A Constitutional History of Railroad Rate Regulation in California, 1879-1911

Abstract

RAILROAD RATE regulation had been discussed in California long before 1878, when a convention met in Sacramento to draft California's second constitution. In the early years of the state, Californians overwhelmingly desired that the legislature maintain high legal maximum rates in order to encourage railroad construction. But, as the railroad system of California grew, providing more and more localities with rail service, agitation began for a curb on the Southern Pacific's monopolistic power and for lower legal maximum rates. This movement, brought to a climax in the mid-1870's when state legislators hassled over rigid maximum rate bills, ended in failure.? Because of the apparent inability of the legislature to effectively regulate railroad rates, the constitutional convention decided to create a three-man railroad commission with the power to set maximum rates. In this way, specific rate schedules were not discussed by the delegates, and local rivalries, which had helped destroy past maximum freight and fare bills, did not enter the debate. California was not the first state to create a commission with the