Interstate Commerce Act of 1887 facts for kids
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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 |
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| Public law | Pub.L. 49-104 |
| Statutes at Large | 24 Stat. 379 |
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| Major amendments | |
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The Interstate Commerce Act of 1887 was an important U.S. federal law. It was created to control the railroad industry. This was especially important because railroads had become very powerful. They sometimes acted like a monopoly, meaning they had too much control over prices.
This law made sure that railroad prices were "reasonable and fair." It also required railroads to share their shipping rates with everyone. The Act stopped railroads from charging different prices for similar distances. This was called "fare discrimination." It often hurt smaller markets, like farmers in the West or South.
To make sure these rules were followed, the Act created a new government group. This group was called the Interstate Commerce Commission (ICC). The ICC's job was to watch over railroads. It made sure they followed the new rules. The railroad industry was the first business in the U.S. to be regulated by the federal government. Later, this law was changed to cover other types of transportation and business.
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Why Was the Interstate Commerce Act Needed?
In the late 1800s, people were worried about the growing power of large companies. Railroads were a big part of this concern. They were the main way people and goods traveled. The prices they charged and their business practices affected everyone.
Sometimes, railroads seemed to misuse their power. This happened because there wasn't enough competition. Railroad companies also teamed up to form "pools" and "trusts." These groups would secretly agree to keep prices high. This made it harder for smaller businesses and farmers.
How Did States Try to Control Railroads?
Many states passed their own laws to control railroads. Groups like the Grange movement, which represented farmers, asked Congress for help. In 1874, the Senate looked into the issue. But Congress didn't act right away.
The Supreme Court's Decision
A big change happened in 1886. The U.S. Supreme Court made a decision in a case called Wabash, St. Louis & Pacific Railway Company v. Illinois. The Court ruled that state laws could not regulate railroads that crossed state lines. This was because of the Commerce Clause in the U.S. Constitution. This clause gives Congress the power to control trade between states.
After this ruling, Congress knew it had to act. So, the Interstate Commerce Act was passed the next year. President Grover Cleveland signed it into law on February 4, 1887. The Act aimed to make railroad rates fair. It also tried to stop secret deals and unfair pricing. Railroads often saw competition as "bad" because it made it harder to pay their investors.
What Did the Interstate Commerce Commission Do?
The Act created the Interstate Commerce Commission (ICC). This was the first independent regulatory agency in the U.S. government. The ICC listened to complaints about railroads. It could order companies to stop unfair practices.
The ICC could investigate and take action against railroads. But its power was limited. It only covered companies that operated across state lines. Over time, the courts reduced the ICC's power even more. By 1906, the Supreme Court had sided with railroad companies in most cases.
How Was the Act Changed Over Time?
The Interstate Commerce Act was updated several times. These changes helped the government better control transportation.
Early 1900s Changes
- Elkins Act (1903): This was a small change to the Act.
- Hepburn Act (1906): This gave the ICC the power to set maximum railroad rates. It also expanded the ICC's control to include bridges, terminals, ferries, and even oil pipelines.
- Mann-Elkins Act (1910): This made the ICC even stronger in controlling railroad rates. It also added telephone, telegraph, and cable companies to the ICC's oversight.
- Valuation Act (1913): This required the ICC to figure out the value of railroad property. This information was used to help set fair shipping rates.
Regulating Trucks and Buses
- Motor Carrier Act of 1935: In 1935, Congress passed this Act. It changed the Interstate Commerce Act to also regulate bus lines and trucking companies.
Later Updates and Deregulation
In the 1970s and 1980s, Congress started to reduce government control over railroads. This was called deregulation.
- Railroad Revitalization and Regulatory Reform Act of 1976 (4R Act): This law gave railroads more freedom in setting prices and services.
- Staggers Rail Act (1980): This Act further reduced the ICC's power. It allowed railroads to set rates more freely. This helped them compete better with the trucking industry.
- Motor Carrier Act of 1980: This law removed many rules from the trucking industry.
End of the ICC
In 1995, Congress decided to close down the ICC. Many of its remaining jobs were moved to a new agency. This new agency is called the Surface Transportation Board.
