Interstate Commerce Commission

INTERSTATE COMMERCE COMMISSION

INTERSTATE COMMERCE COMMISSION. On 31 December 1995, after 108 years of operation, the Interstate Commerce Commission (ICC) closed its doors in compliance with the ICC Termination Act of 1995 (P.L.104-88).This archetypal American independent regulatory commission, once feared by the transportation industry, saw the functions it still performed diminish until, at the end, they were assumed by offices in the Federal Highway Administration and the newly-created Surface Transportation Board, both elements of the U.S. Department of Transportation.

Those with the greatest stake in the ICC, which was created in 1887, were midwestern farmers and the owners and operators of the newly emergent railroad transportation systems. The railroads opened midwestern markets to those in the East, but charged what the market would bear, which was significantly less between two cities connected by more than one carrier than between towns that did not have the benefit of such competition. "Long haul" rates were more beneficial than "short haul" rates, leading farmers and merchants (members of the Grange) to redress their grievances through politics.

This post–Civil War reform movement helped initiate state regulation of railroads and grain elevators. In 1877 the Supreme Court, in Munn v. Illinois, ruled that the states could indeed regulate those properties vested with a public interest. However, in 1886 the Court reversed itself in Wabash, St. Louis and Pacific Railway v. Illinois, saying that only Congress could regulate interstate commerce. In 1887 Congress passed an Act to Regulate Commerce, known thereafter as the Interstate Commerce Act, which President Grover Cleveland signed into law on 4 February 1887. The law established a five-person commission to be appointed by the president and con-firmed by the Senate.

From its inception until the end of the century, the ICC, seeking to negotiate "reasonable and just" rates, was hobbled by the vagueness of its enabling act, the failure of Congress to give it enforcement power, and the Supreme Court's strict interpretation of the Commerce Clause of the Constitution, which emasculated the commission's power. During its first eighteen years, the ICC brought sixteen cases before the Court, fifteen of which were decided in favor of the railroads.

Nevertheless, the ICC would become the model for effective regulation later on. Responding to President Theodore Roosevelt and the Progressive movement, Congress passed the Hepburn Act (1906) and the Mann-Elkins Act (1910), which gave the commission wider authority to set aside rates charged by railroads, set profit levels, and organize mergers. The Hepburn Act extended the ICC's jurisdiction to include sleeping car companies, oil pipelines, ferries, terminals, and bridges. Through a broader interpretation of the Commerce Clause, the Court accepted a more muscular role for the ICC. This allowed for passage of the Esch-Cummins Transportation Act of 1920 and the commission's gradual assumption of regulatory jurisdiction over all other common carriers by 1940 (the Motor Carrier Act of 1935 regulated trucks; the Transportation Act of 1940, water carriers), except the airlines. In addition, the ICC had regulated telephone, telegraph, wireless, and cable services from 1910 until the Federal Communications Commission was established in 1934.

Congress, in the 1940 Transportation Act—and again in the Transportation Act of 1958—attempted to persuade the ICC to prepare a national transportation policy that would impartially regulate all modes of transportation and preserve the advantages of each. In 1966, this mission was shifted to the newly established Department of Transportation, as were the ICC's safety functions, which traced back to the Railroad Safety Appliance Act of 1893.

If the transfer of functions set a new tone for the ICC, the move to deregulate the transportation industry rendered it increasingly irrelevant. Passage of the Motor Carrier Regulatory Reform and Modernization Act of 1980 and the Staggers Rail Act of 1980 deregulated the trucking and rail industries, respectively. In 1982, Congress pared the membership of the ICC—which had grown to eleven—back to five. Staff dwindled from 2,000 to around 200. And on 29 December 1995, President William Clinton signed the ICC Termination Act into law.

BIBLIOGRAPHY

Hoogenboom, Ari. "Interstate Commerce Commission." In A Historical Guide to the U.S. Government. Edited by George Thomas Kurian. New York: Oxford University Press, 1998.

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

R. Dale Grinder

See also Federal Agencies ; Granger Cases ; Granger Movement ; Interstate Commerce Laws ; Interstate Trade Barriers ; Restraint of Trade ; Transportation Act of 1920 .