Railroads

3920

Railroads

strong fashion during the war. The opinion
of the country, however, was shown to be
decidedly in favor of private ownership and
control A proposal to extend even the war-
time government control of railways for a
period of five years, while it was given a
great deal of attention, hardly received seri-
ous consideration. A plan for government
ownership of the railways in the interest of
the employees—the Plumb plan—met with
like treatment.

Government Control is to be distinguished
from government regulation and from gov-
ernment ownership alike. Under government
regulation the railroads are operated by their
owners under certain rules and regulations
established by a governmental authority rep-
resented by a commission; under govern-
ment ownership they are both owned and
operated by the state. Government control
is primarily a special expedient for use in an
emergency such as a war. Under it control
of railroad operation is exercised by the
state, which usually guarantees to the own-
ers average earnings based on a determined
preceding period. Upon the entrance of the
United States into the Great War, the opera-
tion of the railroads of the country was co-
ordinated in the hands of a committee of
executives known as the Railroads War
Board, of which Fairfax Harrison, president
of the Southern Railway, was the head. On
December 26, 1917, acting under the author-
ity conferred upon him by provisions of
Army Appropriation Act of August 29, 1916,
also known as the Federal Operation and
Control Act, President Wilson issued a proc-
lamation placing the transportation system
of the country under government operation
and control.

William G. McAdoo, Secretary of the
Treasury, was designated Director-General
of Railroads, with authority to enter upon
negotiations with the railway companies,
looking to agreement for 'just and reason-
able compensation for the possession, use,
and control of the respective properties on
the basis of an annual guaranteed compen-
sation above accruing depreciation and the
maintenance of their properties* equivalent,
as nearly as may be, to the average of the
net operating income thereof for the three-
year period ending June 30, 1917. Mr. Mc-
Adoo, as Director-General of Railroads,
promptly took steps to create an organiza-
tion to coordinate and carry on the opera-
tion of the roads, and through the possession
of powers not in the hands of the Railroad I

War Board, was able to bring order out of
the chaos of the congestion. He put the
priority privileges on a more sensible basis
and was able, by coordinating the operation
of terminals, shipping over the shortest
routes, and making various lines specialize
on certain kinds of traffic, to help matters
considerably. Railroad employees had been
demanding a readjustment of wages because
of the war-time increase in the cost of liv-
ing. The Railroad Wage Commission, ap-
pointed to make recommendations on this
subject, reported in May that increases were
necessary, and its recommendations were em-
bodied in General Order No. 27 and various
supplements thereto, giving general increases
to employees in all classes of service. To
provide for this general increase, a general
advance of 25 per cent, was made in freight
rates, and passenger fares were raised to 3
cents a mile.

Director-General McAdoo resigned on
January i, 1919, and was succeeded by
Walker D. Hines, who had been Assistant
Director-General. Mr. Hines was confronted
during his term as the head of the Railroad
Administration with constantly increasing
costs, it having been found that the expected
savings from coordinated operation failed to
materialize in anything like the degree looked
for. He essayed to compensate for this han-
dicap by an appropriation from Congress,
which he secured only after much debate and
delay and then in reduced amount. No in-
crease in rates was made, however, with the
result that the year 1919 was a period of
retrogression rather than of progression. Im-
provement and even maintenance work was
held to a minimum; no new equipment was
purchased, and in twenty-six months of gov -
ernment control only one-half as many new
cars and locomotives were added as should
properly be added in a single year. The re-
sult was that the railroads were returned to
their owners on March i, 1920, in great need
of rehabilitation. To cover the period of
transition Congress in the Transportation
Act permitted the railroads to accept, if
they desired, a continuation to September i>
1929, of the annual compensation or standard
return.

Railroads and Labor.—Prior to the organ-
ization of the four great railway brother-
hoods there were no limitations upon the
hours of service of railway trainmen; mile-
age was the sole basis of pay; and no allow-
ance was made for overtime. Through the
efforts of these organizations, however, wage