Railroads and Regulation, 1877-1916

by Gabriel Kolko

This is a 1977 reprint of the original 1965 edition. From the author's "In the following pages I shall attempt critically to re-examine the relation of the railroads to federal regulation and the assumption that the national government consciously or in fact always acted in the manner that the majority of important railroad men considered fundamentally inimical to their interest. Rather, I will suggest that the intervention of the federal government not only failed to damage the interests of the railroads, but was positively welcomed by them since the railroads never really had the power over the economy, and their own industry, often ascribed to them." With extensive bibliography and index. 273 pages.

Genres: History, Politics, Railways, Nonfiction

280 pages, Hardcover

First published March 21, 1965

About the author

A historian specializing in 20th century Ameican politics and foreign policy, Gabriel Morris Kolko earned his BA in history from Kent State University in 1954, his MS from the University of Wisconsin in 1955, and his Ph.D. from Harvard University in 1962. He taught at the University of Pennsylvania and at SUNY-Buffalo before joining the history department of York University in Toronto in 1970.

Reviews

[Frank Stein · Rating 3 out of 5]

This is supposedly a classic of the "regulatory capture" school of historiography that flourished around the author, Gabriel Kolko, in the 1960s and '70s. It aims to show that most federal railroad regulation was actually done at the behest of the railroads themselves. The book is tendentious, rambling, and unconvincing, although it does hit on a few forgotten truths about early federal regulation.

I should start with the good. Kolko does show that railroads wanted two types of federal regulation. First, they wanted their pools legalized. Ever since the organization of the Iowa pool by the Rock Island line and others in 1870, railroads had tried to work together to keep their "tariffs" or charges high, but the pools always fell apart due to defections. An early version of the Senator Shelby Cullom railroad bill included a legalized pooling section, for which railroads were willing to sacrifice a lot, but Rep. John Reagan struck it out in conference committee. So the first federal regulatory act, the Interstate Commerce Act of 1887, didn't contain railroader's single biggest demand, contra Kolko. Cullom continued trying to get one for years, but failed.

Second, both railroads and small shippers hated "rebates," since they drained railroad coffers and gave special benefits to the biggest shippers, like Standard Oil. The railroads did get a special anti-rebating clause in the 1887 act, and two years later they formed an "Interstate Commerce Railway Association," led by former pool leader Albert Fink and former ICC commissioner Aldace Walker, to fight against such rebates. The Pennsylvania Railroad under Alexander Casset also succeeded in getting the Elkins Act passed (under longtime railroad and coal-mine owner, West Virginia Senator, and Chair of Interstate Commerce Committee, Stephen Elkins) to tighten rebates and outlaw "commodity railroads," mainly those in the anthracite coal region of Pennsylvania that owned the coal mines.

Beyond the rebates, however, railroads didn't get much from the federal government in this period. They constantly inveighed against maximum rate regulation, which was put in place in 1906, and they only asked for minimum rate regulation, which they didn't get. They struggled to get broader review of Interstate Commerce Commission decisions before the courts, but their plan, initiated by Richard Olney in 1893 when he worked for the Boston & Maine Railroad, to create a separate commerce court only lasted for three years, from 1910 to 1913. If the Interstate Commerce Commission was so favorable to railroads in this period, one wonders why they were always working to get cases away from it and back into courts.

In general, Kolko tries to use vague statements from politicians that they had nothing against lawful railroads, and turn them into nefarious explanations of why they were doing everything for railroads. He takes railroads' explanations of why they wanted "regulation" of a certain sort, generally legalized pooling, and turns them into explanations of why they secretly wanted maximum rate regulation and all sorts of other federal requirements they actually hated. This book shows how a sharp mind can get trapped in its own thesis, and how it can struggle valiantly against the facts to make that thesis work. It doesn't.

[Czarny Pies · Rating 4 out of 5]

This is the great classic which shows how regulated industries always assume control of the bodies that regulate them.

In Canada we obviously need to give this book a second read. We are still all recovering from the shock of seeing how our federal regulator allowed one of its regulated companies to park a 73 car train comprised of tankers filled with a highly explosive material just above Lac Megantic and then leave it all unattended overnight. The result was 47 deaths.

Regulatory bodies cannot be trusted to do their jobs. Kolko's book explains why.

[Didier "Dirac Ghost" Gaulin · Rating 3 out of 5]

An essential text, chuck full of revelatory pieces of evidence, for the cartelization of the railroad industry, by means of corporate-governmental association, across party line, destroying the myth of an America moved by laissez faire market forces during the so called progressive era. Kolko is quite dry and has a strong anti-capitalist bias, some quotes are sometimes rearranged in order to convey corporate corruption, mostly around Jay Gould who opposed regulations and rate fixing. Kolko is not a great writer but his research is otherwise spectacular, modulo biases.