Valuation Act

Valuation Act
Other short titles	Physical Valuation Act of 1913
Long title	An Act to amend an Act entitled "An Act to regulate commerce," approved February fourth, eighteen hundred and eighty-seven, and all Acts amendatory thereof by providing for physical valuation of the property of carriers subject thereto and securing information concerning their stocks and bonds and boards of directors
Enacted by	the 62nd United States Congress
Effective	March 1, 1913
Citations
Public law	Public Law 62-400
Statutes at Large	37 Stat. 701
Codification
Acts amended	Interstate Commerce Act of 1887
U.S.C. sections created	Section 19a (Interstate Commerce Act)
Legislative history
	Introduced in the House of Representatives as H.R. 22593 by William C. Adamson (D‑GA) on March 25, 1912; Committee consideration by House Committee on Interstate and Foreign Commerce; Passed the House of Representatives on December 5, 1912 (Voice vote); Passed the Senate on February 24, 1913 (Voice vote); Reported by the joint conference committee on February 24 – February 25, 1913; agreed to by the House of Representatives on February 27, 1913 (Voice vote) and by the Senate on February 28, 1913 (Voice vote); Signed into law by President William Howard Taft on March 1, 1913;
Major amendments
	Esch-Cummins Act (1920)

The Valuation Act is a 1913 United States federal law that required the Interstate Commerce Commission (ICC) to assess the value of railroad 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 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.

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. 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

↑ United States. Valuation Act, 62nd Congress, ch. 92, 37 Stat. 701, enacted 1913-03-01.
1 2 "Director of Valuation Prouty Claimed by Death". Railway Review. 69. Chicago: 93. 1921-07-16.
1 2 3 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.
↑ "Tells of Valuation Work. Basis for All Future Freight Rates, Says Judge Prouty". The New York Times. 1914-11-20. p. 15.
↑ Esch–Cummins Act, Pub.L. 66-152, 41 Stat. 456. Approved 1920-02-28.
↑ Gailmard, Sean; Patty, John W. (2013). Learning While Governing: Expertise and Accountability in the Executive Branch. University of Chicago Press. p. 72. ISBN 978-0226924403.
↑ Pub. L. 67–233. 67th Congress, ch. 210, 42 Stat. 624, enacted 1922-06-07.
↑ Rose, Mark H.; Seely, Bruce E.; Barrett, Paul F. (2006). The Best Transportation System in the World: Railroads, Trucks, Airlines, and American Public Policy in the Twentieth Century. Ohio State University Press. pp. 7–8. ISBN 978-0-8142-1036-9.
↑ Miranti, Jr., Paul J. (1990). "Measurement and Organizational Effectiveness: The ICC and Accounting-Based Regulation, 1887-1940" (PDF). Business and Economic History. Second Series. 19. Wilmington, DE: The Business History Conference: 183–192. ISSN 0894-6825.

External links

Selected ICC Valuation Reports (1929-1964)

[1] United States. Valuation Act, 62nd Congress, ch. 92, 37 Stat. 701, enacted 1913-03-01.

[railway-review-2] 1 2 "Director of Valuation Prouty Claimed by Death". Railway Review. 69. Chicago: 93. 1921-07-16.

[Martin-3] 1 2 3 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] "Tells of Valuation Work. Basis for All Future Freight Rates, Says Judge Prouty". The New York Times. 1914-11-20. p. 15.

[5] Esch–Cummins Act, Pub.L. 66-152, 41 Stat. 456. Approved 1920-02-28.

[6] Gailmard, Sean; Patty, John W. (2013). Learning While Governing: Expertise and Accountability in the Executive Branch. University of Chicago Press. p. 72. ISBN 978-0226924403.

[7] Pub. L. 67–233. 67th Congress, ch. 210, 42 Stat. 624, enacted 1922-06-07.

[Rose-8] Rose, Mark H.; Seely, Bruce E.; Barrett, Paul F. (2006). The Best Transportation System in the World: Railroads, Trucks, Airlines, and American Public Policy in the Twentieth Century. Ohio State University Press. pp. 7–8. ISBN 978-0-8142-1036-9.

[9] Miranti, Jr., Paul J. (1990). "Measurement and Organizational Effectiveness: The ICC and Accounting-Based Regulation, 1887-1940" (PDF). Business and Economic History. Second Series. 19. Wilmington, DE: The Business History Conference: 183–192. ISSN 0894-6825.