Roosevelt Signs Elkins Act Prohibiting Railroad Rebates and Price Discrimination

On February 19, 1903, President Theodore Roosevelt signed the Elkins Act, which made it a federal misdemeanor for railroads to grant rebates or preferential rates and held both the carrier and the recipient liable. The Act was sponsored by Senator Stephen B. Elkins of West Virginia and introduced in 1902 at the behest of the Pennsylvania Railroad, whose directors informed Roosevelt of their desire to end the rebate practice. For decades, railroads had charged higher rates to smaller shippers while providing secret rebates to large corporations, giving monopolistic trusts unfair competitive advantages and discriminating against small businesses. The Act required railroads to file and publish freight rates with the Interstate Commerce Commission and made it illegal to deviate from published rates. Violations were punishable by fines between $1,000 and $20,000. However, the Act revealed significant limitations: it eliminated imprisonment as punishment, imposed only monetary fines, and was criticized as drafted by Congress on behalf of railroads rather than consumers. While some railroads curtailed rebates for certain customers, for others the practice continued. The ICC, composed primarily of railroad interests, rarely imposed punitive action in cases brought before it. These shortcomings led Progressives to call for greater regulation, resulting in the more comprehensive Hepburn Act of 1906. The Elkins Act represented both Roosevelt’s commitment to railroad regulation as part of his Square Deal and the practical limits of Progressive reform when corporate interests maintained substantial influence over regulatory design and enforcement.