Interstate Commerce Act

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The Interstate Commerce Act (1887) was signed by President Grover Cleveland on February 4, 1887, while Theodore Roosevelt was ranching in the Dakotas and writing books. Although the act was passed long before he entered the White House, the Interstate Commerce Act is important to Roosevelt. As president, he would use it to regulate America’s railroads.

Railroads were the first “big business” in the United States. They grew at a rapid pace after the Civil War. Farmers and ranchers came to rely on trains to get their goods to market. The federal government exercised a light hand over industry at that time, assisting the expansion of railroads with land grants (until 1871) and little oversight. The railroads gave preferential treatment (in the form of lower rates) to large shippers. Small farmers and businessmen felt this was unfair, and eventually they petitioned Congress to force the railroads to be evenhanded. The result was the Interstate Commerce Act, which attempted to limit corporate power. It regulated the railroads so they had to offer “reasonable and just” transportation rates. Additionally, railroads could no longer provide secret, beneficial rates to certain shippers. In fact, the Interstate Commerce Act required rates to be published so everyone could see them. It also created the Interstate Commerce Commission to make sure the industry complied with the Act. However, weak enforcement ensured that the Interstate Commerce Act languished on the books, nearly forgotten until Theodore Roosevelt became president. 

Monopolistic behavior by the railroads continued unabated, prompting President Roosevelt to seek to reform and regulate the industry. He took the first step by having his administration bring suit in 1902 (decided in 1904) against a railroad monopoly called the Northern Securities Company. Soon after, he signed two important pieces of regulatory legislation, the Elkins Act in 1903 and the Hepburn Act in 1906. Both of these laws strengthened the powers of the Interstate Commerce Commission and acted as a brake on unjust activities by U.S. railroads.