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time to time as fair and reasonable, which compensation shall be considered as a part of the gross contract income of the Express Company. The Director General, however, may require said contract to be submitted to him for his approval, and no contract disapproved by him shall thereafter be effective between the parties.


The Director General will perform all necessary switching service for cars in express service on the lines under Federal control covered by this contract, such as ordinary switching in connection with regular trains at stations which involves movement to and from the stations, and also to and from a track or siding assigned for the handling of express traffic and interchange of cars between railroads over which the Express Company operates, and cars loaded with live stock in transit to and from stockyards for feed, water, and rest, in compliance with the law and service necessary by reason of the failure of the railroads to make schedule connection. For unusual or extraordinary service rendered, such as special switching to and from industry tracks or occasioned by reconsignment of cars and service of like nature, the Express Company shall pay compensation at the rate or charge of the railroads made for similar services to other parties.


The Express Company agrees that the icing and refrigeration of cars in the service of the Express Company while on the lines covered by this contract shall be performed by the agency employed by the Director General for this purpose, the Director General agreeing that the charges for such service shall be reasonable.


No evidences of indebtedness except ordinary bank or commercial loans for current purposes shall be made or issued by the Express Company without the prior approval in writing of the Director General; nor shall any lien of any kind be placed by it upon any property of the new corporation without the prior approval in writing of the Director General. All loans shall be reported to the Director General as soon as made.

The stock issued by the Express Company shall be sufficient to pay at par for the property transferred to it and to provide the cash necessary for working capital. The initial issue of the stock of the Express Company shall not be made until such issue shall have been approved in writing by the Director General. From time to time thereafter as additional funds may be necessary to purchase addi

tional property or reimburse the company for additional property purchased or for working capital, additional stock may be issued by the Express Company, but no issue shall be made without the approval in writing of the Director General.


Either party to this contract may, after July 1, 1922, by not less than six months' notice in writing, to the other party, cancel this contract.


The Express Company agrees that it will at any time during the existence of this contract, upon terms to be agreed upon between the parties hereto, establish at such places as may be designated by the Director General, collection and delivery service for baggage and less than carload shipments of freight.


If during the operation under this contract the gross contract income hereunder for any contract year shall not be sufficient to pay the operating expense and taxes of the Express Company for such contract year, it is agreed that the amount of any such deficit shall be deducted from any payments due the Director General thereafter, as a further allowance by the Director General to the Express Company.


Any controversy which may arise as to the performance of any part of this contract shall be submitted to and determined by the Interstate Commerce Commission after full hearing, and its decision thereon shall be final.


The term "capital stock" or "outstanding capital stock," as used herein, shall mean and include only stock issued by the Express Company upon the approval of the Director General and not canceled.

The term "Director General," as used herein, shall be taken to apply to any official or person who may now exercise the authority of the United States with respect to said lines of railroad under Federal control, or may hereafter, as the successor of the Director General, exercise such authority.

The word "railroad," as used herein, shall include all systems of transportation and appurtenances thereto under Federal control covered by this contract.

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In witness whereof these presents in duplicate originals have, on the day and year first above written, been duly signed and delivered by William G. McAdoo, Director General of Railroads, and duly signed, sealed, and delivered by the American Railway Express Company, by George C. Taylor, its president, thereto duly authorized by a vote of the directors of the company at a meeting duly called and held on June 26, 1918, certificate of which authorization, duly attested by the company's secretary, is hereto attached.


Director General of Railroads. By WALKER D. HINES,

Assistant Director General.



Its President.




At a meeting of the board of directors of the American Railway Express Company, held at the office of the company at 65 Broadway, in the city of New York, on the 26th day of June, 1918, on motion duly made, seconded, and carried, it was


Resolved, That the attached draft of proposed contract between the Director General of Railroads and the American Railway Express Company, relating to the operation, compensation, and other matters connected with the express transportation business over the transportation systems under Federal control, be approved, and the President and Secretary be instructed to execute the same.







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.

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