Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1917-12-28
GOVERNMENT TAKES
RAILROADS TODAY
Secretary McAdoo to Assume
Operation as Director General
Steamship Lines Belonging to Rail
roads Also to Be Taken Over-Big
Salaries to Be Reduced.

WASHINGTON, Dec. 27.-Govern.
ment possession and operation of tho
nation $ railroads for the war was pro
claimed by President Wilson last night
to become effective at noon on FRIDAY,
Dec. 2S. William G. McAdoo, retain.
ing his place in the cabinet as secrc.
tary of the treasury, is placed in
charge as director general of railroads,
Every railroad engaged in general
transportation with its appurtenances,
including steamship lines, is taken over
and all systems will be operated as one
under the director general
In statement accompanying his
proclamation the President announced
that as soon as congress reassembles be
will recommend legislation guarantee
ing pre-war earnings and maintenance
of railroad properties in good repair.
Government backing will be given 20
new issues of railroad securities that a
ready market may be found.
The President = move, although foro.
east for weeks, came at this time as
great surprise to nearly everybody in
Washington including railroad officials.
1t had been generally believed he would
await the reassembling of congress be
fore taking any step. He acted through
Secretary of War Baker under author.
~ conferred in the army appropriation
act.
Direct management of the roads will
remain in the hands of railroad Off
Gals and tho railroads war board com
prised of five railroad heads will con
tinuc to direct actual operation under
Secretary McAdoo's general supcrvi
sion.
The chief practical effect of govern
mcnt operation will be to permit a
complete unifcation of all rail systems,
impossible under private operation by
reason of statutes prohibiting pooling
of rail traffic and earnings. The roads
themselves had gone as far as they
dared in this direction and it became
known yesterday that they had been
warned by Attorney General Gregory
that violation Of anti.pooling laws
could not be permitted.
The situation was fully realized by
President Wilson who in his statement
declared that already some systems
were cndangering their earnings in at
tempting unification.
Although the proclamation applies to
all electric lines engaged in general
transportation. local intcrurban systems
are specifically exempted.
Congress will be asked to guaran-
tee earnings equivalent TO the average
net operating income of each railroad
in the three year period ending Junn
80, 1917. Railroad experts estimate
that this will cost the government next
year in the neighborhood of 100000.
900 which can DO raised in largo part
by increased ireights if the Interstate
Commerce Commission grants the rail
roads application for tho Is per cent
incrcaSe now pending. Otherwise Il will
DO paid largely out Of the general gov.
eminent funds.
The interstate commerce commission
and other governmental agencies which
have to do with tho railroads will con
tinuc to perform their functions as
heretofore except that they will be
subject to orders of the director of rail
roads.
The President kcs it clear that
his decision was not made because OF
any failure on the part of any rail.
roads to perform their whole duty inso-
far os they could while bampered as
they were BY legal restrictions.
Tho plan Of control as outlined
leaves much unsaid as to details, but
the general scheme appears 10 follow
closely the British system except THE
United States government will pay fof
its freight as in the past. Aside from
the President statement there was no
comment in the capital last night on
the government s move.