Interstate Commerce Act

Explanation and Analysis of the Document

Section 1

The opening section of the Interstate Commerce Act of 1887 acknowledges that the act was approved by both the Senate and the House of Representatives of the United States of America. It explains that the act applies to any carrier that transports either passengers or goods, by railroad or by water or a combination of both, across state lines, from one U.S. territory to another, or through the District of Columbia. It also covers transportation of passengers or goods to and from any country adjacent to the United States, such as Canada or Mexico, as well as other foreign countries. The act does not apply, however, to intrastate transportation of passengers or property or to receiving, delivering, storage, or handling of property within one state and not shipped to or from a foreign country from or to any state or territory. For the purpose of this act, the term railroad also applies to the bridges, ferries, and roads used in connection with railroad transportation. The term transportation as used in the act refers to any means of shipment or carriage. The act decrees that all charges in transportation services be “reasonable and just” but does not give further definition of those terms. All unjust and unreasonable charges are prohibited.

Sections 2–5

Rebates and personal discrimination of any kind are prohibited by section 2 of this act. Any preferential treatment is declared “unjust discrimination.”

Section 3 states that local discrimination and preferential treatment for passengers and property are forbidden; equal facilities for the interchange of traffic with connecting lines are ordered so as to not discriminate in carriers' rates and charges between those connecting lines. This section prohibits undue preference or prejudice in interstate commerce.

The so-called long-and short-haul clause of Section 4 prohibited charging higher rates for a shorter haul than for a longer haul under substantially similar circumstances and conditions. This section, however, does stipulate that a carrier may apply to the commission, under special conditions, to authorize an exception to charge less for a longer haul than for a shorter one and that the commission is authorized to do so. Section 5 prohibits all agreements to pool traffic or earnings.

Section 6

All rates are to be clearly published, conveniently posted, and adhered to. Published rates cannot be raised without ten days' public notice of the proposed changes. All rate changes must then be published and adhered to. Reductions of published rates may be made without previous public notice, but these reductions must then be published to the public. All carriers must provide copies of the schedule of rates to the commission, as well as copies of any agreements made between and among carriers. The commission has the right to determine the amount and place of publication of rates. Violations would be punishable.

Sections 7–10

It is forbidden by section 7 to intentionally prevent the “continuous” carriage of freight in order to bypass the provisions of the act. Section 8 states that common carriers who fail to obey the act will be liable to the person or persons injured by their actions, including payment of attorneys' fees.

Section 9 stipulates that any person filing a complaint for damages may make the complaint directly to the commission or through a district or circuit court, but not both. This section also compels testimony of the defendant and the production of papers. Section 10 states that each violation of the act would be subject to a fine not to exceed $5,000.

Section 11

The Interstate Commerce Commission would be composed of five members, to be appointed by the president. The customary term of office for commissioners would be six years. No more than three members may be from the same political party. Commissioners may not be shareholders or financially connected with any common carriers.

Section 12

The powers of the commission include investigation into the management of the common carriers as determined by this act, the right to obtain information from the carriers to enforce the act, and the power to require the attendance and testimony of witnesses and the production of books, papers, contracts and other material evidence relating to an investigation of a complaint. The commission has the right to invoke the aid of the U.S. courts to compel the appearance of witnesses and the production of papers in evidence.

Section 13

This section discusses the procedures to make a complaint against a carrier. Complaints against the common carriers are to be submitted to the commission in the form of a petition; the commission in turn would forward the charges to the common carriers, who must then answer the complaint within a reasonable time. If reparations are made to the injured party, the common carrier is no longer liable for that complaint. Otherwise, the commission has the right and power to investigate the complaint.

Sections 14 and 15

According to section 14, when the commission carries out an investigation, it must make a written report of the facts that led to the conclusion of the investigation. At that time, the commission would recommend compensation. A copy of the commission's report must be kept for the record as well as sent to the person who filed the complaint and the common carrier involved in the case. The commission's decision may be used in future court appeal cases. Section 15 states that if, as a result of an investigation, the commission finds that the common carrier has violated a part of this act, the commission must notify the violators to “cease and desist” in violating the act, or to make reparation to the injured party.

Section 16

If the violator of this act ignores the order of the commission, the commission may apply to the federal courts for assistance. The commission's report may be used as evidence in such cases. The court may then issue a written notice to the violator to stop the practice or to obey the order of the commission. The court may fine the violator up to $5,000 per day for each day that the violation continues or the commission's order remains unheeded. The court-ordered fines may be appealed to the U.S. Supreme Court by any of the parties involved.

Section 17

The commission may operate in whatever way it can to conduct its business and to bring about justice. A majority vote of the commissioners is necessary, and the commission may make changes in its procedures as long as they are in keeping with the practices of the U.S. court system. All votes and officials acts of the commission must be kept in writing and be made available to the public upon request.

Section 18

The annual salary for commissioners will be $7,500. The commission must appoint a secretary, who will be paid $3,500 per year. The commission may hire other employees, who will be paid as the commission decides, upon approval by the secretary of the interior. The secretary if the interior will furnish offices and supplies for the commission. After providing vouchers, the commission's business expenses will be paid by the secretary of the interior.

Sections 19–24

According to section 19, he main office of the commission was to be in Washington, D.C., where its general meetings will be held. If necessary, the commissioners could hold meetings anywhere in the United States to address complaints or to carry out its duties.

The commission is authorized in section 20 to require annual reports from all common carriers. These reports must include details about finance, profits, losses, operations, rates, regulations, and any agreements or contracts with other common carriers. The commission may also fix a period of time when all common carriers must follow a uniform system of accounts.

Section 21 states that by December 1 of every year, the commission must provide a report to the secretary of the interior, which will be forwarded to Congress. The report should contain information and data relating to questions regarding the regulation of commerce. The commission may also include in this report any recommendations for future legislation.

Section 22 makes clear that this act does not apply to the movement, storage, or handling of property belonging to federal, state, or local governments; charities; religious organizations or clergy; or employees of any railroad company. This act does not abridge or change laws already in practice but rather are in addition to them.

Section 23 stipulates that the commission is appropriated the sum of $100,000 for the fiscal year ending June 30, 1888m and section 24 states that sections 11 and 18 of this act were to take effect immediately and the rest within sixty days after the act’ passage.