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“To the Finish"

November 25, 1905


William A. Rogers

“To the Finish"
 

Business, Government Regulation; Business, Railroads; Business, Trusts/Monopolies; Presidential Administration, Theodore Roosevelt; Symbols, Republican Elephant; Transportation, Railroads; U.S. Economic Policy, Business Regulation;
 

Roosevelt, Theodore;
 

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This cartoon depicts President Theodore Roosevelt’s attempt to win the battle being fought among Senate Republicans over railroad regulation, eventually embodied in the Hepburn Act of 1906, which strengthened the authority of the Interstate Commerce Commission.  The president appears in his Rough Rider uniform, with spike in hand, prodding an enraged (and real) Republican Elephant to attack.  The upper body of the opposing (and phony) Republican Elephant (note the elephantine legs) has been transformed into a bellowing train engine, representing large railroad corporations (“trusts”), which controls its threatening movements.  In the Senate’s visitors’ gallery, Uncle Sam and other onlookers watch the fight anxiously.  It was Roosevelt’s regulation of the railroads that earned him the nickname, “trustbuster.”

Roosevelt had succeeded to the presidency upon the assassination of President William McKinley in 1901, and won election in his own right in November 1904.  The next month, in his annual message to Congress, President Roosevelt argued that “the government must in increasing degree supervise and regulate the workings of the railways engaged in interstate commerce.”  He recognized the manifest benefits that the railroad companies had brought to American society, but believed that their economic power also created problems.  Furthermore, the president was convinced that federal regulation of the railroads would circumvent the need for government ownership, which was being promoted by some politicians and public commentators.  (Socialist doctrines were at their height of popularity in the United States during the early-twentieth century).

The Interstate Commerce Commission (ICC) had provided the president with evidence that major railroad companies granted what were considered unfair advantages to certain shippers, such as meat packers.  Therefore, in his December 1904 message to Congress, Roosevelt requested that the ICC be granted authority to decide what constituted a maximum and “reasonable” shipping rate, subject to judicial review, in cases where rates were disputed.  The ICC’s rate would go into effect immediately, thereby placing the legal burden of proof on any railroad company that wanted a federal court to overturn the commission’s ruling.  The proposal did not originate with Roosevelt, but had already been discussed by politicians and reformers.

For many years, the regulation of railroads had been a popular stance for a politician to take.  The Elkins Act of 1903 had outlawed rebates to shippers, a popular law also supported by the railroad companies because it removed competitive pressure to set lower shipping rates.  While readily using the services and products offered by large business corporations, many Americans expressed concerns about their economic power.  The United States had undergone a period of extensive business mergers around the years 1897-1904, resulting in the establishment of hundreds of mega-corporations from thousands of smaller companies.  The railroads, in particular, represented these emerging economic giants in the public eye.  In addition, it was a time of inflation, and artificially holding down railroad rates seemed like a good idea to many Americans.

However, costs were also rising for the railroads, and with traffic varying widely across the country, charging different rates in different regions made sound business sense.  Opponents of railroad regulation charged that federal intervention was not in the “public interest,” as promoters insisted, but based on other business interests, such as those of the shippers, or the self-interest of politicians whose power would be enhanced through legislative and bureaucratic oversight.  Furthermore, critics warned that federal regulation was the first step toward the real goal of government ownership and operation of the nation’s railroads.

The Roosevelt administration put its force behind securing railroad regulation in the final months of the 58th Congress, scheduled to end on March 4, 1905.  A compromise bill, which allowed the ICC rate to go into effect after 60 days, passed the House of Representatives, 326-17, on February 9, 1905.  However, while the Senate Republican leadership, led by Nelson Aldrich, permitted hearings on the bill, they took advantage of the limited amount of time left in the session and the existence of other pressing issues to postpone debate.

During the following months of 1905, sentiment against large business corporations increased.  In New York, prosecuting attorney Charles Evans Hughes (later, governor and the Republican presidential nominee in 1916) pursued a public investigation against gas and insurance companies, which revealed large political contributions combined with bribery of public officials and other crimes.  Influential magazines, such as Collier’s, McClure’s, and World’s Work, unleashed a barrage of articles and editorials against the alleged exploitive and corrupt practices of large business corporations.  Finally, the continuing rise of consumer prices prompted widespread speculation that business interests were gouging the public.

The featured cartoon anticipates the battle over railroad regulation when the Senate session began in early December 1905.  Senator Stephen Elkins of West Virginia, chairman of the Senate Interstate Commerce Committee and himself a railroad executive, emphatically denied the need for further regulation.  The railroad companies lobbied Congress and engaged in a publicity campaign to counter the negative press they had received.  President Roosevelt spoke in favor of regulation, including in his annual message to Congress on December 5, and he and other administration officials pressured senators. 

On December 19, Senator Jonathan Dolliver of Iowa introduced the administration’s bill, and began working with Congressman William Hepburn of Iowa (both were Republicans) to forge a legislative strategy.  On February 8, 1906, the Hepburn bill passed the House with only seven dissenting votes.  During the rest of the month, Senate Republicans who opposed railroad regulation tacked on numerous amendments to weaken the bill, but their efforts were defeated by a bipartisan alliance backing the measure.  Supporters of the bill wanted the federal courts to address only procedural matters concerning the rate setting, but Aldrich and other opponents called for broad judicial discretion to consider the fairness of rates. 

Roosevelt tried to soften Republican opposition by publicly attacking crusading journalists, with whom he often agreed, by labeling them “muckrakers.”  Opposing Senate Republicans were not impressed, although the press was in an uproar.  Finally, Aldrich and Senator William Allen of Iowa drafted an amendment to the bill, the vague language of which satisfied those wanting the courts to have broad discretionary authority.  On May 18, 1906, the bill passed the Senate, 71-3.  In June, a joint House-Senate conference accepted the amended version, which then passed both houses and was signed into law by the President.

Robert C. Kennedy




“To the Finish"
December 14, 2017







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