As a reaction of the Standard Oil Company’s monopolization of the oil industry, and hence its control of the national oil price, the United States Congress passed the Hepburn Act in 1906. The Act prohibited railroads from hauling commodities that they had produced or mined, except for supplies necessary for their own use; this section of the Act became known as the Commodities Clause.
The Act also defined pipelines, storage facilities, terminals, bridges, and ferries as common carriers (see Common Carrier Clause), a definition that placed them under the control of the Interstate Commerce Commission (ICC). The Act strengthened the ICC by giving it the ability to define railroad rates; however, it didn’t have a large affect before World War I since the ICC did not intervene actively in the establishments of rates at this time. The Supreme Court of the United States declared the Common Carrier Clause unconstitutional in 1914 after it was disputed in the courts with companies protesting the ICC’s tariff on major pipelines.
- The Theodore Roosevelt Administration Railroad Legislation (U-S-History.com)