United States Railroad Administration

This article is on the nationalized rail system during World War I. For the corporation that oversaw Conrail, see United States Railway Association.

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.

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 estimated 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 dollars, which was a huge amount of money back then (approximately $15 billion in 2003 dollars, adjusted for inflation) . 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 one could argue that some major East Coast railroads impoverished themselves in so doing, setting up the later railroad collapses in the region.

References

• Kalmbach Publishing, ed. (2000). The Historical Guide to North American Railroads (2nd Edition ed.). Waukesha, Wisconsin: Kalmbach Publishing. pp. 11–12. ISBN 0-89024-356-5. {{cite book}}: |edition= has extra text (help); Cite has empty unknown parameters: |accessyear=, |origmonth=, |accessmonth=, |month=, |chapterurl=, |origdate=, and |coauthors= (help)

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