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Senator WATSON. Will it interrupt you if I ask a question?
Commissioner MCCHORD. Not at all.

Senator WATSON. Did your first head order, as we call it, apply only to open top cars?

Commissioner MCCHORD. Open-top cars. We were apprehensive that the issuance of an order with respect to the box cars would create confusion and we refrained from doing that, but we found no difficulty about the other.

Then the committee with its new rules with respect to closed cars came down-what we know as the Shaffer committee. We found it a very earnest committee, wanting to cooperate with the Commission. and do its part, but we still found there were some roads that would not work in harmony and declined to obey their orders. Then I asked the chairman to join me in a hearing of the executives, and wired them. That was on the 5th day of April, so we had an all-day seance in which they washed their dirty linen.

The ACTING CHAIRMAN. Who do you mean by "chairman," when you speak of "chairman"?

Commissioner MCCHORD. Chairman Hall.

I had had charge of the car-service case and asked the chairman to come in and we had that hearing. Various propositions were made by a great many of the carriers, including, I recall, Mr. Aischton, of the Chicago & North Western, and Mr. Holden, of the Burlington, and others, especially the western and southern carriers, were very anxious for the commission to issue an order. They said nothing would be accomplished without it, and those who opposed it said that a $5,000 penalty was too severe, and that mistakes made by employees would involve them in enormous costs and fines; so I suggested that it might be enforced as the safety appliance laws are enforced. We do not prosecute every violation of the safety appliance law, only flagrant violations. If we did, we would have to be in court all the time. But the prosecutions that were entered into have minimized the trouble with respect to the safety appliance violations. I made that suggestion to them and a great many of the carriers were in sympathy with it. They said they would have a meeting and would come back with resolutions agreeing to it, and waiving the question of further hearing.

So when they came back on the 6th, it was nothing but a resolution. calling on the Interstate Commerce Commission to approve their rules which had proven a failure, and I declined to receive it, and Mr. Hale Holden, who was chairman of that committee, said he would take it back to the executives and they would send a committee down with power. The next I heard of it was on the 11th of April, five days after that. The executives came to Washington, and they issued a proclamation which stated that they were spurred on by patriotic motives; that they had now consolidated all their interests and nationalized their railroads; they had contracted with each other and contracted with the Federal Government and the governments of the States to do that, and they then went along with their activities. Now, that committee did some good

Senator WATSON. In other words, that is what occurred immediately after our declaration of war.

Commissioner MCCHORD. Yes, sir; war, I think, was declared on the 6th, and this was on April 11. But they did not proceed as far as they should have; they did not nationalize to the extent of pooling all their facilities. I said to one or two of them "you have a great opportunity here; you have the summer before you, and you have an opportunity here to clean up and clear up the situation, and unless you do, when winter comes, you are going to get into trouble, because somebody will have to take these roads and operate them that way." They speeded up their trains; I think they probably got 15 per cent additional speed on their trains. The shippers cooperated with them. They had heavier loading, and some good results were obtained, but nothing like in my opinion what could have been accomplished. Then, they came on a short time ago; they nationalized again, and appointed a subcommittee which had a meeting at Pittsburgh. I do not know about the activities of that committee. I do know that they appealed to us to get some information from the carriers who were parties to the nationalization that they could not get themselves. So, as I said in my special report to Congress, I thought it was absolutely necessary for some one to take hold of those roads and nationalize them, because they had not done it.

The ACTING CHAIRMAN. You spoke of the necessity of their nationalizing to a greater degree than what they in fact did. Did you understand that they hesitated because of what might be regarded as legal restrictions?

Commissioner MCCHORD. I understood from the last proclamation, they said they had no doubt about that; that under the laws creating the fuel and the preference commissions they had all the law that was necessary for that, and they could do it. When they first nationalized in April, the Interstate Commerce Commission

Senator LA FOLLETTE. Did they make that statement in writing? Commissioner MCCHORD. Yes, sir.

Senator LA FOLLETTE. Is it in the record?

Commissioner MCCHORD. I do not know whether it is here or not. I could supply it.

Senator LA FOLLETTE. I wish you would.

Commissioner MCCHORD. Both the resolution that came in in April and the one that came in a few weeks ago?

Senator LA FOLLETTE. Yes; and particularly the statement made that the law was ample as it then stood.

Commissioner MCCHORD. I do not know that I have that, but I saw it in print. I will see if I have it at my office.

Senator LA FOLLETTE. If you have it, please supply it.

Commissioner MCCHORD. I saw it in the press as it came from them. I will try to find it. Now, the difficulty about nationalizing and the laws against pooling and the antitrust I do not think stood in the way here.

It meant more the question of the railroad short hauling themselves. They have agreed to do this and pooling their equipment and pooling their facilities, it simply meant traffic arrangement with the shortest route to get it through.

Senator WATSON. In other words, your opinion is that if they had nationalized the roads as they might have done, that they themselves under their management could have so directed and operated the railroads that they could have handled traffic?

Commissioner MCCHORD. I think so, and the commission said in the car-service case, I. C. C., page —:

The commission is of the opinion that prompt relief for existing car-supply conditions can be secured through executive action; that it is the duty of all the carriers at once to appoint a committee, as contemplated at the hearing, vested with plenary power to secure a relocation of cars and to cooperate with the commission at Washington in order that we may be fully advised as to the situation from day to day. If this is done, and it is found that any modification of our order is necessary before or after the effective date thereof, the fact thus brought to our attention will be considered with that end in view. Unless this is done within 10 days from the service of this order the entry of an order prescribing car-service rules for other classes of equipment will be considered.

It was our thought, with the case still open, that we might issue orders from day to day when difficulties arose; but they did not do what they promised; they did not carry out their nationalization scheme.

Senator WATSON. That is, the present railway management committee did not?

Commissioner MCCHORD. No, sir.

Senator WATSON. Are the figures correct-I assume they arethat I read here this morning to Mr. Hall, that they gave, showing that they had increased 20% per cent over 1916?

Commissioner MCCHORD. I assume that is so; yes, sir; and if they had actually nationalized and short-hauled and made their terminals one and made the equipment all one, and if in the summer time or in the fall they had done these things and gone West or South or anywhere and gotten the engines that we were told about and had them brought East, these things would have cleared the situation up.

Senator WATSON. Then it is your opinion that that might have been done by proper coordination and cooperation, without additional equipment?

Commissioner MCCHORD. I think so. I think probably they may need more locomotives; they have 2,600,000 cars. Now, what I am stating is in no wise a criticism of these gentlemen composing this committee, because I am quite sure they were trying to do the best they could, but they could not get away from their own corporate interests. That was the trouble. They say they moved 236,000 cars in eight months. Well, 236,000 cars, when every day of that eight months they had 2,600,000, is not a very great movement.

Senator WATSON. How many did you say they moved?

Commissioner MCCHORD. The carriers owned 2,600,000 in all, and in the eight months the committee says it ordered 236,000 moved. When I say the corporate interests, take the three lines from New York to Chicago the Erie, Pennsylvania, and Baltimore & Ohio. It is claimed that instead of putting an embargo on traffic and diverting it to the lines that could carry it, that those three lines had been taking all the traffic that would come to them, and consequently the congestion. It is only within the last few days that I have seen that statement, and that is an illustration, from the president of one of the large railroads of the West-I do not feel at liberty to give his name unless the committee requires it but he did not give it in confidence.

The ACTING CHAIRMAN. Does the information of your commission, which it has collected from time to time, indicate to you that that

claim is correct-that those three systems of railroads are attempting to handle more than they really can handle over their lines, and if it were diverted to other lines it could have been handled?

Commissioner MCCHORD. Yes. I have not been in very close touch with the car distribution matter for quite a while some months. I take it it is not confined to those three railroads, but it is practically true of all. It is the eagerness of the traffic men to get freight; it is the corporate interest; it has been rather their inclination to take all that is tendered to them.

The ACTING CHAIRMAN. To what extent has there been delay in the movement of freight over these different systems which is above the normal traffic conditions?

Commissioner MCCHORD. That is very serious everywhere, over nearly all the railroads, but especially here in the East.

The ACTING CHAIRMAN. During these months is it true that there were locomotives on the western roads and southern roads that could have been diverted to the eastern territory so as to relieve the situation?

Commissioner MCCHORD. I assume so, because they said they brought over a hundred from the West and have gotten 25 from the South.

The ACTING CHAIRMAN. When was that order made?

Commissioner MCCHORD. I saw it-it just came as information into the office-I think probably a month or three weeks ago. They also said they were endeavoring to get some other locomotives that were being constructed for the Russian Government

Senator CUMMINS. You are not speaking of the order of the Commission but the order of the Railway War Board?

Commissioner MCCHORD. Yes, sir.

Senator WATSON. Do you know how many engines we have sent to Russia and France?

Commissioner MCCHORD. No, I do not. We have, I know, sent some engines over there that were lost en route. I do not know whether those were for France or Russia. Twenty-five were lost on one shipment, but I do not know how many we have sent.

The CHAIRMAN. The statement given in the memorandum furnished us by the American Railway Association, bearing on that subject, throws some light upon it. Now you spoke of the further nationalization of these different railroad systems, and if that were adopted it is your judgment that we could have relieved the situation. I wish you would go more into details and point out how that could have been done, in your judgment.

Commissioner MCCHORD. By doing just what they announced to the public that they had done, consolidated their entire interests, and by pooling their equipment, and making their terminals one and routing the freight over the shortest route and getting it to destination in the shortest time. I think those three things could have been done. Senator CUMMINS. This further nationalization of which you speak related only to the eastern districts, did it not?

Commissioner MCCHORD. Well, I may say

Senator CUMMINS. I mean the one that occurred just a few weeks ago?

Commissioner MCCHORD. Yes, that related only to the eastern district, and I do not see how that could well be carried out without the

nationalization of all of them, because if you want to get a movement from the West and South, if those roads were not parties to the nationalization. It should be a complete nationalization.

The ACTING CHAIRMAN. Now, Mr. McChord, I called the attention this morning of Commissioner Hall to the Esch Act, and to what the Commission had done under that act. Let me ask you, could not the situation have been somewhat relieved if those who were interested in the administration of the coal law had not forbidden the loading of coal for the Lake Region over and above the shipping accommodations that they had for that coal; in other words, my thought is that there was no reason why the terminal facilities in Cleveland and Toledo, and the railroad yards everywhere, should be laden with this coal for the Lake Region when they did not have the ships or bottoms in which to move it.

Commissioner MCCHORD. I may be wrong about it, but I think that is a situation which requires arbitrary action on the part of somebody.

My recollection of that Lake port matter is that it came up to the commission in this way, as to whether the hopper-bottom cars could be shuttled back and forward to the Lake ports in that traffic, while it could have been without an order, yet I thought that it would be quite wholesome for the commission to enter an order under the Esch bill. I believe in the commission exercising all the power it has, if we are ever going to get results. But the carriers having all come in and asked that they be permitted to do that, immediate permission was given. I found out afterwards, however, that some of those cars were taken out of that service, and were sent up East with coal. It was brought to my attention that that was done. How many, I do not know.

The ACTING CHAIRMAN. To what extent has the issuance of these priority orders interfered with the transportation of the country? Commissioner MCCHORD. That is a very hard matter to tell. You understand, of course, that there is no business on earth where the regular order is required more than in the operation of a railroad when a priority order is given; to illustrate, if the train is started with Government freight from Washington to New York it goes along the line, as the Government's priority train, and everybody must get out of the way. It is like a gang of section hands repairing a track; when a train comes they have to take up their tools and get out of the way and wait until the train passes. My idea is that we ought to have the regular order in the running of trains, the Government, of course, is to have the preference in loading cars, preference ahead of everybody, but if you run freight trains from Washington to New York two hours apart, the Government must have preference with respect to those cars, and if you can not get it on the first train put it on the second, and the ordinary shipper must wait. But I think we must look out for the business interests of this country because if that is not preserved, manufacturing concerns and industries will go into bankruptcy. One of the great sinews of war that we have is money, and I do not know where the money is to come from to buy Liberty Bonds to raise the money for the war if we do not preserve those industries. Of course I realize that Government material must have preference and must go ahead;

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