Interstate Commerce in 1906
How Roosevelt Implemented A Square Deal
On June 29 and 30, 1906, President Roosevelt signed a one-two punch of federal legislation that strengthened federal regulation of corporations via interstate commerce – the Hepburn Act on June 29 and the Pure Food and Drug and Meat Inspection Acts on June 30.
From early in his presidency, Roosevelt felt that railroad shipping rates required stronger regulation, and utilized the Interstate Commerce Act of 1887 to do so. He took these actions as a realization of his “Square Deal” domestic policy, which aimed to protect consumers from corporate greed and unscrupulous business practices. Railroads were the first “big business” in the United States. Farmers and ranchers relied on trains to get goods to market. The federal government exercised a light hand over industry at that time, assisting the expansion of railroads with land grants and little oversight. The railroads gave preferential treatment (i.e., lower rates) to large shippers. Small farmers and businessmen felt this was unfair, eventually petitioning 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 requiring them to offer “reasonable and just” transportation rates. Additionally, railroads could no longer provide secret, beneficial rates to certain shippers, as the Interstate Commerce Act required rates to be published. It also established the Interstate Commerce Commission to ensure industry compliance with the Act. However, weak enforcement ensured that the Act languished on the books.
In 1906, following a series of unpopular rate increases by the railroads, Rep. William Hepburn, chairman of the House Commerce Commission, proposed a bill to fortify the powers of the Interstate Commerce Commission (ICC) and strengthen federal regulation of railroads. Intrigued, Roosevelt wholeheartedly supported the passage of such a bill. The railroad companies had sought to do what companies do – increase their profit margin. Enjoying improved demand for their services and victims of their own economic sophistication, they realized that costs were increasing, or inflating. To attract much-needed investment capital to improve efficiency and safety, the railroads raised their rates, enraging passengers, and shippers. Congress and the President then got involved.
Alternately cooperating with Republicans and Democrats, Roosevelt worked to keep more stringent regulations out of the legislation. He thought improved government regulation of the industry was a middle way between the chaos of unfettered competition (including the formation of monopolies) and government ownership of the railroads.
The Hepburn Act was just the latest in a series of federal actions meant to rein in the railroads. Roosevelt had brought suit against the Northern Securities Company in 1902, arguing they were an illegal monopoly. The case was decided by the Supreme Court in the government’s favor in 1904. The 1903 Elkins Act ended rebates and rate discrimination. The Hepburn Act strengthened the provisions of the Elkins Act, giving ICC rulings the force of law (previously only the courts could enforce the regulations) and allowed the Commission to set maximum—though not minimum—“fair, just, and reasonable” rates. It also prohibited giving free passes except to railroad employees and created standard bookkeeping methods. Railroads were required to submit annual reports to the ICC, which employed professional staff to examine railroad accounts. The number of Commissioners grew from five to seven, and their term went from six to seven years.
Beyond specifying railroad regulation, the Hepburn Act's provisions have remained significant to the present, as Congress extended them to apply to other forms of shipping transport, including express companies, ferries, and even oil pipelines. The impact of the Hepburn Act still reverberates today. Significant though it was, the bills Roosevelt signed the following day are better known, perhaps because the effects on the public were more visceral.
Throughout Roosevelt’s presidency, “muckraking” - sensationalist investigative journalism - became a prominent way of spreading information regarding societal ills and unscrupulous practices of the day. Roosevelt coined the term “muckraking” in this context, comparing journalists with the character from John Bunyan’s The Pilgrim's Progress, who was so engrossed with raking the muck he did not bother to look at anything good. Perhaps even more than those who apparently did not see good in the world, Roosevelt deplored those who only criticized without acting or offering solutions. So, when the muckrakers did bring something serious to his attention, he made a point to do something about it. Perhaps the most famous case of this is the enactment of pure food laws.
A seminal work of the muckraking movement, Upton Sinclair’s novel The Jungle, focused on the deplorably unsafe and unsanitary conditions of the nation’s meat processing industry. Although intended as a socialist manifesto decrying the horrific conditions under which working-class immigrants labored, the public was more disgusted by the graphic descriptions of impure food production, such as a worker falling into a rendering vat. "I aimed at the public's heart, and by accident I hit it in the stomach," Sinclair lamented in Cosmopolitan magazine.
Roosevelt's own experience with adulterated food further influenced him. When he served in the Army, he was caught up in what became known as the “embalmed beef” scandal. Poorly preserved, heavily adulterated, and just plain spoiled meat sent by the Morris, Swift, and Armour packinghouses to those serving in Cuba and Puerto Rico killed several times more of them than combat did! In 1899, T.R. testified in a government inquiry that he would “as soon eat his old hat as the canned goods shipped under government contract to the soldiers in Cuba.”
As public outcry mounted, Roosevelt sent federal investigators to inspect Chicago's meatpacking plants. They found that conditions were at least as bad - and in some ways worse! - than Sinclair and others had described. Processing plants were filthy and working conditions were shameful. Spoiled meat was masked with chemical adulterants before being canned or turned into sausages. Milk was “stretched” with chalk, sawdust, or even formaldehyde. Before The Jungle and Roosevelt’s investigations, an attempt to pass legislation regulating meatpacking and other food production floundered in the Senate, much to the consternation of the medical community. With public support and clear evidence behind him, Roosevelt began aggressively championing the passage of a pure food bill, couching it in terms of his “Square Deal” philosophy of protecting consumers.
Roosevelt signed the Pure Food and Drug Act on June 30, 1906, becoming effective in 1907. It prohibited the sale and transport of products that used chemical adulterants to mask inferior quality or spoilage or that were otherwise injurious to health. It also required that products be properly labeled and branded as to the ingredients they contained. Roosevelt also signed the Federal Meat Inspection Act, granting the United States Department of Agriculture the power to inspect livestock, meat, and byproducts, to enforce sanitary and hygienic processing practices, and to ensure that products were not adulterated or misbranded.
The Hepburn Act, the Pure Food and Drug Act, and the Federal Meat Inspection Act were all part of Roosevelt’s crusade to strengthen the regulation of corporations through the Interstate Commerce Clause of the Constitution. Roosevelt believed that this both protected consumers and was beneficial to businesses, ensuring fair and honest competition and practice. He also viewed it as a pragmatic antidote to the socialist revolutions that were sweeping much of the world. “The men of wealth who to-day are trying to prevent the regulation and control of their business in the interest of the public by the proper government authorities will not succeed, in my judgment, in checking the progress of the movement,” Roosevelt said on April 14, 1906, in his speech commonly known as “The Man With The Muck-Rake.” “But if they did succeed they would find that they had sown the wind and would surely reap the whirlwind, for they would ultimately provoke the violent excesses which accompany a reform coming by convulsion instead of by steady and natural growth.”
Oh, T.R.! We need you now!
A few days ago I again visited both the Theodore Roosevelt National Park in North Dakota and the little town of Medora. I was thrilled when a herd of maybe a hundred buffalo walked by both sides of my car. I stayed inside quietly getting good photos.
Also stopped in South Dakota to see the presidents carved on Mt Rushmore.
You mentioned trains. Yesterday driving the beautiful hwy 177 in central Kansas I saw four trains having to stop for one to pass .
Am happy the Roosevelt library is being built in Medora North Dakota instead of NYC. I will return to visit it when it is open