United States Railroad Administration
Encyclopedia
The United States Railroad Administration (USRA) was the name of the nationalized railroad system of the United States
between 1917 and 1920. It was possibly the largest American experiment with nationalization, and was undertaken against a background of war emergency.
, and very soon the nation's railroads proved inadequate to the task of serving the nation's war efforts. There were several sources of the problem. Although the carriers had made massive investments in first years of the twentieth century, there were still inadequacies in terminals, trackage
, and rolling stock
. Inflation
struck the American economy
, and when in 1906 Congress
empowered the Interstate Commerce Commission
(ICC) to set maximum shipping rates, the rail firms had difficulty securing revenue sufficient to keep pace with rising costs. The ICC did allow some increases in rates, however. Also, investors had overexpanded the nation's trackage, so by late 1915 fully one-sixth of the railroad trackage in the country belonged to roads in receivership
(bankruptcy
). The railroad unions (commonly called "brotherhoods"), desiring shorter working days and better pay, threatened strike action
in the second half of 1916. To avert a strike, President Woodrow Wilson
secured Congressional passage of the Adamson Act
, which set the eight hour day as the industry standard. When the Supreme Court ruled the law constitutional
, the carriers had no choice but to comply.
The railroads attempted to coordinate their efforts to support the war by creating the Railroads' War Board, but private action ran into anti-trust and other regulatory barriers. Observers noted, for example, that sometimes competitive practices prevailed that were not in the best interests of efficient mobilization. Also, government departments sought priority for shipment made on their behalf, and congestion in freight yards
, terminals, and port
facilities became staggering.
Finally, in December 1917 the ICC recommended federal control of the railroad industry to ensure efficient operation. The resulting efficiencies were to go beyond simply easing the congestion and expediting the flow of goods; they were to bring all parties—management, labor, investors, and shippers—together in a harmonious whole working on behalf of the national interest. President Wilson issued an order for nationalization on December 26, 1917.
services were cut back and extra fares applied to discourage their use. Uniform passenger ticketing was instituted, and competing services on different former railroads were cut back. Terminals, facilities and shops
were shared.
Over 100,000 railroad car
s and 1,930 steam locomotive
s were ordered at a cost of $380 million, all of new USRA standard
designs, which were up-to-date and standardized types, designed to be the best that could be produced to replace much outdated equipment.
Before the new USRA standard locomotive types were built and released, locomotives that builders had on hand were issued to various railroads. 2-8-0
"Consolidation" locomotives built by the Baldwin Locomotive Works
for transport and use in France were made available. Then 2-10-0
"Decapod" locomotives built for Imperial Russia by both ALCO
and Baldwin, but stranded in the US by the Russian Revolution of 1917
were also made available to the railroads. The USRA leased these locomotives.
William Gibbs McAdoo
, as Director General
of the newly formed USRA.
The law guaranteed the return of the railroads to their former owners within 21 months of a peace treaty
, and guaranteed that their properties would be handed back in at least as good a condition as when they were taken over. It also guaranteed compensation for the use of their assets at the average operational income of the railroads in the three years previous to nationalization. This act laid down in concrete that the nationalization would be only a temporary thing; before, it was not defined as necessarily so.
Both wages and rates for both passenger and freight traffic were raised by the USRA during 1918, wages being increased disproportionately for the lower-paid employees, which proved unpopular among more senior ones.
With the Armistice
in November 1918, McAdoo retired from his post, leaving Walker Hines
as the Director General.
(Railroad Transportation Act) in February 1920, which substantially increased the ICC's powers over the railroads, and the USRA's authority ended on March 1, 1920. The ICC was given powers to approve or reject railroad mergers, to set rates, to approve or reject abandonments of service, and additional oversight responsibilities. The government also made financial guarantees to the railroads after control was handed back to them, to ensure their financial survival after the restoration of control.
The locomotives the USRA built, the USRA Standard designs, were immensely successful, and after the war were copied in great numbers, becoming the closest thing the United States locomotive builders came to standard designs. Indeed, the last steam locomotive built for a Class I railroad
was a USRA copy, an 0-8-0 for the Norfolk & Western Railway. More controversy exists about their freight car designs, but they were certainly an improvement on many outdated cars in service before the USRA period. It can certainly be said, however, that the influx of new and modern locomotives and cars 'for free' assisted in the revival of the railroads' hitherto shaky fortunes and set up, in the years between the Great War and the Great Depression, a somewhat 'Golden Age' for railroading.
The experiment was not repeated. In World War II
, the private railroads handled the war effort admirably, though one could argue that some major East Coast railroads impoverished themselves in so doing, setting up the later railroad collapses in the region.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
between 1917 and 1920. It was possibly the largest American experiment with nationalization, and was undertaken against a background of war emergency.
Background
On April 6, 1917, the United States entered World War IWorld War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, and very soon the nation's railroads proved inadequate to the task of serving the nation's war efforts. There were several sources of the problem. Although the carriers had made massive investments in first years of the twentieth century, there were still inadequacies in terminals, trackage
Rail tracks
The track on a railway or railroad, also known as the permanent way, is the structure consisting of the rails, fasteners, sleepers and ballast , plus the underlying subgrade...
, and rolling stock
Rolling stock
Rolling stock comprises all the vehicles that move on a railway. It usually includes both powered and unpowered vehicles, for example locomotives, railroad cars, coaches and wagons...
. Inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
struck the American economy
Economy of the United States
The economy of the United States is the world's largest national economy. Its nominal GDP was estimated to be nearly $14.5 trillion in 2010, approximately a quarter of nominal global GDP. The European Union has a larger collective economy, but is not a single nation...
, and when in 1906 Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
empowered the Interstate Commerce Commission
Interstate Commerce Commission
The Interstate Commerce Commission was a regulatory body in the United States created by the Interstate Commerce Act of 1887. The agency's original purpose was to regulate railroads to ensure fair rates, to eliminate rate discrimination, and to regulate other aspects of common carriers, including...
(ICC) to set maximum shipping rates, the rail firms had difficulty securing revenue sufficient to keep pace with rising costs. The ICC did allow some increases in rates, however. Also, investors had overexpanded the nation's trackage, so by late 1915 fully one-sixth of the railroad trackage in the country belonged to roads in receivership
Receivership
In law, receivership is the situation in which an institution or enterprise is being held by a receiver, a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights." The receivership remedy is an equitable remedy that emerged in...
(bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
). The railroad unions (commonly called "brotherhoods"), desiring shorter working days and better pay, threatened strike action
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...
in the second half of 1916. To avert a strike, President Woodrow Wilson
Woodrow Wilson
Thomas Woodrow Wilson was the 28th President of the United States, from 1913 to 1921. A leader of the Progressive Movement, he served as President of Princeton University from 1902 to 1910, and then as the Governor of New Jersey from 1911 to 1913...
secured Congressional passage of the Adamson Act
Adamson Act
The Adamson Act was a United States federal law passed in 1916 that established an eight-hour workday, with additional pay for overtime work, for interstate railroad workers....
, which set the eight hour day as the industry standard. When the Supreme Court ruled the law constitutional
Constitutionality
Constitutionality is the condition of acting in accordance with an applicable constitution. Acts that are not in accordance with the rules laid down in the constitution are deemed to be ultra vires.-See also:*ultra vires*Company law*Constitutional law...
, the carriers had no choice but to comply.
The railroads attempted to coordinate their efforts to support the war by creating the Railroads' War Board, but private action ran into anti-trust and other regulatory barriers. Observers noted, for example, that sometimes competitive practices prevailed that were not in the best interests of efficient mobilization. Also, government departments sought priority for shipment made on their behalf, and congestion in freight yards
Rail yard
A rail yard, or railroad yard, is a complex series of railroad tracks for storing, sorting, or loading/unloading, railroad cars and/or locomotives. Railroad yards have many tracks in parallel for keeping rolling stock stored off the mainline, so that they do not obstruct the flow of traffic....
, terminals, and port
Port
A port is a location on a coast or shore containing one or more harbors where ships can dock and transfer people or cargo to or from land....
facilities became staggering.
Finally, in December 1917 the ICC recommended federal control of the railroad industry to ensure efficient operation. The resulting efficiencies were to go beyond simply easing the congestion and expediting the flow of goods; they were to bring all parties—management, labor, investors, and shippers—together in a harmonious whole working on behalf of the national interest. President Wilson issued an order for nationalization on December 26, 1917.
Changes and new equipment
Change happened swiftly. The railroads were organized into three divisions: East, West and South. Duplicate passenger services were killed off, costly and employee-heavy sleeping carSleeping car
The sleeping car or sleeper is a railway/railroad passenger car that can accommodate all its passengers in beds of one kind or another, primarily for the purpose of making nighttime travel more restful. The first such cars saw sporadic use on American railroads in the 1830s and could be configured...
services were cut back and extra fares applied to discourage their use. Uniform passenger ticketing was instituted, and competing services on different former railroads were cut back. Terminals, facilities and shops
Workshop
A workshop is a room or building which provides both the area and tools that may be required for the manufacture or repair of manufactured goods...
were shared.
Over 100,000 railroad car
Railroad car
A railroad car or railway vehicle , also known as a bogie in Indian English, is a vehicle on a rail transport system that is used for the carrying of cargo or passengers. Cars can be coupled together into a train and hauled by one or more locomotives...
s and 1,930 steam locomotive
Steam locomotive
A steam locomotive is a railway locomotive that produces its power through a steam engine. These locomotives are fueled by burning some combustible material, usually coal, wood or oil, to produce steam in a boiler, which drives the steam engine...
s were ordered at a cost of $380 million, all of new USRA standard
USRA standard
The USRA standard locomotives and railroad cars were designed by the United States Railroad Administration, the nationalised rail system of the United States during World War I. 1,856 steam locomotives and over 100,000 railroad cars were built to these designs during the USRA's tenure...
designs, which were up-to-date and standardized types, designed to be the best that could be produced to replace much outdated equipment.
Before the new USRA standard locomotive types were built and released, locomotives that builders had on hand were issued to various railroads. 2-8-0
2-8-0
Under the Whyte notation for the classification of steam locomotives, 2-8-0 represents the wheel arrangement of two leading wheels on one axle , eight powered and coupled driving wheels on four axles, and no trailing wheels...
"Consolidation" locomotives built by the Baldwin Locomotive Works
Baldwin Locomotive Works
The Baldwin Locomotive Works was an American builder of railroad locomotives. It was located in Philadelphia, Pennsylvania, originally, and later in nearby Eddystone, Pennsylvania. Although the company was very successful as a producer of steam locomotives, its transition to the production of...
for transport and use in France were made available. Then 2-10-0
2-10-0
Under the Whyte notation for the classification of steam locomotives, 2-10-0 represents the wheel arrangement of two leading wheels on one axle, ten powered and coupled driving wheels on five axles, and no trailing wheels...
"Decapod" locomotives built for Imperial Russia by both ALCO
American Locomotive Company
The American Locomotive Company, often shortened to ALCO or Alco , was a builder of railroad locomotives in the United States.-Early history:...
and Baldwin, but stranded in the US by the Russian Revolution of 1917
Russian Revolution of 1917
The Russian Revolution is the collective term for a series of revolutions in Russia in 1917, which destroyed the Tsarist autocracy and led to the creation of the Soviet Union. The Tsar was deposed and replaced by a provisional government in the first revolution of February 1917...
were also made available to the railroads. The USRA leased these locomotives.
Progression
On March 21, 1918 the Railway Administration Act became law, and Wilson's 1917 nationalization order was affirmed. Wilson appointed his son-in-law, Secretary of the TreasuryUnited States Secretary of the Treasury
The Secretary of the Treasury of the United States is the head of the United States Department of the Treasury, which is concerned with financial and monetary matters, and, until 2003, also with some issues of national security and defense. This position in the Federal Government of the United...
William Gibbs McAdoo
William Gibbs McAdoo
William Gibbs McAdoo, Jr. was an American lawyer and political leader who served as a U.S. Senator, United States Secretary of the Treasury and director of the United States Railroad Administration...
, as Director General
Director General of Railroads
Director General of Railroads was a United States federal government position in the United States Railroad Administration , whose organization announced February 9, 1918. It consisted of the Director General of Railroads and eight major divisions and seven regional offices.The first Director...
of the newly formed USRA.
The law guaranteed the return of the railroads to their former owners within 21 months of a peace treaty
Peace treaty
A peace treaty is an agreement between two or more hostile parties, usually countries or governments, that formally ends a state of war between the parties...
, and guaranteed that their properties would be handed back in at least as good a condition as when they were taken over. It also guaranteed compensation for the use of their assets at the average operational income of the railroads in the three years previous to nationalization. This act laid down in concrete that the nationalization would be only a temporary thing; before, it was not defined as necessarily so.
Both wages and rates for both passenger and freight traffic were raised by the USRA during 1918, wages being increased disproportionately for the lower-paid employees, which proved unpopular among more senior ones.
With the Armistice
Armistice
An armistice is a situation in a war where the warring parties agree to stop fighting. It is not necessarily the end of a war, but may be just a cessation of hostilities while an attempt is made to negotiate a lasting peace...
in November 1918, McAdoo retired from his post, leaving Walker Hines
Walker Hines
Walker Downer Hines was an American railroad executive and second Director General of the United States Railroad Administration.- Family :...
as the Director General.
Winding down
Congress passed the Esch-Cummins ActEsch-Cummins Act
The Esch–Cummins Act of 1920, or Railroad Transportation Act, was a United States federal law that returned railroads to private operation after World War I, with much regulation...
(Railroad Transportation Act) in February 1920, which substantially increased the ICC's powers over the railroads, and the USRA's authority ended on March 1, 1920. The ICC was given powers to approve or reject railroad mergers, to set rates, to approve or reject abandonments of service, and additional oversight responsibilities. The government also made financial guarantees to the railroads after control was handed back to them, to ensure their financial survival after the restoration of control.
Conclusions
It is estimated that the USRA and the nationalizing of the American railroads between December 28, 1918, and March 1, 1920, cost the United States government $1.12 billion dollars, which was a huge amount of money back then (approximately $15 billion , adjusted for inflation). The USRA is generally seen as having been effective in getting things moving for the war effort, but at a steep price.The locomotives the USRA built, the USRA Standard designs, were immensely successful, and after the war were copied in great numbers, becoming the closest thing the United States locomotive builders came to standard designs. Indeed, the last steam locomotive built for a Class I railroad
Class I railroad
A Class I railroad in the United States and Mexico, or a Class I rail carrier in Canada, is a large freight railroad company, as classified based on operating revenue.Smaller railroads are classified as Class II and Class III...
was a USRA copy, an 0-8-0 for the Norfolk & Western Railway. More controversy exists about their freight car designs, but they were certainly an improvement on many outdated cars in service before the USRA period. It can certainly be said, however, that the influx of new and modern locomotives and cars 'for free' assisted in the revival of the railroads' hitherto shaky fortunes and set up, in the years between the Great War and the Great Depression, a somewhat 'Golden Age' for railroading.
The experiment was not repeated. In World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, the private railroads handled the war effort admirably, though one could argue that some major East Coast railroads impoverished themselves in so doing, setting up the later railroad collapses in the region.
See also
- History of rail transport in the United StatesHistory of rail transport in the United StatesRailroads have played a large role in the development of the United States of America, from the industrial revolution in the North-east to the colonization of the West. The American railway mania began with the Baltimore and Ohio Railroad in 1828 and flourished until the Panic of 1873 bankrupted...
- Federal Railroad AdministrationFederal Railroad AdministrationThe Federal Railroad Administration is an agency in the United States Department of Transportation. The agency was created by the Department of Transportation Act of 1966...
- started in 1966.