What were three negative effects of the Interstate Commerce Act of 1887?
The goal of the Interstate Commerce Act of 1887 was to address the issue of railroad monopolies. While the Act had great intentions, there were resulting negative effects.
1. The terms used in the writing of the law often times contradicted one another. For example: in some instances competition was promoted and in other situations competition was penalized.
2. The 5 member board had little power to enforce the goals of the ICA. The authority given to them was ambiguous at best, and further weakened by the Supreme Court's ruling that the ICC could not establish standards for rates (eNotes 2007)
3. The act aimed to eliminate discrimination in rate plans. The problem was identifying what was "discrimination". In many instances the discrimination was subjective.
It is a federal law targeting at unfair practices of the monopolistic railroad industry by eliminating the usage of discriminatory against small markets, and constructing a reasonable price standard. However, there are still negative effects regarding this policy.
Firstly, this policy is very contradictory as some provisions were used to stimulate competition amongst companies, while on the other hand, some were used to penalized and crackdown on competition.
Secondly, this policy only apply to railroads.
Lastly, the power that the five member board had was very limited to say the least, to enforce the goals of ICA of 1887, so it was plain useless.