The Granger laws were a set of legislative regulations passed by the US states of Illinois, Wisconsin, Iowa, and Minnesota in the 1860s and 1870s. The laws were meant to curb the rising cost of transport and storage charged by grain elevators and railroad companies who enjoyed monopoly. Several farmers in Southern and Midwestern states united to form the Granger Movement that spearheaded the adoption of the Granger Laws. The United States Supreme Court ruled on important matters concerning regulations including the Wabash vs. Illinois and Munn vs. Illinois cases. The Granger Movement established a legacy that continues to date as the National Grange of the Order of Patrons of Husbandry.
The Granger Movement
The Granger Movement was established by American farmers in the Southern and Midwestern states who sought to increase their earnings a year after the American Civil War. The Civil War had affected farmers negatively, and many of them had accumulated losses and debts. Few farmers had managed to acquire machinery and land, but at high interest rates. At the time, railroad was the efficient transport mode available to farmers, but the industry was privately owned and unregulated. Railroad companies charged excessive transport costs that farmers had to incur or face losses by not transporting their crops to market. In 1866, (then) US President Andrew Johnson sent Hudson Kelley to the South to assess the effects of war on agriculture. Hudson was shocked by what he found and decided to form a movement that would unite the northern and southern farmers. In 1868, the first grange in the country was formed in Fredonia, New York. The movement rallied farmers to construct regional storage facilities and grain elevators, mills, and silos of their own. The movement also pushed for the enactment of laws to curb transport costs.
Enactment of the Laws
Before 1890, the United States Congress did not have the mandate to enact federal antitrust laws. The movement had to push state legislatures to enact laws that protected farmers from high prices charged for grain storage and railroads. After intense lobbying, Illinois became the first state to regulate the cost of transport by setting a maximum amount that railroad companies could charge farmers. Minnesota, Iowa, and Wisconsin also passed similar laws shortly after. The laws did not fare well with the grain storage and railroad companies, who took the matter to court. In 1877, the “Granger Cases” reached the US Supreme Court. The Supreme Court rulings on the Wabash v. Illinois and Munn v. Illinois cases led to the enactment of the Interstate Commerce Act of 1887 that required transport companies to reveal their rates to Congress and banned railroad companies from charging different cost for the same distance.