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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 include regulation of telephone, telegraph and wireless companies, and created a commerce court.^[1]

Background

President William Howard Taft was concerned about controlling unfair trade practices and competition in the railroad industry. His administration argued that the Interstate Commerce Act (1887) and the Hepburn Act (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.)^[2]^{: 522–526}

Overview

The Mann-Elkins Act was a piece of reform legislation developed during the Progressive era. The principal sponsors were Congressmen Stephen Benton Elkins and James Robert Mann. While there had been concern in Congress about the limited effectiveness of the ICC generally, the act was developed in direct response to rate increases that western railroads announced in 1910.^[2]^: 524

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.^[3] 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..."^[1]^{: Sec. 15} This was the first federal law to authorize setting of maximum rates for a single industry during peacetime.^[4]^: 354 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.^[5]^{: 217–219}

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 telecommunications industry, and designated telephone, telegraph and wireless companies as common carriers.^[1]^{: Sec. 1}^[5]^: 216

Commerce court

The act created the short-lived United States Commerce Court for adjudication of railway disputes.^[5]^: 216 Any appeals from commerce court decisions would go directly to the United States Supreme Court, to increase the efficiency and speed of cases.^[1]^{: Sec. 6} This disallowed the railroad companies from dragging out long court cases. The Court presided until 1913, when it was abolished by Congress.^[6]^[7]

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 (bankruptcy).^[8] 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.^[9]^: 515–16 As the United States considered entering World War I, the government identified nationwide inadequacies in terminals, trackage, and rolling stock. In December 1917 the ICC recommended federal control of the railroad industry to ensure efficient operation during wartime. President Woodrow Wilson issued an order for nationalisation of the railroads on December 26, 1917.^[10] The United States Railroad Administration was established to manage the railroads during the war, and was abolished in 1920 by the Esch–Cummins Act.^[11]

The Mann–Elkins Act paved the way for the Communications Act of 1934. 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.^[12]^[13]

References

^ ^a ^b ^c ^d United States. Mann-Elkins Act, 61st Congress, 2nd session, ch. 309, 36 Stat. 539, enacted June 18, 1910.
^ ^a ^b Pringle, Henry A. (1939). The Life and Times of William Howard Taft: A Biography. New York: Farrar & Rinehart.
^ Judson, Frederick N. (1912). The Law of Interstate Commerce and Its Federal Regulation (2nd ed.). Chicago: T.H. Flood. p. 471.
^ Martin, Albro (1992). Railroads Triumphant: The Growth, Rejection and Rebirth of a Vital American Force. New York: Oxford University Press. ISBN 0-19-503853-3.
^ ^a ^b ^c Sharfman, Isaiah L. (1915). Railway Regulation: An Analysis of the Underlying Problems in Railway Economics from the Standpoint of Government Regulation. Chicago: La Salle Extension University.
^ U.S. Urgent Deficiency Act, 63rd Congress, 1st session, ch. 32, 38 Stat. 208, October 22, 1913. Effective December 31, 1913.
^ Gilmore, Eugene A.; Wermuth, William C. (1917). "III. The Various United States Courts and their Jurisdiction: The Commerce Court (Abolished)". Modern American Law. Chicago: Blackstone Institute. pp. 278–280.
^ Cunningham, William J. (February 1921). "The Railroads Under Government Operation. I. The Period to the Close of 1918". The Quarterly Journal of Economics. 35 (2): 292. doi:10.2307/1883890.
^ March, Francis A. (1919). History of the World War. Philadelphia: United Publishers of the United States and Canada.
^ United States. Presidential Proclamation 1419, December 26, 1917, under authority of the Army Appropriation Act, 39 Stat. 45, August 29, 1916.
^ United States. Esch–Cummins Act, Pub. L. 66–152, 41 Stat. 456. Approved 1920-02-28.
^ "Mann Elkins Act - Commercial | Laws.com". commercial.laws.com. Retrieved 2017-05-26.
^ "The Communications Act of 1934; Federal Privacy Council". www.fpc.gov. Retrieved 2017-05-26.