The Mann–Elkins Act, also called the Railway Rate Act of 1910, was a

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 va ...

that strengthened the authority 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 eliminat ...

(ICC) over railroad rates. The law also expanded the ICC's jurisdiction to include regulation of

telephone A telephone is a telecommunications device that permits two or more users to conduct a conversation when they are too far apart to be easily heard directly. A telephone converts sound, typically and most efficiently the human voice, into e ...

telegraph Telegraphy is the long-distance transmission of messages where the sender uses symbolic codes, known to the recipient, rather than a physical exchange of an object bearing the message. Thus flag semaphore is a method of telegraphy, whereas p ...

and

wireless Wireless communication (or just wireless, when the context allows) is the transfer of information between two or more points without the use of an electrical conductor, optical fiber or other continuous guided medium for the transfer. The most ...

companies, and created a commerce court.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, D.C., Washington, DC from ...

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

Background

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 ...

was concerned about controlling unfair trade practices and competition in the railroad industry. His administration argued that the

Interstate Commerce Act The Interstate Commerce Act of 1887 is a United States federal law that was designed to regulate the railroad industry, particularly its monopolistic practices. The Act required that railroad rates be "reasonable and just," but did not empower ...

(1887) and the

Hepburn Act The Hepburn Act is a 1906 United States federal law that expanded the jurisdiction of the Interstate Commerce Commission (ICC) and gave it the power to set maximum railroad rates. This led to the discontinuation of free passes to loyal shippers. ...

(1906) were only partially effective in addressing problems that the railroads had imposed upon the national economy. Taft supported amending the Interstate Commerce Act to allow the ICC's initiation of suspending of railroad rate increases (rather than just by responding to complaints). Taft also recommended that railroads should be allowed to arrange rate increases among themselves. (The latter proposal was not adopted in the enacted legislation.)

Overview

The Mann-Elkins Act was a piece of reform legislation developed during the

Progressive era The Progressive Era (late 1890s – late 1910s) was a period of widespread social activism and political reform across the United States focused on defeating corruption, monopoly, waste and inefficiency. The main themes ended during Am ...

. The principal sponsors were Congressmen

Stephen Benton Elkins Stephen Benton Elkins (September 26, 1841January 4, 1911) was an American industrialist and politician. He served as the Secretary of War between 1891 and 1893. He served in the United States Congress as a Delegate from the Territory of New Mexi ...

and James Robert Mann. While there had been concern in

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 a ...

about the limited effectiveness of the ICC generally, the act was developed in direct response to rate increases that western railroads announced in 1910.

Rate setting

The 1910 act amended the 1887 and 1906 acts by authorizing the ICC to investigate railroad rate increases, suspending rates where warranted and placing the burden of proof upon the railroad for demonstrating reasonableness. The law mandated that the ICC is "empowered to determine and prescribe what will be the just and reasonable individual or joint rate or rates..." This was the first federal law to authorize setting of maximum rates for a single industry during peacetime. The "long-and-short haul" clause of the 1887 act was strengthened to prohibit railroads from charging passengers more for a short trip, compared to a longer ride, over the same route unless specifically approved by the ICC. The Act terminated the railroad companies' ability to give free or discounted rates to those who were employees or family of employees.

Regulation of additional industries

The act extended the authority of the ICC to regulate the

telecommunication Telecommunication is the transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems. It has its origin in the desire of humans for communication over a distance greater than that fe ...

s industry, and designated

and

companies as

common carrier A common carrier in common law countries (corresponding to a public carrier in some civil law systems,Encyclopædia Britannica CD 2000 "Civil-law public carrier" from "carriage of goods" usually called simply a ''carrier'') is a person or compan ...

Commerce court

The act created the short-lived

United States Commerce Court The Commerce Court of the United States was a short-lived federal trial court. It was created by the Mann-Elkins Act in 1910 and abolished three years later.Urgent Deficiency Act, 63rd Congress, 1st session, ch. 32, , October 22, 1913. Effective ...

for adjudication of railway disputes. Any appeals from commerce court decisions would go directly to the

United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...

, to increase the efficiency and speed of cases. This disallowed the railroad companies from dragging out long court cases. The Court presided until 1913, when it was abolished by Congress.

Aftermath

Following implementation of the act, railroads had difficulty securing revenue sufficient to keep pace with their rising costs, although the ICC had allowed some rate increases. Investors had overexpanded the nation's trackage, so by late 1915 fully one-sixth of the railroad trackage in the country belonged to roads in

receivership In law, receivership is a situation in which an institution or enterprise is held by a receiver—a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights"—especially in ca ...

(

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...

). The national railway investment of 17.5 billion dollars, of which more than half was funded debt, had an estimated worth of sixteen billion dollars. As the United States considered entering

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

, the government identified nationwide inadequacies in terminals,

trackage A railway track (British English and UIC terminology) or railroad track (American English), also known as permanent way or simply track, is the structure on a railway or railroad consisting of the rails, fasteners, railroad ties (sleepers, ...

, and

rolling stock The term rolling stock in the rail transport industry refers to railway vehicles, including both powered and unpowered vehicles: for example, locomotives, freight and passenger cars (or coaches), and non-revenue cars. Passenger vehicles can b ...

. In December 1917 the ICC recommended federal control of the railroad industry to ensure efficient operation during wartime. President

Woodrow Wilson Thomas Woodrow Wilson (December 28, 1856February 3, 1924) was an American politician and academic who served as the 28th president of the United States from 1913 to 1921. A member of the Democratic Party, Wilson served as the president of ...

issued an order for

nationalisation Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...

of the railroads on December 26, 1917. The

United States Railroad Administration The United States Railroad Administration (USRA) was the name of the nationalisation, nationalized railroad system of the United States between December 28, 1917, and March 1, 1920. It was the largest American experiment with nationalization, and ...

was established to manage the railroads during the war, and was abolished in 1920 by the

Esch–Cummins Act The Transportation Act, 1920, commonly known as the Esch–Cummins Act, was a United States federal law that returned railroads to private operation after World War I, with much regulation. It also officially encouraged private consolidation of rai ...

. The Mann–Elkins Act paved the way for the

Communications Act of 1934 The Communications Act of 1934 is a United States federal law signed by President Franklin D. Roosevelt on June 19, 1934 and codified as Chapter 5 of Title 47 of the United States Code, et seq. The Act replaced the Federal Radio Commission with ...

. The 1934 law consolidated portions of the Mann-Elkins Act and other laws affecting the telephone and radio industries, to create a unified authority for telecommunications within a new agency, the

Federal Communications Commission The Federal Communications Commission (FCC) is an independent agency of the United States federal government that regulates communications by radio, television, wire, satellite, and cable across the United States. The FCC maintains jurisdiction ...

References

{{DEFAULTSORT:Mann-Elkins Act 1910 in American law 1910 in rail transport Progressive Era in the United States United States communications regulation United States federal transportation legislation United States railroad regulation