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​​Corrupt practices arose as the railroad industry grew in size. Railroaders made huge profits using any way to get results, no matter how unethical, if they were not constrained by government regulations. Regulating these corrupt businesses became focal points for the federal government during the progressive era. President Teddy Roosevelt, William Howard Taft, and Woodrow Wilson served as presidents during this era respectively. The main reason for railroad regulation were the scandalous rise of shipping rates in the railroad business. Large businesses were controlling the whole industry and could set unreasonably high rates because they were the only option. The Sherman Antitrust Act set a precedent that the federal government was against these kind of monopolies and that they would continue to try and regulate railroads. Throughout their terms, each president succeeded at times and failed at times too. Overall, the federal government was successful in regulating the railroads.

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The interstate commerce act was passed by congress and senate on February 4th, 1887. This act granted congress the power "to Regulate Commerce with foreign Nations, and among the several States"(US Senate). This created the interstate Commerce Commission(ICC). The Interstate Commerce act addresses fostering industrial efficiency by giving congress more power in regulating railroad rates. This act is a top down movement in which this act that congress and senate created has an effect on small business owners and farmers who were being charged higher rates, the rates they are now being charged are fair rates. The railroad companies that once favored large companies now has more restrictions because of the Interstate Commerce Act. It is able to control big corporations and take away some of their power.

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The Elkins Act was put in place in 1903 and was named after Senator Stephen B. Elkins of West Virginia. This act put an end to rebates which were refunds to businesses that shipped large amounts on the railroads. Railroad companies disliked this because businesses could threaten to go to other railroad companies if not given rebates. The Interstate Commerce Act took power from railroad companies changing rates, and the Elkins Act took away rebates so Railroad companies had some power. In this scenario, change occurs because the railroad companies express that they do not agree that businesses should have the power to demand refunds and threaten railroad companies. This idea is brought to the government who then writes the bill prohibiting rebates. This act was supported fully by President Theodore Roosevelt. Railroad directors informed Roosevelt about wanting to get rid of rebates and he fully supported this bill because of what it would do for the economy during the Progressive Era. The Elkins Act is a perfect example of a bottom-up movement where Railroad directors brought rebates to the attention of President Roosevelt.

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Robert La Follette was a Wisconsin Governor from 1901-to 1906, during this time he made many progressive reforms including a very influential one in 1903. In 1903 he persuaded the legislature to tax railroad companies based on the property of the railroads like any other business property. In 1905 a commission was made to regulate these taxes. This reform solidified La Follette's reputation as a pioneer in the progressive era. He wanted to drive big businesses out of politics and he thought of no better way than taxing them.

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1904: Northern Securities v. U.S. goes to Supreme Court

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1904: Northern Securities v. U.S. goes to Supreme Court

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In his trust-busting efforts to break up Big business monopolies, President Roosevelt authorized the Department of Justice to take the Northern Securities Company to court for breaching the Sherman Antitrust Act in the 1904 Northern Securities case. J.P. Morgan, a banker, and railroad magnate James J. Hill formed the Northern Securities Company. Northern Securities is a company that specializes in financial services. While Theodore Roosevelt's presidency was centered on efficiency and fairness, he aimed to minimize the power held by Big Business and Corporations who had set up new firms called Trusts. The Supreme Court ruled that the Company did indeed violate the Sherman Anti-Trust Act and the company was dissolved. In the following seven years, 44 other legal lawsuits were waged, with similar outcomes to the Northern Securities case, and additional monopolistic businesses were dissolved. The power of the Big Businesses and Corporations including large railroad companies were at last being checked.

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Congress' attempt to regulate the railroad s through the creation of the Interstate Commerce Commission in 1887 had proved largely ineffectual. In 1905 and 1906 a new interest in tighter governmental control led to the passage of the Hepburn Act. Named for its sponsor, Representative William Hepburn of Iowa, the act empowered the commission to regulate rates after complaints were registered by dissatisfied shippers. Hepburn stated his position in a speech to the House on February 7, 1906, a portion of which is reprinted here. He wanted neither to strip the railroad s of all their rate-making powers nor to keep the commission the weak regulating body that it was.

Source:
Congressional Record, Washington, 59 Cong., 1 Sess., p. 2253.

Mr. Chairman, this is a great question. Any proposition of law that involves an interest so great as the railway interests of the United States ought to be regarded with solicitude by those who are charged with responsibility in that behalf.

One-twelfth of all the wealth in the United States is involved in greater or less degree in this bill. The earnings of the railways are so colossal that $2,100,000,000 mark the amount of this great interest in one year. Our whole wealth production is but ten times more than that. Think how colossal this is. But the aggregate of investments, the aggregate of annual earnings does not mark fairly the importance of this subject to the American people. Think how dependent we are for our prosperity, for the comforts of life even, upon the common carriers of the land. Think of the infinitude of the transactions between the carriers and those they serve — millions and millions of transactions.

And yet, Mr. Chairman, the gentleman from Massachusetts [Mr. McCall] announced the astonishing doctrine that with all these varied and varying interests, with all of these interests, the people cannot separate themselves from, they cannot separate their connection with, the railways — yet in all of these multiplied transactions there shall be no practical arbiter, no one to settle disputes except one of the parties in interest. …

The courts [have] proved inadequate because of these reasons: The subject of the controversy in all of the cases that I can conceive is an involved one to the plaintiff; the knowledge and information that would enable the plaintiff to maintain his action for an overcharge are not in his possession. He could not give that expert testimony as to all the elements that would enter into the composition of a just and reasonable charge or an overcharge while a knowledge of all these facts are in the hands of his adversary, and therefore he could not recover.

That is one of the difficulties, not with the courts but because of the peculiarities of the subject of controversy. The courts have not been adequate and therefore some other means had to be substituted. With what abhorrence would we look upon a proposition, if gentlemen should make it, with reference to controversies other than of this class that were certain to rise and be numerous in the community, providing that one of the parties alone should determine the rightfulness of the controversy; and yet that is what is involved in all of these multitudes of possible disputes between carrier and shipper.

It is the carrier that fixes the rate. He imposes upon the other party the necessity of accepting his rate. There is no escape from it. He may pay the charge and then the common law, says the gentleman from Maine [Mr. Littlefield], gives him a remedy and allows him to recover for the overcharge. Ah, how barren is that remedy, and while it is a known fact that the cases where such suits might be instituted are counted by millions, none is ever brought because of the expense, because of the delay, because of the inability to secure the proof whereby a judgment is within the limits of possibility. Therefore it is futile to talk about the courts as they are constituted furnishing that remedy that ought to be somewhere existent.

Now, what do we do by this bill? The gentlemen who oppose it have discussed it as though it conferred upon the Railway Commission the power to establish schedules and rates. They have, I think, sometimes purposely set up this bogie for the purpose of combating it. No one has proposed that. The jurisdiction of the commission is limited, as is its power limited, by this law. They cannot at pleasure establish a rate. Before their jurisdiction attaches it must be ascertained that a wrong has been done, an overcharge has been made, a wrong in an extravagant, unreasonable rate, because the law today and the common law provide that the carriers' charge shall be just and reasonable. That is the limit to which he is permitted to go in fixing his tariff of schedules.

Now, under the operation of this bill, if it should become a law, it is necessary for someone to allege a violation of the statute — that a crime, in other words, has been done — because the overcharge is a crime, as well as being prohibited, and remedies furnished civilly by the courts. He has committed a crime. What then? Investigation follows, and if it is ascertained that the carrier is in violation of the law, then the jurisdiction of the commission attaches, and it is permitted to do what? Fix a rate? Oh, no; oh, no. It is permitted to establish a just, reasonable, and fairly remunerative rate that shall be the maximum rate that the carrier shall charge. That is all.

Can you think of any legislative effort in the direction of control more conservative that this? First, the carrier must be in the wrong — the carrier must be a criminal. His criminality must be ascertained. When it is ascertained by a dispassionate commission, then a rate within limitations, fair and certain and well-defined, may be established as the maximum that the carrier may charge, leaving the feature of flexibility still remaining in the rate, and permitting the carrier to charge that lower sum that the exigencies of business or the activities of competition may make it prudent and wise for him to adopt.
ANNOTATIONS:
The ethos of this primary source is that it is very credible, the source talks about the Hepburn Act of 1906, this source comes straight from William Hepburn who had a great influence on this act.

The logos of the source is when Hepburn is arguing for better rates, he says this because, “that a crime, in other words, has been done — because the overcharge is a crime, as well as being prohibited, and remedies furnished civilly by the courts.” Overcharging rates are criminal and should not be done. He is very persuasive and emphasizes throughout the text that rates should be fairer. The Hepburn act does just that and makes sure rates do not increase and stay fair.

The pathos that Hepburn uses is the persuasiveness in the last paragraph where he states that this act will set a maximum rate that may be charged and if the railway company would like they could charge that max rate or charge less. This act gives them options for what they can charge while still being fair.

Throughout the text, Hepburn emphasizes the word “criminal” when referring to the overcharge of rates. These rates have become so ridiculous and expensive that it is robbing the people and businesses who use the railways.

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The Hepburn Act of 1906, named for its sponsor, Republican congressman William Peters Hepburn, strengthened federal railroad control by fortifying the powers of the Interstate Commerce Commission (ICC). After a series of unpopular rate increases by railroad firms, the Act was passed. By the turn of the 19th century, the railroads, benefiting from increased demand for their services and victims of their own economic knowledge, had noticed that costs were rising, a concept now known as inflation. In a sense, the Hepburn act was made to reinforce the Interstate Commerce Act. This top to bottom movement strengthened previous regulations on large railroad companies by preventing rates from getting too high. This legislation was strongly advocated for by Teddy Roosevelt, who firmly believed that the federal government should expand its oversight and regulation of interstate railroads. The use of a variety of Acts and other regulations mandated by the federal government were mostly effective. The laws were firmly reinforced and supported because they were issued by the federal government. However, These acts were often lacking the necessary steps to completely regulate the railroad businesses. All in all, the Hepburn Act was successful in strengthening railroad regulations, there was still much left on the table that was addressed in later years.

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The Mann–Elkins Act, also known as the Railway Rate Act of 1910, was a federal law passed in the United States that strengthened the Interstate Commerce Commission's (ICC) control over railroad rates. Controlling unfair trade practices and competitiveness in the railroad business was a priority for President William Howard Taft. His government claimed that the Interstate Commerce Act (1887) and the Hepburn Act (1906) were only partially effective in addressing problems caused by railroads in the national economy. the act was developed in direct response to rate increases that western railroads announced in 1910. These controlled rates made it more possible for smaller businesses to have access to and use railroads without spending an unreasonable amount of money. This is reflective of the American dream because it is presenting railroads in a more achievable fashion that is attainable for people besides massive businesses that dominated the economy. Once again the use of federal power and laws were used to make sure that these regulations were strongly reinforced and implemented.

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December 26, 1917: U.S. railroads are nationalized in the public interest.

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December 26, 1917: U.S. railroads are nationalized in the public interest.

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in 1916, Congress passed the Army Appropriations Act which granted the president the power to take over the nation’s transportation systems, if needed during wartime conditions. The railroad system faltered under the heavy demands of a wartime economy in 1917, resulting in materials being unable to be loaded and shipped on trains. On December 26, 1917, President Wilson issued a declaration that he had nationalized the railroad system. This made the railroad industry completely controlled by the federal government, granting easier access to the public. However, this was soon changed backed and the railroads were returned to their private businesses. This conflict between the federal government and railroad businesses went on for most of the end of the 19th century and beginning of the 20th century. Slowly, with more and more laws being created to regulate the railroad industry, small steps were made towards a good system. This would certainly not be the end though.

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The Transportation Act of 1920, commonly known as the Esch–Cummins Act, was a United States federal law that regulated the restoration of railroads to private ownership following World War I. The major details of the law included:
- Terminated federal control of railroads from March 1, 1920.
- Authorized the government to make settlements with railroad carriers for matters caused by nationalization, such as compensation and other expenses.
- Directed the ICC to prepare and adopt a plan for the consolidation of the railway properties of the United States into a limited number of systems.
- Granted authority to the ICC to set minimum shipping rates, oversee railroads' financial operations, and regulate acquisitions and mergers.
- Established procedures for settling labor disputes between railroads and employees. A Railroad Labor Board was created to regulate wages and settle disputes.
Although the railroads were returned to their private businesses, many new regulations and rules were established to effectively keep large railroad businesses in check. All of these movements for regulation were top to bottom movements. More specifically, through the creation of new laws that demanded certain rates or controlled rates.