The Valuation Act is a 1913

United States federal law The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the nation's Constitution, which prescribes the foundation of the federal government of the United States, as well as ...

that required the

Interstate Commerce Commission The Interstate Commerce Commission (ICC) was a regulatory agency in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads (and later trucking) to ensure fair rates, to elimina ...

(ICC) to assess the value of

railroad Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a prep ...

property. This information would be used to set rates for the transport of freight.

Background

The act was the brainchild of ICC commissioners Charles A. Prouty and

Franklin K. Lane Franklin Knight Lane (July 15, 1864 – May 18, 1921) was an American progressive politician from California. A member of the Democratic Party, he served as United States Secretary of the Interior from 1913 to 1920. He also served as a commi ...

. Its objective was the setting of fair rates for freight shipments. It was a classic piece of

Progressive Era The Progressive Era (late 1890s – late 1910s) was a period of widespread social activism and political reform across the United States focused on defeating corruption, monopoly, waste and inefficiency. The main themes ended during Am ...

legislation designed to find a scientific basis for setting

tariffs A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and po ...

(shipping charges) by determining the correct value of each railroad's

real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or aff ...

and

assets In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can ...

. Members of

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assumed that with this information, the ICC would be able to set rates according to the principle of a reasonable

rate of return In finance, return is a profit on an investment. It comprises any change in value of the investment, and/or cash flows (or securities, or other investments) which the investor receives from that investment, such as interest payments, coupons, cas ...

on the real value of each railroad and the industry as a whole.

Implementation

The law amended the

Interstate Commerce Act of 1887 The Interstate Commerce Act of 1887 is a United States federal law that was designed to regulate the railroad industry, particularly its monopolistic practices. The Act required that railroad rates be "reasonable and just," but did not empower ...

and required the ICC to organize a Bureau of Valuation in order to undertake the assessments. The ICC formulated a set of procedural and reporting standards for the valuation process, and then permitted the individual railroads to complete the valuation under the nominal supervision of an ICC administration. Although the original intent of the Valuation Act was to prepare a one-time assessment of railroad assets, subsequent legislation had the effect of prolonging the process. The Esch-Cummins Act of 1920 expanded the ICC's rate-setting responsibilities, and the agency in turn required updated valuation data from the railroads. The enlarged process led to a major increase in ICC staff, and the valuations continued for almost 20 years. The valuation process turned out to be of limited use in helping the ICC set rates fairly. Congress passed a minor amendment to the law in 1922.

Aftermath

Prouty resigned from his Commissioner post at the ICC to serve as the first Valuation Bureau Chairman. Lane resigned to become

Secretary of the Interior Secretary of the Interior may refer to: * Secretary of the Interior (Mexico) * Interior Secretary of Pakistan * Secretary of the Interior and Local Government (Philippines) * United States Secretary of the Interior See also *Interior ministry An ...

in the

Woodrow Wilson Thomas Woodrow Wilson (December 28, 1856February 3, 1924) was an American politician and academic who served as the 28th president of the United States from 1913 to 1921. A member of the Democratic Party, Wilson served as the president of ...

administration.

References

External links

Selected ICC Valuation Reports (1929-1964)
1913 in American law 1913 in rail transport 62nd United States Congress History of rail transportation in the United States Interstate Commerce Commission Progressive Era in the United States United States federal transportation legislation United States railroad regulation

Background

Implementation

Aftermath

See also

References

Further reading

External links