View source for Interstate Commerce Act of 1887

{{Short description|United States federal law}}
{{Use American English|date=June 2025}}
{{Infobox U.S. legislation
| longtitle         = An act to regulate commerce
| enacted by        = 49th
| effective date    = April 7, 1887
| cite public law   = {{uspl|49|104}}
| cite statutes at large = {{usstat|24|379}}
| passedbody1     = U.S. House
| passeddate1     = February 4, 1887
| passedbody2     = U.S. Senate
| passeddate2     = February 4, 1887
| conferencedate  = February 4, 1887
| amendments      = {{flatlist|
* [[Elkins Act]]
* [[Hepburn Act]]
* [[Mann–Elkins Act]]
* [[Valuation Act]]
* [[Motor Carrier Act of 1935]]
* [[Railroad Revitalization and Regulatory Reform Act]]
* [[Staggers Rail Act]]
* [[Motor Carrier Act of 1980]] }}
}}
{{multiple image
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 | image1 = Interstate Commerce Act, Page 1 (5389845199).jpg
 | image2 = Interstate Commerce Act, Page 2 (5390452352).jpg
 | footer = Act of February 4, 1887 (Interstate Commerce Act)
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{{Grover Cleveland series}}

The '''Interstate Commerce Act of 1887''' is a [[United States federal law]] that was designed to regulate the railroad industry, particularly its [[monopoly|monopolistic]] practices.<ref name="NatArchive2021">{{cite web | author=U.S. National Archives and Records Administration | date=September 8, 2021 | title=Interstate Commerce Act (1887) | website=archives.gov | url=https://www.archives.gov/milestone-documents/interstate-commerce-act | access-date=December 31, 2024}}</ref> 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.<ref>Potter, David. M. (1947). [http://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=2415&context=uclrev "Discriminatory Freight Rates: Implications of the Interstate Commerce Commission's Regulatory Powers"] ''The University of Chicago Law Review'', 15(1), Article 8. Accessed 2017-03-28.</ref><ref>Editors, Law Review. (1947). [http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2314&context=lcp "The Historical Development of Easter-Southern Freight Rate Relationships"] Law and Contemporary Problems, 12(1). Accessed 2017-03-28.</ref>   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.<ref name="NatArchive2021" /> It was later amended to regulate other modes of transportation and commerce.

==Background of the act==
{{anchor|rate discrimination}}
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 [[Railroad pool|pools]] and [[Trust (monopoly)|trusts]] that fixed rates at higher levels than they could otherwise command.<ref name="Johnson">{{cite book |title=Principles of Railroad Transportation |last1=Johnson |first1=Emory R. |last2=Van Metre |first2=Thurman W. |year=1918 |publisher=D. Appleton |location=New York |pages=292–307 |chapter=Chapter XVIII. Pools and Traffic Associations |chapter-url=https://books.google.com/books?id=zi4pAAAAYAAJ&q=johnson%20principles%20of%20railroad%20transportation&pg=PA292 }}</ref>

Responding to a widespread public outcry, [[State governments of the United States|states]] passed numerous pieces of legislation. Through the 1870s various constituencies, notably the [[Grange movement]] representing farmers, lobbied [[United States Congress|Congress]] to regulate railroads. While the Senate would [[United States Senate Committee on Transportation Routes to the Seaboard|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,<ref>U.S. Supreme Court. ''Wabash, St. Louis & Pacific Railway Company v. Illinois,'' {{ussc|118|557|1886}}, 7 S. Ct. 4, 30 L. Ed. 244</ref> the [[U.S. Supreme Court]] ruled that state laws regulating interstate railroads were [[unconstitutional]] because they violated the [[Commerce Clause]] of the [[United States Constitution|Constitution]], which gives Congress the exclusive power "to regulate Commerce with foreign nations, and among the several States, and with the Indian Tribes."<ref>U.S. Constitution, [[Commerce Clause|Article I, Section 8, Clause 3]].</ref> 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.<ref name="Kohlmeier">{{cite book |title=The Regulators: Watchdog Agencies and the Public Interest |last=Kohlmeier |first=Louis M. Jr. |year=1969 |publisher=Harper & Row |location=New York |isbn=978-0-06-043747-3}}</ref>{{rp|12}}

The act worked to keep rates and railroad revenue up on routes where competition existed.<ref name="Acworth">{{cite journal |last1=Acworth |first1=W.M. |date=1905-12-01 |title=The Recent History of Federal Control of Railroads in the United States |journal=Railroad Gazette |volume=XXXIX |issue=22 |page=170 |url=https://books.google.com/books?id=yJxMAAAAYAAJ&q=railroad+gazette+1887&pg=RA1-PA170 }}</ref> 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.)<ref name="Acworth"/> 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."<ref>White, Richard; Stanford University (2008). [http://www.history.upenn.edu/economichistoryforum/docs/white_08.pdf "Kilkenny Cats: Transcontinental railroads, destructive competition, and the odd road to North American modernity."] {{Webarchive|url=https://web.archive.org/web/20100616034252/http://www.history.upenn.edu/economichistoryforum/docs/white_08.pdf |date=2010-06-16 }} Paper presented at the [http://www.history.upenn.edu/economichistoryforum/ Penn Economic History Forum] {{Webarchive|url=https://web.archive.org/web/20100615061607/http://www.history.upenn.edu/economichistoryforum/ |date=2010-06-15 }}, University of Pennsylvania, Department of History, Philadelphia, PA, October 3, 2008.</ref>

==Jurisdiction of the act==
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 of the United States|courts]] would further narrow the agency's authority, and in 1903 Congress established the [[United States Department of Commerce and Labor|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.<ref>Louis Hacker & Benjamin Kendrick ''The United States Since 1865'', 236</ref>

==Amendments==
===Early twentieth century===
Congress passed a minor amendment to the Act in 1903, the [[Elkins Act]].<ref>Elkins Act, 57th Congress, Sess. 2, ch. 708, {{USStat|32|847}}, approved 1903-02-19.</ref> 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.<ref>Hepburn Act of 1906, 59th Congress, Sess. 1, ch. 3591, 34 Stat. 584, approved 1906-06-29.</ref> 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.<ref>Mann-Elkins Act of 1910, 61st Congress, ch. 309, 36 Stat. 539, approved 1910-06-18.</ref> 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.<ref>Valuation Act, 62nd Congress, ch. 92, {{USStat|37|701}}, enacted 1913-03-01.</ref>

===Motor Carrier Act of 1935===
In 1935, [[United States Congress|Congress]] passed the Motor Carrier Act, which amended the Interstate Commerce Act to regulate [[bus]] lines and [[trucking]] as [[common carrier]]s.<ref>''Motor Carrier Act of 1935'', {{USStatute|74|255|49|543|1935|08|09}}</ref>

===Later amendments===
Congress enacted simplifying and reorganizing amendments in 1978, 1983 and 1994.<ref>Revised Interstate Commerce Act of 1978, Pub.L. 95–473, 92 Stat. 1337, {{USC|49|10101}}, approved 1978-10-17. Pub.L. 97–449, 96 Stat. 2413, approved 1983-01-12. Pub.L. 103–272, approved 1994-07-05.</ref>

===Deregulation===
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.<ref>Railroad Revitalization and Regulatory Reform Act, Pub. L. 94-210, 90 Stat. 31, {{USC|45|801}}, approved 1976-02-05.</ref> 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.<ref>Staggers Rail Act of 1980, Pub. L. 96-448, 94 Stat. 1895, approved 1980-10-14.</ref>

The [[Motor Carrier Act of 1980]] deregulated the trucking industry.<ref>Motor Carrier Act of 1980, Pub. L. No. 96-296, 94 Stat. 793, approved 1980-07-01.</ref>

===Abolition===
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]].<ref>Interstate Commerce Commission Termination Act, {{USPL|104|88}}, {{USStat|109|803}}; 1995-12-29.</ref>

==See also==
* [[History of rail transport in the United States]]

==References==
{{reflist}}

==External links==
{{NIE poster|Interstate Commerce Act}}
* [https://www.archives.gov/milestone-documents/interstate-commerce-act#transcript Full text]
* [https://catalog.archives.gov/id/299823 Images of handwritten original text]
* [https://www.pbs.org/wgbh/amex/streamliners/peopleevents/e_ica.html "People & Events: Interstate Commerce Commission"] {{Webarchive|url=https://web.archive.org/web/20110628202807/http://www.pbs.org/wgbh/amex/streamliners/peopleevents/e_ica.html |date=2011-06-28 }} - PBS Online

{{Grover Cleveland}}
{{United States antitrust law|state=collapsed}}

[[Category:1887 in American law]]
[[Category:history of rail transportation in the United States]]
[[Category:Interstate Commerce Commission]]
[[Category:United States federal transportation legislation]]
[[Category:United States railroad regulation]]