Question

Why did the federal government establish the interstate commerce commission

Answer 1

The federal government established the interstate Commerce Commission to supervise the performance of the railroad industry. Railroads were the first industry to be regulated by the federal government. 

Answer 2

The Interstate Commerce Commission was originally established to regulate railroads and insure fair rates were being charged.  

The Interstate Commerce Commission was created as one of the provisions of the Interstate Commerce Act of 1887. The Interstate Commerce Act made prices to ship goods via railroads fair for all who had products to ship, so that small farmers no longer had to pay more than bigger companies.

Railroads had been giving favorable treatment and prices to major companies for shipping freight on rail lines.  The Interstate Commerce Act of 1887 aimed to end such practices.  The act contained provisions such as:

... All railroads were required to set fair and reasonable shipping rates.

... Charging different rates for a similar service was declared illegal.

... Railroads could not charge more for short-haul services than a proportional rate of long-haul services on the same route.

... Railroads were forbidden from providing favorable treatment to any person or company or location.

... Railroads were required to display their rates and not charge higher than their posted rates.