Interstate Commerce Act (ICA) (1887)

The ICA grew out of the economic unrest of the 1870s, chiefly among midwestern and southern farmers, over corporate influence and wealth more generally, and the untrammeled power of the railroad industry particularly. During this period, society relied on railroads as the primary mode of individual and freight transport. Railroads wielded extensive control over freight and passenger rates, the determination of routes and branch service, and the formation and conduct of trusts. Passengers were disadvantaged due to exorbitant fares and limited routes; freight carriers and shippers operated in a landscape of tiered pricing schemes and disadvantageous freight ranking; and private railroad concerns were hobbled due to price fixing and the manipulation of markets by larger firms. Predatory practices led to the bankrupting of independent railroads and the consolidation of firms into trusts unchecked by competitive pressures. The power exercised by railroads therefore was more than a matter of getting from point A to point B but the ability of individuals and competing businesses to exercise individual and commercial freedom.

Even as piecemeal action on the state government level attempted to bring some measure of reform, railroads operated across state lines, making comprehensive change impractical and incomplete. Southern and midwestern states, for example, created independent regulatory commissions and enacted economic and safety legislation aimed at railroads. The U.S. Supreme Court further denuded state regulatory control in the 1886 case of Wabash v. Illinois (118 U.S. 557). The Court ruled decidedly against the State of Illinois, holding that the Commerce Clause restricted the ability of states to regulate activities impacting interstate commercial affairs such as those carried on by railroads. The situation was compounded by the long-standing laissez-faire policy of postbellum politicians, thus equaling inaction at the federal level. With the campaign of Grover Cleveland promising reform both within and outside the federal government, prospects for substantive change seemed promising. Upon taking office Cleveland's reform agenda led to a partial rejection of the spoils system, cutting government waste and exalting merit above party affiliation. The passage of the ICA constituted the most extensive component of his reform agenda and the beginnings of federal regulation.

The ICA signified the beginnings of federal regulatory legislation, serving as a critical first step in a proactive government committed to modern commercial reform.

Jonathan C. Bergman

See also: Cleveland, Grover (1837–1908) ; Federal Trade Commission Act (1914) ; Granger Movement ; Hepburn Act (1906) ; Long-Haul/Short-Haul Discrimination ; Railroad Regulation ; Railroads ; Roosevelt, Theodore (1858–1919) ; Transportation Act of 1920

References

Bryant, Keith L., and Henry C. Dethloff. A History of American Business. Englewood Cliffs, NJ: Prentice-Hall, 1983.

Dos Passos, John R. The Inter-State Commerce Act: An Analysis of Its Provisions. 1887. Reprint, Ithaca, NY: Cornell University Library, 2009.

Hoogenboom, Ari, and Olive Hoogenboom. A History of the ICC: From Panacea to Palliative. New York: W.W. Norton and Company, 1976.

McNulty, Timothy J. “ICC Faces Extinction in Budgetary Cuts; Regulatory Agency Considered a Relic.” Chicago Tribune, February 7, 1995.

Nevins, Allan. Grover Cleveland: A Study in Courage. 1932. Reprint, Norwalk, CT: Easton Press, 1989.

Phillips, Don. “On the Track to Extinction? ICC Approves Giant Rail Merger, Now Awaits Elimination.” Washington Post, July 21, 1995.

Posner, Richard A. Antitrust Law. Chicago: University of Chicago Press, 2001.

Pusateri, Joseph C. A History of American Business. Arlington Heights, IL: Harlan Davidson, 1984.

Stone, Richard D. The Interstate Commerce Commission and the Railroad Industry: A History of Regulatory Policy. New York: Praeger Publishers, 1991.