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The United States Railroad Administration
On April 6, 1917, the United States entered World War I, and very soon the nation's railroads proved inadequate to the
task of serving the nation's war efforts. There were several sources of the problem. Although the carriers had made
massive investments in first years of the twentieth century, there were still inadequacies in terminals, trackage and
rolling stock. Inflation struck the American economy, and when in 1906 the federal government empowered the Interstate
Commerce Commission to set maximum rates, the rail firms had difficulty securing revenue sufficient to keep pace with
rising costs. The Interstate Commerce Commission did allow some increases in rates, however. Also, investors had over
expanded the nation's trackage, so by late 1915 fully one-sixth of the railroad trackage in the country belonged to roads
in receivership (bankruptcy). The railroad unions or "brotherhoods", desiring shorter working days and better pay,
threatened strike action in the second half of 1916. To avert a strike, President Woodrow Wilson secured Congressional
passage of the Adamson Act, which set the eight hour day as the industry standard. When the Supreme Court ruled the law
constitutional, the carriers had no choice but to comply. The railroads attempted to join forces to coordinate their
efforts and help the war effort, but private action proved inadequate. Observers noted, for example, that sometimes
competitive practices prevailed that were not in the best interests of efficient mobilization. Also, government
departments sought priority for shipment made on their behalf, and congestion in freight yards, terminals, and port
facilities became staggering. Finally, in December 1917 the Interstate Commerce Commission recommended federal control
of the railroad industry to ensure efficient operation. The resulting efficiencies were to go beyond simply easing the
congestion and expediting the flow of goods; they were to bring all parties, management, labor, investors, and shippers,
together in a harmonious whole working on behalf of the national interest. On March 21st, 1918, President Wilson used the
Railway Administration Act to nationalize the vast majority of US railroads. William Gibbs McAdoo, Secretary of the
Treasury, was appointed Director General of Railroads, with the Santa Fe's chairman Walker D. Hines appointed
Assistant Director General. The United States Railroad Administration officially took charge at noon on December 28,
1917 by Executive Order in anticipation of legislative authority. Change happened swiftly. The railroads were divided into
three Divisions; East, West and South. Duplicate passenger services were killed off, costly and employee-heavy sleeping
car services were cut back and extra fares applied to discourage their use. Uniform passenger ticketing was instituted,
and competing services on different former railroads were cut back. Terminals, facilities and shops were shared.
On March 21, the Railway Administration Act became law; it guaranteed the return of the railroads to their former
owners within 21 months of a peace treaty, and guaranteed that their properties would be handed back in at least as good
a condition as when they were taken over. It also guaranteed compensation for the use of their assets at the average
operational income of the railroads in the three years previous to nationalisation. This act laid down in concrete that
the nationalisation would be only a temporary thing; before, it was not defined as necessarily so.
With the Armistice in November 1918, McAdoo retired from his post, leaving Hines as the Director General.
In early 1920 the Interstate Commerce Commission's powers over the railroads were substantially increased, in readiness
for the USRA's disbandment in March of 1920. They were given powers to approve or reject railroad mergers, to set
rates, to approve or reject abandonments of service, and much else. The government also made financial guarantees to the
railroads after control was handed back to them, to ensure their financial survival after the restoration of control.
On March 1, 1920 the railroads were handed back to their original owners and the USRA disbanded.
Background Image:
Charles Ervin, engineer on left
Atchison Topeka & Santa Fe Railroad
Engine #1882 2x6x2 Prairie Type
Argentine, Kansas 1921
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