Interstate Commerce Commission - Later Years

Later Years

By 1952, the ICC had jurisdiction over railroads, ferries, pipelines, bridges, internal and coastal shipping, trucks, and interstate bus lines, the catch being that the majority of internal waterway traffic and truck traffic was, by virtue of one law or another, exempt from ICC control. The ICC's authority over the railroads extended to the setting of maximum and minimum rates, approving or disapproving consolidations and mergers, authorizing construction and abandonment of lines, and issuance of securities — indeed, every aspect of the railroad business but labor relations.

The Transportation Act of 1958 gave the ICC jurisdiction over passenger train discontinuances, previously under the authority of the state commissions (state authorities had allowed discontinuance of through trains with states, e.g. allowing a New York-Chiacgo train to be discontinued within Ohio. The ICC earned a reputation for capriciousness in the matter of passenger-train discontinuances. This was illustrated when the ICC denied the Milwaukee Road's petition to drop a coach-only Chicago-Minneapolis local service on a route that had three other trains, yet it permitted the discontinuance of Chicago and Eastern Illinois Railroad's well-patronized Georgian-Humming Bird. It was the last passenger train on the Chicago-Danville-Terre Haute-Evansville run, and it was far less a local train than it was a north end of Chicago-Atlanta and Chicago-Mobile service operated jointly by the Louisville and Nashville Railroad.

In the matter of mergers, the ICC functioned at a glacial pace. Proceedings in connection with the proposed merger of the Chicago, Rock Island and Pacific Railroad (Rock Island) and Union Pacific Railroad (UP) dragged on for ten years, during which time the Rock Island fell apart and ceased to be the desirable merger partner that Up had courted. Railroad historian George Drury commented that some of the blame was laid on the other railroads. The usual reaction of a railroad company upon learning of a proposed merger between two of its competitors is not "We're good enough to give them a run for their money even if they merge" but rather "They'll run us out of business."

Over-regulation of railroads reached the point that the ICC could (and did) require railroads to continue operations that lost money: essentially depriving the railroads of property without due process. In 1962, President John F. Kennedy delivered a message on transportation to Congress in which he criticized the regulatory structure, which resulted in successor Lyndon B. Johnson establishing the Department of Transportation (DOT) in 1966. The DOT was to develop and coordinate policies that would encourage a national transportation system. Some rate-making and regulatory functions remained with the ICC, however. The Federal Railroad Administration would be born out of the DOT, for the sole purpose of dealing with railroad affairs.