In an effort to further the development of e-commerce, the federal Electronic Signatures Act (2000) established uniform national standards for determining the circumstances under which contracts and notifications in electronic form are legally valid. Legal standards were also specified regarding the use of an electronic signature ("an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record"), but the law did not specify technological standards for implementing the act. The act gave electronic signatures a legal standing similar to that of paper signatures, allowing contracts and other agreements, such as those establishing a loan or brokerage account, to be signed on line.

Once consumers' worries eased about on-line credit card purchases, e-commerce grew rapidly in the late 1990s. In 1998 on-line retail ("e-tail") sales were $7.2 billion, double the amount in 1997. On-line retail ordering represented 15% of nonstore sales (which included catalogs, television sales, and direct sales) in 1998, but this constituted only 1% of total retail revenues that year. Books are the most popular on-line product order—with over half of Web shoppers ordering books (one on-line bookseller, Amazon.com, which started in 1995, had revenues of $610 million in 1998)—followed by software, audio compact discs, and personal computers. Other on-line commerce includes trading of stocks, purchases of airline tickets and groceries, and participation in auctions.

The Rise of Commerce in Europe

The Crusades did much to widen European trade horizons and prefaced the passing of trade superiority from Constantinople to Venice and other cities of N Italy. In the 15th and 16th cent. with the sudden expansion of Portugal and Spain the so-called commercial revolution reached a climax. In N and central Europe, the earlier supremacy of the Hanseatic League, the Rhenish cities, and the cities of N France and Flanders was eclipsed by the rise of national states. Antwerp began its long career of glory when the Spanish were losing hegemony, and the Dutch briefly triumphed in the race for world commerce in the 17th cent. The Dutch in turn gave way to a British-French rivalry that by 1815 left Great Britain paramount.

The rise of the chartered company under the auspices of the national state had much to do with the expansion of trade, as did the modern corporation, which later displaced the chartered company. The Industrial Revolution of the 18th and the 19th cent. also fostered the development of commerce, generating both products for trade and the means for trading them. World commerce was aided materially by the invention of the astrolabe, the mariner's compass, and the sextant; by the development of iron and steel construction; by the application of steam to both land and water transport; and by the more recent development of the telephone, telegraph, cable, radio, and the Internet, and of inventions such as refrigeration, the gasoline engine, the electric motor, the airplane, and the computer.

International Trade Today

The theory of commerce as imposed by the national state has varied from the mercantilism of the 17th and 18th cent. and the protective tariff of the 19th and 20th cent. to the free trade that Britain long upheld. After World War II the cold war limited trade between Communist and capitalist countries until the late 1980s, but the need for commercial expansion led to the creation of a number of international and regional systems designed to remove trade barriers. The International Monetary Fund was established in 1944 to help nations finance temporary trade deficits. The General Agreement on Tariffs and Trade (GATT), signed in 1947 by 23 major industrial countries to reduce tariffs, evolved into an ongoing mechanism for reducing trade barriers, and after eight rounds of negotiations, the Uruguay Round (the last round, 1995) created the World Trade Organization.

In 1957 the European Economic Community was created, and in the 1980s and early 90s European leaders signed a series of agreements that created a unified West European economy in 1993 (see European Union). In 1992 leaders from the United States, Canada, and Mexico signed the North American Free Trade Agreement (NAFTA); Mercosur was established a year earlier in South America. Nonetheless, national economic interests have been difficult to overcome, and a number of countries, including the United States, passed protectionist legislation and enacted retaliatory tariffs in the 1980s and 90s.

The chambre de commerce of Marseilles (1599) was the first organization to use the name; the idea spread through France in the 17th and 18th cent. The first to be formed in Great Britain was on the island of Jersey (1768). In America the first was the Chamber of Commerce of the State of New York, organized in 1768. By 1870 there were 40 throughout the United States.

The local chambers are federated in the United States Chamber of Commerce (founded 1912), which maintains at its Washington, D.C., headquarters a technical staff and lobbies in the interests of its member organizations. Its membership includes 3 million companies, 3,000 state and local chapters, and 830 business associations; American chambers are located in 82 foreign countries, and those of other countries have offices in the United States. The International Chamber of Commerce (founded 1920) promotes open international trade and investment. Its headquarters are in Paris.

See also trade association.

The ICC, the first regulatory commission in U.S. history, was established as a result of mounting public indignation in the 1880s against railroad malpractices and abuses (see Granger movement), but until President Theodore Roosevelt, the ICC's effectiveness was limited by the failure of Congress to give it enforcement power, by the Supreme Court's interpretation of its powers, and by the vague language of its enabling act. Beginning with the Hepburn Act (1906), the ICC's jurisdiction was gradually extended beyond railroads to all common carriers except airplanes by 1940. Its enforcement powers to set rates were also progressively extended, through statute and broadened Supreme Court interpretations of the commerce clause of the Constitution, as were its investigative powers for determining fair rates of return on which to base rates. In addition, the ICC was given the task of consolidating railroad systems and managing labor disputes in interstate transport. In the 1950s and 60s the ICC enforced U.S. Supreme Court rulings that required the desegregation of passenger terminal facilities.

The ICC's safety functions were transferred to the Dept. of Transportation when that department was created in 1966; the ICC retained its rate-making and regulatory functions. However, in consonance with the deregulatory movement, the ICC's powers over rates and routes in rails and trucking were curtailed in 1980 by the Staggers Rail Act and Motor Carriers Act. Most ICC control over interstate trucking was abandoned in 1994, and the agency was terminated at the end of 1995. Many of its remaining functions were transferred to the new National Surface Transportation Board.

In the U.S., any commercial transaction or traffic that crosses state boundaries or that involves more than one state. Government regulation of interstate commerce is founded on the commerce clause of the Constitution (Article I, section 8), which authorizes Congress “To regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes.” The Interstate Commerce Commission, established in 1887, was originally intended to regulate the railroad industry; its jurisdiction was later expanded to include trucks, ships, freight forwarders, and other interstate carriers. The Sherman Act (1890), followed by the Clayton Act (1914), made illegal any act that tended to interfere with free competition between and among industries, businesses, and any interstate commercial venture. The Federal Trade Commission (FTC) was established by the Federal Trade Commission Act of 1914, which gave the FTC powers—judicial, legislative, and executive—to administer the Sherman and Clayton acts. The Federal Communications Commission (FCC) was created to protect the right of the public to the airwaves through licensing and oversight of the practices of broadcasters in radio and television. In the 20th century, court decisions tended to interpret interstate commerce broadly, thus allowing Congress to regulate a wide variety of activities by which interstate commerce could be affected, even if they took place within the borders of a single state. One such decision was Heart of Atlanta Motel v. U.S. (1964), in which the Supreme Court upheld the prohibition of discrimination in public accommodations contained in the 1964 Civil Rights Act on the ground that the discriminatory practices of a business operating in only one state could affect interstate commerce.

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business-to-consumer and business-to-business commerce conducted by way of the Internet or other electronic networks. E-commerce originated in a standard for the exchange of documents during the 1948–49 Berlin blockade and airlift. Various industries elaborated upon the system until the first general standard was published in 1975. The electronic data interchange (EDI) standard is unambiguous, independent of any particular machine, and flexible enough to handle most simple electronic transactions. In addition to standard forms for business-to-business transactions, e-commerce encompasses much wider activity—for example, the deployment of secure private networks (intranets) for sharing information within a company, as well as selective extensions of a company's intranet to collaborating business networks (extranets). A new form of cooperation known as a virtual company, actually a network of firms, each performing some of the processes needed to manufacture a product or deliver a service, has flourished.

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In the Constitution of the United States (Article I, section 8), the clause that authorizes Congress “To regulate Commerce with foreign Nations, and among the several States, and with Indian Tribes.” It is the legal foundation of much of the U.S. government's regulatory authority. Seealso interstate commerce.

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Any of various voluntary organizations of business firms, public officials, professional people, and public-spirited citizens whose primary interest is in publicizing, promoting, and developing commercial and industrial opportunities in their local area, and usually also community schools, streets, housing, and public works. The International Chamber of Commerce (founded 1920) acts as the voice of the business community in the international field and runs a court of arbitration for settling commercial disputes. National chambers of commerce exist in most industrialized, free-enterprise countries. The first to use the name was founded in Paris in 1601; the first U.S. chamber of commerce was that of the state of New York, founded in 1768.

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(1887–1995) First regulatory agency established in the U.S. and a prototype for independent government regulatory bodies. An agency of the U.S. Department of Transportation, it was responsible for the economic regulation of interstate surface transportation, including railroads, trucking companies, and buslines. It certified carriers, regulated rates, oversaw mergers, and approved railroad construction. The ICC was dissolved in 1995.

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