Interstate Commerce Commission

From Wikipedia, the free encyclopedia

You have new messages (last change).

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 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.

Contents

[edit] Creation

The creation of the long ICC 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 muckraker 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 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 purview of the Commission. 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.

[edit] As an example of regulatory capture

Historians, political scientists, and economists have used the Interstate Commerce Commission as a classic example of regulatory capture. They accused the Commission of acting in the interests of railroads and trucking companies. The ICC, they claimed, set rates at artificially high levels and excluded new competitors through a restrictive permitting process. Other critics concede that given the monopolistic nature of the railroad industry in 1887, something like the Interstate Commerce Commission may have been needed. These critics charge that the ICC's "regulated monopoly" model was largely obsolete by the 1920s, when trucks had emerged to compete with trains--and air-freight was on the horizon. Hence the ICC's powers should have been drastically curtailed sometime before World War II. For these critics, the ICC serves as an example of the federal government's failure to abandon projects that are no longer useful. By 1970, expert support for rate regulation had reached such a low point that The Interstate Commerce Omission, an exposé written under the auspices of consumer advocate Ralph Nader, failed to call for more zealous regulators or better regulation. The solution, the report concluded, was deregulation, i.e., free entry into trucking and railroads.

[edit] 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 1920-1923 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 topice "In the Matter of Consolidation of the Railways of the United States into a Limited Number of Systems".[2]

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

  1. Boston and Maine Railroad; Maine Central Railroad; Bangor and Aroostook Railroad; Delaware and Hudson Railroad
  2. New Haven Railroad; New York, Ontario and Western Railway; Lehigh and Hudson River Railway; Lehigh and New England Railroad
  3. New York Central Railroad; Rutland Railroad; Virginian Railway; Chicago, Attica and Southern Railroad
  4. Pennsylvania Railroad; Long Island Rail Road
  5. Baltimore and Ohio Railroad; Central Railroad of New Jersey; Reading Railroad; Buffalo and Susquehanna Railroad; Buffalo, Rochester and Pittsburgh Railway; 50% of Detroit, Toledo and Ironton Railroad; 50% of Detroit and Toledo Shore Line Railroad; 50% of Monon Railroad; Chicago and Alton Railroad (Alton Railroad)
  6. Chesapeake and Ohio-Nickel Plate Railroad; Hocking Valley Railway; Erie Railroad; Pere Marquette Railway; Delaware, Lackawanna and Western Railroad; Bessemer and Lake Erie Railroad; Chicago and Illinois Midland Railroad; 50% of Detroit and Toledo Shore Line Railroad
  7. Wabash-Seaboard Air Line Railway; Lehigh Valley Railroad; Wheeling and Lake Erie Railway; Pittsburgh and West Virginia Railway; Western Maryland Railway; Akron, Canton and Youngstown Railway; Norfolk and Western Railway; 50% of Detroit, Toledo and Ironton Railroad; Toledo, Peoria and Western Railroad; Ann Arbor Railroad; 50% of Winston-Salem Southbound Railway
  8. Atlantic Coast Line Railroad; Louisville and Nashville Railroad; Nashville, Chattanooga and St. Louis Railway; Clinchfield Railroad; Atlanta, Birmingham and Coast Railroad; Mobile and Northern Railroad; New Orleans Great Northern Railroad; 25% of Chicago, Indianapolis and Louisville Railway (Monon Railway); 50% of Winston-Salem Southbound Railway
  9. Southern Railway; Norfolk Southern Railroad; Tennessee Central Railway (east of Nashville); Florida East Coast Railway; 25% of Chicago, Indianapolis and Louisville Railway (Monon Railway)
  10. Illinois Central Railroad; Central of Georgia Railway; Minneapolis and St. Louis Railway; Tennessee Central Railway (west of Nashville); St. Louis Southwestern Railway (Cotton Belt Railway); Atlanta and St. Andrews Bay Railroad
  11. Chicago and North Western Railway; Chicago and Eastern Illinois Railway; Litchfield and Madison Railroad; Mobile and Ohio Railroad; Columbus and Greenville Railway; Lake Superior and Ishpeming Railroad
  12. Great Northern-Northern Pacific Railway; Spokane, Portland and Seattle Railway; 50% of Butte, Anaconda and Pacific Railway
  13. Milwaukee Road; Escanaba and Lake Superior Railroad; Duluth, Missabe and Northern Railway; Duluth and Iron Range Railroad; 50% of Butte, Anaconda and Pacific Railway; trackage rights on Spokane, Portland and Seattle Railway to Portland, Oregon.
  14. Burlington Route; Colorado and Southern Railroad; Fort Worth and Denver Railway; Green Bay and Western Railroad; Missouri-Kansas-Texas Railroad; 50% of Trinity and Brazos Valley Railroad; Oklahoma City-Ada-Atoka Railway
  15. Union Pacific Railroad; Kansas City Southern Railway
  16. Southern Pacific Railroad
  17. Santa Fe Railway; Chicago and Great Western Railroad; Kansas City, Mexico and Orient Railway; Missouri and North Arkansas Railway; Midland Valley Railroad; Minneapolis, Northfield and Southern Railway
  18. Missouri Pacific Railroad; Texas and Pacific Railroad; Kansas, Oklahoma and Gulf Railway; Denver and Rio Grande Western Railroad; Denver and Salt Lake Railroad; Western Pacific Railroad; Fort Smith and Western Railroad
  19. Rock Island-Frisco Railway; Alabama, Tennessee and Northern Railroad; 50% of Trinity and Brazos Valley Railroad; Louisiana and Arkansas Railway; Meridian and Bigbee Railroad
  20. Canadian National; Detroit, Grand Haven & Milwaukee Railway; Grand Trunk Western Railway
  21. Canadian Pacific; Soo Line; Duluth, South Shore & Atlantic Railway; Mineral Range Railroad [3]

<marquee> O </marquee>

[edit] Terminal Railroads Proposed

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

  1. Toledo Terminal Railroad; Detroit Terminal Railroad; Kankakee & Seneca Railroad
  2. Indianapolis Union Railway; Boston Terminal; Ft. Wayne Union Railway; Norfolk & Portsmouth Belt Line Railroad
  3. Toledo, Angola & Western Railway
  4. Akron & Barberton Belt Railroad; Canton Railroad; Muskegon Railway & Navigation
  5. Philadelphia Belt Line Railroad; Fort Street Union Depot; Detroit Union Railroad Depot & Station; 15 other properties throughout the United States
  6. St. Louis & O'Fallon Railway; Detroit & Western Railway; Flint Belt Railroad; 63 other properties throughout the United States
  7. 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.

[edit] 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.[4] 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).

[edit] 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.

[edit] 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 Civil Aeronautics Board (1940), the National Labor Relations Board (1935), the Federal Communications Commission (1933), the U.S. Securities and Exchange Commission (1933), 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.

[edit] 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, modelled 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.

[edit] References

  • 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. 

[edit] See also

Retrieved from "http://en.wikipedia.org../../../i/n/t/Interstate_Commerce_Commission_31aa.html"