![]() ![]() State controls of railroad monopolies were upheld by the Supreme Court in Munn v. ![]() The Granger Movement had started in the 1860s providing various benefits to isolated rural communities. These practices were especially harmful to American farmers, who lacked the shipment volume necessary to obtain more favorable rates.Įarly political action against these railroad monopolies came in the 1870s from “Granger” controlled state legislatures in the West and South. ![]() Railroads discriminated in the prices they charged to passengers and shippers in different localities by providing rebates to large shippers or buyers. Although there was competition among railroads for long-haul routes, there was none for short-haul runs. The railroad monopolies had the power to set prices, exclude competitors, and control the market in several geographic areas. Monopolies are generally viewed as harmful because they obstruct the free competition that determines the price and quality of products and services offered to the public. The railroad companies held a natural monopoly in the areas that only they serviced. In the years following the Civil War, railroads were privately owned and entirely unregulated. The act also established a five-member enforcement board known as the Interstate Commerce Commission. Congress passed the law largely in response to decades of public demand that railroad operations be regulated. In 1887 Congress passed the Interstate Commerce Act, making the railroads the first industry subject to federal regulation. ![]()
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