Valuation Act facts for kids
The Valuation Act was a United States federal law passed in 1913. This law made the Interstate Commerce Commission (ICC) figure out how much railroad property was worth. This information was important for setting fair prices for moving goods by train.
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What Was the Valuation Act?
Why Was This Law Needed?
This law was an idea from two important people at the ICC: Charles A. Prouty and Franklin K. Lane. They wanted to make sure that the prices for shipping goods by train were fair.
This act came from a time called the Progressive Era. During this period, many laws were made to solve problems using a more scientific approach. The idea was to find the true value of each railroad's land and other important things it owned.
Members of Congress believed that once the ICC knew the real value of the railroads, they could set fair shipping prices. These prices would allow railroads to earn a reasonable profit based on their actual worth.
How the Law Was Put into Action
The Valuation Act changed an older law called the Interstate Commerce Act of 1887. It required the ICC to create a new department called the Bureau of Valuation. This bureau was in charge of figuring out the value of the railroads.
The ICC made rules for how the valuation should be done and how to report the findings. Then, the railroads themselves were allowed to do the valuation work. The ICC administration watched over them to make sure it was done correctly.
Even though the law was meant to be a one-time assessment, other laws made the process last much longer. The Esch-Cummins Act of 1920 gave the ICC more power to set rates. Because of this, the ICC needed updated valuation information from the railroads.
This bigger process meant the ICC needed many more staff members. The valuation work continued for almost 20 years. In the end, this long valuation process was not very helpful for the ICC in setting fair rates.
Congress made a small change to the law in 1922.
What Happened Next?
Charles A. Prouty left his job as an ICC Commissioner. He became the first leader of the new Valuation Bureau. Franklin K. Lane also left the ICC. He became the Secretary of the Interior for President Woodrow Wilson.
