The Esch-Cummins Act, also known as the Transportation Act of 1920, returned railroads to private operation after they were nationalized during World War I.
On December 26, 1917, President Woodrow Wilson ordered that U.S. railroads be nationalized in the public interest. Wilson’s order led to the creation of the U.S. Railroad Administration, and Congress ratified the order with the Railway Administration Act of 1918.
The Esch-Cummins Act also encouraged private consolidation of railroads to create a limited number of systems and ordered the Interstate Commerce Commission (ICC) to ensure their profitability. It also granted authority to the ICC to set minimum shipping rates, oversee railroads’ financial operations, and regulate acquisitions and mergers.
The measure established methods to settle labor disputes and created the Railroad Labor Board to regulate wages and settle disputes.
