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JANUARY 5, 1918.

The Director General said:

An important change in the passenger train service on the eastern roads goes into effect Sunday, January 6. I have consented to this change because it is imperatively necessary that passenger travel shall be reduced as much as possible during the present serious emergency which confronts the people in the eastern section of the country. By elimination of unnecessary passenger train service, much motive power, skilled labor, track and terminal facilities are released for the handling of coal and food and other supplies essential to the life of the people as well as to the sucessful prosecution of the war. Every patriotic citizen can directly help the Government in clearing up the present unsatisfactory situation on the railroads by refraining from all unnecessary travel at this time.

The breakdown in passenger service of the various railroads in the East has not made a pleasant impression on the public, but it must be borne in mind that the railroad companies in the East are still seriously congested with an unusual amount of freight traffic, the movement of which is more vital to the country than the movement of passengers, and that the weather conditions for the past two weeks have seriously impeded railroad operations.


JANUARY 18, 1918.

Director General of Railroads McAdoo announced this afternoon the appointment of a Railroad Wage Commission to make a general investigation of the subject of railroad wages in the United States. The Director General named as members of the commission Franklin K. Lane, Secretary of the Interior; Charles C. McChord, member of the Interstate Commerce Commission; J. Harry Covington, chief justice of the Supreme Court of the District of Columbia; and William R. Willcox, of New York. The members of this commission are all men who have had experience in dealing with the problems referred to it.

Secretary Lane was for eight years a member of the Interstate Commerce Commission, and was also the chairman of the board, consisting of himself, the Secretary of Labor, Daniel Willard, and Samuel Gompers, which brought about the agreement between the railroads and the four railroad brotherhoods to accept the Adamson Law.

Commissioner McChord was formerly chairman of the Kentucky railroad commission. During his eight years of service as a member of the Interstate Commerce Commission he has been largely concerned with those regulatory laws which directly affect railroad employees, and during 1916 had charge of the car-shortage problems. Judge Covington, prior to his appointment as a Federal judge in 1914, was a Member of Congress, serving on the Committee on Interstate and Foreign Commerce, the committee which considers all railway legislation in the House of Representatives. He was the President's personal representative last summer on a mission to the Pacific Coast States in connection with labor troubles existing there.

Mr. Willcox is the present chairman of the Republican national committee. After serving as postmaster of New York City, he was appointed by Gov. Hughes chairman of the New York public service commission for the first district, and served upon that body for six years.

The commission has been appointed with a view to determining the wages for the different classes of labor upon the railroads. It will begin its work at once, and will report to the Director General, giving its recommendations in general terms as to changes that should be made. Upon this report the Director General will make a decision. In dealing with such a complex problem as railroad wages, the powers of the commission must be very broad if it is to report a satisfactory result. It is authorized to make a general investigation of the whole field of railroad labor, the compensation of persons in the service of the railroads, the relation of the railroad wages to wages in other industries, the conditions in different parts of the country, the special emergency respecting wages to wages which exist at this time owing to war conditions, and the high cost of living, and the relation between the different classes of railroad labor.

The creation of this commission is the culmination of a large number of complaints and demands of employees which have been pending before the railroad managers for some time past. These complaints and demands were brought to the attention of the Director General shortly after the assumption of the operation of the railroads by the Government. They came in all forms, from various groups of unorganized employees of the railroads.

President Wilson sent the following letter to each member of the commission:

May I not assure you of my appreciation of your acceptance of the invitation extended to you by the Director General of Railroads to serve as a member of the more important commission he has appointed to inquire into the question of wages of railroad employees in the United States?

With warm regard,

Cordially and sincerely yours,



FEBRUARY 4, 1918.

DEAR SIRS: The following is an outline of the functions of the Regional Directors. I shall be glad if you will bring to my attention from time to time any points which are not clear to you or which you think call for modification or extension.

Broadly speaking, I wish to give you power to direct railroad operations in your territory so as to handle traffic with the least congestion, the highest efficiency, and the greatest expedition. As far as is consistent with these objects you will, of course, keep down operating


I have put responsibility upon you for the entire operating situation. I mention the following simply as few illustrations of the matters which are thus intrusted to you:

You should see that terminals are used to the best advantage and that such changes in established practices are made as will bring this about.

Where minor capital expenditures are needed to establish new connections for the better use of terminals, you will endeavor to get some or all of the interested companies, by their voluntary action, to arrange therefor, and will refer to me cases of expenditures which can not be so arranged.

You will order such changes in routing of traffic, using any lines or parts of lines in combination as will avoid uneconomical routes and congestion of particular terminals or railroads, giving due consideration to shippers' interests.

The Commission on Car Service has been replaced by the Car Service Section of the Division of Transportation (the personnel remaining largely the same). The Car Service Section—

(a) Will have charge of all matters pertaining to car service, including the relocation of freight cars as between individual railroad and regions.

(b) Will issue instructions through the Regional Director providing, on application of proper governmental authorities, for preference in car supply and movement.

(c) Will receive from railroads such reports, periodical or special, as it may require in order to keep fully informed with respect to car service, embargo or transportation conditions.

(d) Must be promptly informed of all embargoes placed, modified or removed, and will, from time to time, recommend such embargo policies and exemptions as the needs of the Government, seasonal requirements, or other circumstances may demand.

(e) Will deal directly with railroads with respect to matters within its jurisdiction, and will keep the Regional Directors advised of all instructions or orders in which they are concerned.

You will keep fully advised as to the situation concerning the use of locomotives, repairs to locomotives, amount of shop capacity, and amount of shop labor available for locomotive repairs. You will have power to promote the general good of the transportation situation in your region by making transfers of locomotives from one railroad to another or of locomotives needing repairs from one shop to another and transfer of shop labor from one shop to another. Such transfers, should, of course, have reference to any agreements between labor and the company affected and be made with just regard to the welfare and rights of employees. You will, of course, have like duty and power respecting car repairs.

As to labor, you have been advised of the appointment of the Railroad Wage Commission. The general policy as to all labor is that there shall be no interruption of work because of any controwages and living conditions will have the consideration of the Railroad Wage Commission.

Pending action by me upon the report of that commission there ought not to be any radical change in existing practices without submitting the matter to me for approval. But it should be understood that the usual methods of settling by agreement ordinary grievances and complaints shall continue as heretofore and that the companies are free to negotiate as heretofore with their employees and are expected to observe faithfully existing agreements with their employees. In cases of doubt about new negotiations with employees, the advice of the Director General should be sought.

You should bear in mind that labor has the very natural feeling that railroad managers, although now working for the Government and on Government account, necessarily continue the same conception of and attitude toward labor problems that they had when acting under private management. I am told that labor will have a natural suspicion that any unfavorable action taken by railroad managers indicates a purpose on their part to make governmental control a failure and to use it for promotion or vindication of their own theories.

For these reasons, great care should be taken to avoid anything having even the appearance of arbitrary action, and it will be expedient, at least at the outset and until the matter shall take more definite shape, not to dispose, unless by mutual agreement, of any

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