User:Russell D. Jones/Sandbox

Samuel P. Huntington, "The Marasmus of the ICC: The Commission, the Railroads, and the Public Interest," The Yale Law Journal 61, No. 4 (April 1952): 467-509.

The ICC was for many years considered a stellar success story.

Commission on Organization, Task Force Report on Regulatory Commissions 82 (1948): Also known as the Hoover Commission: the railroads' attitude towards ICC was "one of respect and general satisfaction with the Commission and its procedures, though carriers may be highly critical of and dissatisfied with particular decisions." [III, p. 34.]

McIntire, "Dedication," George Washington Law Review 5 (1937), 287: "Creation of the Interstate Commerce Commission as an independent agency of the Federal Government has proved a highly successful experiment. In its half a century of existence it has become established as a permanent and essential national institution."

Samuel Untermeyer, quoted in Miller "The Interstate Commerce Commission—Past and Present," ICC Practitioners' Journal 13 (1946), 800: "The Accomplishments of the Interstate Commerce Commission is [sic] the greatest triumph of modern times in scientific government. No one who has watched at close range our progress in securing control over the railroads will doubt our capacity for progressive government in that direction."

Miller, "The Lives of the Interstate Commerce Commissioners and the Commission's Secretaries," 13 ICC Practitioners' Journal (1946), 2-4.

Hearings before House Committee on Expenditures in Executive Departments on Reorganization Plan No. 7 of 1950, 81st Cong., 2d Sess., (1950).

Mansfield, The Lake Cargo Coal Rate Controversy (1932), 141: The ICC by the 1910s had "gained a place near the Supreme Court in public estimation."

By 1950, it had "developed an enviable reputation for honesty, impartiality, and expertness. Its age, prestige, and scope combined to make it the premier federal agency in the transportation field."

But it was clear also that by 1950, the ICC had reached its apogee. Its appropriations had flattened out. The number of its employs had started to decline. Its decisions were more frequently than ever before being overruled by the courts. The quality of the commissioners and their staff had started to deteriorate. Praise was turning into criticism. And Congress had established the Office of the Undersecretary of Commerce for Transportation.

The traditional sources of support for the ICC came from farmers and shippers. Throughout the ending years of the 19th century, the railroads were able to keep the ICC and its friends at bay through the courts. But by the 1900s, with an activist President and Congress now also siding with the enemies of the railroads, more powers for the ICC were put in place. By 1914, the ICC was firmly in control of the railroad industry.[472] "ICC policy during this period directly reflects its shipper and farmer sources of political support."[482]

Following the First World War, political shifts required that the ICC find new allies. The "Normalcy" of the Harding, Coolidge, and Hoover Administrations meant progressivism was in retreat. The farm crisis of the 1920s, clearly indicated that the problems of agricultural profitability were more systemic than could be explained by bogeyman of monopolistic railroad pricing. Thus, for the ICC to retain the power and prestige that it had accumulated during the Progressive Era it needed the support of power interest groups. ICC Commissioners chose to ally with railroad managers. In 1920, the ICC approved a significant rate increase. In 1922, it ordered a 10 percent rollback, but this was out of line with the decline in prices. Railroad economist C. E. Childe calculated in 1949 that during the 1920s, the ICC stabilized railroad rates at about 165% the 1913 level whereas prices had risen to only about 140%. This represents a real rate increase of about 15% between 1913 and 1929. Hoch-Smith Resolution (1925) shows loss of farmer support for ICC. 1926 was last time ICC denied a rate increase. [482]

ICC during the depression: wholesale prices fell 30% between 1929 and 1932 but ICC maintained and slightly increased rates by approving "emergency" petitions. Rejected a shippers' request for rate reductions in 1933; approved 10 per cent rate increase (1938). Even after world war two and during the worst of the post war depression, the ICC kept rail rates ahead of inflation. Prices between 1946 and 1950 rose 35.6%, but railroad rates rose 67.6% [483]. These steps were recuperative as by 1950, railroad rates were in rough parity with wholesale prices. "The speed of the ICC in increasing freight rates during this period contrasts with its tardiness during the World War I inflation and has evoked praise from the railroads...."[485]

{This decision can be seen as early as the 1922 shopmen's strike.}

ICC has not responded to changes in the transportation market.

Since 1935, the railroads' attitude towards the ICC "can only be described as one of satisfaction, approbation, and confidence." [473] A subcommittee of the AAR stated that the ICC "is eminently qualified by nearly sixty years of experience to handle transportation matters with a maximum of satisfaction to management, labor, and the public." See Huntington, p. 473, for about half a dozen more references of railroad praise for the ICC.

Change in ICC behavior:
Economists talk about "capture theory"
Richard P. Olney suggested as early as the 1890s that the ICC would become "a sort of barrier between the railroad corporations and the people and a sort of protection against hasty and crude legislation hostile to railroad interests." Olney, quoted is Matthew Josephson, The Politicos (1938), 526.

The railroads have been vocal in their defense of ICC independence. They have opposed reorganizing the ICC within the executive branch, including opposing the creation of a Department of Transportation, the moving of ICC functions (such as safety inspection) to other offices. [473] Opposed the creation of new government offices dealing with Tpn; opposed the interference of other offices with the commission.[476-477] The argument became that the ICC was protecting the public interest and if other agencies were interfering in ICC affairs, they must be doing so at the behest of some special interest. The Justice Department was a favorite target of this argument in anti-trust cases. [477] {see also 488-490 regarding how the ICC obstructed anti-trust investigation and enforcement} RRs have advocating increasing power of ICC. Give ICC more power over RRs [477] (e.g., Reed Bulwinkle); Give ICC power over Railroad competitors (Motor Carrier Act of 1935, Transportation Act of 1940) [479]; Rrs fought to have other regulatory agencies merged with ICC: Maritime Commission, Civil Aeronautics Board [479]; All federal transportation activities should be led by ICC, including Bureau of Roads, and possible Coast Guard, Corps of Engineers and other bureaus. [480]. "The railroads are alone among the interests surrounding the Commission in their constant and comprehensive support of that body."[480?]

This support from the railroads to the ICC was purchased by the ICC through years of favorable decisions.

Reed-Bulwinkle Act (1948): ICC empowered to exempt rate conferences and bureaus from antitrust laws.

ICC, apart from its Bureau of Motor Carriers, had been cool to truckers. Truckers not enthusiastic about ICC. ICC not fair to truckers, and partial to rrs. [492-499] Same with water-born carriers. [499-505] The ICC was even able to force the coastwise trade to stop after World War Two [505].

Huntington concludes that because of railroad affiliation, the ICC is less viable than it had been. It has alienated carriers, shippers, government agencies; subverted Congressional intent by not being fair and impartial as required by law [507]; it is passive and lost leadership

Because of its affiliation with the railroads the Commission has, like them, become a defender of the status quo. To this end it has maintained an outdated, formalistic type of procedure. ...// It has neglected administrative planning, and has failed to develop a coherent transportation policy aside from that of giving the railroads what they want. ... These failures of the Commission have inevitably led to the formation within the executive branch of a responsible office which can take the lead in national transportation policy and planning. [507-508]"

Swain. "A decade of Railroad Reorganization under Section 77 of the Federal Bankruptcy Act." Harvard Law Review 56 (1943): 1054-1058.