The Railway Evaluation Act, also called the Parcel Post Act, required the Interstate Commerce Commission to organize a Bureau of Valuation to administer a complete valuation of the real property and assets of every railroad in the United States from 1914-1921.
Pushed for by I.C.C. commissioners ""Charles A. Prouty"" and Franklin K. Lane", the act was a classic piece of Progressive Era railroad legislation designed to find a scientific basis for setting railroad tariffs (or shipping charges) by determining the real value of each railroad's property and assets. Legislators assumed that with this information the I.C.C. would be able to set rates according to the principle of a reasonable rate of return on the real value of each railroad and the industry as a whole. The I.C.C. formulated a set of procedural and reporting standards for the valuation and then permitted the individual railroads to complete the valuation under the nominal supervision of an I.C.C. administration.
Prouty resigned from the I.C.C. to serve as the Valuation Bureau Chairman, and his Progressive pursuit of fairness earned him the distrust and enmity of the railroads. Lane resigned to become Wilson’s Secretary of the Interior. The valuation process began in 1914 and was substantially complete by 1921, with the bulk of the investigative work done by the renowned Harvard, American, and Northwestern Economics Professor, with a specialization in public utilities and railroads, Dr. John Henry Gray, who did much to bridge the gap between armchair economic theory and the practical specialist. The act was essentially passed in recognition of the fact that a more mature approach to the regulation of railway rate making was essential to the attainment of the objects of regulation.