Why was the Interstate Commerce Act of 1887 significant in the context of economic regulation in the United States?

• A. It mandated a national minimum wage for workers.
• B. It abolished tariffs on imported goods.
• C. It established the federal government's authority to regulate railroad rates and practices.
• D. It created the Federal Reserve System.

Answer: (C)

Verified step by step guidance

1. Understand the historical context: Before the Interstate Commerce Act of 1887, railroads operated with little federal oversight, often leading to unfair practices such as rate discrimination and monopolistic control.
2. Recognize the problem the Act addressed: The Act was designed to regulate the railroad industry, particularly to ensure that rates were reasonable and just, preventing railroads from charging excessively high prices or engaging in discriminatory pricing.
3. Identify the key provision of the Act: It established the Interstate Commerce Commission (ICC), the first federal regulatory agency, which was empowered to oversee and enforce fair railroad rates and practices.
4. Connect the Act to economic regulation: This was significant because it marked the beginning of federal government intervention in private industry to protect public interest and promote fair competition.
5. Distinguish the Act from other policies: Unlike minimum wage laws, tariff policies, or the creation of the Federal Reserve, the Interstate Commerce Act specifically focused on regulating railroad rates and practices at the federal level.