deliver such amount of competitive traffic to them as is necessary to insure the quantity carried during the threeyear test period. Thus far the contract has been taken advantage of by relatively few of the relinquished roads.

FEDERAL OPERATION

From the summary already made of the reasons why the roads were taken over, it appears clear that the main object in view by the Federal Railroad Administration 1 was that of making the railroads a part of our line of communications and an effective weapon in the conduct of the war. This meant first, that the transportation system of the country must be operated as a unit and made to serve our war needs, with only secondary regard to other considerations, and second, that in the accomplishment of this task, there should be no waste transportation if it could possibly be avoided. We were seriously short of facilities, and the task could be accomplished only if every mile of track and every unit of equipment were used to their utmost capacity and in the most efficient manner. Yet as we shall see later, the demand for speed and efficiency was not always consistent with the requirements of economical railroading.

Of the many methods inaugurated for securing economies in service, those which brought the largest returns in money, if we may rely upon the estimates of the Administration, have been the elimination of passenger service, the unification of terminals, and the reduction in size and expense of the organizations of the individual railroads.

That there was ample justification for elimination of passenger service as a war measure needs little demon

1 For the organization of the United States Railroad Administration, with a summary of its accomplishments for the first seven months, see Brice Clagett, in Quarterly Journal of Economics, vol. xxxiii, p. 188, November, 1918.

stration. Even before the war, there was much comment concerning duplicate passenger service out of the large cities, particularly those of the Middle West, like Chicago, St. Louis, and St. Paul, and now when every available locomotive and car was needed either for the handling of food or munitions, or in transporting troops to the camps and the embarkation points, and when track room at the inadequate terminals was at a premium, the Administration was well within its rights in introducing somewhat ruthlessly a severe cut in service. The saving appears to have been the largest in the west and northwest, where passenger accommodations had been the most liberal, and in the Eastern Region where the traffic was heaviest. The method followed was to eliminate duplicate service, and in many cases to lengthen the schedules of limited trains and impose upon them the duty of handling local traffic. The hours of trains on parallel routes were "staggered" and railroad tickets were honored by alternative routes. Some trains with light earnings were discontinued altogether. In the case of transcontinental traffic, the fastest service was assigned to the most direct route, the others being used for local traffic. The Director General estimated the annual saving in passenger train miles as 67,291,000, or a little over 10 per cent. Some of the Regional Directors have computed the saving at $1.00 per mile.

This reduction in scheduled train service made possible a notable achievement of the Administration in its troop movement, in which from January 1, 1918, to the signing of the armistice, there were transported 6,496,150 men. From 4500 different points, 1,785,342 drafted men were moved to training camps and fed in transit. Of the total movement, 4,038,918 men in 9109 special trains traveled an average distance of 855 miles, the largest long distance troop movement in history. Into

the crowded embarkation ports were brought 1,904,014 men without interference with other traffic. During one period of 30 days, more than 20 troop trains daily entered the port of New York.

That the policy of reduction of passenger service has resulted in very appreciable inconvenience and discomfort to the traveling public, every one can testify, but it was borne with cheerfulness as a war necessity, and for that reason only. That the Administration fully appreciates this fact is evident in the generous restoration of pre-war service that has already taken place. To what extent the roads can or will eliminate the waste of passenger transportation when they are again in possession of their properties remains to be seen. Many executives have contended that the wasteful duplicate service is the result of an inability to agree upon a more efficient schedule of operation, without incurring the penalties of the Anti-trust Act. Whether or not this is true, there is a vast difference between the ability to do a thing, and the desire to do it. The removal of any possible restrictions of law would not compel railroads to arrange their trains on an alternating schedule, or to assign to some one road the limited service and leave to the others the local service. The desire of each road to offer the best service at the most popular hour of the day is the cause of transportation waste, and the removal of legal restrictions with an opportunity to pool earnings, would not provide compensation for a loss of the advertising value of good train service, nor could it eradicate the natural and commendable spirit of emulation.

In the unification of terminal facilities, the opportunities for radical economies are not so abundant as in the reduction of passenger service. While many of the competitive practices have been done away with, the physi

cal barriers to a thoro unification cannot be removed. The growth in population and the increase in land values has intensified a situation which was essentially uneconomic and unscientific from the beginning, and which is due to the competitive and individualistic character of our railroad development. On the side of passenger service, the most striking case of unification is found in the opening of the Pennsylvania Terminal in New York to the Baltimore and Ohio and the Lehigh Valley railroads.

For the control of freight traffic, terminal managers were appointed at all the important terminal points. While the actual physical reconstruction of terminals was of course impossible, there was opportunity for saving in switching costs and consequently increased speed in handling. Efforts have been made to route traffic so as to ensure delivery with the minimum of switching, and when switching has been required, to confine the service to as few carriers as possible. It was found for example, that in some cases in the Chicago terminal, as many as nineteen different railroads were serving one plant or district solely as a result of competition. Wherever possible, switching is now confined to one line. In the Southwestern Region, the switching work formerly done by 109 roads is now handled by 54.

The weakest point in our present operating machine is found in the state of the terminal facilities, a condition growing rapidly more serious with the increase in population and the lack of available space. It is a comparatively simple problem to increase trackage on the line, but the benefit of such increase is altogether neutralized if cars cannot be handled expeditiously at terminals. As a matter of fact, it may happen that additional business results in an actual loss to the carrier accepting it, because it slows up its entire service, and often only

serves to create congestion and stagnation. It has been the primary object of the carrier to meet the wishes of the shipper, to provide him with equipment promptly as called for, and to accept his consignments without question. In fact, this is the obligation imposed upon the carrier by law, and while there is likewise imposed the legal obligation to deliver, yet the accent both in legislation and in practice has been placed upon the act of getting goods started on their way, regardless of the capacity of the terminal to take care of the cars or of the consignee to unload. The only relief heretofore has been the resort by terminal roads to the crude and unsatisfactory method of embargoes, which have simply forced the congestion back along the line, and have produced wave-like movements of traffic, difficult to handle and creating conditions unsatisfactory to shippers. Under federal operation the so-called "permit system" was introduced for certain kinds of traffic, especially that essential to the war, under which goods could not be accepted for transportation until assurance was received that the consignee could accept and unload without car delay. This system, in the management of which all government departments coöperated, alone made possible the handling of the immense war traffic without congestion. All War and Navy Department shipments were handled on a permit basis. All export traffic via Atlantic, Gulf, and Pacific ports was and is still handled in this manner, and the system was applied during the war to domestic shipments to Philadelphia, New York, and Baltimore. Wheat and hog shipments to primary markets have been stabilized by this process. Except for export shipments and the handling of grain, there is at present no further need for the holding back of traffic, but the success of the experiment has been so decided that it should be carried over into normal times to be