ID: Interstate Commerce Act
When: February 4, 1887
Who:
- Congress: Passed the act.
- President Grover Cleveland: Signed the act into law.
- Railroad companies: Primarily affected by the act’s regulations.
- Farmers and shippers: Benefited (theoretically) from the act’s intended regulation of railroad rates.
What:
The Interstate Commerce Act established the Interstate Commerce Commission (ICC), the first federal regulatory agency. Its purpose was to regulate railroads to curtail abusive pricing and discriminatory practices. Specifically, it aimed to prevent railroad monopolies from charging exorbitant rates for transporting goods across state lines.
Impact: Why Significant?:
- First Federal Regulatory Agency: Marked a significant expansion of federal power into the economy, establishing a precedent for future government regulation of industries.
- Limited Success Initially: While it aimed to curb railroad abuses, the ICC initially lacked the power to effectively enforce its regulations. The courts often sided with the railroads, limiting the commission’s impact.
- Symbol of Progressive Reform: Represented an early attempt to address the problems created by rapid industrialization and the rise of powerful monopolies. It signaled a growing public awareness of the need for government intervention to protect consumers and businesses from unfair practices.
- Legal Battles and Refinements: The ICC’s effectiveness improved over time through legal challenges, court rulings, and amendments to the act. It laid the groundwork for future federal regulatory efforts.
- Shift in Power Dynamics: Represented a shift in the balance of power between large corporations and the government, though the shift was gradual and contested.