Exam 21: The Progressive Era

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The Hepburn Act is a significant piece of United States federal legislation that was passed by Congress and signed into law by President Theodore Roosevelt on June 29, 1906. Officially known as "An Act to Amend an Act entitled 'An Act to regulate commerce,' approved February fourth, eighteen hundred and eighty-seven, and all Acts amendatory thereof, and to enlarge the powers of the Interstate Commerce Commission," the Hepburn Act aimed to strengthen federal regulation of the nation's railroads.

The significance of the Hepburn Act lies in its expansion of the powers of the Interstate Commerce Commission (ICC), which was originally established by the Interstate Commerce Act of 1887. Before the Hepburn Act, the ICC had limited authority and was largely ineffective in regulating railroad rates. Railroads were often accused of charging unfair and discriminatory rates, and there was widespread public demand for stronger government oversight.

Key provisions of the Hepburn Act included:

1. Empowering the ICC to set "just and reasonable" maximum railroad rates and to examine railroad's financial records.
2. Extending the ICC's jurisdiction to include bridges, terminals, ferries, sleeping cars, express companies, and oil pipelines.
3. Prohibiting free passes and rebates, practices that were seen as corrupt and anti-competitive.
4. Requiring railroads to adopt uniform accounting systems, making it easier for the ICC to assess financial practices and rates.
5. Allowing the ICC to initiate rate cases on its own initiative, rather than waiting for shippers to lodge complaints.

The Hepburn Act represented a significant step forward in the Progressive Era's efforts to regulate big business and protect the public interest. It was part of President Roosevelt's "Square Deal" program, which aimed to ensure fairness for workers, consumers, and businesses. The Act helped to curb monopolistic practices in the railroad industry and laid the groundwork for further regulatory legislation in the 20th century. It was a key moment in the history of federal regulatory policy, demonstrating an increased willingness by the government to intervene in the economy to promote fairness and competition.

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The Northern Securities Company was a short-lived American railroad trust formed in 1901 by E.H. Harriman, James J. Hill, J.P. Morgan, and their associates. The company was a consolidation of several major railroad systems in the Northwest, including the Northern Pacific Railway, the Great Northern Railway, and the Chicago, Burlington and Quincy Railroad. The creation of the trust was an attempt to control competition among the railroads, essentially creating a monopoly in the transportation markets of the Northwest.

The significance of the Northern Securities Company lies in its role in the history of U.S. antitrust law. In 1902, President Theodore Roosevelt, in his pursuit of the "trust-busting" policies, directed the Justice Department to sue the Northern Securities Company under the Sherman Antitrust Act, which was designed to combat anti-competitive practices. This was a landmark case because it was one of the first times the federal government took strong action against monopolies.

The case, Northern Securities Co. v. United States, went to the Supreme Court, which ruled in a 5-4 decision in 1904 that the Northern Securities Company was indeed an illegal monopoly and ordered its dissolution. This decision was significant because it was a major victory for the antitrust movement and set a precedent for the federal government's ability to regulate big business. It also bolstered Roosevelt's reputation as a "trust buster" and helped to define his presidency.

The dissolution of the Northern Securities Company marked an important moment in the Progressive Era, a time when the government began to take a more active role in regulating the economy and addressing the social issues caused by industrialization and the growth of corporate power.