by filing the tariffs with the Interstate Commerce Commission, but the Commission was shorn of its power to suspend such rates pending final determination of their justness and reasonableness. The Commission was authorized to hold hearings if complaints were made and, after such hearings to make such findings or orders as are authorized by the Interstate Commerce Act; but the Commission was also required to take into account the fact that the transportation systems were being operated under a unified and coordinated control and not in competition. It was provided further that when the Director General certified to the Commission that increased revenues were necessary to defray the expenses of federal control and operation, the Commission should take such finding and certificate into consideration in determining the justness and reasonableness of the Director General's changes in rates and regulations.

The Federal Control Act which contained this authority was not approved until March 21, 1918. Steps were taken at once to determine the extent and the form of the necessary increases. On May 25 an order was issued which in general terms horizontally increased freight rates about 25% and advanced the passenger rate to 3 cents per mile. Where the existing rate was higher than 3 cents per mile no increase was ordered. Suburban fares were increased 10%. The passenger fare increase as a whole was estimated to be about 20%. A surcharge of 12 cent per mile

for passengers using Pullman cars was also ordered. These were the only general rate increases initiated by the United States Railroad Administration, although numerous adjustments in individual rates were made later, most of them resulting in reductions rather than increases.

To provide an effective organization for the adjustment of complaints concerning freight rates and regulations, 24 local and 3 general freight traffic committees were created, upon which the public had representation. Proposed changes were passed by the local committee to the general committee and then to the Director of Traffic, with a copy to the Director of Public Service. Every change had to be approved by the two Directors, or, if they divided in opinion, the Director General was called upon to decide. The public representatives on these committees were usually selected by the shippers' organizations. Individually their votes had equal weight with the votes of the individual railroad members, but the public members were in the minority.* The railroad members, therefore, controlled the majority of recommendation, but the minority influence was recognized. The arrangement did much to maintain amicable relations between the shipping public and the Railroad Administration during the trying period of the war.t

*In 1919 the organization was changed so as to give shippers equal representation in number.

+For passenger rate matters three general committees were formed, but on these the public was not represented.

On one important task, begun a long time ago, substantial progress was made. For years the Interstate Commerce Commission had been pressing for action which would bring about uniformity in freight classifications, and the railroads had been struggling with the problem. As between the Official, Southern, and Western classifications there had been many variations in the classification of articles and in the regulations which applied to the classification. Under the unification brought about by federal control there appeared to be an excellent opportunity to secure the necessary compromises between the railroads themselves and between shippers and railroads. The fact that any plan of uniformity meant losses to some of the railroads if the lowest classification in any territory were adopted uniformly and, conversely, meant higher freight charges to the shippers if the highest classification were adopted, had been the principal stumbling block in the path of progress. The Railroad Administration set about with vigor to achieve the desired uniformity, but nothing definite was accomplished in 1918. In 1919, however, under Mr. Hines' régime as Director General, a consolidated classification was presented to the Interstate Commerce Commission; Mr. Hines did not care to initiate it himself without the prior approval of the Commission. Vigorous opposition on the part of shippers developed at the hearings, and the Commission declined to approve the plan of re-classification because it appeared to have the effect of unduly increasing rates-the upward adjustments exceeding those which were downward.

The Commission, however, gave its approval to the unification of the rules. Though this in itself was an important step forward, it is to be regretted that the golden opportunity presented by the war period and federal control to solve an extremely troublesome problem was lost. The difficulties which lie in the path of a complete solution to the classification problem are now as great as they were before federal control.

CHAPTER XI

LABOR POLICIES DURING FIRST YEAR OF FEDERAL CONTROL

HE relations between the railroad companies and their employees during the latter part of the year 1917 were badly strained. The scarcity of labor and the keen competitive bidding of munitions, shipbuilding and other plants, led to very substantial increases in the general scale of wages in those industries. Railroad employees had received no general increases in 1917. Their leaders had made insistent demands for substantial advances. The justice in a demand for an upward revision in the scale of compensation was recognized by the railroad executives, but they differed from the labor leaders as to the degree of increase warranted by the abnormal conditions. Besides, the railroad executives held to the view that until the Interstate Commerce Commission had acted favorably upon the pending applications for rate increases the companies would be financially unable to assume the burden of higher payroll costs.

The argument of "inability to pay" a higher wage scale did not appeal to railroad workers. They felt the pinch of higher living costs and were well informed as to the inflated pay envelops of workers in war industries. Just a year previously