Elkins Act facts for kids
The Elkins Act was an important United States federal law passed in 1903. It changed an older law called the Interstate Commerce Act of 1887. This new law gave the Interstate Commerce Commission (ICC) the power to fine railroad companies and other businesses. They would be fined if they gave or took secret discounts on shipping prices.
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What Was the Elkins Act?
The Elkins Act made it illegal for railroads to offer special, secret prices to some customers. These secret prices were called rebates. Before this law, big companies often got these rebates. This meant they paid less to ship their goods than smaller businesses.
Why Were Rebates a Problem?
Imagine you own a small toy store. You pay the full price to ship your toys by train. But a huge toy company gets a secret discount. This makes it harder for your small store to compete. Rebates gave big companies an unfair advantage. They could sell their products for less because their shipping costs were lower.
Who Was Involved?
Before the Elkins Act, large industries like those dealing with livestock (farm animals) and oil often demanded rebates. They would pay the normal shipping fee, but then force the railroad companies to give some money back. This was like a secret refund.
Why Was the Act Needed?
Railroad companies often felt pressured by these big businesses. These powerful companies, sometimes called trusts (which were like huge monopolies), would demand rebates. If the railroads didn't agree, the trusts might threaten to use other shipping methods or even build their own railroads.
How Did the Act Help?
The Elkins Act helped stop this unfair practice. It said that everyone had to pay the same published shipping rates. Railroad companies, their leaders, and their workers could all be punished if they broke this rule. Businesses that accepted the rebates could also be fined.
President Roosevelt's Role
The law was strongly supported by President Theodore Roosevelt. He included it as part of his "Square Deal" plan. The "Square Deal" was his promise to give everyone a fair chance in America. Passing the Elkins Act made President Roosevelt very popular with many Americans. It showed he was fighting for fairness against powerful big businesses.
