1. Mission

CHAPTER 54

INTERSTATE COMMERCE COMMISSION

The Interstate Commerce Commission is a national establishment, independent of any of the ten departments, and endowed with quasi legislative and judicial powers for the purpose of administering and enforcing the Interstate Commerce Act, as amended and supplemented. Its general mission is to establish and maintain just and reasonable transportation facilities, rates, classifications, regulations, and practices; to supervise the issuance of securities or the assumption of financial obligations by carriers; to provide for the safety of employees, passengers, and property; to correlate the competitive factors in the transportation industry; and to aid the President in the liquidation of wartime government management of transportation.3

2. History

As soon as the public began to appreciate the advantages of railways in serving the people with rapid and economical transportation, there arose a high demand for maximum of construction, and as an expression of such public sentiment the government made liberal land grants. Thus in the early stages of American railway history the relation between government and the public and railroads was characterized by cordial encouragement. Progress was more marked in railroading than in the other cardinal activities of the American people. The powerful status of railroads overshadowed other undertakings. Certain preferences, inconsistent with the public duty of a common carrier, were made. Such abuses led to a growing demand for railroad regulation. Some of the states anticipated the national government in entering the field of railroad regulation legislation. But they could not meet the situation involved in interstate transportation. The Senate Windom Committee Report of 1874 informed the public and legislators on the railroad problem, and with the Senate Cullom Committee of

1 Act Feb. 4, 1887 (24 Stat. 379, 383).

2 By Acts of March 2, 1889 (25 Stat. 855); Feb. 10, 1891 (26 Stat. 743); Feb. 8, 1895 (28 Stat. 643); June 29, 1906 (34 Stat. 584); by a joint resolution approved June 30, 1906 (34 Stat. 838); by Acts of April 13, 1908 (35 Stat. 60); Feb. 25, 1909 (35 Stat. 648); June 18, 1910 (36 Stat. 539); August 24, 1912 (37 Stat. 566); March 1, 1913 (37 Stat. 701); March 4, 1915 (38 Stat. 1196); Aug. 9, 1916 (39 Stat. 441); Aug. 29, 1916 (39 Stat. 538 [Comp. St. §§ 8604aaa-8604w]); Aug. 29, 1916 (39 Stat. 619); Feb. 17, 1917 (39 Stat. 922); March 2, 1917 (39 Stat. 951); May 29, 1917 (40 Stat. 101); Aug. 9, 1917 (40 Stat. 270); Aug. 10, 1917 (40 Stat. 272); Feb. 28, 1920 (41 Stat. 456); June 7, 1922 (42 Stat. 624); Aug. 18, 1922 (42 Stat. 827); and June 7, 1924 (43 Stat. 526).

3 Institute for Government Research, Service Monograph No. 18, p. 54.

4 Drinker, Treatise on the Interstate Commerce Act, vol. 1, p. 54.

5 Interstate Commerce Commission, Annual Report, 1887, p. 4 et seq.; Haney, A Congressional History of Railways.

6 Wabash, St. L. & P. R. Co. v. Illinois, 118 U. S. 557, 7 S. Ct. 4, 30 L. Ed. 244.

1886 paved the way for a strong demand for national legislation culminating in the act of 1887.1 The government's attitude towards the railroads had thus passed from benevolent fostering to stern restriction.

Some of the beacon lights of subsequent legislation are: Duties imposed upon the commission in regard to government-aided railroad and telegraph lines.8 A remedy was provided by mandamus, without previous investigation by the commission, where equal facilities were denied shippers, while, on the other hand, shippers' attempts to obtain lower rates by means of false billing and other fraudulent devices were made criminal offenses. Taking testimony by deposition was authorized.10 Immunity was granted witnesses testifying before the commission.11 The commission was given jurisdiction in safety and accident prevention.12 The chairman of the Commission was designated with the Commissioner of Labor to attempt to compose labor controversies through mediation and conciliation, or arbitration.13 The attendance of witnesses was made compulsory,14 for a witness had declined to answer fully as to his enjoyment, as a shipper, of a preferential rate, on the ground of the protection afforded by the Fifth. Amendment to the Constitution, and had been upheld by the Supreme Court,15 which ruled that the witness was not adequately protected.16 The validity of the act of 1893 was sustained by the Supreme Court in 1896.17 While it was supposed that the commission's findings of fact would be final, and that the courts would review only questions of law, the courts actually permitted defendants to introduce evidence that had not been before the commission, and based decisions on the court's interpretation of the facts.18 The commission's powers in the matter of remedying evils in connection with rate-making were curtailed by the Supreme Court.19 The jurisdiction of the commission was further embarrassed by the long and short haul decisions.20

The carriers themselves sought to avoid the losses incident to extensive rebating, and upon their demand the Elkins Amendment 21 was enacted, which

1 Act Feb. 4, 1887 (24 Stat. 379, 383).

749th Cong. 1st Sess., S. R. 46, p. 215.

8 Act Aug. 7, 1888 (25 Stat. 382 [Comp. St. §§ 10080-10086]).

9 Act March 2, 1889 (25 Stat. 855).

10 Act Feb. 10, 1891 (26 Stat. 743 [Comp. St. § 8576]).

11 Act Feb. 11, 1893 (27 Stat. 443 [Comp. St. § 8577]).

12 Act March 2, 1893 (27 Stat. 531), amended by Act April 1, 1896 (29 Stat. 85 [Comp. St. § 8610]).

13 Act June 1, 1898 (30 Stat. 424). See, also, Act March 4, 1911 (36 Stat. 1397), and Act July 15, 1913 (38 Stat. 103 [Comp. St. §§ 8666-8676]).

14 Act Feb. 11, 1893 (27 Stat. 443 [Comp. St. § 8577]).

15 Counselman v. Hitchcock, 142 U. S. 547, 12 S. Ct. 195, 35 L. Ed. 1110.

16 R. S. § 860 (section 12, Act of 1887 [24 Stat. 383]).

17 Brown v. Walker, 161 U. S. 591, 16 S. Ct. 644, 40 L. Ed. 819.

18 Kentucky & Indiana Bridge Co. v. Louisville & N. R. Co. (C. C.) 37 F. 567, 2 L. R. A. 289.

19 Cincinnati, N. O. & T. P. Ry. v. Interstate Commerce Commission, 162 U. S. 184, 16 S. Ct. 700, 40 L. Ed. 935; Interstate Commerce Commission v. Cincinnati N. O. & T. P. R. Co., 167 U. S. 479, 17 S. Ct. 896, 42 L. Ed. 243.

20 Chicago & N. W. Ry. Co. v. Osborne, 52 F. 912, 3 C. C. A. 347; Interstate Commerce Commission v. Alabama Midland Ry. Co. (C. C.) 69 F. 227.

21 Act Feb. 19, 1903 (32 Stat. 847).

tended to rehabilitate the commission's powers.22 Followed the Hepburn Bill,23 which increased the commission membership and the term of office of commissioners, and extended the jurisdiction of the commission as to activities subject thereto, as well as its control over rates. The Supreme Court recognized the constitutionality of the exercise of legislative power delegated by Congress beyond the power of the courts to review.24 Some defects of the law were revealed in judicial decisions.25 Telegraph and telephone companies in interstate business were placed under the commission's jurisdiction by the Mann-Elkins Act.26 The Panama Canal Act conferred upon the commission jurisdiction over transportation of property from point to point in the United States by rail and water, through the Panama Canal or otherwise, not entirely within the limits of a single state.2

27

The powers of the commission were dealt with by several important decisions of the Supreme Court.28

An act directed the commission to appraise the property of all common carriers subject to the act to regulate commerce.29 Certain powers were granted the commission to prevent restraint in competition 30 and to administer certain provisions of the Clayton Act.31

The Safety Appliance Act was broadened.32 The Hours of Service Act 33 was intended to remedy the evil of excess of hours of employment, which was thought to be responsible in some measure for accidents. The commission's means of enforcement was to require carriers to file reports of such overtime

22 Ripley, Railroads, Rates and Regulation, pp. 493, 494. 23 Act June 29, 1906 (34 Stat. 584).

24 Interstate Commerce Commission v. Illinois Cent. R. Co., 215 U. S. 452, 30 S. Ct. 155, 54 L. Ed. 280.

25 "Orange Renting Case," Southern Pac. Co. v. Interstate Commerce Commission, 200 U. S. 536, 26 S. Ct. 330, 50 L. Ed. 585, reversing the Circuit Court, and ruling that railroads are not prohibited from regulating routes for shipment; i. e., denying the claimed right of the shipper to name the route of his goods; "Portland Gateway Case," Interstate Commerce Commission v. Northern Pac. Ry. Co., 216 U. S. 538, 30 S. Ct. 417, 54 L. Ed. 608 denying the right of the commission to designate through passenger routes when there is another route available, although not the passenger's preference.

26 Act June 18, 1910 (36 Stat. 539).

27 Act Aug. 24, 1912 (37 Stat. 566).

28 Interstate Commerce Commission v. Goodrich Transit Co., 224 U. S. 194, 32 S. Ct. 436, 56 L. Ed. 729; United States v. Atchison T. & S. F. Ry. Co., 234 U. S. 476, 34 S. Ct. 986, 58 L. Ed. 1408; United States v. Union Pac. R. Co., 234 U. S. 495, 34 S. Ct. 995, 58 L. Ed. 1426; United States v. Standard Oil Co., 234 U. S. 548, 34 S. Ct. 956, 58 L. Ed. 1459; O'Keefe v. United States, 240 U. S. 294, 36 S. Ct. 313, 60 L. Ed. 651.

29 Act March 1, 1913 (37 Stat. 701 [Comp. St. § 8591]).

30 Act Aug. 24, 1912 (37 Stat. 566 [Comp. St. § 8567]).

31 Act Oct. 15, 1914 (38 Stat. 730).

32 Act March 2, 1903 (32 Stat. 943 [Comp. St. §§ 8613-8615]); Act April 14, 1910 (36 Stat. 298 [Comp. St. § 8617 et seq.]); Act May 30, 1908 (35 Stat. 476 [Comp. St. §§ 86248629]); Act Feb. 17, 1911 (36 Stat. 913); Act March 4, 1915 (38 Stat. 1192 [Comp. St. §§ 8639a-8639d]).

33 Act March 4, 1907 (34 Stat. 1416 [Comp. St. §§ 8678-8680]).

employment, which requirement was held constitutional.34 The carrier was held required to make reasonable effort to confine hours of service within the stated limits.35 The Accident Reports Act of March 3, 1901, was enlarged.36 There was legislation in regard to the transportation of explosives the improper handling of which has caused loss of life.87 The commission was charged with the duty of determining the rates for mail transportation.38

The carriers' defense in rate cases of "confiscation without due process of law" resulted in an effort toward improved cost accounting.39

The membership of the commission was increased in 1917.40

The World War created an emergency and called for government management.41

This Transportation Act of 1920 42 increased membership of the commission to eleven and necessitated a grouping of the members into five divisions, and each division was assigned various duties in addition to sitting with the full commission. The Bureaus of Traffic, Finance, Informal Cases, and Service were added to assist the commission in administering the act of 1920. There were various other amendments of this act.43

3. Jurisdiction

The Interstate Commerce Act, amended, applies to common carriers engaged in the transportation of passengers or property wholly by railroad, or partly by railroad and partly by water when both are used under a common control, management, or arrangement for a continuous carriage or shipment; or the transportation of oil or other commodity, except water and except natural or artificial gas, by pipe line, or partly by pipe line and partly by railroad or by water; or the transmission of intelligence by wire or wireless from one state or territory of the United States, or the District of Columbia, to any other state or territory of the United States, or the District of Columbia, or from one place in a territory to another place in the same territory, or from any place in the United States through a foreign country to any other place in the United States, or from or to any place in the United States to or from a foreign coun34 Baltimore & O. R. Co. v. Interstate Commerce Commission, 221 U. S. 612, 31 S. Ct. 621, 55 L. Ed. 878.

35 Atchison, T. & S. F. Ry. Co. v. U. S., 244 U. S. 336, 37 S. Ct. 635, 61 L. Ed. 1175, Ann. Cas. 1918C, 794.

36 Act May 6, 1910 (36 Stat. 350).

37 Act May 30, 1908 (35 Stat. 555); Act March 4, 1909, § 341 (35 Stat. 1088, 1159 [Comp. St. § 10515]).

38 Act July 28, 1916 (39 Stat. 412). See, also, Act Aug. 24, 1912 (37 Stat. 559).

39 See Smyth v. Ames, 169 U. S. 466, 18 S. Ct. 418, 42 L. Ed. 819.

40 Act Aug. 9, 1917 (40 Stat. 270 [Comp. St. § 8596]).

41 Act Aug. 29, 1916 (39 Stat. 645 [Comp. St. § 1974a]); Act May 29, 1917 (40 Stat. 101); Act Aug. 10, 1917 (40 Stat. 272 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 8563]); Act March 21, 1918 (40 Stat. 451 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3115a31154p]).

42 Act Feb. 28, 1920 (41 Stat. 456 [Comp. St. Ann. Supp. 1923, § 100714 et seq.]).

43 Act June 5, 1920 (41 Stat. 946); Act Feb. 26, 1921 (41 Stat. 1145 [Comp. St. Ann. Supp. 1923, § 100714e(1)]); Act March 4, 1921 (41 Stat. 1444 [Comp. St. Ann. Supp. 1923, §§ 10402-10406]); Act June 10, 1921 (42 Stat. 27).

try, but only in so far as such transportation or transmission takes place within the United States.

The provisions of this act shall also apply to such transportation of passengers and property and transmission of intelligence, but only in so far as such transportation or transmission takes place within the United States.

The Act does not apply:

To the transportation of passengers or property, or to the receiving, delivering, storage, or handling of property, wholly within one state and not shipped to or from a foreign country from or to any place in the United States as aforesaid;

To the transmission of intelligence by wire or wireless wholly within one state and not transmitted to or from a foreign country from or to any place in the United States as aforesaid; or

To the transportation of passengers or property by a carrier by water where such transportation would not be subject to the provisions of this act except for the fact that such carrier absorbs, out of its port to port water rates or out of its proportional through rates, any switching, terminal, lighterage, car rental, trackage, handling, or other charges by a rail carrier for services within the switching, drayage, lighterage, or corporate limits of a port terminal or district.44

It does not apply to Porto Rico.45

4. "Common Carrier" Defined

The term "common carrier," as used in section 1, paragraph 3, of the act, includes all pipe line companies, telegraph, telephone, and cable companies operating by wire or wireless, express companies, sleeping car companies, "and all persons, natural or artificial, engaged in such transportation or transmission as aforesaid as common carriers for hire." "Carrier" and "common carrier” are used interchangeably in the act.

5. "Railroad" defined

"Railroad" includes all bridges, car floats, lighters, and ferries used by or operated in connection with any railroad, and also all the road in use by any common carrier operating a railroad, whether owned or operated under contract, agreement, or lease, and also all switches, spurs, tracks, terminals, and terminal facilities of every kind used or necessary in the transportation of the persons or property designated in the act, including all freight depots, yards, and grounds, used or necessary in the transportation or delivery of any such property.46

44 Section 1, Act Feb. 4, 1887 (24 Stat. 379), as amended June 29, 1906 (34 Stat. 584), April 13, 1908 (35 Stat. 60), June 18, 1910 (36 Stat. 539), February 17, 1917 (39 Stat. 922), March 2, 1917 (39 Stat. 951), May 29, 1917 (40 Stat. 101), August 10, 1917 (40 Stat. 272), and February 28, 1920 (41 Stat. 456).

45 Act March 2, 1917 (39 Stat. 964 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3803p]).

46 Section 1, par. 3, of the Act (41 Stat. 474 [Comp. St. Ann. Supp. 1923, § 8563)).