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Growth and Transformati19

Growth and Transformati19 - according to a prearranged...

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Growth and Transformation After two great wars, the United States comes of age RAILROADS, REGULATIONS, AND THE TARIFF Railroads were especially important to the expanding nation, and their practices were  often criticized.  Rail lines extended cheaper freight rates to large shippers by rebating a  portion of the charge, thus disadvantaging small shippers.  Freight rates also frequently  were not proportionate to distance traveled; competition usually held down charges  between cities with several rail connections.  Rates tended to be high between points  served by only one line. Thus it cost less to ship goods 1,280 kilometers from Chicago  to New York than to places a few hundred kilometers from Chicago. Moreover, to avoid  competition rival companies sometimes divided (“pooled”) the freight business 
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Unformatted text preview: according to a prearranged scheme that placed the total earnings in a common fund for distribution. Popular resentment at these practices stimulated state efforts at regulation, but the problem was national in character. Shippers demanded congressional action. In 1887 President Grover Cleveland signed the Interstate Commerce Act, which forbade excessive charges, pools, rebates, and rate discrimination. It created an Interstate Commerce Commission (ICC) to oversee the act, but gave it little enforcement power. In the first decades of its existence, virtually all the ICC's efforts at regulation and rate reductions failed to pass judicial review....
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