1. In upholding the Wagner Act, the court defined "interstate commerce" as business which is transacted across state lines. Specifically, although Jones & Laughlin Steel Corporation was incorporated within the state of Pennsylvania, and although its manufacturing plants were located in Pittsburgh and Aliquippa, it received raw materials from outside Pennsylvania and shipped most of its product (approximately 75 percent) to locations outside of Pennsylvania.
The issue of whether or not Jones & Laughlin engaged in interstate commerce is critical to the issue because it determines whether or not the federal government has jurisdiction in the case. By using the reasoning that interstate commerce can take place by the interaction of one company with other companies located in other states, the court upheld the jurisdiction of the federal government to have an interest in the case.
This interpretation differs from the idea that interstate commerce must involve one company having direct operations in several states. Such an example would be that where a company has manufacturing facilities in several states, or where it is vertically integrated so that it owns perhaps a raw material processor, manufacturing plant and distribution facilities across several states. In this case, however, it was held that interstate commerce could indeed exist when a single company with operations in a single state interacts with other companies in other states.
2. In determining that a manufacturing company is engaged in interstate commerce and is thus subject to the Wagner Act, the court determined that the interaction of the manufacturing company with other companies located in other states constituted an arrangement whereby the free flow of goods across state lines took place. If the manufacturing company encountered difficulties, for whatever reason, the interstate commerce in which it engaged would be affected.
This effect would derive fro...