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The Hood Company, a Massachusetts company, owned three milk-receiving stations in New York. The company distributed milk from these facilities in Boston. When the company sought a license for another receiving station in New York, state officials denied its request on the grounds that expanding Hood's facilities would reduce the local supply of milk and result in destructive competition. The company appealed the case to the Supreme Court.

Was New York's denial of the license unconstitutional under the Commerce Clause?

In a 5-to-4 decision, the Court held that New York's restriction on business activity was an unconstitutional application of the Commerce Clause. The Court held that the system fostered by the Clause must be one in which "every farmer and every craftsman shall be encouraged to produce by the certainty he will have free access to every market in the Nation." The Court also emphasized the economic interdependence of the states, warning that "fantastic rivalries. . .and reprisals" would ensue if the states were allowed to enact local protectionist measures.