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