User:Iazyges/United States Railroad Administration

The United States Railroad Administration (USRA) was the name of the nationalized railroad system of the United States between December 28, 1917, and March 1st, 1920. It was possibly the largest American experiment with nationalization, and was undertaken against a background of war emergency.

Background
By the time United States entered World War I in April 1917, the Railroad Industry was already facing economic downturn. By late 1915 higher taxes and operation costs, and price regulations of the Hepburn Act, forced one-sixth of America's railroads into receivership, due to their companies bankruptcy. In late 1916 the railroad unions threatened to go on strike, demanding better working hours and pay. In order to prevent this, President Woodrow Wilson secured the passage of the Adamson Act, which established eight hour workdays and overtime pay for interstate railroad workers. The act was challenged by the rail road industry, but upheld as constitutional by the Supreme Court in Wilson v. New. Despite the passage of the law, after the start of the war many skilled railway workers quit their jobs to join the booming armament industry or enlisted.

After the United States entered World War I, the presidents of railroad companies attempted to support the war effort, by establishing the five member Railroads' War Board to enhance capacity and coordinate efforts. At the same time, the presidents also desired for government agents to ration the railroads through traffic prioritization. The dual strategy was initially successful, especially the movement of surplus train cars to areas lacking them, which cut the national train car shortage by 75% by the summer of 1917. They also convinced the eastern railroads to discontinue many passenger trains, freeing a total of 20,000,000 mi of train tracks for use, roughly equal to the total service provided by one moderately large railroad. This allowed the railroads to supply more rail cars to the war effort, and reduce congestion. Efforts to share facilities were crippled by the Board's lack of authority, and their inability to share anything more than train cars, as any sharing of facilities or traffic by railroad companies would violate the Sherman Antitrust Act.

In December 1917, the railroad industry had reached a crisis point, from loss of skilled labor and equipment crippled by an especially harsh winter, and attempted to jointly share facilities, causing the Department of Justice to threaten to prosecute them for violation of the Sherman Act. Attempts by the government to ration traffic failed, as each government department deemed their own traffic to be priority, causing the majority of rail traffic in the US to be deemed priority traffic by the government. These problems, combined with a bountiful harvest and demand for coal, caused massive backups in train traffic, some backups starting 1,000 mi from the coast.

Establishment
The crisis situation in the railroad industry led the Interstate Commerce Commission (ICC) to recommend that the federal government take control of the industry in December of 1917. Shortly after, President Wilson established the United States Railroad Administration by Presidential Proclamation 1419 on 26 December 1917, under the authority of the Army Appropriations Act of 1916. Wilson appointed his son-in-law William McAdoo, who had previously been Secretary of the Treasury, as Director General of Railroads on 28 December 1917, with Walker Hines as Assistant Director General of Railroads. The takeover was strengthened by Congress on 21 March 1918 by the Railway Administration Act of 1918, which stipulated that the government must pay the railroad companies rent equal to the average of their income for the past three years, that the railroads must be returned to their companies within 21 months of the end of the war, and that the railroads must be returned in equal or better quality as they were when taken over, else the government would compensate the companies.

Operations
Although the priorities of the USRA varied little from the Railroads' War Board, it had the ability and authority to enforce changes that the Railroads' War Board had only been able to request. The key task of the USRA was to move war-time traffic where needed, with as little disruption to civilian economy as possible. Director General McAdoo sought this by way of increasing capacity by way of coordination, and through rationing railroad use, without requiring spending by the Department of Treasury. Because of the Railway Administration Act of 1918, the USRA was able to ignore the ICC, state regulatory commissions, and shipping dictates, and was immune to anti-trust laws, allowing it to allocate traffic through the shortest route by utilizing the facilities of different companies. The USRA could also modify the traffic priorities of government departments and commercial shippers, raise shipping rates, raise money to improve facilities and rolling stock, and grant wage increases to workers.

The USRA eagerly used its power upon its establishment, with McAdoo issuing the General Order No. 1 days after being appointed Director General, ordering railroad managers to develop plans to reduce overlapping of services, to jointly use tracks and terminals, and eliminate unnecessary passenger service. These plans were put into place within weeks, allowing freight to travel over the shortest distance and maintenance to be performed at the nearest facilities, regardless of corporate ownership. By June of 1918 these changes cut down on unneeded passenger traffic by 67,000,000 mi, allowing locomotives to be used for the war effort, which amounted to roughly 12,000,000 mi in 1918. Some of the changes were implemented by January of 1918, but most were finished by June.

Post-war
After the end of World War I, the Esch–Cummins Act was passed on 28 February 1920, which transferred all railroads controlled by the USRA back into the ownership of their private companies. After this point, the USRA existed solely to liquidate and settle accounts. After 1 January 1926, the position of Director General of Railroads was held by the incumbent Secretary of the Treasury, and after the termination of the USRA by the Reorganization Act of 1939 on 1 July 1939, all responsibilities of the Director General were transferred directly to the Secretary of the Treasury.

Organization
The organization of the USRA was announced on 9 February 1918, separating it into the office of the Director General, eight major regions, and seven regional offices.


 * The Division of Law was established on 9 February 1918 to supervise the legal activities of the railroad carriers which were under federal control, to prepare contracts with the carriers, and settle claims. The department was abolished on 16 February 1933, after the death of General Counsel Sidney F. Andrews, with all remaining duties transferred to the Assistant Director General.


 * The Division of Transportation was established on 9 February 1918 to direct the operations of the seized railroads and water carriers, and also to review disputes between managers and employees in conjunction with the Division of Labor. It was re-designated the Division of Operation on 11 June 1918, and abolished on 1 March 1920.


 * The Division of Labor was established on 9 February 1918 to hear disputes between managers and employees. It was organized into three railway adjustment boards: Railway Board of Adjustment No. 1, which heard disputes involving engineers, firemen, conductors, and trainmen; Railway Board of Adjustment No. 2, which heard disputes relating to shop craft unions; Railway Board of Adjustment No. 3, which heard disputes involving railroad telegraphers, switchmen, clerks, and right-of-way maintenance employees. It was abolished on 1 March 1920, with all responsibilities being transferred to the Director General.


 * The Division of Public Service and Accounting was established on 9 February 1918 to oversee accounting. It was renamed to the Division of Accounting on January 24, 1919, and superseded in January 1920 by the Office of the Comptroller, which functioned until 28 February 1937, when it was abolished.


 * The Division of Traffic was established on 9 February 1918 to supervise traffic, simplify railroad operations, and correct inequalities in freight rates. It was abolished on 1 March 1920, and all functions were first transferred to the Department of Transportation within the Division of Liquidation Claims of the Treasury Department, and later on 15 April 1921 to the Division of Law.


 * The Division of Finance and Purchasing was established on 9 February 1918 to coordinate regional committees, and purchase railroad supplies and equipment. It was renamed to the Division of Purchases on 15 March 1919. It was abolished on 1 April 1920 with all functions transferred to the Division of Liquidation Claims of the Treasury Department.


 * The Board of Railroad Wages and Working Conditions was established on 25 May 1918 by USRA General Order 27, due to a recommendation from Railroad Wage Commission, to investigate complains and disputes involving wages and conditions. It was later abolished by USRA Circular 107 on 1 April 1920.