Esch-Cummins Act
Encyclopedia
The Esch–Cummins Act of 1920, or Railroad Transportation Act, was a United States federal law that returned railroads to private
operation after World War I
, with much regulation. It also officially encouraged private consolidation of railroads and mandated that the Interstate Commerce Commission
(ICC) ensure their profitability.
had ordered that U.S. railroads be nationalized in the public interest. This order was implemented through the creation of the United States Railroad Administration
. Congress
ratified the order in the Railway Administration Act of 1918.
.
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...
operation after World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, with much regulation. It also officially encouraged private consolidation of railroads and mandated that the Interstate Commerce Commission
Interstate Commerce Commission
The Interstate Commerce Commission was a regulatory body in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads to ensure fair rates, to eliminate rate discrimination, and to regulate other aspects of common carriers, including...
(ICC) ensure their profitability.
Background
The United States had entered World War I in April 1917, and the government found that the nation's railroads were not prepared to serve the war effort. On December 26, 1917, President Woodrow WilsonWoodrow Wilson
Thomas Woodrow Wilson was the 28th President of the United States, from 1913 to 1921. A leader of the Progressive Movement, he served as President of Princeton University from 1902 to 1910, and then as the Governor of New Jersey from 1911 to 1913...
had ordered that U.S. railroads be nationalized in the public interest. This order was implemented through the creation of the United States Railroad Administration
United States Railroad Administration
The United States Railroad Administration was the name of the nationalized railroad system of the United States between 1917 and 1920. It was possibly the largest American experiment with nationalization, and was undertaken against a background of war emergency.- Background :On April 6, 1917, the...
. Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
ratified the order in the Railway Administration Act of 1918.
Major provisions
The Esch-Cummins Act:- Terminated federal control of railroads, effective March 1, 1920.
- Authorized the government to make settlements with railroad carriers for matters caused by nationalization, such as compensation and other expenses
- Directed the ICC to prepare and adopt a plan for the consolidation of the railway properties of the United States into a limited number of systems. See Ripley Plan.
- Granted authority to the ICC to set minimum shipping rates, oversee railroads' financial operations, and regulate acquisitions and mergers.
- Established procedures for settling labor disputes between railroads and employees. A Railroad Labor Board was created to regulate wages and settle disputes.
Subsequent legislation
Title III of the Esch-Cummins Act, which pertained to labor disputes, was repealed in 1926 by the Railway Labor ActRailway Labor Act
The Railway Labor Act is a United States federal law that governs labor relations in the railroad and airline industries. The Act, passed in 1926 and amended in 1934 and 1936, seeks to substitute bargaining, arbitration and mediation for strikes as a means of resolving labor disputes...
.
See also
- Interstate Commerce Act of 1887
- Elkins ActElkins ActThe Elkins Act is a 1903 United States federal law that amended the Interstate Commerce Act of 1887. The Elkins Act authorized the Interstate Commerce Commission to impose heavy fines on railroads that offered rebates, and upon the shippers that accepted these rebates. The railroad companies were...
of 1903 - Mann-Elkins ActMann-Elkins ActThe Mann–Elkins Act was a 1910 United States federal law that is among the Progressive era reforms. The Act extended the authority of the Interstate Commerce Commission to regulate the telecommunications industry, and designated telephone, telegraph and wireless companies as common...
of 1910 - Railway Labor ActRailway Labor ActThe Railway Labor Act is a United States federal law that governs labor relations in the railroad and airline industries. The Act, passed in 1926 and amended in 1934 and 1936, seeks to substitute bargaining, arbitration and mediation for strikes as a means of resolving labor disputes...
of 1926