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mit the successful carrying out of a farsighted program of improvement and further unification of facilities, and that this additional experience in federal operation under peace conditions would give the desired demonstration of the value of unified control and direction. With such further experience as a guide Congress could more intelligently take up the task of legislating for a permanent solution.*

On January 11, 1919, Mr. McAdoo retired as Director General and was succeeded by Walker D. Hines, his principal assistant. When Mr. Hines, early in February, appeared before the Senate Committee on Interstate Commerce, he supported his predecessor's suggestion that the tenure of federal control be continued for five years. At the same time he made certain suggestions embodying his own views as to what should be the basis of a permanent plan for adoption at the end of the five-year period.

In advocating an extension of federal control Mr. Hines placed himself on the defensive. The opinion was held in some quarters that the Railroad Administration was more interested in perpetuating itself than in responding to the general public demand for legislation which would bring about a safe and speedy return of the roads to private management. Mr. Hines, however, never ardent in his advocacy of an extension of federal control, soon changed his position. In a number of public addresses throughout the South and West during the late spring and early summer of 1919 he suggested a plan of his own under which the roads would be restored to their owners as soon as the necessary legislation could be enacted, and under which they would be operated in a small number of large systems, their directorates to include representatives of the Government and of labor.

* Statement of Mr. McAdoo before the Committee on Interstate Commerce, United States Senate, Janary 3, 1919.

Throughout his entire term of office Mr. Hines was subjected to much criticism. It should be noted, however, that Mr. Hines could take some comfort in the fact that this criticism came from nearly every one of the divergent interests. The view of the railroad executives was that the Administration was not always fair in its treatment of the interests of the owners of the properties, as for example in the matter of maintenance, and that its failure to advance rates in 1919 to meet the higher operating costs unfairly placed upon the railroads the onus of advancing rates after the roads were returned. These rate advances were made necessary, in greater part, by radically increased wage scales and by the adoption during the closing months of federal control of the restrictive rules in the so-called national agreements. On the part of labor Mr. Hines was criticized because in the latter part of 1919 he refused to be stampeded into granting additional concerted wage demands from practically every class of railroad labor. Instead he insisted that these demands should be reviewed by a tribunal to be appointed by Congress for that specific purpose. Congress, however, refused to entertain the suggestion and reminded the Director General that he had ample authority to deal with the situation himself. On the part of shippers there was dissatisfaction because many of the privileges which were curtailed during the war were not promptly or fully restored, and because requests for downward revision of certain rates were not all favorably acted upon. On the part of Congress there was fault-finding because of the large operating deficits and there was a disposition to embarrass the Railroad Administration by neglecting to provide the working capital which Mr. Hines recommended. On the part of the state commissions there was resentment against the continuation of the war-time power of the federal administration, which crippled the states in their efforts to resume intrastate rate regulation on the pre-war basis.

It will be seen, therefore, that Mr. Hines' administration failed to satisfy any one group, and that he was beset with difficulties much greater than those with which Mr. McAdoo had to deal during his war-time regime. Mr. Hines had a thankless task. No review of his stewardship would be complete if it failed to record a tribute to his courage in adhering consistenly to his conception of his responsibility to the broad and longtime interests of the nation. He remained in office at a substantial personal sacrifice and severely taxed his health by devotion to his work. If he made mistakes in policy, they were as a rule the result of an over-conscientious attitude toward his duty as the representative of the Government. During a large part of his term in office he was unable to consult freely with the President (who was in France or ill during the greater part of 1919), and therefore was obliged in many important matters of policy to act upon his own initiative and responsibility.

At the time of his appointment as Director General Mr. Hines announced that he proposed to carry forward the policies “so ably put into effect by Mr. McAdoo—fidelity to public interest, a square deal for labor, with not only an ungrudging but a sincere and cordial recognition of its partnership, and fair treatment for the owners of the railroad properties and for those with whom the railroads have business dealings."*

* Public statement, January 11, 1919.

1

CHAPTER XIV

RELATIONS WITH STATE COMMISSIONS; ATTI

TUDE ON RATE ADJUSTMENTS IN 1919

O

NE of the first important steps taken by
Mr. Hines after he became Director Gen-

eral was to divide the Division of Public Service and Accounting into two separate divisions. The late Judge Prouty remained in charge of accounting, and Max Thelen, formerly chairman of the California Railroad Commission and of the National Association of Railroad Commissioners, was appointed Director of Public Service, effective February 1, 1919.

Mr. Thelen was selected as the head of the newly created division because it was hoped that by reason of his former affiliations and the respect with which he was held by the state regulating bodies he might be able to accomplish much in easing the strained relations between the Railroad Administration and the Commissions of the several states. During 1918, when the war was in progress, Director General McAdoo exercised to the full extent the authority conferred upon him by the President's proclamation and the Federal Control Act, assuming complete jurisdiction over intrastate as well as interstate rates and service.* The state commissioners were not

.

*"There is little question that the summary manner in which the increases were put through was deliberate, and designed to forestall any interference that might spring from public discussion.'-Railroads and Government, F. H. Dixon, p. 159.

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