Final answer:
The Interstate Commerce Act of 1887 established the Interstate Commerce Commission (ICC) to regulate the railroad industry and ensure fair practices, such as standard rates and prohibiting discriminatory perks. The Hepburn Act of 1906 further enhanced ICC’s authority, letting it set maximum rates and shifting the legal burden to railroads.
Step-by-step explanation:
To investigate concerns about the railroad industry's practices, the states and Congress created the Interstate Commerce Commission (ICC) through the enactment of the Interstate Commerce Act of 1887. This act mandated that railroad rates be "reasonable and just" and made it illegal for railroads to offer free passes or other perks to influence politicians and press. The ICC, as the federal regulatory body, initially had the power to investigate complaints and file lawsuits but was later empowered by the Hepburn Act of 1906 to establish maximum railroad rates and shifted the burden of proof to the railroads.
This creation of the ICC represented a significant step towards federal regulation of the railroad industry. It was a direct response to the unfair practices that disadvantaged farmers and other small shippers, who were at the mercy of the railroads' discriminatory rates and business practices. Subsequent legislation, including the Elkins Act and the Hepburn Act, further strengthened the regulatory powers of the ICC.