The White Court ruled 7–2 in Houston, East & West Texas Railway Company v. United States and Texas & Pacific Railway Company v. United States (1914)—collectively called the Shreveport Rate cases—that Congress and the Interstate Commerce Commission (ICC; created by congressional legislation) could regulate intrastate rates to prevent harm to interstate travel. The issue arose because the two railway companies were charging far lower rates for travel between Texas cities than they were for travel between Texas and another state, even though the intrastate distance was far greater than the interstate distance. For example, the rate for travel from Dallas to Marshall, Texas (about 150 miles), was 36.8 cents per mile, while the rate for travel from Shreveport, Louisiana, to Marshall (about 45 miles) was 56 cents per mile.

The ICC believed this constituted an “undue preference and advantage” to the Texas cities and harmed interstate commerce. The railways contended that the ICC was overreaching its bounds and exceeded Congress’s Commerce Clause powers.

The Court sided with the United States in an opinion written by Justice Charles Evans Hughes, who wrote that “interstate trade was not left to be destroyed or impeded by the rivalries of local government.” He noted that the ICC was dealing with intrastate travel that was negatively impacting interstate commerce and, thus, the ICC could regulate it. Justices Horace Lurton and Mahlon Pitney dissented without writing an opinion.