The herald and news. [volume] (Newberry S.C.) 1903-1937, 1918-01-01
FEDERAL GOVERNMENT ASSUMES
CONTROL AND OPERATION
OF ALL ROADS.
seq. Ei'iD0O TsKEE5 CHARGE
AS Director General He is Expected
to D;ract Unif;cation ard Operation
of Roads Through Present Manage,
ment.-Retains Cabinet Place.

Washingtcn.-CC-- 0osses'
sion and operatioa : lc X n 5 rail
roads for the war was proclaimed by
President Wilson and became effect
i've at noon Friday, December %. Will
liam C. McAdoo, retaining his place
in the cabinet as secretary Of the
treasury, is plac< d in charge as direc-
tor general of railroads.
Every railroad engaged in general
transportation, with its appurtenances
including steamship lines, is taken
over and all systems win be operated
as one under the director general.
In statement accompanying his
proclamation, the president announc-
ed that as soon as congress reassem-
bles he will recommend legislation
guaranteeing pre-war earnings and
maintenance Of railroad property in
good repair.
Government backing will be given
to new issues of railroad securities
that a ready market may be found.
Great Surprise.
The presidents move, although
forecast for weeks, came at this time
as great surprise to nearly every
body in Washington, including rail
road officials. 1t had been generally
believed that he would await the re-
assembling Of congress before taking
airy step. He acted through Secre-
tary of War Baker, under authority
conferred in the army appropriation
act.
Management Of the roads will re-
main in the hands Of railroad officials
and the railroads war board, com.
prised of five railroad heads, will con-
tinue to direct actual operation under
Secretary McAdoo's general superyi.
sion.
The chief practical effect of govern.
ment operation will be to permit a
complete unifcation Of all rail sys'
tens, impossible under private opera.
tion by reason Of statutes prohibiting
pooling of rail traffic and earnings.
The roads themselves had gone as far
IS they dared in this direction, and it
became known only that they had
been warned by Attorney General
Gregory that violation Of anti-pool.
ing laws could not be permitted.
lnterurbans Exceptad.
Although the proclamation applies
to all electric lines engaged in gen.
eral transportation, local interurban
systems are specifically exempted.
Congress will be asked to guaran'
tee earnings equivalent to the aver
age net operating income for the
three-year period ending June 80, 1917.
Railroad experts estimate that this
will cost the government next year
in the neighborhood Of s10o,ooo,ooo,
which can be raised in large part by
increased freights, if the interstate
commerce commission grants the
roads application for the Is per cent
rate increase now pending. Otherwise
it will be paid largely out OF the gen
eral government funds.
The interstate commerce commits
sion and other government agencies
which have to do with the railroads
will continue to perform their func
tions as heretofore, except that they
will be subject to orders of the direc
tor of railroads.
Railroads Not Blamed.
The president makes it clear thai
his decision was not made because oi
any failure on the part of the rail
roads to perform their whole luty IN
so far as they could while hamperes
as they were by legal restrictions.
The plan Of control as outlined II
the proclamation and statement
leaves much unsaid as to details, bu
the general scheme appears to follow
closely the British system.
,yrasuoc