Competition Versus Regulation: The Agricultural Exemption in the Motor Carrier Act

Transportation of passengers or property by motor carriers engaged in interstate or foreign commerce has been subject to federal regulation by the Interstate Commerce Commission since 1935. At that time motor carriers in intrastate commerce were regulated in all the states of the Union by state commissions which controlled entry into the industry, rates, and safety of operations, but there was no comparable federal regulation. The Federal Motor Carrier Act of 1935, now part II of the Interstate Commerce Act,' was intended to fill this gap by creating a federal regulatory scheme similar to that provided by the states. In addition, the Act was deemed necessary as "a part of a complete and coordinated program of legislation touching all forms of transportation." Indeed, the 1934 Report of the Federal Coordinator of Transportation had called attention to the fact that the various modes of transportation "interlock and react, one against another, in a multitude of ways." Hence, he suggested that "the system cannot permanently be half regulated and half unregulated."