Interstate Commerce Commission (ICC) history
A federal agency established by Congress in 1887 to regulate the RAILROADS. The ICC was created by the Interstate Commerce Act. The original emphasis of the commission was to control the railroad practice of granting rebates to the largest customers, thereby eliminating price discrimination. Many of the railroads had granted rebates to their largest customers, and industrialists such as Andrew CARNEGIE and John D. Rockefeller used the rebates to their benefit in accumulating monopoly power in their own industries. In addition, the law required railroads to publish their rates and entrusted the ICC with enforcing the new regulations.
The ICC’s power temporarily was curtailed in 1897 when the Supreme Court denied its power to set maximum railroad rates. Congress responded in 1906 by passing the Hepburn Act, which again gave the agency power over rates and extended its jurisdiction to oil pipelines. After World War I, the agency was given additional power under the Esch-Cummins Transportation Act to consolidate the railroads into 20 operating systems and to regulate minimum rates as well. In 1935, the Motor Carrier Act brought the trucking industry under ICC regulation, and in 1940, the Transportation Act brought water carriers under its jurisdiction as well.
After World War II, the tide began to shift against the ICC as railroads began to lose market share to trucking and other forms of transportation. DEREGULATION in the 1980s made the agency’s original powers less important to fair competition and the economy, and calls were heard in the late 1980s for its abolition. After the deregulation of rail rates and practices in the STAGGERS RAIL ACT of 1980, and subsequent motor carrier deregulation, the ICC shrank considerably. When the decision to abolish the ICC finally was made by Congress in 1995, REGULATION of railroads was further reduced, and almost all of the former ICC responsibilities were transferred to the Department of Transportation. The new successor agency, the Surface Transportation Board, began with an almost entirely railroad-oriented set of responsibilities.
The ICC formally was abolished at the end of 1995, and many of its powers were assumed by the Surface Transportation Board (STB). The ICC Termination Act of 1995 established the STB as a three-member independent agency affiliated with the Department of Transportation. Its three members are appointed by the president, serving staggered five-year terms.
The demise of the ICC is one of the few examples of changing trends in transportation and industry having a negative effect on the regulator originally charged with overseeing a particular sector of the economy.
Further reading
- Hoogenboom, Ari, and Olive Hoogenboom. A History of the ICC from Panacea to Palliative. New York: Norton, 1976.
- Kerr, K. Austin. American Railroad Politics, 1914–1920: Rates, Wages, and Efficiency. Pittsburgh: University of Pittsburgh Press, 1968.