Booth v. Illinois

Background

A grain broker bought an option to purchase 10,000 bushels of corn at a set price during a ten-day period in August 1899. Illinois prosecuted him under a state criminal law that made such option contracts unlawful and void as gambling contracts. The broker argued the statute violated his Fourteenth Amendment rights to life, liberty, and property, and the Illinois Supreme Court affirmed his conviction before the case reached this Court.

Reasoning

The Court examined whether the law had a real relation to suppressing gambling and market abuses. It accepted the state court’s view that many options can be mere wagers or help create “corners” that manipulate prices, and that the legislature could reasonably conclude banning options would curb those harms. The opinion acknowledged prior statements about freedom to contract but explained that such freedom is not absolute when the State reasonably regulates to prevent admitted public evils. The Court stressed that courts should only strike down legislation when it is plainly and palpably unconstitutional and therefore upheld the statute and the broker’s conviction.

Real world impact

The ruling permits Illinois to criminally prohibit certain option contracts to fight gambling-style speculation and possible market manipulation. Brokers and commodity traders using short-term options may face fines, voided contracts, or criminal penalties under this law. The opinion also noted enforcement could affect Board of Trade practices and the handling of large grain shipments, but it emphasized that policy adjustments are for the legislature to consider, not the courts.

Dissents or concurrances

Two Justices dissented; the opinion records their disagreement but does not explain their reasons.