Interstate Commerce Commission - Creation

Creation

The ICC was established by the Interstate Commerce Act of 1887 (Pub.L. 49-104, 24 Stat. 379, enacted February 4, 1887), which was signed into law by President Grover Cleveland. The creation of the 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.

The Act applied to all railroads engaged in interstate commerce, even if they were located entirely within a single state, and it also applied to water carriers — riverboats, barges, ferries — owned or controlled by railroads. The Act states that rates charged by the railroads had to be "just and reasonable," but it did not set standards for reasonableness. Railroads were forbidden to give preference, advantage, special rates, or rebates to any person, company, location, city or type of traffic; there had been alleged attempts by railroads to obtain influence over city and state governments and a widespread practice of granting free transportation in the form of yearly passes to opinion leaders (elected officials, newspaper editors, ministers, et al. Railroads were not allowed to charge more for a short haul than a long haul under the same circumstances when the short haul was a segment of a longer haul (e.g., a New York-Baltimore trip should not cost more than a New York-Washington, D.C. trip). The act prohibited pooling, which, in a railroads case, was the sharing of revenue or freight. Railroads were required to publish rates and give advance notice of change.