INTERSTATE COMMERCE ACT. The popular name for an act of Congress. approved February 4, 1S87, and officially designated as "An act to regulate commerce." The name is clue to the fact that the law rests upon the con stitutional provision which empowers Congress to regulate commerce between the States.
The rapid development of railways in the united States after the Civil War, the sharp corn petition between competing lines, and the grow ing dependence of the agricultural and industrial interests of the country upon the transportation agencies developed a strong antagonism between the railroads and the public. The railroads were charged with making extortionate rates and with the rankest favoritism. The welfare of individ uals, of localities, and of industries depended in a high degree upon their action. It was in their power, by. special privileges to individual ship pers like the Standard Oil Company, to email out competition. By special rates to favored locali ties other points were placed at a disadvantage. while in making rates on different products nice questions arose which naturally affected the wel fare of great industries. The States had endeav ored without avail to cola" with the problem. Most. of them had created railroad commissions. Some of them, particularly in the States of the middle West, hod been clothed with drastic powers to fix maximum rates and to supervise minutely all phases of railroad management. Others, like the Massachusetts commission, had only advisory powers. All had the effect of throwing light upon the operations of the roads and creating a public sentiment in favor of reforms which railroad managers found it dif ficult to disregard wholly.
The failure of the State commissions to pro vide an adequate regulation of railways was due not so much to their methods as to their geo graphical limitations. The consolidation of roads and mutual agreements for through freight took a large part of the traffic out of the jurisdiction of the State commissions. Bence, a general demand arose for regulation by the Federal Gov ernment. National regulation was recommended by President Arthur in 1S83, and, after pro tracted debate, was finally obtained by the net of ISS7.
The law subjects to its provisions all common carriers by rail, or by rail and water, which engage in interstate eon:into-cc: business. It pro hibits special rates to individuals, and declares that no undue or unreasonable preference shall he given to any particular locality or to any par ticular description of traffic. It prohibits higher rates for a short distance than a long distance on the same route, when the shorter distance is in cluded in the former, unless under exceptional circumstances and with authority of the com mission. It makes unlawful any arrangements
between roads whereby trallie is pooled and the proceeds divided. It prescribes that all roads shall make their rates public, that they shall not depart from such published rates, nor change them without, due notice.
The act creates a commission of five members, with power to require reports from railroads on their operations, to hear complaints and make investigations relative to any alleged infraction of the act. In making such examinations the commission may compel the attendance of wit nesses, and, in case of refusal to attend or testify. may invoke the aid of the Culled States courts to enforce its commands. If the commission finds that the railroads violate the law in any way, it may enjoin upon them to discontinue the practice. Offenses against the act are made misdemeanors. The actions of the commission are subject to the review of the courts, and a person injured may elect to take his ease either before the com mission or, disregarding the commission, before the courts, although he cannot do both.
The operation of the act has not been all that was hoped for. The most satisfactory result of the law has been the publicity which it has given to railroad affairs. The numerous hearings before the commission have brought out a mass of evi dence on all points concerning rate-making and other aspects of railroad management. The sta tistical service prescribed by the act has been most. efficiently performed. and. through the pow ers in the commission to prescribe uniform methods of accounting, excellent results have been obtained in the Annual Report on the Matisties of Railroads. The clause of the act designed to prohibit pooling has accomplished this result. hut has rather helped than hindered the unified man agement of railroads which it was designed to prevent.. The framers of the act believed in con petition as a regulator of the railway business and sought to maintain competition by prohibit ing pooling arrangements. The courts, especially in the Trans-Missouri Traffic Association case, have been obliged to uphold this section of the law rigorously. The result has been to hasten the process of railroad consolidation. As uni form administration was impossible by means of agreement, it has been effected by means of lease and purchase.