The Sentinel=record., 1917-12-27

!
 -ooierred in the army appropriation ac.
 Direct management of the roads
 Will remain in the hands of railroad officials and the railroad war board.
 comprised of five railroad heads. will
 continue to direct actual operation
 under Secretary McAdoo's general superyisln.
 The chief practical effect of rov-
 elAment operation will be to permit complete unification of all rail systems impossible under priyato operation by reason of statutes nro-
 hibiting pooling of rail traffic and earnings. The roads themselves had
 gone as far as they dared in this dt-
 fection and it became known only to- day that they bad been warned by Attorney General Gregory that a vio- iatIon of anti pooling laws could no, to permitted.
 AlS situation was fully realized by President Wilson. who in his state ment declared the roads had gone as far as they could and that already some systems were endangering their earnings in attempting unification.
 Although the proclamation applies 10 all electric lines ehgaged in gen
 eral transportation local interurban systems are specifically exempted. Congress will be asked to guarantee earnings equivalent 10 the average net operating income of eacn railroad in the three year period ending June 90. l917.
 Railroad experts estimate that this will cost the government next year in the neighborhood of one hundred million dollars which can he raised
 in large part by increased freight rates if the interstate commerce com mission grants the roads application for the fifteen per cent rate increase now pending Otherwise it will be paid largely out of the general gov ernment funds
 The interstate commission and other government agencies which have to do with the railroads will continue to perform their functions as heretofore except that they will be subject 10 orders of tne director of railroads.
 The president mslAos it clear that his decision Was not made becaSae of any failure on the part of the rail- roads to perform their whole duty in solar as they could while hampered as they were by legal restrictions.
 The committee of railroad execu- tives,' said his statement. have done the utmost that il was possible for ties they neither could escape nor neutralize. In more fairness to them the full authority of the government must be substituted
 The plan of control as outlined in
 the proclamation and statement leaves much unsaid as to details. but the general scheme appears to fol- low closely the British system. In England. however, government freight is carried free and the guaranteed earnings require an enormous amount of moM.y from government funds, while in the United states the gov
 elnment will pay for it's freight as in t1e 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 tonight on the governments
 Il owe
 Secretary McAdoo declined to be uesticned and members of the rail road war board said r1ey would have
 no statement to make until tomorrow.
 The presidents statement follows. "l have exercised the powers over
 inc transportation systems of the l conntrv which were granted me by Inc act of congress of August, l9l6' necause it has become imperatiyely 1 necessary for me to do so. This IS | war oe resources no less than ot
 men 1rrhaps even more than Of men, 1 md if is necessary for the complete | nobolization of our resources that 1 he transportation systems of the
 country should be organized and em-
 oloved under a single authority ana simDlified method of coordination 7C0YTINTED ON PAGE D