After the Supreme Court ruling in 1886, state governments

In Wabash, St. Louis & Pacific Railway Co. v. Illinois (1886), the Supreme Court ruled that states could not regulate railroad rates for travel crossing state lines; that authority belonged to Congress. The ruling therefore greatly reduced state power over railroads, making choice C correct. States could still regulate some activity that took place entirely within their own borders, so their regulatory power was not eliminated altogether.

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