Interstate Commerce Commission: Wikis

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Seal of the ICC

The Interstate Commerce Commission (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 United States 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

Creation

The creation of the Interstate Commerce 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. 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 reporter 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 Elkins Act required that rates be published. Eventually, when this piece of (economic) anti-discrimination legislation was constitutionally challenged, the United States Supreme Court ruled it to be constitutional.[citation needed] And signally (for the future of anti-discrimination legal challenges) the Court founded its ruling upon the existence of the then new 14th Amendment to the U. S. Constitution, and its equal protection clause.

In the Supreme Court's view, the U. S. Congress through legislation could outlaw an act of (economic) discrimination against an individual or corporation if the act of discrimination constituted for the affected person(s) a failure by the discriminator to afford the affected person(s) the equal application (protection) of the rules or laws.

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 states. 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.

"The Commission is, or can be made, of great use to the railroads. It satisfies the popular clamor for a government supervision of the railroads, while at the same time that supervision is almost entirely nominal." - William H. H. Miller, US Attorney General, circa 1889.[1]

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.

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 1920–3 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 the plan under the topic "In the Matter of Consolidation of the Railways of the United States into a Limited Number of Systems".[2]

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 Road; 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 Railway; 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 Railway; 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 Great Western Railway; 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 Railway; 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 and Milwaukee Railway; Grand Trunk Western Railway
  21. Canadian Pacific; Soo Line; Duluth, South Shore and Atlantic Railway; Mineral Range Railroad [2]
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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.

Racial integration of transport

Although racial discrimination was never a major focus of its efforts, the ICC had to address civil rights issues when passengers filed complaints.

History

  • April 28, 1941 - In Mitchell v. United States, the United States Supreme Court rules that discrimination in which a colored man who had paid a first class fare for an interstate journey was compelled to leave that car and ride in a second class car was essentially unjust, and violated the Interstate Commerce Act.[3] The court thus overturns an order of the Interstate Commerce Commission dismissing a complaint against an interstate carrier.
  • June 3, 1946 - In Morgan v. Virginia, the US Supreme Court invalidates provisions of the Virginia Code which require the separation of white and colored passengers where applied to interstate bus transport. The state law is unconstitutional insofar as it is burdening interstate commerce - an area of federal jurisdiction.[4]
  • June 5, 1950 - In Henderson v. United States, the United States Supreme Court rules to abolish segregation of reserved tables in railroad dining cars. The Southern Railway had reserved tables in such a way as to allocate one table conditionally for blacks and multiple tables for whites; a black passenger travelling first-class was not served in the dining car as the one reserved table was in use. The Interstate Commerce Commission ruled the discrimination to be an error in judgement on the part of an individual steward; both the United States District Court for the district of Maryland and the US Supreme Court disagreed, finding the published policies of the railroad itself to be in violation of the Interstate Commerce Act.
  • September 1, 1953 - In Sarah Keys v. Carolina Coach Company, WAC Sarah Keys, represented by civil rights lawyer Dovey Roundtree, becomes the first black to challenge "separate but equal" in bus segregation before the Interstate Commerce Commission. While the initial ICC reviewing commissioner declined to accept the case, claiming Brown v. Board of Education "did not preclude segregation in a private business such as a bus company", Roundtree ultimately prevailed in obtaining a review by the full eleven-person commission.[5]
  • November 7, 1955 – Interstate Commerce Commission bans bus segregation in interstate travel in Sarah Keys v. Carolina Coach Company. This extends the logic of Brown v. Board of Education (1954), a precedent ending the use of "separate but equal" as a defence against discrimination claims in education, to bus travel across state lines.
  • December 5, 1960 - In Boynton v. Virginia, the U.S. Supreme Court holds that racial segregation in bus terminals is illegal because such segregation violates the Interstate Commerce Act. This ruling, in combination with the ICC's 1955 decision in Keys v. Carolina Coach, effectively outlaws segregation on interstate buses and at the terminals servicing such buses.
  • May 4, 1961 - The first Freedom Ride leaves Washington D.C. with nominal scheduled destination of New Orleans, only to encounter mob violence in Alabama. On May 24, freedom riders were the target of passenger arrests in Mississippi. The more than sixty Freedom Rides in the months that followed were to gain national attention, with more than 300 arrested in Jackson, Mississippi alone in a few short months.
  • September 23, 1961 - Interstate Commerce Commission, at Robert F. Kennedy’s insistence, issues new rules ending discrimination in interstate travel. Effective November 1, 1961, six years after the ICC's own ruling in Keys v. Carolina Coach Company, all interstate buses required to display a certificate that reads: “Seating aboard this vehicle is without regard to race, color, creed, or national origin, by order of the Interstate Commerce Commission.”

Relationship between regulatory body and the regulated

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.

"It shall be unlawful for any common carrier subject to the provisions of this part to make, give, or cause any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic, in any respect whatsoever; or to subject any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. . . ." - 54 Stat. 902, Interstate Commerce Act, 49 U.S.C. § 3(1).

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.[3] 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).

Criticism

Two large bears "Interstate Commerce Commission" and "Federal Courts" attacking Wall Street. Shown in Puck Magazine on May 8, 1907

The limitation on railroad rates in 1906-07 depreciated the value of railroad securities, a factor in causing the panic of 1907.[6]

Some economists and historians, such as Milton Friedman[7] assert that existing railroad interests took advantage of ICC regulations to strengthen their control of the industry and prevent competition, constituting regulatory capture.

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. Final Chair Gail McDonald oversaw transferring its remaining functions to the Surface Transportation Board.

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 Federal Communications Commission (1934), the U.S. Securities and Exchange Commission (1934), the National Labor Relations Board (1935), the Civil Aeronautics Board (1940), Postal Regulatory Commission (1970) and the Consumer Product Safety Commission (1975). In recent decades, this regulatory structure of independent Federal agencies has gone out of fashion; the agencies created after the 1970s generally have single heads appointed by the President and are divisions inside executive Cabinet 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.

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, modeled 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. The ICC was abolished in 1995.

See also

References

  1. ^ Thomas Frank, "Politics will undermine regulation plan" Marketplace, American Public Media, June 18, 2009.
  2. ^ "NTL" (PDF). NTL. http://ntl.bts.gov/lib/000/600/642/750911.pdf. 
  3. ^ Mitchell vs. United States, 1941
  4. ^ Morgan v. Virginia, 1946
  5. ^ Challenging the System: Two Army Women Fight for Equality, Judith Bellafaire Ph.D., Curator, Women In Military Service For America Memorial Foundation
  6. ^ Edwards 1907, p. 66
  7. ^ Free to Choose, 1979 (1990 edition), p.194

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