The Yale expositor. (Yale, St. Clair County, Mich.) 1894-current, 1918-01-03
Names McAdoo as Director Gen.
eraI for All Lines in
United States.
EARNINGS TO BE GUARANTEED
Action, Which Affects Also coastvse,
Lake and River Steamship Prop
critics, Taken as a War
Measure.


take over the railroads and appoint
ing Secretary OF the Treasury McAdOo
to the position of director general of
railways.
Mr.. McAdoO will remain secretary
Of the treasury. and in his dual role
Will be the most powerful official in
the nation except the president.
The railroads will continue to he
operated by their respective corpora
tions under the direction of Mr..
McAdoo, and the primary function Of
the lines will become the transporta-
ton of troops and war supplies and
materials, to which all other service
will be subordinated.
Properties Which Are Taken.
The properties that will pass into
the control of the government are:
All railroads, comprising 100000
miles of lines, valued at $1,000 OOO,-
600.
All coastwise, lake and river steam
ship lines.
All terminals, terminal companies,
and terminal associations.
The Pullman company's sleeping
cars and parlor cars.
The packers and other concerns pri-
vate car lines.
All railroad elevators and ware
houses.
All railroad telegraph and telephone
lines.
All interurban electric lines carry
ing freight only.
Street Car Lines Exempt.
The president will not take over at
this time any street car or local pas
senger carrying interurban electric
lines, but he provides I'm his praclama-
tion tF"t by subsequent order he may
take possession of any such lines
found desirable, including subways
and tunnels.
The proclamation does not specific
ally mention express companies, but
the language of the proclamation. in
which there appear the words, land
all other equipment and appurtenances
commonly used upon or operated as
part Of such system" would seem to
include these companies.
Guarantee of Fair Profit.
The government guarantees to the
stockholders of each of the railroads
profit equal at least to the average
profits of the road during the fiscal
years of 1915, 1916 and 1917.
Taking all of the roads OF the cOun-
try as a basis, the general average was
6.21 per cent on their total capital In
veStment.
The president says that he will
ask congress to provide for the guar
antee of pre-war earnings to the own
ers of the properties, and he adds:
Investors I'm railway securities
NAV rest assured that their rights and
interests will be as scrupulOusly looked
aftc" by the government as they could
be by the several railway systems"
McAdoo to Negotiate.
Director General McAdoo is instruct
ed to negotiate with the railroads i'm
mediately agreements providing for
compensation to the owners of the
properties amounting to the average
net profit derived by each company
during the three-year pre-war period,
these agreements to be submitted to
the president for action in connection
with the legislation asked of congress.
Bondholders and other security hold
ers are TO receive the same return on
their investment they received during
the pre-war period and other creditors
are to receive their due with rights
unimpaircd.
The president takes possession OF
the railroads by executive order under
the authority conferred upon him by a
provision Of the army appropriation act
of August 20. 1916, which follows:
"The president In time of war is EN-
powered through the secretary of war.
10 take possession and assume control
of any system or systems of transport
tation, or any part thereof, and to
utilize the same. TO the exclusion, as
| far as may be necessary, of all other
traffic thereon, for the transfer or
transportation Of troops, war material
and equipment, or for such other pur-
poses connected with emergency as
may be needful or desirable"
Cut in Passenger Traffic.
The government will be required to
provide the railroads with approx
mateIy S1.OO0.OOO.0OO, IL is estimated,
for the expansion and building of new
terminals. extensions of trackage and
additional rolling stock.
Government control will also entail
a general shifting of rolling stock to
the centers OF war industry to relieve
the congestion of transportation of war
materials. Hundreds of engines and
| thousands of cars will be sent from
western and southern roads to eastern
territory, where 80 per cent Of the
war supplies are being produced.
Passenger traffic Is scheduled to be
greatly curtailed. On western roads