Interstate Commerce Act enacted

On February 4, 1887, President Grover Cleveland signed the Interstate Commerce Act in Washington after Congress responded to years of public anger over railroad rates and rebates. The law required railroads engaged in interstate commerce to publish their rates, banned unreasonable charges, and prohibited discriminatory practices such as rebates and favoritism. Congress also created the Interstate Commerce Commission, making it the first permanent federal regulatory commission in American history.

The act addressed the central Gilded Age conflict over whether giant railroad corporations could continue to set freight rates without meaningful public supervision. Farmers in the Granger movement, small shippers, and many western legislators argued that railroad combinations used secret rebates and long-haul pricing to crush local competition and distort entire regional economies. Business leaders and limited-government critics accepted some regulation, but they resisted federal rules that could turn rate making into a permanent national function.

The Interstate Commerce Commission began operating in 1887 as the direct institutional result of the act, although early Supreme Court decisions such as Interstate Commerce Commission v. Cincinnati, New Orleans and Texas Pacific Railway Co. in 1897 limited its power to set rates. Those weaknesses later pushed Congress toward stronger measures such as the Hepburn Act of 1906, which expanded ICC authority over railroad regulation.