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Interstate Commerce Act

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The Interstate Commerce Act is a federal law passed in 1887 that created the Interstate Commerce Commission and gave it the power to regulate interstate railroads.[1] The Commission was the first independent federal agency and existed until its abolition in 1995.[2]

Background

Prior to the passage of the act, railroads had been unregulated and in some areas had operated as natural monopolies. Several groups, such as the Grange movement representing farmers and groups representing small businesses protested the status and practices of these railroads and sought political action. Some of the most common grievances were the charging of different rates for short or long trips and for small or large clients, often achieved through rebates for large clients, and the formation of trusts by railroad companies.

Some states enacted railroad regulations in the 1860s and 1870s, but these were declared unconstitutional by the decision in Wabash, St. Louis & Pacific Railway Co. v. Illinois (1886), which affirmed the sole right of the Federal Government to regulate interstate commerce. The Interstate Commerce Act was passed in the following year.[3]

Provisions

Interstate Commerce Commission

The act created the Interstate Commerce Commission, which consisted of five commissioners appointed by the President with the advice and consent of the Senate. No commissioner could participate in any case in which he had a financial interest. The primary duties of the Commission were to investigate complaints by customers, companies, and railroad commissioners regarding violations of the act. In its early form, the Commission did not have the power to take direct enforcement action. The act instructed the Commission to call on the Circuit Courts to prosecute offenders.[1]

The act authorized the Commission to "from time to time, make or amend such general rules or orders as may be requisite for the order and regulation of proceedings before it" (See the article on Wayman v. Southard for a discussion of rulemaking before the passage of the Administrative Procedure Act.) The act also held that "No complaint shall at any time be dismissed because of the absence of direct damage to the complainant."[1]

Subsequent laws, such as the Sherman Anti-Trust Act, expanded and modified the powers of the ICC.

Antitrust

The act made it unlawful for any common carrier "to enter into any contract, agreement, or combination with any other common carrier or carriers for the pooling of freights of different and competing railroads, or to divide between them the aggregate or net proceeds of the earnings of such railroads."[1] Anti-trust and anti-monopoly legislation became more common in the following decades, especially during the Progressive Era under Presidents Theodore Roosevelt, William Howard Taft, and Woodrow Wilson.

Anti-discrimination

The act required that all charges made by railroad companies for the transportation of people and property be "reasonable and just." It also barred those companies from giving any "undue or unreasonable preference or advantage" to any client, and from offering rebates to certain preferred clients. The companies could not charge higher rates for trips of different durations if those trips were "under substantially similar circumstances and conditions." These provisions reflected the concerns of farmers and small businesses that had led to the passage of the act.[3] [1]

Carriers must publish rates and schedules

To ensure compliance, the act required all interstate railroads to print and publish their schedules and rates, and to make them available in every station they operated. Clients and ICC commissioners could then compare the actual charges to those printed.

Amending statutes

Below is a partial list of subsequent laws that amended provisions of the Interstate Commerce Act:

  • Railroad Safety Appliance Act of 1893 mandated air brakes and automatic couplers on all trains involved in interstate commerce and empowered the ICC to enforce the new requirements.[4]
  • Elkins Act of 1903 banned railroads from offering rebates and empowered the ICC to enforce the new rule.[5]
  • Hepburn Act of 1906 allowed the ICC to set maximum rates for railroads engaged in interstate commerce.[6]
  • Mann–Elkins Act of 1910 imposed a price ceiling on railroad rates and allowed the ICC to investigate rate increases and suspend rates it deemed unfair.[7]
  • Valuation Act of 1913 required the ICC to create a Bureau to assess the value of railroad lands in order to calculate reasonable tariff rates.[8]
  • Motor Carrier Act of 1935 expanded the jurisdiction of the Interstate Commerce Act and Commission to cover buses and trucks.[9]
  • Railroad Revitalization and Regulatory Reform Act of 1976 created a new regulatory system for American railroads following the bankruptcy of several major carriers.[10]
  • Staggers Rail Act of 1980 deregulated the railroad industry and replaced the regulatory scheme established by the Interstate Commerce Act of 1887.[11]
  • Motor Carrier Act of 1980 similarly deregulated the trucking industry.[12]
  • Interstate Commerce Commission Termination Act of 1995 abolished the Interstate Commerce Act and transferred its powers to other agencies.[2]

See also

External links

Footnotes

  1. ↑ 1.0 1.1 1.2 1.3 1.4 OurDocuments.gov, Transcript of Interstate Commerce Act (1887), accessed December 27, 2017
  2. ↑ 2.0 2.1 Government Publishing Office, ICC Termination Act of 1995, accessed December 27, 2017
  3. ↑ 3.0 3.1 OurDocuments.gov, Interstate Commerce Act of 1887 - Document Info, accessed December 29, 2017
  4. ↑ LegisWorks.org, Railroad Safety Appliance Act of 1893, accessed December 27, 2017
  5. ↑ LegisWorks.org, Elkins Act, accessed December 27, 2017
  6. ↑ LegisWorks.org, Hepburn Act, accessed December 27, 2017
  7. ↑ LegisWorks.org, Mann-Elkins Act, accessed December 27, 2017
  8. ↑ LegisWorks.org, Valuation Act, accessed December 27, 2017
  9. ↑ LegisWorks.org, Motor Carrier Act, accessed December 27, 2017
  10. ↑ LegisWorks.org, Railroad Revitalization and Regulatory Reform Act, accessed December 27, 2017
  11. ↑ Government Publishing Office, Staggers Rail Act, accessed December 27, 2017
  12. ↑ GovTrack, S. 2245 (96th): Motor Carrier Act of 1980, accessed December 27, 2017
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