|The United States Railroad Administration was established in December 1917 by proclamation of President |
Woodrow Wilson, to control and operate all rail transport for the duration of the war. The Railroad
Administration was a direct response to the failure of the Railroads' War Board, which railroad executives had
formed in April 1917 to achieve a coordinated "railway system" for the World War I emergency. Although this
private effort to coordinate activities had resulted in some pooling of freight cars and coal supplies, it was
difficult to unify other transportation resources without governmental intervention and was almost impossible
to obtain adequate financial assistance.
Under the United States Railroad Administration, the government "leased" key facilities," which eventually
totaled 532 properties with 366,000 miles of track, valued at $18 billion. This included terminal companies, an
express company, and certain coastal and inland waterways and piers, although street cars, interurban lines, and
industrial railroads were all excluded from the Railroad Administration's control. In general, the Railroad
Administration retained the personnel and administrative machinery of each property under the direct charge
of a federal manager, usually an officer of the corporation. Regional directors were in charge of coordinating
operations, and the regional directors, in turn, answered to the director general, William Gibbs McAdoo,
former secretary of the Treasury and later railroad lawyer, Walker D. Hines.
This episode of government enterprise was intended to be an emergency military measure to help win the war,
and supporters carefully pointed out that they did not regard it as a socialist experiment. Certain efficiencies
and economies did result, and centralization and standardization eliminated competitive wastes. The Railroad
Administration organized unified terminals, notably at Chicago, and developed a "permit system" that prevented
loading until shippers gave assurances for unloading. It standardized locomotives and freight cars, centralized
the purchasing of equipment and supplies, and pooled repair shops and maintenance. A coal zoning plan helped to
eliminate fuel wastes.
Passenger service, although discouraged because of the war, gained unifying devices such as consolidated ticket
offices, the universal mileage book, and standard ticket forms and baggage rules. Finally, the Railroad
Administration eliminated advertising while standardizing all statistical records. The government spent $1.12
billion in all, mostly for additions, betterments, and equipment. An act of 21 March 1918 guaranteed
stockholders and bondholders compensation equal to the average annual net operating income during the
preceding three years, 1914–1917. Wages generally rose, and the administration formally recognized the eight-
hour day for 2 million railroad employees. In March 1920, sixteen months after the armistice, the government
returned the railroads to private management under the supervision of the Interstate Commerce Commission
and in accordance with the Transportation Act of 1920.