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The Court held that Illinois had violated the Commerce Clause by placing a direct burden on interstate commerce. Under the Commerce Clause only Congress had the power to do so and states could only place indirect burdens on commerce.
Wabash, St. Louis & Pacific Railway Company v. Illinois, 118 U.S. 557 (1886), also known as the Wabash Case, was a Supreme Court decision that severely limited the rights of states to control or impede interstate commerce. It led to the creation of the Interstate Commerce Commission.
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The case was argued on April 14, 1886 - April 15, 1886 and was decided on October 25, 1886, by vote of 6 to 3. Associate Justice Miller wrote for the Court with Associate Justices Field, Harlan, Woods, Matthews, and Blatchford concurring; Associate Justices Bradley and Gray, along with Chief Justice Waite, dissented.
In Wabash, "direct" burdens on interstate commerce were not permitted by the Export Tax Clause of the Constitution (Article I, Section 9); however, those "indirect" burdens were permitted under the Commerce Clause. This was a standard enacted in Cooley v. Board of Wardens (1852).
Effects of decision
The Wabash decision led to the creation in 1887 of the first modern regulatory agency, the Interstate Commerce Commission.
It clarified the "direct" v. "indirect" test (though this doctrine was abandoned in the 1930s).
It was one of the first instances in government assuming responsibility for economic affairs that had previously been delegated to the states.