large bins, and received grain from the Northwest that was commingled so that the identity of individual lots was lost.2 Owners received negotiable receipts for quantities rather than specific parcels, and nine firms controlled nine of the fourteen elevators then operating in the city.3
In 1870 Illinois adopted a new constitution that declared elevators and storehouses where grain was stored for compensation to be public warehouses and directed the general assembly to pass laws regulating their charges.4 On April 13, 1871, the legislature enacted the statute at issue, which defined public warehouses in cities of 100,000 or more inhabitants, required operators to obtain a license from the circuit court and post a $10,000 bond, and fixed maximum storage rates at two cents per bushel for the first thirty days and one-half cent for each additional fifteen days.5
The defendants continued to operate without obtaining the required license and continued to charge the higher rates they had previously published.6 They were prosecuted for transacting business as public warehousemen without a license, convicted, and fined.7 The Supreme Court of Illinois affirmed the judgment.8
The United States Supreme Court granted review to address the federal constitutional challenges raised by the warehousemen.9
Whether the Illinois statute fixing maximum charges for grain storage in public warehouses in cities of 100,000 or more inhabitants violates the Due Process Clause of the Fourteenth Amendment?10
When the owner of property devotes it to a use in which the public has an interest, the property becomes affected with a public interest and ceases to be juris privati only.11 This grants the public an interest in that use to the extent created so that the owner must submit to reasonable public regulation including the fixing of maximum charges for storage and handling.12
Yes. The defendants constructed their warehouse and elevator in Chicago in 1862 on leased ground and began receiving and storing grain for hire at rates they set annually by agreement with other elevator owners and published each January.13 The structures held between 300,000 and 1,000,000 bushels, were divided into large bins, and received grain from the Northwest that was commingled so that the identity of individual lots was lost. Owners received negotiable receipts for quantities rather than specific parcels, and nine firms controlled nine of the fourteen elevators then operating in the city.
In 1870 Illinois adopted a new constitution that declared elevators and storehouses where grain was stored for compensation to be public warehouses and directed the general assembly to pass laws regulating their charges. On April 13, 1871, the legislature enacted the statute at issue, which defined public warehouses in cities of 100,000 or more inhabitants, required operators to obtain a license from the circuit court and post a $10,000 bond, and fixed maximum storage rates at two cents per bushel for the first thirty days and one-half cent for each additional fifteen days. The defendants continued to operate without obtaining the required license and continued to charge the higher rates they had previously published. They were prosecuted for transacting business as public warehousemen without a license, convicted, and fined. The Supreme Court of Illinois affirmed the judgment. The United States Supreme Court granted review to address the federal constitutional challenges raised by the warehousemen.
The business of elevating and storing grain in Chicago is one in which the whole public is interested because the grain of the northwest finds its way to Chicago, is stored in the warehouses, is bought and sold there, and the charges for storage are a matter of public concern given the virtual monopoly created by the limited number of operators.14 The statute is a regulation of that business affected with a public interest that fixes maximum charges for storage and handling without depriving the warehousemen of title or possession of their property and without taking the property for public use, thereby satisfying due process.15
The power to regulate is not the power to destroy.16 The regulation here is reasonable because it addresses extortion in a business that has become a virtual monopoly upon which producers, shippers, and receivers of grain depend.17 The question of the reasonableness of the regulation is one for the legislature.18 The courts cannot review the discretion of the legislature in this regard.19 The act therefore is not in conflict with the Fourteenth Amendment.20
The statute does not violate the Due Process Clause of the Fourteenth Amendment.21
Related opinions on this issue
Joined by Justice Strong
Justice Field dissents on the ground that the warehouses are private property used for a private business without any special privilege or franchise from the government.22 The legislature therefore has no power to fix the compensation the owners may receive for the use of their property or their services in connection with it.23 The majority's doctrine that property becomes clothed with a public interest whenever it is used in a manner to make it of public consequence and affect the community at large would allow the legislature to regulate the prices of all businesses.24
This doctrine would destroy the protection of the Due Process Clause for the use and income of property, leaving all property and business at the mercy of a majority of the legislature.25
Whether the statute violates the Equal Protection Clause of the Fourteenth Amendment?26
The Equal Protection Clause does not prevent a state from regulating the business of warehouses in cities of 100,000 or more inhabitants differently from warehouses in smaller cities when the regulation applies uniformly to all similarly situated operators within the defined class.27
No. The statute applies the same maximum rates and licensing requirements to all warehousemen doing business in cities having not less than one hundred thousand inhabitants where grain of different owners is mixed together or stored so that identity cannot be preserved.28 The classification is based on the size of the city and the nature of the storage operations that create the public interest and virtual monopoly.29 There is no showing that the statute denies equal protection within that class.30
The statute does not violate the Equal Protection Clause of the Fourteenth Amendment.31
Whether the statute conflicts with the Commerce Clause by regulating interstate commerce?32
The Commerce Clause confers upon Congress the power to regulate commerce with foreign nations and among the several States.33 The States may regulate matters of local concern even though they may incidentally affect commerce.34 The regulation of charges for the storage of grain in warehouses located and operated exclusively within the State is a matter of local concern that is not a regulation of commerce itself.35
No. The warehouses of the defendants are situated and their business carried on exclusively within the limits of the State of Illinois.36 They are used as instruments by those engaged in State as well as interstate commerce.37 They are no more necessarily a part of commerce itself than the dray or the cart by which grain would be transferred from one railroad station to another.38 The regulation of the charges for storage is a thing of domestic concern.39
Until Congress acts in reference to their interstate relations the State may exercise all the powers of government over them even though in so doing it may indirectly operate upon commerce outside its immediate jurisdiction.40
The statute does not conflict with the Commerce Clause.41
Whether the statute violates the port preference prohibition of Article I, Section 9?42
The provision of Article I, Section 9 that no preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another operates only as a limitation of the powers of Congress and in no respect affects the States in the regulation of their domestic affairs.43
No. The statute regulates the charges of warehouses located in Illinois cities and does not give any preference to the ports of one State over those of another.44 The port preference prohibition is a limitation upon Congress alone and has no application to state legislation regulating local warehousing operations.45
The statute does not violate the port preference prohibition of Article I, Section 9.46