"(b) Will issue instructions through the Regional Director providing, on application of proper governmental authorities, for preference in car supply and movement.

"(c) Will receive from railroads such reports, periodical or special, as it may require in order to keep fully informed with respect to car service, embargo or transportation conditions.

"(d) Must be promptly informed of all embargoes placed, modified or removed, and will, from time to time, recommend such embargo policies and exemptions as the needs of the Government, seasonal requirements, or other circumstances may demand.

"(e) Will deal directly with railroads with respect to matters within its jurisdiction, and will keep the Regional Directors advised of all instructions or orders in which they are concerned.

"You will keep fully advised as to the situation concerning the use of locomotives, repairs to locomotives, amount of shop capacity, and amount of shop labor available for locomotive repairs. You will have power to promote the general good of the transportation situation in your region by making transfers of locomotives from one railroad to another or of locomotives needing repairs from one shop to another and transfer of shop labor from one shop to another. Such transfers, should, of course, have reference to any agreements between labor and the company affected and be made with just regard to the welfare and rights of employees. You will, of course, have like duty and power respecting car repairs.

"As to labor, you have been advised of the appointment of the Railroad Wage Commission. The general policy as to all labor is that there shall be no interruption of work because of any controversies between employers and employees. All matters relating to wages and living conditions will have the consideration of the Railroad Wage Commission.

"Pending action by me upon the report of that commission there ought not to be any radical change in existing practises without submitting the matter to me for approval. But it should be understood that the usual methods of settling by agreement ordinary grievances and complaints shall continue as heretofore and that the companies are free to negotiate as heretofore with their employees and are expected to observe faithfully existing agreements with their employees. In cases of doubt about new negotiations with employees, the advice of the Director General should be sought.

"You should bear in mind that labor has the very natural feeling that railroad managers, although now working for the Government and on Government account, necessarily continue the same conception of and attitude toward labor problems that they had when acting under private management. I am told that labor will have a natural suspicion that any unfavorable action taken by railroad managers indicates a purpose on their part to make governmental control a failure and to use it for promotion or vindication of their own theories.

"For these reasons, great care should be taken to avoid anything having even the appearance of arbitrary action, and it will be expedient, at least at the outset and until the matter shall take more definite shape, not to dispose, unless by mutual agreement, of any labor claims involving large questions of policy without first submitting the matter to me.

"In the central organization in Washington I propose to have a labor man as a member of my staff who will give his special attention to labor problems, not only to the problems of wages and conditions but also to the problem of aiding the railroads in obtaining sufficient labor and of bringing about a better understanding between officers and employees. The morale and esprit de corps of officers and men should be brought to the highest standards.

"There are several matters involving broad questions of public policy concerning which I wish you to make careful studies and report to me with your recommendations.

"1. To what extent if at all should additional passenger service be discontinued in order to save coal, labor, locomotives, and shop capacity for freight service. In arriving at any recommendations on this matter it is very important to give due consideration to public convenience. It is quite probable that I shall wish to take the matter up informally with State railroad commissions as to any reductions in service which you think should be made. In dealing with such matters the local point of view must be considered and the State commissions afford a useful instrumentality for obtaining this point of view, and also, to the extent that we can act in harmony with the commission's views, for satisfying local public sentiment as to what is done. So far the State commissions have evinced a commendable spirit of cooperation.

"2. I wish you also to make careful study of the extent to which (a) freight solicitation should be discontinued or diminished and freight and passenger agencies, freight offices, ticket offices, and so forth, discontinued or consolidated; (b) the extent to which traffic officials, soliciting or otherwise, should be transferred to other service and to what other service they should be assigned; and (c) extent to which, if at all, any portion of these forces should be released from service.

"3. I wish you also to make a study of (a) the extent to which duplications of service can be avoided, both passenger and freight; (b) extent to which fast freight service can be discontinued or slowed down; (c) extent to which less-than-carload service can be consolidated or diminished; at all times having reasonable consideration for the public convenience.

"4. I would like to have your views as to the extent to which the making of purchases can be unified either

for the entire country, or for the separate regions, or for parts thereof, accompanying it with a statement of the advantages which you think would result from such unification.

"5. The extent to which standardization may be effected in your region on the railroads in your territory (a) with respect to locomotives-the various types which will be required to effect the best standardization; (b) freight cars, open and box cars, and the various types which will be best adapted for use in your territory.

"Your recommendations should be made in reference to the adoption to the same standards throughout the United States except in so far as local conditions can make specific types or designs desirable to meet the peculiarities of such local conditions.

*

"6. In general, I shall be glad to have you make a study of the extent to which various classes of operating expenses can be curtailed or eliminated on account of present conditions of Government possession and control. Of course, you understand that by virtue of General Order No. 6 it will be necessary for local associations to make applications for the Director General's approval if it is desired that they continue to be supported out of operating revenues. If any such applications are made to you, I shall be glad to have your recommendations in regard thereto, being guided by the principle that no functions should be carried on by associations whose expenses are chargeable against operating revenues except such functions as are reasonably necessary under the existing condition of Government possession and control, and that only the expense appropriate to such functions should be paid out of operating revenues.

"On all these matters I shall appreciate your specific recommendations at the earliest practicable date.

*This refers to associations of railroad officers, such as the American Railway Association.

"In dealing with this whole subject it is, of course, important for you to view the matter, and to get the various railroad executives of railroads in your jurisdiction to view the matter, from the entirely new standpoint that all the railroads now constitute a single system to be operated so as to secure the maximum of transportation with the minimum of waste, and that the fact that a readjustment will mean that a particular railroad will lose certain sorts of traffic must be disregarded as it is not sufficient reason why the readjustment should not be made, if in other respects it is in the public interest.

"Certain general matters are having consideration here and somewhat later will probably be taken up with you. Examples of these matters are additions and betterments, what equipment not already ordered needs to be provided. I shall be greatly interested in any suggestions which you can make to me on these matters at the present time and from time to time.

"You will of course have the right to continue or discontinue or create such local committees or representatives as you think proper to insure the best results at particular terminals or in particular subdivisions of your territory. Doubtless at many important terminals you will find it advantageous to select some exceptionally able, aggressive, and tactful railroad representative to take charge of the terminal and to coordinate with the railroad activities, the activities of merchants, coal dealers, truckmen, and so forth, so as to secure the best possible results in the loading and unloading of cars.

"I take it that your communications to the railroads in your region should be to the respective presidents, receivers, or other chief operating officers with such modifications of that practise as you may think advis able, arranging, however, in case of such modifications, that the president, receiver, or other chief operating officer fully understands the practise which you pursue.

"Pending the further shaping of the work, there are various general subjects which you should refer to this