ArtI.S8.C3.1.7.2 Federal Regulation of Land Transportation

Article I, Section 8, Clause 3:

[The Congress shall have Power . . .] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .

Congressional regulation of railroads may be said to have begun in 1866. By the Garfield Act, Congress authorized all railroad companies operating by steam to interconnect with each other so as to form continuous lines for the transportation of passengers, freight, troops, governmental supplies, and mails, to their destination.1 An act of the same year provided federal chartering and protection from conflicting state regulations to companies formed to construct and operate telegraph lines. 2 Another act regulated the transportation by railroad of livestock so as to preserve the health and safety of the animals. 3

Congress’s entry into the rate regulation field was preceded by state attempts to curb the abuses of the rail lines in the Middle West, which culminated in the Granger Movement. Because the businesses were locally owned, the Court at first upheld state laws as not constituting a burden on interstate commerce; 4 but after the various business panics of the 1870s and 1880s drove numerous small companies into bankruptcy and led to consolidation, there emerged great interstate systems. Thus in 1886, the Court held that a state may not set charges for carriage even within its own boundaries of goods brought from without the state or destined to points outside it; that power was exclusively with Congress. 5 In the following year, Congress passed the original Interstate Commerce Act. 6 A Commission was authorized to pass upon the reasonableness of all rates by railroads for the transportation of goods or persons in interstate commerce and to order the discontinuance of all charges found to be unreasonable. In ICC v. Brimson, 7 the Court upheld the Act as necessary and proper for the enforcement of the Commerce Clause and also sustained the Commission's power to go to court to secure compliance with its orders. Later decisions circumscribed somewhat the ICC's power. 8

Expansion of the Commission's authority came in the Hepburn Act of 1906 9 and the Mann-Elkins Act of 1910. 10 By the former, the Commission was explicitly empowered, after a full hearing on a complaint, to determine and prescribe just and reasonable maximum rates; by the latter, it was authorized to set rates on its own initiative and empowered to suspend any increase in rates by a carrier until it reviewed the change. At the same time, the Commission's jurisdiction was extended to telegraphs, telephones, and cables. 11 By the Motor Carrier Act of 1935, 12 the ICC was authorized to regulate the transportation of persons and property by motor vehicle common carriers.

The modern powers of the Commission were largely defined by the Transportation Acts of 1920 13 and 1940. 14 The jurisdiction of the Commission covers not only the characteristics of the rail, motor, and water carriers in commerce among the states but also the issuance of securities by them and all consolidations of existing companies or lines. 15 Further, the Commission was charged with regulating so as to foster and promote the meeting of the transportation needs of the country. Thus, from a regulatory exercise originally begun as a method of restraint there has emerged a policy of encouraging a consistent national transportation policy. 16

Footnotes

  1.  Jump to essay-114 Stat. 66 (1866).
  2.  Jump to essay-214 Stat. 221 (1866).
  3.  Jump to essay-317 Stat. 353 (1873).
  4.  Jump to essay-4Munn v. Illinois, 94 U.S. 113 (1877); Chicago B. & Q. R. Co. v. Iowa, 94 U.S. 155 (1877); Peik v. Chicago & N.W. Ry., 94 U.S. 164 (1877); Pickard v. Pullman Southern Car Co., 117 U.S. 34 (1886).
  5.  Jump to essay-5Wabash, St. L. & P. Ry. Co. v. Illinois, 118 U.S. 557 (1886). A variety of state regulations have been struck down on the burdening-of-commerce rationale. E.g., Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U.S. 761 (1945) (train length); Napier v. Atlantic Coast Line R.R., 272 U.S. 605 (1926) (locomotive accessories); Pennsylvania R.R. v. Public Service Comm'n, 250 U.S. 566 (1919). But the Court has largely exempted regulations with a safety purpose, even a questionable one. Brotherhood of Firemen v. Chicago, R.I. & P. R.R., 393 U.S. 129 (1968).
  6.  Jump to essay-624 Stat. 379 (1887).
  7.  Jump to essay-7154 U.S. 447, 470 (1894).
  8.  Jump to essay-8ICC v. Alabama Midland Ry., 168 U.S. 144 (1897); Cincinnati, N.O. & Texas Pacific Ry. v. ICC, 162 U.S. 184 (1896).
  9.  Jump to essay-934 Stat. 584.
  10.  Jump to essay-1036 Stat. 539.
  11.  Jump to essay-11These regulatory powers are now vested, of course, in the Federal Communications Commission.
  12.  Jump to essay-1249 Stat. 543 (1935).
  13.  Jump to essay-1341 Stat. 474.
  14.  Jump to essay-1454 Stat. 898, U.S.C. §§ 1 et seq. The two acts were intended . . . to provide a completely integrated interstate regulatory system over motor, railroad, and water carriers. United States v. Pennsylvania R.R., 323 U.S. 612, 618-19 (1945). The ICC's powers include authority to determine the reasonableness of a joint through international rate covering transportation in the United States and abroad and to order the domestic carriers to pay reparations in the amount by which the rate is unreasonable. Canada Packers v. Atchison, T. & S. F. Ry., 385 U.S. 182 (1966), and cases cited.
  15.  Jump to essay-15Disputes between the ICC and other government agencies over mergers have occupied a good deal of the Court's time. Cf. United States v. ICC, 396 U.S. 491 (1970). See also County of Marin v. United States, 356 U.S. 412 (1958); McLean Trucking Co. v. United States, 321 U.S. 67 (1944); Penn-Central Merger & N & W Inclusion Cases, 389 U.S. 486 (1968).
  16.  Jump to essay-16Among the various provisions of the Interstate Commerce Act which have been upheld are: a section penalizing shippers for obtaining transportation at less than published rates, Armour Packing Co. v. United States, 209 U.S. 56 (1908); a section construed as prohibiting the hauling of commodities in which the carrier had at the time of haul a proprietary interest, United States v. Delaware & Hudson Co., 213 U.S. 366 (1909); a section abrogating life passes, Louisville & Nashville R.R. v. Mottley, 219 U.S. 467 (1911); a section authorizing the ICC to regulate the entire bookkeeping system of interstate carriers, including intrastate accounts, ICC v. Goodrich Transit Co., 224 U.S. 194 (1912); a clause affecting the charging of rates different for long and short hauls. Intermountain Rate Cases, 234 U.S. 476 (1914).