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The Granger laws were a group of laws enacted by states off Minnesota, Iowa, Wisconsin, and Illinois in the late 1860s and early 1870s intended to regulate rapidly rising crop transport and storage fees railroads and grain elevator companies charged farmers. Passage of the Granger laws was promoted by the Granger Movement, a group of farmers belonging to the National Grange of the Order of Patrons of Husbandry. As the source of extreme aggravation to the powerful railroad monopolies, the Granger Laws led to several important U.S. Supreme Court cases, highlighted by Munn v. Illinois and Wabash v. Illinois. The legacy of the Granger Movement remains alive today in the form of the National Grange organization.
Key Takeaways: Granger Laws
- The Granger laws were state laws passed in the late 1860s and early 1870s regulating the fees grain elevator companies and railroads charged farmers to store and transport their crops.
- Granger laws were enacted in the states of Minnesota, Iowa, Wisconsin, and Illinois.
- Support for the Granger laws came from farmers belonging to the National Grange of the Order of Patrons of Husbandry.
- Supreme Court challenges to the Granger laws led to the enactment of the Interstate Commerce Act of 1887.
- Today, the National Grange remains a vital part of life in American farming communities.
The Granger movement, the Granger Laws, and the modern Grange stand as evidence of the great importance America's leaders have historically placed on farming.
“I think our governments will remain virtuous for many centuries; as long as they are chiefly agricultural.” - Thomas Jefferson
Colonial Americans used word “grange” as they had in England to refer to a farmhouse and its associated outbuildings. The term itself comes from the Latin word for grain, grānum. In the British Isles, farmers were often referred to as “grangers.”
The Granger Movement: The Grange is Born
The Granger movement was a coalition of American farmers mainly in Midwestern and Southern states that worked to increase farming profits in the years following the American Civil War.
The Civil War had not been kind to farmers. The few that had managed to buy land and machinery had gone deeply in debt to do so. Railroads, which had become regional monopolies, were privately owned and entirely unregulated. As a result, the railroads were free to charge farmers excessive fares to transport their crops to market. Vanishing income along with the human tragedies of the war among farming families had left much of American agriculture in a dismal state of disarray.
In 1866, President Andrew Johnson sent U.S. Department of Agriculture official Oliver Hudson Kelley to assess the postwar condition of agriculture in the South. Shocked by what he found, Kelley in 1867 founded the National Grange of the Order of Patrons of Husbandry; an organization he hoped would unite Southern and Northern farmers in a cooperative effort to modernize farming practices. In 1868, the nation's first Grange, Grange No. 1, was founded in Fredonia, New York.
While first established mainly for educational and social purposes, the local granges also served as political forums through which farmers protested the constantly increasing prices for transporting and storing their products.
The granges succeeded in reducing some of their costs through the construction of cooperative regional crop storage facilities as well as grain elevators, silos, and mills. However, cutting transportation costs would require legislation regulating the massive railroad industry conglomerates; legislation that became known as the “Granger laws.”
The Granger Laws
Since the U.S. Congress would not enact federal antitrust laws until 1890, the Granger movement had to look to their state legislatures for relief from the pricing practices of the railroad and grain storage companies.
In 1871, due largely to an intense lobbying effort organized by local granges, the state of Illinois enacted a law regulating railroads and grain storage companies by setting maximum rates they could charge farmers for their services. The states of Minnesota, Wisconsin, and Iowa soon passed similar laws.
Fearing a loss in profits and power, the railroads and grain storage companies challenged the Granger laws in court. The so-called “Granger cases” eventually reached the U.S. Supreme Court in 1877. The court's decisions in these cases set legal precedents that would forever change U.S. business and industrial practices.
Munn v. Illinois
In 1877, Munn and Scott, a Chicago-based grain storage company, was found guilty of violating the Illinois Granger law. Munn and Scott appealed the conviction claiming the state's Granger law was an unconstitutional seizure of its property without due process of law in violation of the Fourteenth Amendment. After the Illinois Supreme Court upheld the Granger law, the case of Munn v. Illinois was appealed to the U.S. Supreme Court.
In a 7-2 decision written by Chief Justice Morrison Remick Waite, the Supreme Court ruled that businesses serving the public interest, such as those that store or transport food crops, could be regulated by the government. In his opinion, Justice Waite wrote that government regulation of private business is right and proper “when such regulation becomes necessary for the public good.” Through this ruling, the case of Munn v. Illinois set an important precedent that essentially created the foundation for the modern federal regulatory process.
Wabash v. Illinois and the Interstate Commerce Act
Almost a decade after Munn v. Illinois the Supreme Court would severely limit the rights of the states to control interstate commerce through its ruling in the 1886 case of Wabash, St. Louis & Pacific Railway Company v. Illinois.
In the so-called “Wabash Case,” the Supreme Court found Illinois' Granger law as it applied to the railroads to be unconstitutional since it sought to control interstate commerce, a power reserved to the federal government by the Tenth Amendment.
In response to the Wabash Case, Congress enacted the Interstate Commerce Act of 1887. Under the act, the railroads became the first American industry subject to federal regulations and were required to inform the federal government of their rates. In addition, the act banned the railroads from charging different haul rates based on distance.
To enforce the new regulations, the act also created the now-defunct Interstate Commerce Commission, the first independent government agency.
Wisconsin's Ill-Fated Potter Law
Of all the Granger laws enacted, Wisconsin's “Potter Law” was by far the most radical. While the Granger laws of Illinois, Iowa, and Minnesota assigned the regulation of railroad fares and grain storage prices to independent administrative commissions, Wisconsin's Potter Law empowered the state legislature itself to set those prices. The law resulted in a state-sanctioned system of price fixing which allowed little if any profits for the railroads. Seeing no profits in doing so, the railroads stopped building new routes or extending existing tracks. The lack of railroad construction sent Wisconsin's economy into a depression forcing the state legislature to repeal the Potter Law in 1867.
The Modern Grange
Today the National Grange remains an influential force in American agriculture and a vital element in community life. Now, as in 1867, the Grange advocates for the causes of farmers in areas including global free trade and domestic farm policy. '
According to its mission statement, the Grange works through fellowship, service, and legislation to provide individuals and families with opportunities to develop to their highest potential in order to build stronger communities and states, as well as a stronger nation.
Headquartered in Washington, D.C., the Grange is a non-partisan organization that supports only policy and legislation, never political parties or individual candidates. While originally founded to serve farmers and agricultural interests, the modern Grange advocates for a wide variety of issues, and its membership is open to anyone. “Members come from all over -- small towns, large cities, farmhouses, and penthouses,” states the Grange.
With organizations in more than 2,100 communities in 36 states, local Grange Halls continue to serve as vital centers of rural life for many farming communities.
Sources and Further Reference
- “The Granger Laws.” American History. From Revolution to Reconstruction and Beyond.
- Boden, Robert F. “.”Railroads and the Granger Laws Marquette Law Review 54, no. 2 (1971).
- “Munn v. Illinois (1877): An Important Granger Case.” United States History.
- “The Supreme Court Strikes Down Railroad Regulation.” George Mason University. History Matters.
- Detrick, Charles R. “,”The Effects of the Granger Acts Journal of Political Economy 11, no. 2 (1903).