Mann-Elkins Act Strengthens Railroad Regulation, Expands ICC Authority to Telecommunications

President William Howard Taft signed the Mann-Elkins Act, also called the Railway Rate Act of 1910, strengthening the Interstate Commerce Commission’s (ICC) authority over railroad rates and expanding federal regulation to telephone, telegraph, and wireless companies for the first time. The legislation emerged after 24 western railroads simultaneously raised rates by up to 50 percent, shocking the Taft administration and threatening antitrust prosecution. The act authorized the ICC to investigate and suspend railroad rate increases for up to 10 months, shifting the burden of proof to railroads to demonstrate that rates were reasonable—the first federal law authorizing peacetime maximum rate-setting for a single industry. The legislation also created the short-lived United States Commerce Court to expedite railway disputes, though this was abolished in 1913 by President Wilson. The act extended ICC jurisdiction to telecommunications companies, declaring them common carriers subject to federal regulation, paving the way for the Communications Act of 1934.

However, the strengthened regulatory framework created unintended consequences that foreshadowed later patterns of regulatory capture. With the ICC gaining near-complete control over rail rates and competition, railroads struggled to secure revenue sufficient to keep pace with rising costs, even as the ICC allowed some rate increases. Investor overexpansion of the nation’s trackage meant that by late 1915, one-sixth of all railroad trackage belonged to roads in receivership (bankruptcy). This pattern—where aggressive regulation led to industry consolidation and financial distress, which then created pressure for regulatory relief that favored surviving major players—would repeat throughout the 20th century. The act represented the high-water mark of Progressive Era railroad regulation, but also demonstrated how regulatory power, once granted, could be captured by the industries it was meant to constrain, as railroads and telecommunications companies learned to work within and eventually influence the regulatory apparatus meant to control them.