Vanderbilt Law Review

First Page



The origins of the intercity trucking industry were humble. The development of the motor truck and of an intercity highway system which made its use in the transportation of freight practicable led many enterprising individuals to set themselves up as intercity truckers during the decade between 1925 and 1935. Capital requirements were minimal. The initial investment was frequently no more than the down payment on the motor vehicles employed. In the early stages of development, the typical motor carrier was a sole proprietorship, partnership or family-held corporation which relied for its financing on retained earnings of the business and hand-to-mouth borrowing from local banking institutions or equipment manufacturers rather than upon public financing through security issues traditionally employed in corporate finance.

Federal regulation of the intercity motor carrier industry was inaugurated by the passage of the Motor Carrier Act in 1935. This legislation subjected the issuance of securities by common or contract carriers by motor vehicle to the provisions of section 20a of the Interstate Commerce Act which had been enacted as part of the Transportation Act of 1920, to confer on the Interstate Commerce Commission authority over the issuance of railroad securities.