Law and the Great Plains: Essays on the Legal History of the Heartland

By John R. Wunder | Go to book overview

5
The Railroad Question Revisited: Chicago, Milwaukee & St. Paul Railway v. Minnesota and Constitutional Limits on State Regulations

James W. Ely, Jr.

Few issues more vexed Americans during the Gilded Age than the regulation of railroads. America's first big business, the railroads, wielded enormous economic power and by the end of the nineteenth century represented 10 percent of national wealth. 1 Farmers and other local shippers often viewed railroads as an exploitative monopoly and blamed them for excessive and discriminatory charges. They repeatedly clamored for regulation of the freight and passenger rates fixed by railroad companies. Agricultural interests in the Great Plains states were particularly active in seeking regulatory legislation. Railroad investors and managers, on the other hand, opposed regulatory laws and defended their autonomy to determine rates. They feared that governmental control of rates would benefit shippers and farmers at the expense of the railroads by imposing unreasonably low charges. Moreover, they asserted that regulation of rates would likely impair capital investment and thus stifle railroad growth and economic development.

Sectional division was evident in the legislative response to the growth of railroads. The eastern states created advisory commissions that could make reports and recommend reforms but had no enforcement power or authority to set transportation rates. 2 Skeptical about the efficacy of competition, western farmers demanded more stringent governmental control

-73-

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