The Barre daily times. (Barre, Vt.) 1897-1959, 1917-12-27
McADOO is CHOSEN AS
DIRECTOR-GENERAL
President Wilson, Who Or
dered Taking Over of All
the Systems in the United
States, Will Ask Congress
for Right to Issue New
Railroad Securities

Washington, D. c., Dec. 27.--One of the
first acts of the government in beginning
the operation of the railroads under proc
lamation issued by President Wilson last
night will be to reduce the salaries now
paid to railway executives and to in
crease in some measure the wages of the
: railway workers. The securities to be is
sued while the government is in control
will be at interest rates not less than
four per cent and the issues will be made
under joint authority of the director gen
eral, William G. MeAdoo, secretary of
the treasury, and the interstate com
merce commission.
President Wilson, when he outlines the
governments plans in his Forthcoming
address to Congress, will ask that the
government be empowered to buy
quantity of the new railroad securities.
All dividends over and above the amount
TO be agreed upon will 90 to the govern
ment.
Congress will be asked also to appro
pirate large fund, probably S200000,-
900, for the immediate supply of rolling
stock to handle the food of traffic which
has swamped the roads. The director
general will have authority to decide
whether the government shall also as
sumo the, operation and control of the
express companies.
Every railroad engaged in general
transportation, with its appmtenances,
including steamship lines, is taken over
and all systems will be operated as one
under the director general.
In statement accompanying his proc
lamation the president announced that /
as soon as Congress reassembles he will /
recommend legislation guaranteeing pre-
war earnings and maintenance of rail
road properties in good repair.
Government backing will be given to
new issues of railroad securities, that a
ready market may be found.
The presidents move, although fore
cast for weeks, came at this time as a
great surprise to nearly everybody in
Washington, including railroad officials.
it had been generally believed he would
await the reassembling of Congress be-
fore taking any step. He acted through ,
Secretary of War Baker under authority ,
conferred in the army appropriation act. /
Direct management of the roads will I
remain in the hands of railroad officials j
and the railroads war board, comprised '
of five railroad heads, will continue to d- I
rect actual operation under Secretary {
AlcAdoo's supervision.
The chief practical effect of govern i
ment operation will be to permit com .
plete unifcation of all rail systems. i'm !
possible under private operation by rea- t
son of statutes prohibiting pooling OF il
rail traffic and earnings. The roads t
themselves had gone as far as they dared a
in this direction, and it became known I
only yesterday that they had been t
warned by Attorney General Gregory t
that a violation of anti-pooling laws p
could not be permitted. G
This situation was fully realized by d
President Wilson, who in his statement il
declared that already some systems were a
endangering their earnings in attempting 4
n
. -hiAAOu-h Aut iaRNAdtiidAiti dffplltr u u
all electric lines engaged in general trans il
portation, local interurban systems are
specifically exempted.
Congress will be asked to guarantee
Earnings equivalent TO tie average net
operating income Of each railroad in the n
three-year period ending June 30. 1917 =
Railroad experts estimate that this will
cost the government next wear in the
Of Sl0O.OO0O00 which can L
be raised in large part by increased a.
ireights ii the interstate commission m
grants the roads application for the Is vi
per cent rate increase now pending. 9th al
.rwise il viii be paid largely out Of the al
general government funds 81
The interstate commerce commission NJ
ind other government agencies which III
rave 20 do with the railroads viii con- o.
niue to perform their functions a. here
ofore. except Sat they viii h. subject tv
= orders ~ the director of railroads VI
The president makes il clear that his an
.ccisiou was not made because of any be
allure on The part Of any railroads to in