Roosevelt Signs Hepburn Act Creating First True Federal Regulatory Agency

On June 29, 1906, President Theodore Roosevelt signed the Hepburn Act into law after a month of conference committee reconciliation, with the Senate passing it 71-3 and the House by substantial margin. The Act fundamentally strengthened the Interstate Commerce Commission, giving it power to set maximum railroad rates and making ICC rulings enforceable without requiring separate court action—creating what scholars consider the federal government’s first true regulatory agency with quasi-legislative authority. Named for Representative William Hepburn of Iowa, the legislation passed after a series of unpopular railroad rate increases and addressed shortcomings in the earlier Elkins Act of 1903. The Hepburn Act expanded ICC jurisdiction to cover bridges, terminals, ferries, sleeping cars, express companies, and oil pipelines. It required railroads to submit annual reports to professional ICC staff, prohibited free passes except to employees, established standard bookkeeping methods, toughened anti-rebate provisions, and increased penalties for violations. The number of commissioners grew from five to seven with extended terms. Roosevelt took intense interest in the bill’s passage, alternately cooperating with Republicans and Democrats to keep more stringent regulations out while ensuring meaningful reform. The Act’s model of an expert administrative body with direct rulemaking power—previously limited by court dependency—served as structural precedent for New Deal agencies including the SEC. Scholars consider the Hepburn Act the most important railroad legislation of the first half of the 20th century. However, it still allowed only maximum (not minimum) rate-setting and lacked authority over railroad securities and capitalization, revealing continued limits on Progressive regulatory ambitions in the face of corporate power.