United States Railroad Administration

The United States Railroad Administration was the name of the nationalized railroad system of the United States between 1917 and 1920. It was possibly the largest American experiment with nationalization, and was undertaken against a background of war emergency.

Background

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 overexpanded 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 (commonly called "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.

Nationalization

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.

Railroad consolidation

The USRA had a plan to consolidate the nation's railroads into nineteen railroad systems. The plan was abandoned in 1940. The planned railroads were as follows:
# Boston and Maine Railroad; Maine Central Railroad; Bangor and Aroostook Railroad; Delaware and Hudson Railroad
# New Haven Railroad; New York, Ontario and Western Railway; Lehigh and Hudson River Railway; Lehigh and New England Railroad
# New York Central Railroad; Rutland Railroad; Virginian Railway; Chicago, Attica and Southern Railroad
# Pennsylvania Railroad; Long Island Rail Road
# Baltimore and Ohio Railroad; Central Railroad of New Jersey; Reading Railroad; Buffalo and Susquehanna Railroad; Buffalo, Rochester and Pittsburgh Railway; 50% of Detroit, Toledo and Ironton Railroad; 50% of Detroit and Toledo Shore Line Railroad; 50% of Monon Railroad; Chicago and Alton Railroad (Alton Railroad)
# Chesapeake and Ohio-Nickel Plate Railroad; Hocking Valley Railway; Erie Railroad; Pere Marquette Railway; Delaware, Lackawanna and Western Railroad; Bessemer and Lake Erie Railroad; Chicago and Illinois Midland Railroad; 50% of Detroit and Toledo Shore Line Railroad
# Wabash-Seaboard Air Line Railway; Lehigh Valley Railroad; Wheeling and Lake Erie Railway; Pittsburgh and West Virginia Railway; Western Maryland Railway; Akron, Canton and Youngstown Railway; Norfolk and Western Railway; 50% of Detroit, Toledo and Ironton Railroad; Toledo, Peoria and Western Railroad; Ann Arbor Railroad; 50% of Winston-Salem Southbound Railway
# Atlantic Coast Line Railroad; Louisville and Nashville Railroad; Nashville, Chattanooga and St. Louis Railway; Clinchfield Railroad; Atlanta, Birmingham and Coast Railroad; Mobile and Northern Railroad; New Orleans Great Northern Railroad; 25% of Chicago, Indianapolis and Louisville Railway (Monon Railway); 50% of Winston-Salem Southbound Railway
# Southern Railway; Norfolk Southern Railroad; Tennessee Central Railway (east of Nashville); Florida East Coast Railway; 25% of Chicago, Indianapolis and Louisville Railway (Monon Railway)
# Illinois Central Railroad; Central of Georgia Railway; Minneapolis and St. Louis Railway; Tennessee Central Railway (west of Nashville); St. Louis Southwestern Railway (Cotton Belt Railway); Atlanta and St. Andrews Bay Railroad
# Chicago and North Western Railway; Chicago and Eastern Illinois Railway; Litchfield and Madison Railroad; Mobile and Ohio Railroad; Columbus and Greenville Railway; Lake Superior and Ishpeming Railroad
# Great Northern-Northern Pacific Railway; Spokane, Portland and Seattle Railway; 50% of Butte, Anaconda and Pacific Railway
# Milwaukee Road; Escanaba and Lake Superior Railroad; Duluth, Missabe and Northern Railway; Duluth and Iron Range Railway; 50% of Butte, Anaconda and Pacific Railway; trackage rights on Spokane, Portland and Seattle Railway to Portland, Oregon.
# Burlington Route; Colorado and Southern Railroad; Fort Worth and Denver Railway; Green Bay and Western Railroad; Missouri-Kansas-Texas Railroad; 50% of Trinity and Brazos Valley Railroad; Oklahoma City-Ada-Atoka Railway
# Union Pacific Railroad; Kansas City Southern Railway
# Southern Pacific Railroad
# Santa Fe Railway; Chicago and Great Western Railroad; Kansas City, Mexico and Orient Railway; Missouri and North Arkansas Railway; Midland Valley Railroad; Minneapolis, Northfield and Southern Railway
# Missouri Pacific Railroad; Texas and Pacific Railroad; Kansas, Oklahoma and Gulf Railway; Denver and Rio Grande Western Railroad; Denver and Salt Lake Railroad; Western Pacific Railroad; Fort Smith and Western Railroad
# Rock Island-Frisco Railway; Alabama, Tennessee and Northern Railroad; 50% of Trinity and Brazos Valley Railroad; Louisiana and Arkansas Railway; Meridian and Bigbee Railroad

Changes and new equipment

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.

Over 100,000 railroad cars and 1,930 steam locomotives were ordered at a cost of $380 million, all of new USRA standard designs, which were up-to-date and standardized types, designed to be the best that could be produced to replace much outdated equipment. However, as commonplace with designs approved by a committee and paid for by the Government, some of the designs were inefficient and the costs higher than they should have been.

Before the new USRA standard locomotive types were built and released, locomotives that builders had on hand were issued to various railroads. 2-8-0 "Consolidation" locomotives built by the Baldwin Locomotive Works for transport and use in France were made available. Then 2-10-0 "Decapod" locomotives built for Imperial Russia by both ALCO and Baldwin, but stranded in the US by the Russian Revolution of 1917 were also made available to the railroads. The USRA leased these locomotives.

Progression

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.

Both wages and rates for both passenger and freight traffic were raised by the USRA during 1918, wages being increased disproportionately for the lower-paid employees, which proved unpopular among more senior ones.

With the Armistice in November 1918, McAdoo retired from his post, leaving Hines as the Director General.

Winding down

In early 1920 the Interstate Commerce Commission's powers over the railroads were substantially increased, in readiness for the USRA's disbandment in March 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, the railroads were handed back to their original owners and the USRA disbanded.

Conclusions

It is estimatedWho|date=August 2008 that the USRA and the nationalizing of the American railroads between December 28, 1918, and March 1, 1920, cost the United States government $1.12 billion dollarsFact|date=February 2008, which was a huge amount of money back then (approximately $15 billion in 2003 dollars, adjusted for inflation)Fact|date=August 2008 . The USRA is generally seen as having been effective in getting things moving for the war effort, but at a steep price.

The locomotives the USRA built, the USRA Standard designs, were immensely successful, and after the war were copied in great numbers, becoming the closest thing the United States locomotive builders came to standard designs. Indeed, the last steam locomotive built for a Class I railroad was a USRA copy, an 0-8-0 for the Norfolk & Western Railway. More controversy exists about their freight car designs, but they were certainly an improvement on many outdated cars in service before the USRA period. It can certainly be said, however, that the influx of new and modern locomotives and cars 'for free' assisted in the revival of the railroads' hitherto shaky fortunes and set up, in the years between the Great War and the Great Depression, a somewhat 'Golden Age' for railroading.

The experiment was not repeated. In World War II, the private railroads handled the war effort admirably, though oneWho|date=August 2008 could argue that some major East Coast railroads impoverished themselves in so doing, setting up the later railroad collapses in the region.

References

*cite book | last = | first = | authorlink = | coauthors = | editor =Kalmbach Publishing
others = | title = The Historical Guide to North American Railroads | origdate =
origyear =
origmonth =
url =
format =
accessdate =
accessyear =
accessmonth =
edition = 2nd Edition
date =
year = 2000
month =
publisher = Kalmbach Publishing
location = Waukesha, Wisconsin
language =
id = ISBN 0-89024-356-5
pages = 11-12
chapter =
chapterurl =
quote =

*| Name = Facts on File History Database Center
URL = http://www.fofweb.com/History/MainPrintPage.asp?