portation agencies of the country. The ground was thus laid for the correlation and coördination of the work of these several agencies into a general transportation system that could not possibly have been secured while they were under separate management.

Undoubtedly one of the prime considerations leading to the taking over of the railroads by the Government was the critical situation that existed in respect to railway labor. Ever since the outbreak of the war evidence was accumulating that railway labor was becoming restive and was likely to make demands that the roads, in their straitened financial condition, would find it difficult to meet. One of the pressing problems confronting the Director-General of Railroads upon his assuming office was thus this question of the readjustment of railway wages. To understand this situation it is necessary to say a few words regarding the passage of what is known as the Adamson Act of 1916 relative to the compensation of railway labor and of the commission that was appointed in pursuance of its terms to consider the question of the adoption of a general eight-hour working day as a basis for the calculation of wages.

On March 29, 1916, a concerted demand was made by the four railroad Brotherhoods (Locomotive Engineers, Locomotive Firemen, Railway Conductors, and Railway Trainmen) that eight hours should be made the time measure of a day's work, there being then in existence a double standard of miles and hours, while leaving unchanged the combined hour and mileage method of payment as well as the miscellaneous provisions in the existing schedule. This demand was refused by the railroads on June 15, 1916, and the proposal was made that the whole controversy be submitted to arbitration either be

fore the Interstate Commerce Commission or in accordance with the provisions of the Newlands Act of July 15, 1913. This proposition was refused by the Brotherhoods, and on August 8, 1916, a strike was ordered. Such a strike would have interrupted railway communications throughout the United States and would have been a national calamity the gravity of which could not be calculated. To prevent such a disaster the President intervened. He called the representatives of the two sides to Washington and laid before them proposals for the settlement of their differences. These proposals were accepted by the Brotherhoods but refused by the railroads. The President thereupon went before Congress and in a special address, on August 29, 1916, recommended the passage of an act to establish the eight-hour day as the legal basis alike of work and wages in the employment of all railway employees actually engaged in the work of operating trains in interstate transportation, and to provide for the appointment of a commission by him to observe the actual results of the operation of such a system. In pursuance of this recommendation Congress passed the so-called Adamson Act, entitled, "An Act To establish an eight-hour day for employees of carriers engaged in interstate and foreign commerce and for other purposes," approved on September 3 and 5, 1916.

The railroads immediately instituted proceedings in the courts to test the constitutionality of this Act. As a result of this action the Brotherhoods again threatened to strike without awaiting the decision of the courts if a settlement were not at once effected. The President thereupon appointed a committee representing the Council of National Defense to attempt the settlement of the controversy. On March 19, 1917, the committee made an award which was in harmony with the eight-hour

law but defined somewhat more specifically the application of the eight-hour basis to existing schedules and practices. This award provided for a Commission of Eight, the railroads and Brotherhoods each being represented by four commissioners, to decide disputes arising under the award. The award was accepted by both parties. On the same day, March 19, 1917, the Supreme Court of the United States rendered its decision sustaining the constitutionality of the Adamson Act (Wilson v. New et al, 243 U. S. 332). As stated by the Commission provided for by the Adamson Act in its report:

The eight-hour day as the measure of a day's work for the purpose of reckoning compensation of certain classes of railroad employees has thus become an accomplished fact. We do not understand that the roads have an intention of further contesting the establishment of the eight-hour day for the employees concerned in the negotiations.

The Commission provided for by the Adamson Act was duly constituted with Major-General George W. Goethals as Chairman. It submitted its report on December 29, 1917. This report, although having no direct bearing upon the settlement of the controversy, is an exceedingly valuable document as throwing light upon not only the effect of the workings of the Adamson Act, but the whole problem of the compensation of railway labor.

This was the situation on January 1, 1918, when the railroads were taken over by the Government. Immediately upon his appointment as Director-General, Mr. McAdoo announced that, as the result of a conference with the officers of the railway Brotherhoods, he had appointed a Railroad Wage Commission composed of Franklin K. Lane, Secretary of the Interior, Charles C. McChord, member of the Interstate Commerce Commis

sion, J. Harry Covington, Chief Justice of the Supreme Court of the District of Columbia, and William R. Wilcox, formerly Chairman of the Public Service Commission for the First District of New York, to investigate and report upon what readjustments should be made in the wages of railway employees. He announced at the same time that the decision made on the basis of this investigation would be retroactive to January 1, 1918. In the order appointing this Commission, dated January 18, 1918, it was stated that:

The Commission shall make a general investigation of the compensation of persons in the railroad service, the relation of railroad wages to wages in other industries, the conditions respecting wages in different parts of the country, the special emergency respecting wages which exists at this time owing to war conditions and the high cost of living, as well as the relation between different classes of railroad labor.

This Commission made its report on May 10, 1918. It is an exceedingly interesting and valuable document. In it the Commission pointed out the difficulties of its task and the impossibility, under the abnormal conditions obtaining, of devising a system that would represent a permanent adjustment of the intricate problem of railway-labor pay. It confined its attention therefore to recommending the action that should be taken at once to meet actual conditions. It found that, notwithstanding the fact that the railroads had during 1916 and 1917 increased the wages of their employees by an amount exceeding in the aggregate $350,000,000 a year, still further increases should be made if the increased cost of living that had taken place since 1916 was to be met. The increases that had been made, moreover, had been extremely uneven as regards the different classes of railway labor. The Commission thus stated that "these ad

vances were not in any way uniform, either as to employment or as to amounts or as to roads, so that one class of labor benefited much more than another on the same road, and as between roads there was the greatest divergence." The situation had been dealt with as pressure made necessary, and naturally those who, by organization or through force of competition, could exert most pressure fared best. Especially did the Commission find that in these increases the higher paid classes of workers had fared best and the lower paid the worst. "There stands out," the Commission said, "one dominating fact, recognized by railroad workers as well as by railroad officials a conclusion compelled by that large sense of equity which governs when logical processes fail - that the lower grades of railroad employment, those in which the supply of labor has been less restricted, and where organization has been difficult, if not impossible, deserve increases out of proportion to the increases for those in the superior grades."

Because of this condition the Commission rejected the policy pursued by England, in meeting a similar situation, of recommending a flat or uniform increase of all wages. Instead it embodied its recommendations for wage increases in the form of a schedule calling for descending percentages of increase in wages as they existed in December, 1915, according as their amounts rose, these percentages running from 4.56 per cent. for wages from $238.01 to $239.00 to 43 per cent. for wages from $46.01 to $47.00 per month. The changes thus recommended would not, of course, remove the inequalities in wages that existed between different classes of labor and different roads. They constituted, however, all that it was possible to do without making an investigation that would require months or years to complete. It was esti