Middletown transcript. [volume] (Middletown, Del.) 1868-current, 1918-01-05

Operation to Be Controlled
Through Present Management.
INCOMEIS GUARANTEED
Net Operating Revenue To Ea0as
Average OF Three Years Preceo'"8
June 80, 1e17-New Security Issues
To Be Given Government Backing
and Condition OF Properties To Be
Maintained.

Maintained.
Washington.-Preside Wilson by
proclamation has taken possession ana
operation of the nations railroads 1oE
the war. William 6. McAdoo, reta'pr
ing his place in the Cabinet as Sef'
rotary of the Treasury. is placed m
charge as DirectorGeneral OF RsAF
roads.
Every railroad engaged in general
transportation with its appurtenancess
including steamship lines. is taken
over, and all systems will be oper-
ated as one under the Director-Gen"
eral.
In a statement accompanying his
proclamation, the President an
nounced that as soon as Congress re-
assemblies he will recommend leg1s-
lation guaranteeing pre-war earnings
and maintenance of railroad proper
ties in good repair.
Government backing will be given
to new issues of railroad securities.
that ready market may be found.
The Presidents move, although
forecast for weeks, came at this time
as a great surprise to nearly every
body in Washington, including rail-
road officials. 1t had been generally
believed he would await the reas'
sembling of Congress before taking
any step. He acted through Secre'
tary of War Baker, under authority
conferred in the Army Appropriation
act
Direct management of the roads
will remain in the hands of railroad
officials, and the Railroads War
Board, comprised of FIVE railroad
heads, will continue to direct actual
operation under Secretary McAdoo's
| general supervision.
The chief practical effect of Gov
eminent operation will be to permit
| a complete unif1cation of all rail sys'
TENS, impossible under private OPP
Grafton by reason of statutes prohibit
ing pooling of rail traffic and earn.
ings. The roads themselves had gone
as far as they dared in this direction.
and they had been warned by Attor-
ney-General Gregory that violation
of anti-pooling laws could not be per
mitted.
This 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
to all electric lines engaged in general
transportation, local interurban sys
TENS are specifically exempted.
To Cost $4,000, 900 In Year.
Congress will be asked to guarantee
earnings equivalent to the average
net operating income of each railroad
in the three-year period ending Juns
30, 1917. Railroad experts estimate
that this will cost the Government
next year in the neighborhood of 500,
600. 900, which can be raised in large
part by increased freights. if the in
terstate Commerce Commission grant!
the roads application for the Is pc
cent. rate increase now pending. 9th
erwise it will be paid largely out o
the general Government funds.
The Interstate Commerce Commits
sion and other Government agencie
which have to do with the railroad
will continue to perform their fune
tons as heretofore except that the,
will be subject to orders Of the IN
rector of Railroads.
The President makes it clear tina
his decision was not made because o
any failure on the part of the raj
roads to perform their whole duty il
, ! 80 far as they could while hampere
as they were by legal restrictions.
, Express Companies Too.
, Some doubt was felt as to wheGne
. express companies are included in tn
. Presidents proclamation. They wer
not mentioned specifically, but tn
: President referred to every system {
+ transportation and the appurtenance
\ thereof" This was generally inte
I preted as including these companies
l. whose business is 50 closely inte
I locked with that of the railroads.
J. It is presumed that railroads wi
l. apply direct to the Interstate Con
8 MERGE Commission or to the stat
commissions, as in the past withol
referring question of rate increases
the Director General. although til
procedure will depend largely on tn