Expert: Hank Hokamp Date: 5/10/2008 Subject: american history
Question What is the Cooley Rule?
Answer
Hello, Penelope:
The real beginning of economic regulation by Congress started with the Interstate Commerce Act of 1877, which was in response to a Supreme Court decision that states could not regulate interstate railroad rates. In Wabash, St. Louis & Pacific Railroad Company v. Illinois (1886), the Supreme Court refused to apply the Cooley Rule in such a way as to allow state regulation of these rates. It may be recalled that the Cooley rule gave to the states the power to regulate local effects of commerce among the states, otherwise known as interstate commerce. As Thomas Reid Powell put it, the Cooley rule was essentially that Congress may regulate interstate commerce; the states may also regulate interstate commerce but not too much. How much is too much is beyond the scope of this statement. Following the enactment of the Interstate Commerce Commission legislation, the Congress began adopting other legislation that attempted to regulate various business practices. This included the Sherman Anti-Trust Act of 1890, the Clayton Act of 1914, the Federal Trade Commission Act of 1914, and, of course, the all important Federal Reserve Act of 1913. These pieces of legislation helped extend federal regulation of a wide variety of business and commercial activities, heretofore either unregulated or regulated by state legislation.
