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Long title | An act to regulate commerce |
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Enacted by | the 49th United States Congress |
Effective | April 7, 1887 |
Citations | |
Public law | Pub. L. 49–104 |
Statutes at Large | 24 Stat. 379 |
Legislative history | |
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Major amendments | |
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Personal 28th Governor of New York 22nd & 24th President of the United States First presidency
Inter-presidency Second presidency
Presidential campaigns Retirement ![]() | ||
The Interstate Commerce Act of 1887 is a United States federal law that was designed to regulate the railroad industry, particularly its monopolistic practices. [1] The Act required that railroad rates be "reasonable and just", but did not empower the government to fix specific rates. It also required that railroads publicize shipping rates and prohibited short haul or long haul fare discrimination, a form of price discrimination against smaller markets, particularly farmers in Western or Southern Territory compared to the official Eastern states. [2] [3] The Act created a federal regulatory agency, the Interstate Commerce Commission (ICC), which it charged with monitoring railroads to ensure that they complied with the new regulations.
With the passage of the Act, the railroad industry became the first industry subject to federal regulation by a regulatory body. [1] It was later amended to regulate other modes of transportation and commerce.
The act was passed in response to rising public concern with the growing power and wealth of corporations, particularly railroads, during the late nineteenth century. Railroads had become the principal form of transportation for both people and goods, and the prices they charged and the practices they adopted greatly influenced individuals and businesses. In some cases, the railroads were perceived to have abused their power as a result of too little competition. Railroads also banded together to form pools and trusts that fixed rates at higher levels than they could otherwise command. [4]
Responding to a widespread public outcry, states passed numerous pieces of legislation. Through the 1870s various constituencies, notably the Grange movement representing farmers, lobbied Congress to regulate railroads. While the Senate would investigate and report its findings and recommendations in 1874, Congress declined to step in, mirroring the lack of consensus in approach. In the 1886 decision on Wabash, St. Louis & Pacific Railway Company v. Illinois however, [5] the U.S. Supreme Court ruled that state laws regulating interstate railroads were unconstitutional because they violated the Commerce Clause of the Constitution, which gives Congress the exclusive power "to regulate Commerce with foreign nations, and among the several States, and with the Indian Tribes." [6] With many of those questions of approach decided, Congress passed the Interstate Commerce Act the following year; it was signed into law by President Grover Cleveland on February 4, 1887. [7] : 12
The act worked to keep rates and railroad revenue up on routes where competition existed. [8] It did this by attempting to force publicity about rates and make rebates and discrimination illegal. ('Discrimination' meant lower rates for certain customers, e.g. politicians, large customers, sharp bargainers, long haul shippers, shippers in competitive markets, low season travelers.) [8] Railroads saw that competition made it hard to pay their stockholders and bondholders the amount of money promised to them, and competition was therefore "bad." [9]
The act also created the Interstate Commerce Commission (ICC), the first independent regulatory agency of the US government. As part of its mission, the ICC heard complaints against the railroads and issued cease and desist orders to combat unfair practices. While the ICC was empowered to investigate and prosecute railroads and other transportation companies that were alleged to have violated the act, its jurisdiction was limited to companies that operated across state lines. Over time the courts would further narrow the agency's authority, and in 1903 Congress established the Department of Commerce and Labor and its Bureau of Corporations to study and report on wider industries and their monopolistic practices. By 1906, the Supreme Court had ruled in favor of a railroad company in fifteen out of the sixteen cases over which it presided. [10]
Congress passed a minor amendment to the Act in 1903, the Elkins Act. [11] Major amendments were enacted in 1906 and 1910. The Hepburn Act of 1906 authorized the ICC to set maximum railroad rates, and extended the agency's authority to cover bridges, terminals, ferries, sleeping cars, express companies and oil pipelines. [12] The Mann-Elkins Act of 1910 strengthened ICC authority over railroad rates and expanded its jurisdiction to include regulation of telephone, telegraph, and cable companies. [13] The Valuation Act of 1913 required the ICC to organize a Bureau of Valuation that would assess the value of railroad property. This information would be used to set freight shipping rates. [14]
In 1935, Congress passed the Motor Carrier Act, which amended the Interstate Commerce Act to regulate bus lines and trucking as common carriers. [15]
Congress enacted simplifying and reorganizing amendments in 1978, 1983 and 1994. [16]
Congress passed various railroad deregulation measures in the 1970s and 1980s. The Railroad Revitalization and Regulatory Reform Act of 1976 (often called the "4R Act") gave railroads more flexibility in pricing and service arrangements. The 4R Act also transferred some powers from the ICC to the newly formed United States Railway Association, a government corporation, regarding the disposition of bankrupt railroads. [17] The Staggers Rail Act of 1980 further reduced ICC authority by allowing railroads to set rates more freely and become more competitive with the trucking industry. [18]
The Motor Carrier Act of 1980 deregulated the trucking industry. [19]
Congress abolished the ICC in 1995 (see Interstate Commerce Commission Termination Act) and many of its remaining functions were transferred to a new agency, the Surface Transportation Board. [20]
The Interstate Commerce Commission (ICC) was a regulatory agency in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads to ensure fair rates, to eliminate rate discrimination, and to regulate other aspects of common carriers, including interstate bus lines and telephone companies. Congress expanded ICC authority to regulate other modes of commerce beginning in 1906. Throughout the 20th century, several of ICC's authorities were transferred to other federal agencies. The ICC was abolished in 1995, and its remaining functions were transferred to the Surface Transportation Board.
The Elkins Act is a 1903 United States federal law that amended the Interstate Commerce Act of 1887. The Act authorized the Interstate Commerce Commission (ICC) to impose heavy fines on railroads that offered rebates, and upon the shippers that accepted these rebates. The railroad companies were not permitted to offer rebates. Railroad corporations, their officers, and their employees, were all made liable for discriminatory practices.
The Hepburn Act is a 1906 United States federal law that expanded the jurisdiction of the Interstate Commerce Commission (ICC) and gave it the power to set maximum railroad rates. This led to the discontinuation of free passes to loyal shippers. In addition, the ICC could view the railroads' financial records, a task simplified by standardized bookkeeping systems. For any railroad that resisted, the ICC's conditions would remain in effect until the outcome of legislation said otherwise. By the Hepburn Act, the ICC's authority was extended to cover bridges, terminals, ferries, railroad sleeping cars, express companies and oil pipelines.
The Mann–Elkins Act, also called the Railway Rate Act of 1910, was a United States federal law that strengthened the authority of the Interstate Commerce Commission (ICC) over railroad rates. The law also expanded the ICC's jurisdiction to include regulation of telephone, telegraph and wireless companies, and created a commerce court.
The Transportation Act, 1920, commonly known as the Esch–Cummins Act, was a United States federal law that returned railroads to private operation after World War I, with much regulation. It also officially encouraged private consolidation of railroads and mandated that the Interstate Commerce Commission (ICC) ensure their profitability. The act was named after Rep. John J. Esch and Sen. Albert B. Cummins.
The Airline Deregulation Act is a 1978 United States federal law that deregulated the airline industry in the United States, removing federal control over such areas as fares, routes, and market entry of new airlines. The act gradually phased out and disbanded the Civil Aeronautics Board (CAB), but the regulatory powers of the Federal Aviation Administration (FAA) over all aspects of aviation safety were not diminished.
The Communications Act of 1934 is a United States federal law signed by President Franklin D. Roosevelt on June 19, 1934, and codified as Chapter 5 of Title 47 of the United States Code, 47 U.S.C. § 151 et seq. The act replaced the Federal Radio Commission with the Federal Communications Commission (FCC). It also transferred regulation of interstate telephone services from the Interstate Commerce Commission to the FCC.
The Staggers Rail Act of 1980 is a United States federal law that deregulated the American railroad industry to a significant extent, and it replaced the regulatory structure that had existed since the Interstate Commerce Act of 1887.
The Railroad Revitalization and Regulatory Reform Act of 1976, often called the "4R Act," is a United States federal law that established the basic outlines of regulatory reform in the railroad industry and provided transitional operating funds following the 1970 bankruptcy of Penn Central Transportation Company. The law approved the "Final System Plan" for the newly created Conrail and authorized acquisition of Northeast Corridor tracks and facilities by Amtrak.
In the United States government, independent agencies are agencies that exist outside the federal executive departments and the Executive Office of the President. In a narrower sense, the term refers only to those independent agencies that, while considered part of the executive branch, have regulatory or rulemaking authority and are insulated from presidential control, usually because the president's power to dismiss the agency head or a member is limited.
The Safety Appliance Act is a United States federal law that made air brakes and automatic couplers mandatory on all trains in the United States. It was enacted on March 2, 1893, and took effect in 1900, after a seven-year grace period. The act is credited with a sharp drop in accidents on American railroads in the early 20th century.
Railroads played a large role in the development of the United States from the Industrial Revolution in the Northeast (1820s–1850s) to the settlement of the West (1850s–1890s). The American railroad mania began with the founding of the first passenger and freight line in the country, the Baltimore and Ohio Railroad, in 1827, and the "Laying of the First Stone" ceremonies and the beginning of its long construction heading westward over the obstacles of the Appalachian Mountains eastern chain in the next year. It flourished with continuous railway building projects for the next 45 years until the financial Panic of 1873, followed by a major economic depression, that bankrupted many companies and temporarily stymied and ended growth.
The United States Railroad Administration (USRA) was the name of the nationalized railroad system of the United States between December 28, 1917, and March 1, 1920. It was the largest American experiment with nationalization, and was undertaken against a background of war emergency following American entry into World War I. During its brief existence, the USRA made major investments in the United States railroad system, and introduced standardized locomotive and railroad car classes, known as USRA standard. After the end of World War I, while some in the United States advocated for continuing nationalization, ultimately the railroads were returned to their previous owners in early 1920.
The Surface Transportation Board (STB) of the United States is an independent federal agency that serves as an adjudicatory board. The board was created in 1996 following the abolition of the Interstate Commerce Commission (ICC) and absorbed regulatory powers relevant to the railroad industry previously under the ICC's purview.
The United States Railway Association (USRA) was a government-owned corporation created by United States federal law that oversaw the creation of Conrail, a railroad corporation that would acquire and operate bankrupt and other failing freight railroads. USRA operated from 1974 to 1986.
The Motor Carrier Regulatory Reform and Modernization Act, more commonly known as the Motor Carrier Act of 1980 (MCA) is a United States federal law which deregulated the trucking industry.
Title 49 of the United States Code is a positive law title of the United States Code with the heading "Transportation."
George W. Bush & Sons Co. v. Malloy, 267 U.S. 317 (1925), was a decision by the United States Supreme Court, which held that the state statute under which the Maryland Public Service Commission (PSC) issued certificates of public convenience and necessity to common carriers engaged in interstate commerce violated the Commerce Clause of the United States Constitution.
The Valuation Act is a 1913 United States federal law that required the Interstate Commerce Commission (ICC) to assess the value of railroad property. This information would be used to set rates for the transport of freight.
Transportation in the United States is governed by laws and regulations of the federal government. The Department of Transportation is responsible for carrying out federal transportation policy, and the Department of Homeland Security is responsible for security in transportation.