"The Government of the United States is the only great government now engaged in the war which has not already assumed control of this sort. It was thought to be in the spirit of American institutions to attempt to do everything that was necessary through private management, and if zeal and ability and patriotic motive could have accomplished the necessary unification of administration, it would certainly have been accomplished; but no zeal or ability could overcome insuperable obstacles, and I have deemed it my duty to recognize that fact in all candor now that it is demonstrated and to use without reserve the great authority reposed in me. A great national necessity dictated the action, and I was therefore not at liberty to abstain from it."
The Government undertook to guarantee to each company such net earnings as would amount to the ascertained average of the three-year period ending with June, 1917. The rights of stockholders and bondholders and other creditors of the railroads were not to be impaired by the change in control, and the roads were to be kept in as good repair and equipment as when taken over. For their upkeep and betterment the President sought an appropriation of $500,000,000 from Congress.
The Secretary of the Treasury, William G. McAdoo, was appointed director general. His first act was to order that all terminals, ports, locomotives, rolling stock and other transportation facilities be utilized in the common cause of serving the country. By this course he ended all railroad compacts apportioning the distribution of traffic, and pooled the terminals for the common use of all carriers whose lines or cars could reach them.
Meantime a coal famine, due to freight congestion of unexampled proportions, had been gradually developing. At the beginning of December the country, except in the northwest, faced a serious shortage of fuel, not through lack of coal, but through lack of means to transport it. Dr. H. A. Garfield, the Federal Fuel Administrator, took steps to have coal and coke given the right of way over general freight, which in turn was subordinate to the transit of actual war supplies. Traffic priority of coal shipments was the remedy sought to loosen the congestion of coal cars at mines and terminals. But sufficient coal did not reach the various points of distribution for normal winter use, nor, what was as serious, for war purposes. It was solely a transportation problem, involving a general freight problem, and its solution would also solve the fuel problem. The navy and factories alone required 100,000,000 tons more than they needed before, and could get little above half that quantity. There came an imperative call for fuel economy from Dr. Garfield, who warned the country that unless it could save 50,000,000 tons by retrenchment, the Government would have to stop the operation of nonessential industries where coal was a big factor in order to apply the use of fuel so saved for essential war industries.
In the end Dr. Garfield resorted to heroic measures. Without prior notice he issued a closing order to the industries east of the Mississippi, which were thus made to feel the full force of the coal famine. The operation of all factories, except those engaged in the manufacture of foodstuffs, was suspended for five days (from January 18 to January 22, 1918), and they were also to close every Monday from January 28 to March 25 inclusive. Coal merchants were required in selling fuel to give preference to railroads, domestic, and public service consumers, ships for bunker purposes, Government departments, national and local, and manufacturers of perishable food. On the five days named and on the succeeding Mondays, no fuel was to be delivered to any other person or corporation for any purpose except for plants which must be operated seven days a week to avoid injury to their equipment, and printing establishments. The curtailment of the use of fuel was further prescribed on the Mondays named to an extent that virtually made them holidays. All private, business, and professional offices, except those of banks and trust companies, physicians and dentists, were forbidden to be heated or lighted at all except to avert the danger of damage from frozen apparatus. Wholesale and retail stores (except those selling food), business buildings, saloons, theaters, dance halls and all other places of amusement came under this ban.
The country was startled by the sweeping order. Protests poured into the White House; Congress was in a ferment; the Senate passed a resolution urging a postponement of such a drastic step. But Dr. Garfield remained firm. He insisted that the inadequacy of the coal supply and transportation facilities to meet the enormous war demands, coupled with unprecedented adverse weather, had made immediate restrictive measures imperative. The order, with a few modifications, was enforced in the face of a rising storm of indignation from a multitude of objectors who saw nothing but industrial chaos in its operation.
The protests subsided as quickly as they arose. Industry had received a violent shock; confusion and uncertainty followed; but the order was obeyed. It fell with stunning effect upon an unprepared public opinion which in some directions exploded with symptoms of a panic-stricken hysteria. But presently it began to dawn on the public mind that if a cessation of business for a few days helped the railroads to move coal and war freight, whereby ships could get fuel and cargoes to depart to Europe, and also removed the tantalizing spectacle (one of many like situations elsewhere) of a coalless New York while 350,000 tons were traffic-bound a few miles away, the fuel-curtailment order would be remembered as marking a decision of great courage and statesmanship. The congestion of the railroads and their terminals had produced a condition bordering on transportation immobility. The arteries of commerce, as it were, had become frozen. Factories and plants piled their daily output in railroad yards and near the docks in rising quantities. The accumulations of undelivered freight grew and grew and the panting railroads, working beyond the limits of what their traffic would bear, could only reduce the incubus piecemeal. The tardy recognition came that, even had there been no coal shortage, which was the primary cause of the shutdown, a temporary cessation of manufacture was necessary to clear the loaded tracks and empty the groaning storehouses before they were burdened with further accretions from the hives of industry.
The antagonism provoked by the closing order soon gave way to a cordial spirit of cooperation, and many industries affected undertook to assume in large part the financial burdens incident to enforced idleness. Manufacturing was halted and further merchandise was kept from cluttering the crowded railroads. Improved transportation conditions followed, due largely to milder weather. The way was rapidly cleared for a steady movement of coal to tidewater for bunkering ships loaded with supplies for the American oversea forces and for the Allies, as well as for supplying domestic fuel needs.