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Valuation Act

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The Valuation Act is a 1913 United States federal law that required the Interstate Commerce Commission (ICC) to assess the value of railroad property.[1] 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.[2] 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 and assets. 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.[3]

Implementation

The law amended the Interstate Commerce Act of 1887 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.[3] The valuations were conducted between 1914 and 1921, and completed under the auspices of Harvard University professor Dr. John Henry Gray, as by this time Prouty and Lane were no longer working for the ICC.[citation needed]

Congress passed a minor amendment to the law in 1922.[4]

Aftermath

Prouty resigned from his Commissioner post at the ICC to serve as the first Valuation Bureau Chairman.[2] His pursuit of fairness earned him the distrust and enmity of the railroads.[citation needed] Lane resigned to become Secretary of the Interior in the Woodrow Wilson administration.[5]

See also

References

  1. ^ United States. Valuation Act, 62nd Congress, ch. 92, 37 Stat. 701, enacted 1913-03-01.
  2. ^ a b "Director of Valuation Prouty Claimed by Death". Railway Review. 69. Chicago: 93. 1921-07-16.
  3. ^ a b Martin, Albro (1992). Railroads Triumphant: The Growth, Rejection & Rebirth of a Vital American Force. New York: Oxford University Press. p. 358. ISBN 0-19-503853-3. Except to take up incredible amounts of space on library shelves, the reports of the valuation agency never served any visible purpose.
  4. ^ Pub. L. 67–233. 67th Congress, ch. 210, 42 Stat. 624, enacted 1922-06-07.
  5. ^ "Cabinet complete, Wilson announces". New York Times. 1913-03-04.

Further reading

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