On April 5, 1917, the day before war was declared, Franklin K. Lane, Secretary of the Interior, introduced and had passed by the Council of National Defense the following resolution:
Resolved, That Commissioner Willard be requested to call upon the railroads to organize their business so as to lead to the greatest expedition in the movement of freight.
Acting in accordance with this resolution, the principal railroad executives of the country met in Washington on April 11, 1917, and resolved that during the war they would coördinate their operations in a continental railway system, merging during such period all their merely individual and competitive activities in the effort to produce a maximum of national transportation efficiency. The direction of the continental railway system thus organized was placed by the railroads in the hands of the executive committee of the Special Committee on National Defense of the American Railway Association. This executive committee was also known as the Railroads' War Board.
Under this resolution the railroads of the United States continued to be operated under private ownership and private management until December 28, 1917.
On that date President Wilson, exercising his war-time prerogative, took control of the railways of the country and appointed W. G. McAdoo Director General.
2. Congress in January passed a railroad-control bill.
3. On April 11, 1918, President Wilson issued a proclamation taking over for the Government the property of coastwise shipping lines.
4. On May 24th, Director General McAdoo placed in charge of each railroad property a federal manager whose duty it was to report to the regional director.
5. On June 29th, the Railroad Administration relinquished from federal control nearly 2,000 short-line railroads whose control by the Administration was regarded as not "needful or desirable."
During the first six months after the United States entered the war statistics showed that the railways not only handled far more traffic than in any earlier six months of their history but also as much as in any entire year prior to 1907. It will be remembered that the years 1906 and 1907 marked the climax of a long period of rapid increase of railroad business which resulted in the longest and most acute congestion of traffic and shortage that had ever been known prior to the war period. The grounds offered by the Government for taking over the railway systems during the war might be explained as the resultant of the findings of the Interstate Commerce Commission on December 5th, in which it was stated that the claim of the roads for higher rates could not be granted.