CRS Annotated Constitution

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Federal Regulation of Land Transportation.—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.”663 An act of the same year provided federal chartering and protection from conflicting state regulations to companies formed to construct and operate telegraph lines.664 Another act regulated the transportation by railroad of livestock so as to preserve the health and safety of the animals.665

Congress’ 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;666 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.667 In the following year, Congress passed the original Interstate Commerce Act.668 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.” The Commission’s basic[p.177]authority was upheld in ICC v. Brimson,669 in which the Court upheld the validity of the Act as a means “necessary and proper” for the enforcement of the regulatory commerce power and in which it also sustained the Commission’s power to go to court to secure compliance with its orders. Later decisions circumscribed somewhat the ICC’s power.670

Expansion of the Commission’s authority came in the Hepburn Act of 1906671 and the Mann–Elkins Act of 1910.672 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.673 By the Motor Carrier Act of 1935,674 the ICC was authorized to regulate the transportation of persons and property by motor vehicle common carriers.

The powers of the Commission today are largely defined by the Transportation Acts of 1920675 and 1940.676 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.677 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[p.178]begun as a method of restraint there has emerged a policy of encouraging a consistent national transportation policy.678


663 14 Stat. 66 (1866).
664 14 Stat. 221 (1866).
665 17 Stat. 353 (1873).
666 Munn v. Illinois, 94 U.S. 113 (1877); Chicago B. & Q. R. Co. v. Iowa, 94 U.S. 155 (1877); Peik v. Chicago & Nw. Ry. Co., 94 U.S. 164 (1877); Pickard v. Pullman Southern Car Co., 117 U.S. 34 (1886).
667 Wabash, 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., 272 U.S. 605 (1926) (locomotive accessories); Pennsylvania R. v. Public Service Comm., 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. Co., 393 U.S. 129 (1968).
668 24 Stat. 379 (1887).
669 154 U.S. 447 (1894).
670 ICC v. Alabama Midland Ry., 168 U.S. 144 (1897); Cincinnati, N.O. & Texas Pacific Ry. v. ICC, 162 U.S. 184 (1896).
671 34 Stat. 584 (1906).
672 36 Stat. 539 (1910).
673 These regulatory powers are now vested, of course, in the Federal Communications Commission.
674 49 Stat. 543 (1935).
675 41 Stat. 474 (1920).
676 54 Stat. 898 (1940), U.S.C. Sec. 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 Railroad Co., 323 U.S. 612, 618–619 (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. Co., 385 U.S. 182 (1966), and cases cited.
677 Disputes 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).
678 Among 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. Co. 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).
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