"This act limited the working hours of children and forbade the interstate sale of goods produced by child labor. This act limited the working hours of children and forbade the interstate sale of goods produced by child labor." (archives.gov)
In other words, the federal government was trying to protect children from exploitation by unscrupulous employers by limiting the work hours of children and prohibiting the sale of goods produced by children between states.
Background of the Case: There was the dad, Roland Dagenhart from North Carolina, that wanted his son, Reuben, to work at the age of 14 in a textile mill. However, because of the Keating-Owen Child Labor Act of 1916, Reuben was not allowed to work.
What is a textile mill? This is a factory where people make yarn, fabric, and other clothing items. Picture Source: Children in a textile mill, Yazoo City, 1911 (Lewis Wickes Hine, Library of Congress, Washington D.C. [LOT 7479, v. 3, no. 2113])
Question brought to the Supreme Court on behalf of Mr. Dagenhart: Does the Keating-Owen Child Labor Act violate the Commerce Clause in the U.S. Constitution?
Question: What is the Commerce Clause?
Location: Article 1, Section 8, Clause 3 in the United States Constitution Text: "to regulate commerce with foreign nations, and among the several states, and with the Indian Tribes." In other words: Congress has to power to make the rules for trade, exchange, or relations on behalf of the citizens of the United States.
Outcome of the Case: 5 to 4 decision for Mr. Dagenhart Reasoning: Since textile mills make, produce, clothing, this does not deal with commerce, "thus outside the power of Congress to regulate." (Source: Oyez)
How did the Court's decision change the balance of power between the state and national governments? Supreme Court Justice Day said this case falls under the jurisdiction of the 10th Amendment to the American Bill of Rights. The Federal government cannot regulate child labor and the Keating-Owen Child Labor Act of 1916 is declared unconstitutional.
Text of the 10th Amendment: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. (U.S. Constitution - Tenth Amendment | Resources - Congress)
In the end, who won? This Supreme Court case is an example of how the Federal government lost power to the states. The states expanded their power, like still allowing child labor even after a federal law was passed, while the national government contracted its power. Fun Fact: In 1941, the Supreme Court, with different judges, reversed the original ruling in the Dagenhart case. With the passing of the Fair Labor Standards Act in 1938, there are specific guidelines and rules each state must follow when, and if, employers decide to higher a minor. The U.S. Department of Labor, created in 1913, oversees the welfare, including minors, to improve working conditions and wages.