Saturday marks the anniversary of the passage of the Interstate Commerce Act, which in 1887 created the first federal regulatory agency, the Interstate Commerce Commission (ICC). Although those who created the ICC had no intention of establishing the modern administrative state we now have, the creation of the ICC was an inadvertent first step toward the federal leviathan that governs us today.
The ICC was originally created to address growing problems created by the expansion of railroads in America. It was the outgrowth of the “Granger” movement, which took hold in many Midwestern states such as Illinois, Iowa, Minnesota, and Kansas. The Grangers were farmers who were angry over the immense power held by railroads, banks, and other economic combinations as a result of the Industrial Revolution.
While some of the Grangers were radical, they were as fearful of unaccountable bureaucrats in centralized agencies as they were of centralized economic power. (One might even say that the Grangers were the first “occupiers,” but unlike today’s Occupy movement, the Grangers did not think that big government was the solution.)
Since there was little clamor for big government during the 1880s, the ICC’s powers were carefully limited. For years after it was created, the ICC did not have the power to set railroad rates. The main powers held by the ICC were investigatory. It could investigate railroad abuses and corruption and could issue cease-and-desist orders, but courts were charged with enforcing those orders.
The turning point for the ICC came in 1906, when Congress passed the Hepburn Act, which gave the ICC the power to set railroad rates—essentially a legislative power to set standards for action that the railroads had to follow. Theodore Roosevelt campaigned extensively for the Hepburn Act, circumventing Congress and going straight to the American people to lobby for its passage.