From Rate Regulation to Financial Control: Accounting and Public Policy at the Interstate Commerce Commission, 1887-1933

This paper focuses on the application by the Interstate Commerce Commission (ICC) of accounting to achieve two public policy goals relating to the railroad industry from 1887 to 1933. The first involved using accounting to implement the federal agency’s explicit mandate of assuring rate equity and an implicit goal of reducing rail industry informational asymmetries. Subsequently in the 1920s, the ICC used accounting rate of return data to reduce securities speculation, facilitate regional rail consolidation, and govern industry finance. This system ceased when its approaches proved ineffective in addressing the dislocations experienced during the 1930s Great Depression.