US Railroad Monopolies

By the turn of the 20th century, the American railroad network was largely controlled by a handful of tycoons. High monopolistic rail freight rates had been successfully challenged in the east by the Grange farmers’ movement, but the issue succeeded in capturing presidential attention in 1901, with a battle for the control of Great Northern/Northern Pacific Railroads. James J. Hill, their proprietor, called in the legendary financier, J.P. Morgan, when he realized Edward Harriman, controller of Union/Southern Pacific was attempting a surreptitious takeover. Morgan warded off the threat, but the battle caused panic on Wall Street, and new President Theodore Roosevelt felt compelled to act. Roosevelt used antitrust legislation established by the Interstate Commerce Act (1887) to attack rail monopolies. James J. Hill’s Northern Securities was dissolved by order of the Supreme Court (1904). Further legislation, the Elkins Act (1903) and Hepburn Act (1906), tackled covert rebates and excess pricing.