which moved under priority orders, was such a large part of the total that the shipper of freight outside of the priority list—the man who was trying to carry on "business as usual"-had much to contend with. To keep a complete control of the freight situation and avoid congestions such as those of the last two or three months of 1917, the embargo method was so frequently used that the ordinary shipper was kept "guessing" as to whether his shipment would be accepted at all and if accepted when it would reach its destination.

The permit system was adopted under these circumstances, and had much to commend it. It was applied primarily to export freight, but to a limited extent was applied also to domestic traffic destined to points in the congested areas. The system had much to do with the reduction in the accumulation of freight at seaboard and prevented further blockades. Under the permit plan a shipment for a seaport or other designated destination would not be accepted by the railroads at the shipping point until a permit was issued, and the permit would not be issued until it was known that the consignee was prepared to receive the shipment. Under former conditions the shipper, in the absence of a specific embargo, could deliver his freight to the railroad regardless of the ability or inability of the consignee to take the freight on its arrival at destination. The new method in effect controlled the flow of traffic at the source and prevented accumulations of cars at destination, particularly at the seaboard. It proved of such value that the railroad com

panies, on the return to them of their lines, retained it as regards export traffic.

An important innovation was the " Sailing Day Plan"; better called the shipping day plan. It was applied to the movement of less than carload freight and was designed to bring about the better utilization of freight cars by securing a heavier average load per car. Schedules were worked out from the principal less than carload shipping points and freight of that class for certain destinations or certain transfer points was held for through cars which would run on specified days of the week. The daily loading of this freight to transfer stations, when the tonnage for one destination did not justify a through car, had caused congestion at many transfer points. Under the new plan the assembly of less than carload shipments into larger carload units reduced the number of transfers and saved some of the delay to freight.

Yet the plan was not generally approved by shippers, as it gave certain distributing centers an advantage over other competing distributing centers to common markets when the traffic from the first was greater than that from the second and therefore justified more frequent service.

The abolition of the off-line freight agencies took away a form of service which had not been appreciated fully until the offices were closed. While primarily freight soliciting agencies, they acted also as bureaus of information for the shipping public and as such were of much convenience to the shippers. The tracing of shipments was a real value. The New York representative of a

western road would obtain reports of cars destined to or coming from points on his line and on request would keep the shippers informed of their location and probable delivery or arrival. The offices were clearing-houses for various kinds of commercial information, and the soliciting forces naturally did their best to serve their patrons and create the good will so valuable in traffic relations. When it was made clear to the Railroad Administration that this feature of the off-line agency service was a real loss to the shippers, an attempt was made to give similar information in central freight information bureaus in important centers, but the substitute was regarded by the shipping public as poor.

CHAPTER X

RATES IN 1918

T was clearly apparent when federal control began that the existing rate scale would not

IT

yield sufficient revenue to enable the Government to earn the guaranteed rental. The power of the Director General to establish rates was not determined until the passage of the Federal Control Act. That power was defined in Sections 8 and 10.

"That the President may execute any of the powers herein and heretofore granted him with relation to federal control through such agencies as he may determine, and may fix the reasonable compensation for the performance of services in connection therewith, and may avail himself of the advice, assistance, and cooperation of the Interstate Commerce Commission and of the members and employees thereof, and may also call upon any department, commission, or board of the Government for such services as he may deem expedient. But no such official or employee of the United States shall receive any additional compensation for such services except as now permitted by law.

"That during the period of federal control, whenever in his opinion the public interest requires, the President may initiate rates, fares, charges, classifications, regulations, and practises by filing the same with the Interstate Commerce Commission, which said rates, fares, charges, classifications, regulations, and practises shall

not be suspended by the commission pending final determination.

"Said rates, fares, charges, classifications, regulations, and practises shall be reasonable and just and shall take effect at such time and upon such notice as he may direct, but the Interstate Commerce Commission, shall, upon complaint, enter upon a hearing concerning the justness and reasonableness of so much of any order of the President as establishes or changes any rate, fare, charge, classification, regulation, or practise of any carrier under federal control, and may consider all the facts and circumstances existing at the time of the making of the same. In determining any question concerning any such rates, fares, charges, classifications, regulations, or practises or changes therein, the Interstate Commerce Commission shall give due consideration to the fact that the transportation systems are being operated under a unified and coordinated national control and not in competition.

"After full hearing the commission may make such findings and orders as are authorized by the act to regulate commerce as amended, and said findings and orders shall be enforced as provided in said act: Provided, however, That when the President shall find and certify to the Interstate Commerce Commission that in order to defray the expenses of federal control and operation fairly chargeable to railway operating expenses, and also to pay railway tax accruals other than war taxes, net rents for joint facilities and equipment, and compensation to the carriers, operating as a unit, it is necessary to increase the railway operating revenues, the Interstate Commerce Commission in determining the justness and reasonableness of any rate, fare, charge, classification, regulation, or practise shall take into consideration said finding and certificate by the President, together with such recommendations as he may make.'

It will be observed that the Act gave the President the authority to initiate rates and regulations