At first, Texas farmers welcomed the railroads. But in the 1870s, they became outraged at unfair rates and discriminatory practices. Small railroads were bought by big corporations with headquarters far away. Rates were set by agreements between railroads. If a farmer wanted to ship his crops, he had no choice but to pay the high rates.
The farmers did not understand the complex and interconnected economy. They formed a political organization, known as the Grange, in 1873. They opposed big government, banks, and taxation, and payment for public education. To fight the power of the railroads, they prevented rail companies from buying competing lines. Most importantly, they gave the legislature the power to fix rates and fares.
The Farmers vs. the Railroads
Public anger towards the railroads grew. During the 1880s, railroads were the main political issue.
In 1870, only 5 percent of the Texas population lived in cities or towns. Over the next thirty years, the urban population tripled, and cotton and cattle created wealth. This growth was helped by the railroads, as rail transportation rates fell.
Farming was more productive than ever, but farm prices had also fallen steeply. To make money at the lower prices, farmers mechanized operations and purchased land to grow cash crops on a large scale. Some ended up heavily in debt; others lost their land.
Farmers blamed the railroads, along with banks and politicians. Texans turned to the government for help.
Many railroad opponents supported the creation of a commission to oversee rates and fares, mediate disputes between shippers and the railroads, and enact regulations.
The railroad companies took action against this threat to their power. The most successful railroad owner was Jay Gould, who controlled many of the nation’s most important railways. Gould warned the legislature that passage of regulation could hurt business and violate the Texas Constitution, which gave regulatory power to the legislature. The commission bill didn’t pass.
During 1883, the legislature passed new laws setting passenger rates at three cents a mile, ending land grants to railroads and making it illegal to charge more for short hauls than for long hauls. They also created an office of the State Engineer to investigate railroad abuses. These new regulations had no enforcement mechanism.
Source: The Fight for the Commission
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