The Hepburn Act is a 1906

United States federal law The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the nation's Constitution, which prescribes the foundation of the federal government of the United States, as well as ...

that expanded the jurisdiction of the

Interstate Commerce Commission The Interstate Commerce Commission (ICC) was a regulatory agency in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads (and later trucking) to ensure fair rates, to elimina ...

(ICC) and gave it the power to set maximum railroad rates. This led to the discontinuation of free passes to loyal shippers. In addition, the ICC could view the railroads'

financial records Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

, a task simplified by standardized bookkeeping systems. For any railroad that resisted, the ICC's conditions would remain in effect until the outcome of legislation said otherwise. By the Hepburn Act, the ICC's authority was extended to cover bridges, terminals, ferries, railroad sleeping cars, express companies and oil pipelines.

Overview

The Hepburn Act was named for its sponsor, ten-term Iowa Republican congressman

William Peters Hepburn William Peters Hepburn (November 4, 1833 – February 7, 1916) was an American Civil War officer and an eleven-term Republican congressman from Iowa's now-obsolete 8th congressional district, serving from 1881 to 1887, and from 1893 to 1909. ...

. The final version was close to what President

Theodore Roosevelt Theodore Roosevelt Jr. ( ; October 27, 1858 – January 6, 1919), often referred to as Teddy or by his initials, T. R., was an American politician, statesman, soldier, conservationist, naturalist, historian, and writer who served as the 26t ...

had asked for, and it easily passed

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...

, with only three dissenting votes. The Act, along with the Elkins Act of 1903, was a component of one of Roosevelt's major policy goals: railroad

regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. ...

. The most important provision of the law gave the ICC

price control Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of good ...

power to replace existing rates with "just-and-reasonable" maximum rates, and authorized the Commission to define what was just and reasonable. The Act made ICC orders binding; that is, the railroads had to either obey or contest the ICC orders in federal court. To speed the rate-setting process, the Act specified that appeals from rulings of the district courts would go directly to the U.S. Supreme Court. Anti-rebate provisions were toughened, free passes were outlawed, and the penalties for violation were increased. The ICC staff grew from 104 in 1890 to 178 in 1905, 330 in 1907, and 527 in 1909. Finally, the ICC gained the power to prescribe a uniform system of

accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...

, require standardized reports, and inspect railroad accounts. The limitation on railroad rates depreciated the value of railroad securities, a factor in causing the Panic of 1907.

Significance

Scholars consider the Hepburn Act the most important piece of legislation affecting railroads in the first half of the 20th century. Economists and historians debate whether it crippled the railroads, giving so much advantage to the shippers that a giant unregulated

trucking industry Road transport or road transportation is a type of transport using roads. Transport on roads can be roughly grouped into the transportation of goods and transportation of people. In many countries licensing requirements and safety regulations e ...

—undreamed of in 1906—eventually took away their business.

Follow-up legislation

Congress passed the

Mann–Elkins Act The Mann–Elkins Act, also called the Railway Rate Act of 1910, was a United States federal law that strengthened the authority of the Interstate Commerce Commission (ICC) over railroad rates. The law also expanded the ICC's jurisdiction to inc ...

in 1910 during the administration of President

William Howard Taft William Howard Taft (September 15, 1857March 8, 1930) was the 27th president of the United States (1909–1913) and the tenth chief justice of the United States (1921–1930), the only person to have held both offices. Taft was elected pr ...

, to address limitations in implementation of the Hepburn Act. The Mann–Elkins Act authorized the ICC to initiate reviews of railroad rate increases, rather than simply responding to complaints from shippers. The 1910 law empowered the ICC to set "just and reasonable" maximum rates and placed the burden of proof upon the railroad for demonstrating reasonableness.United States. Mann-Elkins Act,

61st Congress The 61st United States Congress was a meeting of the legislative branch of the United States federal government, composed of the United States Senate and the United States House of Representatives. It met in Washington, DC from March 4, 1909, to ...

, 2nd session, ch. 309, , enacted June 18, 1910.

References

{{Theodore Roosevelt 1906 in American law Presidency of Theodore Roosevelt United States railroad regulation United States federal transportation legislation 1906 in rail transport 1906 in American politics Progressive Era in the United States History of rail transportation in the United States

Overview

Significance

Follow-up legislation

See also

References