Regulation of Interstate Commerce: Key Federal Power

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What is the regulation of interstate commerce? How is this addressed in the Constitution?

The regulation of interstate commerce is an essential function of the federal government. It helps keep things moving smoothly within the country.

Read more about the Constitution and the regulation of interstate commerce.

Regulation of Interstate Commerce

The new Constitution also granted federal power to establish post roads and to set uniform standards of weights and measures, further rationalizing and harmonizing trade between the states. 

It would make little sense for the new government to be able to regulate international commerce without being able to regulate interstate commerce. The Constitution greatly simplified the economic relationships between the states by granting the federal government the sole authority to unilaterally impose tariffs and duties on imports.

Thus, states could no longer (without the consent of Congress) put tariffs on imports from other states. Under the Articles, states taxed the products of other states in a protectionist effort to boost their own domestic goods. This led to higher prices for both producers and consumers, uncertainty about true prices, the general depression of commerce, and widespread evasion.

To further stimulate interstate commerce, Congress was also given the sole authority to coin money and issue paper notes of legal tender; this put the Union on the path to having a stable and strong currency, enabling merchants and consumers to be more clear about the true value of the goods they were buying and selling. Before the ratification of the Constitution, the states had been coining and printing their own money, leading to widespread economic chaos.

The Economic Case for the Union

Without the regulation of interstate commerce, there could be harmful effects on the economy. Rich states like New York would be able to extract extortionary customs duties and fees on their smaller and weaker neighbors like Connecticut and New Jersey, inhibiting commerce between states. 

There would also be no effective mechanism for paying back or apportioning the national debt. If the states were only joined in a loose league rather than a compact union, the individual states would be extremely reluctant to contribute money to help pay the debts of other states.

This would be especially true considering the fact that any apportionment of the national debt among the states of the confederacy would be unequal. The highly indebted states would be clamoring to offload their debt onto the others; the less-indebted states would be unwilling to contribute money to help the others. As a result, debts would go into default. This would have a harmful effect on the establishment of strong national credit.

Regulation of Interstate Commerce: Key Federal Power

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Rina Shah

An avid reader for as long as she can remember, Rina’s love for books began with The Boxcar Children. Her penchant for always having a book nearby has never faded, though her reading tastes have since evolved. Rina reads around 100 books every year, with a fairly even split between fiction and non-fiction. Her favorite genres are memoirs, public health, and locked room mysteries. As an attorney, Rina can’t help analyzing and deconstructing arguments in any book she reads.

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