Interstate Commerce Commission

Interstate Commerce Commission
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Interstate_Commerce_Commission".

The Interstate Commerce Commission (or ICC) was a regulatory body in the United States created by the Interstate Commerce Act of 1887, which was signed into law by President Grover Cleveland. The agency was abolished in 1995, and the agency's remaining functions were transferred to the Surface Transportation Board.

The Commission's five members were appointed by the President with the consent of the United States Senate. This was the first independent agency (or so-called Fourth Branch). The ICC's original purpose was to regulate railroads (and later trucking) to ensure fair rates, to eliminate rate discrimination, and to regulate other aspects of common carriers.

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1 Creation
2 Ripley Plan to consolidate railroads into regional systems
- 2.1 Terminal railroads proposed
3 Relationship between regulatory body and the regulated
4 Criticism
5 Abolition
6 Legacy
- 6.1 International influence
7 References
8 See also

Creation

The creation of the Interstate Commerce Commission was the result of widespread and longstanding anti-railroad agitation. Western farmers, specifically those of the Grange Movement, were the dominant force behind the unrest, but Westerners generally — especially those in rural areas — believed that the railroads possessed economic power that they systematically abused. A central issue was rate discrimination between similarly situated customers and communities. Other potent issues included alleged attempts by railroads to obtain influence over city and state governments and the widespread practice of granting free transportation in the form of yearly passes to opinion leaders (elected officials, newspaper editors, ministers, and so on) so as to dampen any opposition to railroad practices. Some behavior was presumably less common; the reporter Charles Edward Russell claimed that the railroad that served his hometown had refused to ship newsprint to a newspaper editor because the editor had attacked the railroad in print.

Various sections of the Interstate Commerce Act banned "personal discrimination" and gave the Commission the power to determine maximum "reasonable" rates. Equally significant, the Elkins Act required that rates be published.

The Commission had a troubled start because the law that created it failed to give it adequate enforcement powers. Its powers were later expanded and subsequent legislation permitted the ICC to set minimum as well as maximum rates. Later legislation removed railroad safety from the states. A long-standing controversy was how to interpret language in the Act that banned charging more for a shorter "haul" than a longer one. Enforced in a literal manner, this clause could have driven many railroads out of business.

Between 1910 and 1934, the ICC had the authority to regulate interstate telephone services. (The very name of the agency suggests that lawmakers may have planned for it to become the "single roof" over many disparate regulatory efforts.) In 1934, this authority was transferred to the new Federal Communications Commission.

Ripley Plan to consolidate railroads into regional systems

The Transportation Act of 1920 directed the Interstate Commerce Commission to prepare and adopt a plan for the consolidation of the railway properties of the United States into a limited number of systems. Between 1920–3 William Z. Ripley, a professor of political economy at Harvard University, wrote up ICC's plan for the regional consolidation of the U.S. railways. [1] His plan became known as the Ripley Plan. In 1929 the ICC published Ripley's Plan under the title Complete Plan of Consolidation. Numerous hearings were held by ICC regarding plan under the topic "In the Matter of Consolidation of the Railways of the United States into a Limited Number of Systems".^[1]

The plan called for creating 21 Regional Railroads and 100 Terminal Railroads. The proposed 21 regional railroads were as follows:

Terminal railroads proposed

There were 100 terminal railroads that were also proposed. Below is a sample:

Toledo Terminal Railroad; Detroit Terminal Railroad; Kankakee & Seneca Railroad
Indianapolis Union Railway; Boston Terminal; Ft. Wayne Union Railway; Norfolk & Portsmouth Belt Line Railroad
Toledo, Angola & Western Railway
Akron & Barberton Belt Railroad; Canton Railroad; Muskegon Railway & Navigation
Philadelphia Belt Line Railroad; Fort Street Union Depot; Detroit Union Railroad Depot & Station; 15 other properties throughout the United States
St. Louis & O'Fallon Railway; Detroit & Western Railway; Flint Belt Railroad; 63 other properties throughout the United States
Youngstown & Northern Railroad; Delray Connecting Railroad; Wyandotte Southern Railroad; Wyandotte Terminal Railroad; South Brooklyn Railway

The Transportation Act of 1940 repudiated the Consolidated Plan and it was thus abandoned.

Relationship between regulatory body and the regulated

Although racial discrimination was never a major focus of its efforts, the ICC had to address civil rights issues when passengers filed complaints. A friendly relationship between the regulators and the regulated is evident in several early civil rights cases. Throughout the South, railroads had established segregated facilities for sleeping cars, coaches and dining cars. At the same time, the plain language of the Act (forbidding "undue or unreasonable preference" as well as "personal discrimination") could be read as an implied invitation for activist regulators to chip away at racial discrimination. In at least two landmark cases, however, the Commission sided with the railroads rather than with the African-American passengers who had filed complaints. In both Mitchell v. United States (1941) and Henderson v. United States (1950), the U.S. Supreme Court took a more expansive view of the Act than the Commission.[3] In 1962, the ICC banned racial discrimination in buses and bus stations, but it did not do so until several months after a binding pro-integration Supreme Court decision (Boynton v. Virginia) and the Freedom Rides (in which activists engaged in civil disobedience to desegregate interstate buses).

Criticism

Some economists and historians assert that existing railroad interests took advantage of ICC regulations to strengthen their control of the industry and prevent competition. See "regulatory capture".

Abolition

Congress passed various deregulation measures in the 1970s and 1980s. In 1995, when most of the ICC's powers had been eliminated, Congress abolished the agency, transferring its remaining functions to the Surface Transportation Board.

Legacy

The ICC served as a model for later regulatory efforts. Unlike, for example, state medical boards (historically administered by the doctors themselves), the seven Interstate Commerce Commissioners and their staffs were full-time regulators who could have no economic ties to the industries they regulated. Post-1887 state and federal agencies adopted this structure. And, like the ICC, later agencies tended to be multi-headed independent commissions with staggered terms for the commissioners. At the federal level, agencies patterned after the ICC included the Federal Trade Commission (1914), the Federal Communications Commission (1934), the U.S. Securities and Exchange Commission (1934), the National Labor Relations Board (1935), the Civil Aeronautics Board (1940), and the Consumer Product Safety Commission (1975). In recent decades, this regulatory structure has gone out of fashion; the agencies created after the 1960s generally have single heads appointed by the President and are housed inside executive Departments (e.g., the Occupational Safety and Health Administration (1970) or the Transportation Security Administration (2002)). The trend is the same at the state level, though it is probably less pronounced.

International influence

The Interstate Commerce Commission had a strong influence on the founders of Australia. The Constitution of Australia provides (ss. 101-104; also s. 73) for the establishment of an Inter-State Commission, modeled after the United States' Interstate Commerce Commission. However, these provisions have largely not been put into practice; the Commission existed between 1913-1920, and 1975-1989, but never assumed the role which Australia's founders had intended for it.

References

^ "NTL" (PDF). NTL.

Stone, Richard D. (1991). The Interstate Commerce Commission and the railroad industry: a history of regulatory policy. New York: Praeger. ISBN 0-275-93941-3.
Barnes, Catherine A. Journey from Jim Crow: The Desegregation of Southern Transit,Columbia University Press, 1983.

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