New Mexico state record. (Santa Fe, N.M.) 1914-19??, 1918-01-04
PRESIDENT TAKES
OVER RAILROADS
Names McAdoo as Director Gen.
eraI for All Lines in
United States.
EARNINGS TO BE GUARANTEED
Action, Which Affects Also Coastwise,
Lake and River Steamship Prop.
critics, Taken as a War
Measure.

Measure.
Observation-Disclosures Wilson,
under his war powers, has as
sumed possession and control OF all
the railroads and steamship lines with
In the United States.
The president issued n proclama-
ton invoking his war authority to
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 be
operated by their respective corpora
tons under the direction of Mr..
McAdoo, and the primary function of
the lines will become the %transporta-
tion Of troops and war supplies and
materials, to which all other service
will be subordinated.
Properties Which Are Taken.
p''l'I li'H tilul VIII IuSN llllD
the control of the government are:
All railroads, comprising 2GO,OOO
miles of lines, valued ut $1,000, OOO,-
900.
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 railroi d 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 Mt
his time any street car or local pas
senger carrying interurban electric
lines, but he provides in his praclama-
lion that by subsequent order he may
take possession of any such lines
found desirable, including subwnys
and tunnels.
The proclamation does not specific
ally mention express companies, but
the language of the proclamation, in
which there appear the words, "and
all other equipment and appurtenances
commonly used upon or operated as n
part Of such system" would seem to
Ippluba thpSa pnmnopiaS |
Guarantee of Fair Profit.
The government guarantees to the
stockholders of each of the railroads
a 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
try as n basis, the general average was
sci 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 in railway securities
may rest assured that their rights and
interests will be as scrupulously looked
after 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 inn
Inediately agreements providing for Il
compensation to the owners of the
properties amounting to the average
nat Dr,a, ln,i,+nI hy anab cnt,,nnv
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
ars are to receive the same return on
pre-war period and other creditors
ire to receive their due with rights
lnimpaired.
The president takes possession OF
he railroads by executive order under
he authority conferred upon him by a
PROVISION Of the army appropriation act
# August 90, 1916, which follows:
'The president in time of war Is en-
through the secretary of war,
o take possession and assume control
II any system or systems of Htranspor-
alton, or any part thereof, and to
Utilize the same. to the exclusion. as
as may be necessary, of all other
rafiic thereon. for the transfer or
transportation of troops. war material
nd equipment, or for such other pur-
connected with emergency as
nay be needful or desirable"
Cut in Passenger Traffic.
The government will be required to
,rovide the railroads with approx
nately S1,OO O,OOO,OO0, it is estimated,
or the expansion and building of new
criminals. extensions of trackage and
dditional rolling stock.
Government control will also entail
general shifting of rolling stock to
he centers of war industry to relieve
he congestion of transportation of war
Materials. Hundreds of engines and
thousands of cars will be sent from
restern and southern roads to eastern {
erritory, where so per cent of the
ar supplies are being produced.
Passenger traffic is scheduled to be {
realty curtailed. On western roads 1