"From the standpoint of the Government three principal reasons are seen for the taking over of the lines:

  1. "The avoidance of obstructions to transportation due to the routing and division of freight, intended to give a fair share to each line in a given territory.
  2. "The abolition of preferences to given shippers and kinds of freight, and the centralization of control over priority in shipment.
  3. "The practical termination of rate controversies and labor discussions as between private individuals and the placing of the roads on a semi-military basis.

"The railroads themselves have received the announcement of the President's action with much greater equanimity than could have been expected. They undoubtedly see in the step the following advantages:

  1. "Assurance of a moderate if not generous income in a period of great uncertainty and difficulty, during which they have been caught between the upper and nether millstones of fixed rates and advancing costs and wages.
  2. "Termination of the danger that threatened them from the continually maturing obligations which ordinarily they would have little trouble in refinancing, but which, under existing conditions, can scarcely be provided for on any basis.
  3. "Provision of means for betterment and improvement at a time when such provision can be had practically only through government orders designed to place such requirements ahead of those of private concerns."

OBJECTS OF GOVERNMENT CONTROL

This experiment in government control was discussed and explained by the Director General after six months' experience in the following statement issued by him on June 15, 1918:

"The policy of the United States Railroad Administration has been informed and shaped by a desire to accomplish the following purposes, which are named in what I conceive to be the order of their importance:

"First, the winning of the war, which includes the prompt movement of the men and the material that the Government requires. To this everything else must be subordinated.

"Second, the service of the public, which is the purpose for which the railways were built and given the privileges accorded them. This implies the maintenance and improvement of the railroad properties so that adequate transportation facilities will be provided at the lowest cost, the object of the Government being to furnish service rather than to make money.

"Third, the promotion of a spirit of sympathy and a better understanding between the administration of the railways and their two million employees, as well as their one hundred million patrons, which latter class includes every individual in the nation, since transportation has become a prime and universal necessity of civilized existence.