Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1917-12-27
TO ASSUME OPERATION UNDER
WAR AUTHORITY DECEMBER %
Practical Effect Complete Unification of All Rail
road Systems Impossible Under Private Own
e~rship-McAdoo Director-G n | of Rail
roads-President to Ask Congress for Definite
Guarantees Regarding Maintenance and In
come of Properties Taken Over

come OF PrOperCleS IL
Washington. Dec. 26.-Governmen'
possession and operation of the ma
tons railroads for the war was pro-
claimed by President Wilson tonight
to become effective at noon next FRI
day, Dec. IS. William 6. Mc.Adoo
retaining his place in the cabinet as
secretary Of the treasury. is placed IN
charge as director general of rail-
roads.
Every railroad engaged in genera
TRANSPORTATION with its appurtenances
including steamship lines, is taken
over and ali systems will be operated
as one under the director general.
In a statement accompanying his
proclamation the President announced
that as soon as Congress re-assem-
blcd he win recommend legislation
guaranteeing pre-war earnings ano
maintenance of railroad properties in
good repair.
Government backing will be given to
new issues of railroad securities tina,
Il ready market may be found.
Great Surprise at This Time
The Presidents move. although fore
cast for weeks, came at this time a.
a great surprise to nearly everybody
in Washington, including railroad Of
fcials. 1t had been generally believed
he would await the rc-assembling o
Congress before taking 7 step. ~
acted through Secretary of War ia
kcr. under authority conferred in tht
army appropriation act.
! Direct management of the roads will
| remain in the hands Of railroad Off
Gals and the Railroads War Boarc
! comprised of five railroad heads. vii
continue to direct actual operation I'M
der Secretary McAdoo's general supe:
: vision.
Permit Complete Unifcation
The chief practical effect of government
operation will be to permit a complete
unifcation of all rail systems, impossibi
under private operation by reason o
statutes prohibiting pooling of rail trafi
and earnings.
The Dads themselves had gone as IA
as they dared in this direction aud it be
came known only today that they ha'
been warned by Attorney General Greg
Dry that a violation of a~nti-pooling law
could not be permitted.
J This situation was fully realized b.
President Wilson, who in his statemen
declared that the roads had gone as ia
as they &ould and that already some sys
TENS were ~endangering their earnings il
attempting unifcation.
Although the proclamation applies TO al
electric lines engaged in general trans
portation. local interurban systems ar
specifically exempted.
Congress will be asked to guarantee
earnings equivalent to the average ne
operating income of each railroad in thu
three-year period ending June go, 1917
Railroad experts estimate that this will
cost the government next year in tn,
neighborhood of 800, 900. 600 which can b,
raised in large part by increased freight:
IL liz liiltiStdlt Commerce tofllfniSSloi
grants the roads application for the l.
per cent. rate increase now pending. 9th,
erwise it will be paid largely out of tn.
general government funds.
The Interstate Commerce Commits.
sion and other government agencies
which have to do with the railroads
will continue to perform their func-
tons as heretofore, except that they
will be subject to orders Of the direc.
tor of railroads.
The President makes il clear that his
decision was not made because Of any
failure on the part of any railroads t.
perform their whole duty insofar as
they could while hampered as they
were by legal restrictions.
Follows British System
The plan of control as outlined in
the proclamation and statement leaves
much unsaid as to details. but the gen
eral scheme appears to follow closely
tn British system. In England, how
ever, government freight is carried
free and the guarantee earnings de-
amnd an enormous amount Of money
from government funds, while in the
United States the government will pay
for it's freight as in the past and will
stand it's part Of increased freight tar
ifs if they are found to be necessary
Some doubt was felt as to whether eX
press comapnies are included in the
Presidents proclamation. They are
not mentioned specifically, but the
President referred to every system OF
transportation and the a~ppurtenances
thereto" This was generally inter
preted az including these companies
whose business is 50 closely interlock-
ed with that Of the railroads.
Presidents Statement
The Presidents statement follows:
Il have exercised the powers over
the transportation systems Of the coun-
try which were granted me by the ac;
Of Congress Of August, 1915 because II
has become imperatively necessary 70,
me 10 do so. This is a war of
no less than of men, perhaps even moe