The railroad industry has been a crucial mode of transportation for the United States since its inception in the early 1800s. However, with its growth came a significant issue of competition. Railroad companies would often engage in cutthroat tactics to eliminate their competitors, leading to higher fares and less efficiency in the industry. In response to this, the United States Congress passed various laws to regulate and reduce competition within the railroad industry.
In the late 1800s, the Sherman Antitrust Act was passed, making it illegal for corporations to engage in monopolistic practices that could harm competition. This law also gave power to the Department of Justice to investigate and prosecute corporations who violated it. The railroad industry was not exempt from this law, and several railroad companies were sued and broken up into smaller, more manageable entities. This helped to level the playing field within the industry and ultimately led to increased efficiency and lower fares for consumers.
Another significant action taken by Congress was the passage of the Interstate Commerce Act in 1887. This act regulated the railroad industry by creating the Interstate Commerce Commission (ICC). The ICC was responsible for regulating railroad rates, ensuring fair competition, and preventing monopolistic practices within the industry. The ICC also put an end to the corrupt rebating system, where large corporations would receive rebates based on how much they shipped, effectively giving them an unfair advantage in the market.
In the 20th century, Congress continued to regulate the railroad industry by passing the Transportation Act of 1920. This act largely consolidated the railroad industry by creating four large, regional railroads. The idea behind this was to ensure economic stability within the industry by eliminating smaller, less profitable companies. The Transportation Act of 1920 also created the Railroad Labor Board to regulate labor relations within the industry.
In conclusion, the United States Congress responded to the railroad industry`s cutthroat practices by passing legislation to regulate and reduce competition. Through laws like the Sherman Antitrust Act, the Interstate Commerce Act, and the Transportation Act of 1920, Congress helped to create a more competitive and efficient market for railroad transportation. These laws continue to regulate the industry today, ensuring fair competition and low fares for consumers.