331,209, or over 50%. These figures, however, do not tell the entire story, as a large part of the 1918 increases and changes in rules were not in effect throughout the entire year.

Mr. McAdoo stated that the increases granted in 1918 were at the annual rate of $600,000,000 to $700,000,000. It is now certain, however, that even the higher figure underestimates the actual extent of the 1918 increases. It is evident that the Director General was not then fully informed as to the effect of the various collateral increases and changes in rules.*

It should be noted here that in 1919 Director General Hines found it necessary to authorize further wage advances and to promulgate additional rules which added to the railroads labor cost, and that in 1920, the United States Labor Board, created by the Transportation Act of that year, found justification for a further general advance of over $600,000,000 per year. The increases granted to railroad labor in 1918 were probably less in percentage than those given to employees in other industries with which the railroads had to compete during an acute shortage of labor.

The further developments in the labor situation, and the policies of the Railroad Administration during the last 14 months of federal control are discussed in Chapter XVII.

*See Chapter XVII for recapitulation of all wage increases during federal control.

A

CHAPTER XII

OPERATING RESULTS OF 1918

S the railroads were commandeered by the
Government to meet a war emergency, a

review of their traffic accomplishments during the year 1918 is of particular interest. It will be recalled that the railroads serving the North Atlantic seaboard were badly congested when the Government took hold. At that time there were 62,247 loaded cars delayed short of their ultimate destination. In addition, there were 31,421 cars held at and west of St. Louis; 24,836 at or west of Chicago; 14,061 at or south of the Ohio River gateways; and 15,545 at or south of the Potomac River gateways. These made a total of 148,110 loaded cars held short of destination. In the majority of cases they were destined to the relatively small area embraced within a line drawn from Portland, Maine, through Albany, Rochester, Harrisburg, and Baltimore.

The operating methods employed to relieve this congestion have already been described. These methods, in spite of the unusually severe weather of January, resulted in the practical clearing of the accumulations by May 1.

During this period the food situation in the countries with which the United States was associated in the war was exceedingly acute. The

needs were estimated by the Food Administrator to be not less than 1,160,000 tons per month. Translated into other terms that meant between 30,000 and 40,000 loaded cars per month to be moved to the seaboard and the same number of empties to be moved westward. The actual exports during the months of January, and the estimated exports for February, fell far short of the minimum requirements, and a forecast of the situation in March was even less encouraging. Vigorous steps were taken by the Railroad Administration to give preference to the transportation of foodstuffs, so that by March 15 the vessel capacity of the Allies was satisfied and there was a surplus awaiting boats.

The situation was graphically described by Carl R. Gray, former director of operation, in an informal address before the St. Louis Railroad Club, May 9, 1919. He stated:

"On the night of February 8, the Director General told me that a committee from the Council of National Defense had asked to see him at 9 o'clock the next morning, but that he had to go to the capital, so he asked them to see me. At 9 o'clock two cabinet ministers, the chairman of the Shipping Board, the Food Administrator, and the Fuel Administrator came in. They had cablegrams from three premiers of Great Britain, of France, and of Italy-to their respective ambassadors, and these cablegrams sounded almost as though they were written by the same person. I remember that in each instance they said that unless the food program promised by Mr. Hoover was not only maintained but the deficiency made up, that the war would be over by the first of April. I asked Mr. Hoover what he had promised and he said 1,160,000 tons a month, commencing with January 1. I asked him,

'How much have you furnished?' He said, 'In January 750,000 tons; February is one-third gone and we are going at the rate of 500,000 tons, so unless the situation is remedied we will reach the first day of March over 1,000,000 tons short. There is just one month between that time and the time these gentlemen have given as the ultimate date.'

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The

"I could see the war lost and the responsibility resting entirely upon the railroads. My fear was that the Director General might hesitate to put into effect the drastic regulations which I knew were necessary. message from the French Premier said that the French rations had been reduced to the armies in the field; the Italian message said that the rations had twice been reduced and could not be reduced again.

"Mr. McAdoo approved the action that was recommended and that night an order was sent out which absolutely forbade the loading of box cars, except at freight houses, with anything except food. That order remained in effect, the only exception being on account of the War Department, until about March 1. Then it was relaxed somewhat. On March 15 we had every elevator on the Atlantic coast filled with grain, and we had 6,615 cars of other food up against the seaboard!

"I don't believe I ever dictated a letter in which I took so much genuine satisfaction as I did the letter, which I dictated for Mr. McAdoo's signature, to the three ambassadors, in which I called attention to their former call and to the representations made at that time, and called their attention to the 6,615 cars up against the water front."

A serious situation existed also with respect to bituminous coal. At the beginning of federal control there was an actual shortage of cars at the mines; there was a lack of systematic distribution; and there was a serious dislocation of the New England supply because of the withdrawal of the coastwise water service. The coal-carrying

water equipment had been commandeered by the navy and the already overburdened rail lines to and in New England were called upon to handle something more than 150% of their normal coal tonnage. An acute situation existed also in the northwest. Through methods which would have been difficult to apply except under unified governmental control the Railroad and the Fuel Administrations together worked out a plan which gave the needed relief. The coal production in February of 1918 exceeded the tonnage of February, 1917, and thereafter during the year 1918 the coal situation was well in hand.

The greatest factor toward improving the situation was the zoning of distribution. Each of the producing districts was assigned a certain fixed area within which to market its coal. Shipments outside of that area were not allowed except under a permit from the Fuel Administration. The plan eliminated a waste of transportation by prohibiting unduly long hauls to destinations which could be served by nearer producing districts. The cross-hauling which had prevailed to a considerable degree theretofore was eliminated, and coal-carrying equipment was more efficiently utilized. The zoning plan furnished also an incentive for utilizing coal available in the plains states, which otherwise would not have been produced in competition with the higher grades of other districts.*

The zoning plan brought substantial savings in transportation; but it was not without disadvantage to coal users. It made necessary many adjustments in markets that were accustomed to a particular grade of coal.