The Valuation Act is a 1913

United States federal law The law of the United States comprises many levels of Codification (law), codified and uncodified forms of law, of which the supreme law is the nation's Constitution of the United States, Constitution, which prescribes the foundation of the ...

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 industry in the United States, truc ...

(ICC) to assess the value of

railroad Rail transport (also known as train transport) is a means of transport using wheeled vehicles running in railway track, tracks, which usually consist of two parallel steel railway track, rails. Rail transport is one of the two primary means of ...

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. Its objective was the setting of fair rates for freight shipments. It was a classic piece of Progressive Era legislation designed to find a scientific basis for setting tariffs (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, refers to parcels of land and any associated structures which are the property of a person. For a structure (also called an Land i ...

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 b ...

. Members of Congress assumed that with this information, the ICC would be able to set rates according to the principle of a reasonable rate of return 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 empowe ...

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. In 1914 Prouty resigned from his Commissioner post at the ICC to serve as the first Valuation Bureau Chairman. 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. Congress passed a minor amendment to the law in 1922.

Aftermath

The valuation process turned out to be of limited use in helping the ICC set rates fairly.

References

External links

{{commonscat, Railroad valuation maps of the United States
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