Interstate Commerce Act signed into law

Background. The Interstate Commerce Act of 1887 was a United States federal law designed to regulate the railroad industry, particularly its monopolistic practices. It required that railroads publicize shipping rates and prohibited short haul or long haul fare discrimination, a form of price discrimination against smaller markets, particularly farmers in Western or Southern Territory compared to the official Eastern states.

Legislative Context. Supreme Court rulings established that state laws regulating interstate railroads were unconstitutional because they violated the Commerce Clause, which grants Congress exclusive power to regulate commerce among the states. Following these decisions, Congress passed the Interstate Commerce Act in 1887, making the railroad industry the first subject to federal regulation by a regulatory body.

Regulatory Creation. The Act created a federal regulatory agency, the Interstate Commerce Commission (ICC), which was charged with monitoring railroads to ensure compliance with the new regulations. This marked the first time an industry was subject to federal regulation by a regulatory body, establishing a precedent for government oversight of private enterprise.