Interstate Commerce Act

During the 1870s, many Americans (particularly farmers) began to resent the apparent stranglehold the railroads exerted over many parts of the country. However, the postwar presidents and many in Congress resisted intervention in economic matters.

Early efforts to bring some form of regulation to the giants were made at the state level, but those measures were later struck down by the U.S. Supreme Court.

In 1887, Congress passed the Interstate Commerce Act which created the Interstate Commerce Commission, the first true federal regulatory agency. It was designed to address the issues of railroad abuse and discrimination and required the following:

  • Shipping rates had to be "reasonable and just"
  • Rates had to be published
  • Secret rebates were outlawed
  • Price discrimination against small markets was made illegal.

Although the law granted the Commission power to investigate abuses and summon witnesses, it lacked the resources to accomplish its lofty goals. Later presidents would assure that reform would not go too far, by appointing pro-railroad commissioners.