# Collier's New Encyclopedia (1921)/Interstate Commerce Law, The

Edition of 1921; disclaimer.
​INTERSTATE COMMERCE LAW, THE. See Interstate Commerce Commission: Railways.
​The law creating the Commission, passed by Congress in 1887, and based on the above clause, was the result of a demand voiced by the farmers of the Middle West, between whom and the railroad companies considerable friction over freight rates had developed. In some cases extortionate freight rates were charged, making the growers of produce for distant markets economically dependent on the railroads.
With regard to railroads, sleeping car companies and express companies, no free transportation was permitted, with certain exceptions. Railroad companies were forbidden to transport free of charge commodities belonging to themselves, excepting timber and equipment. Railroad companies must lay switches to accommodate any and all parties desiring to ship freight. There must be no discrimination in favor of or against any private firm or corporation, desiring to ship goods. There must be no special charges for short hauls. There must be no pooling of freight and division of earnings. Rate and fare schedules must be published and posted in certain places visible to the public. Contracts between railroad companies and between companies and private firms must be filed before the Interstate Commerce Commission, and be formally approved by it.
To enforce these provisions, the Interstate Commerce Commission was created, whose eleven members are appointed for terms of six years, subject to the approval of the Senate. No more than three members of the Commission may be partisans of the same political party.
The Commission is empowered to inquire into the business of all carriers; railroad, steamship and express companies. It may compel testimony and requisition papers and documents, and it has the right to investigate on all complaints that are made before it. It must publish full reports on all such investigations. The power most widely associated with the Commission, however, is that of fixing transportation rates, for both freight and passenger traffic. Its decisions regarding rates are final, and remain valid for two years. The Commission may also award damages where private persons or firms can prove injury received through any of the carrier companies coming under its jurisdiction. It may examine the books and accounts of such companies. It may require from them annual, or even monthly, reports of their finances and business transactions. Summed up, the Commission is, in fact, a court of adjustment in transportation matters, with all the powers of a court. Its headquarters are in Washington, D. C., but its sittings may be in any part of the country.
Transportation Act, 1920.—The Transportation Act, 1920, provides for the termination of Federal control and limits the powers the President may thereafter exercise under the Federal-control act to those necessary to wind up and settle matters arising out of Federal control; for the turning over to the Secretary of War for operation and settling up of all matters arising out of Federal control in connection with boats, barges, tugs, and other facilities on the inland, canal, and coastwise waterways acquired by the United States under the Federal-control act, and requiring him to provide terminal facilities for the interchange of traffic with carriers, and renders the operation of the boats and facilities subject to the provision of the interstate-commerce act to the same extent they would be if not owned by the United States. This act also authorizes the President to advance moneys to the carriers for certain purposes out of the revolving fund created by the Federal-control act, and requires the commission to ascertain and certify to the Secretary of the Treasury the amounts to be thus advanced to the carriers. It also provides for the appointment by the President of an agent to act as defendant in actions at law, suits in equity, proceedings in admiralty, and before the commission, based on matters arising out of Federal control, and confers upon the commission jurisdiction over all claims for reparation pertaining to the Federal-control period, whether arising in respect of intrastate or interstate traffic; that, pending actions, suits, proceedings, and reparation claims shall not abate, but that reparation awards in such cases shall be paid out of the revolving fund; that the period of Federal control shall not be computed as a part of the periods of limitation in actions against carriers or in claims for reparation based on causes of action arising out of matters pertaining to Federal control; and that a judgment in favor of the United States is the only one that may be levied against the property of the carrier where the judgment is based upon such matters.
The Transportation Act also continues in force until changed by lawful authority all rates, fares, charges, classifications, regulations, and practices in effect on Feb. 29, 1920, and prohibits reductions of such rates, fares, and charges prior to Sept. 1, 1920, except with the approval of the commission. It provides certain guaranties of compensation for a period of six months from March 1, 1920, to all carriers which were entitled to the same ​under the Federal-control act, and which on or before March 15, 1920, filed with the commission a written statement that they accepted the provisions and conditions upon which such guaranties are made. A similar guaranty under the same conditions of acceptance is made to the American Railway Express Co. that the contract between it and the Director General of Railroads shall remain in effect during the guaranty period in so far as the said contract constitutes a guaranty to the express company against a deficit in operating income. It provides for advances to the express company and the carriers to meet operating expenses, and fixed charges, and that the commission after the expiration of the guaranty period shall ascertain and certify to the Secretary of the Treasury the amount due any carrier under the guaranty, and the amount of and the times at which such loans or advances shall be made to any carrier. The Transportation Act also provides for the inspection of carriers' records by the President or his agents until the affairs of Federal control are concluded, and for the refunding of carriers' indebtedness to the United States. It also authorizes the Secretary of the Treasury to make new loans to carriers upon certain conditions and upon favorable certification by the commission and creates a revolving fund of $300,000,000 out of which said loans are to be made and out of which certain judgments, decrees, and awards are to be paid.
The Transportation Act also provides a plan for the settlement of controversies between carriers and their employees and subordinate officials through the medium of railroad boards of labor adjustment and a Railroad Labor Board. The latter consists of nine members, three of whom, representing the labor group, are to be chosen from not less than six nominees designated by the employees; three, representing the management, are to be chosen from not less than six nominees designated by the carriers. All nominations in both groups are made under rules and regulations prescribed by the commission. Three members, representing the public, are chosen directly by the President. All appointments are made by and with the advice and consent of the Senate.