The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1917-12-29
GOVERNMENT ROAD coNyR0t.
PRESIDENT WILSON TAKES
CHARGE on TRANsPOlSTA-
TTON BUSINESS.
Railroad and Steamship Lines to He
Operated rs One System Under
Government Direction-Sccretary
of Treasury McAdoo to BE Director
Gcncral-Changc Takes Place To-
morrow.

tlon's railroads for the war was pro-
claimed by President Wilson tonigh,.
4, become effective at noon Friday
December 2s. william G. McAdoo
retaining his place In the cabinet as
secretary OF the treasury. Is placed
in charge as director general OF the
railroads
Every railroad engaged In general
transportation with appurtenances
including steamship lines is taken
over and all systems viii be operat-
Cd an one under the director general.
In statement accompanying the
proclamation the president stated as
soon as congress reassembles ne
would recommend legislation guaran-
teeing pre-war earnings and main
tenance Of railroad properties ir. good
repair. Government backing will be
given TO new issues OF railroad Sc
curities that q ready market may be
found.
The presidents move. although
forecast for weeks, came at this time
as q great surprise to nearly every
body In Washington including rail
road officials. 1t had been generally
believed ne would await the reassem-
bling Of congress before taking any
step. He acted through Secretar.
Baker under authority conferred Ia
the army appropriation act.
Direct management Of the roads
will remain In the hands Of railroad
officials and the railroad board. COM
prised of Ave railroad heads. will
continue to direct actual operation un
der Secretary McAdoo's general super
vision.
The chief practical effect OF gov
eminent operation will be to permit
complete unidcation OF all rail sys-
TENS. impossible >pnder private oper-
alton by reason of statutes prohibit
Ing pooling of rail traffic and earn
ings. The roads themselves had gone
az far as they dared In this direction
and II became known only today ihat
they had been warned by Attorney
Gsperal Gregory that violation OF
- ~anti-pooiing laws could not be per-
mitted.
The situation was fully realized by
President Wilson. who In his state.
mont declared the roads had gone
an Tar an they could and that already
some systems were endangering their
earnings In attempting unification.
Although the proclamation applies
70 oil electric lines engaged in gen.
erai transportation. local interurban
systems are specifically exempted.
Congress will be asked to guaran-
sse earnings equivalent TO the aver
ge net operating income Of each
railroad In the three year period end
ING June 80. 1917. Railroad ex
psrts estimate that this will cost the
government next year in the neigh
borhood OF 100000. 900. which car
be raised In large part by increased
freights II the interstate commerce
commission grants the roads appli
cation for the is per cent. rate ir.
crease now pending. Otherwise
will be paid largely out OF the gener-
al 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 dl
rector OF railroads.
The president makes II clear tha
his decision was not made because oi
any failure on the part OF the rail
roads TO perform their whole duty In
30 far as they could while hamperet
as they were by legal restriction.
The plan OF control as outlined In
the proclamation and statement
leaves much unsaid as to details bu
the. general scheme appears to fol
low closely the British system. II
England. however. the government
freight Is carried free and the guar.
anteed earning required an enormou.
amount OF money from government
funds. while In the United States tn,
government will pay for It's freight
az In the past and will stand it's part
OF Increased freight tariffs IL they are
found TO be necessary.
Aside from the presidents state
ment there was no comment i'm the
capital tonight on the governments
move,
The presidents statement follows:
81 haxa exerciaad tho nnwera nro,