The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1917-12-27
PRESIDENT
TAKES OVER
RAILROADS
And Puts Secretary McAdoo
in Charge
IN EFFECT THIS NOON
win he Given Profits at Pre-War
Rate and viii be Run On
British Plan.

Washington, Dec. 27.-Government
possession and operation of the ma
tion's railroads for the war was pro-
claimed by President Wilson last
night to become effective at noon
tomorrow. William G. McAdoo, re-
tanning his place in the cabinet as
secretary of the treasury, is placed
in charge, as director-general of rail
roads.
Every railroad engaged in general
transportation, with its appurtenanc-
es, including steamship lines, is TAX
en- over and all systems will be oper
ated as one under the director-gen-
erai
In a statement accompanying his
proclamation, the president announe
ed that as soon as Congress reas
sembled, he will recommend legisla
don guaranteeing prewar earnings
and maintained for railroad proper
ties in good repair
Government backing will be given
to new issues of railroad securities
that a ready market may be found.
forecast for weeks, came at this time
The presidents move, although
as great surprise to nearly every
body in Washington. including rail.
road otficialsg 1t had been generally
believed o he would await the reas-
sembling of Congress before taking
any step, He acted 8threughmSecre5
tary OF, War Baker, UNDER authority
conferred in the army appropriation
act. -,-f~ t,orr
Direct management, of the roads
will remain in the hands Of railroad
officials and the railroads war board
composed of five railroad heads, viii
continue to direct actual operation
under Secretary McAdoos general
supervision
The chief practical effect of govern
ment operation will be to permit
complete unification of all rail sys-
TENS, impossible under private oper
alton by reason of statutes prohibit
ing pooling of rail traffic and earn
ings. The roads themselves had gone
rs far as they dared in this direction
and 1t became Known only YESTERDAY
lha' they had been warned by Attor,
ney General Gregory that a violation
of antipooling laws could not be per
mitted
Congress will he asked to guaran
tee earnings equivalent to the aver.
age net operating income of each rail
road in the three years period ending
June 30, 1917. Railroad experts est.
mate that this will cost the govern
ment next year in the neighborhooi
of $lOO,000000, which can be raised
in large part by increased freights. ii
The interstate commerce commission
grants the roads application for the
10 per cent rate increase now pend
ing. Otherwise it will be paid large
ly out of the general government
funds. The interstate commerce
commission and other government
agencies which have to do with the
railroads will continue to perform
theT functions as heretofore, except
that they will be subject to orders o.
The director of railroads.
The plan of control as outlined ir
The proclamation and statement
leaves much unsaid as to details. bu
the general scheme appears to follow
closely the British system. In Enc.
land, however, government freight Is
carried free and the guaranteed earn
ings require an enormous amount OF
money from government funds, while
in the United States the government
will pay for its freight as in the past
and will stand its part of increased
freight tariffs If they are found to be
necessary.
Aside from the presidents state
ment there was no comment In the
capital last night on the govern.
ment's move. Secretary McAdoo de,
clined to be quoted and members OF
the railroads war board said they
would have no statement to make un
til today.