interest, the incorporation or control of the incorporation of carriers, and all proposed changes in the organization of the Interstate Commerce Commission and the act to regulate commerce, also the subject of government ownership of all public utilities, such as telegraph, wireless, cable, telephone, express companies, and railroads engaged in interstate and foreign commerce and report as to the wisdom or feasibility of government ownership of such utilities and as to the comparative worth and efficiency of government regulation and control as compared with government ownership and operation.

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Hearings were begun in November, 1916, and were continued intermittently until December 19, 1917. During these hearings, international events moved so rapidly and the situation of the United States was so changed in consequence of the declaration of war of April 6, 1917, that the information made available by the investigation could not be crystallized into a recommendatory report. Only a few days after the termination of the hearings, the President by proclamation took control of the railroads of the country, and three days thereafter hearings were begun on governmental control of railroads before the Senate Committee on Interstate Commerce to provide suitable legislation to support the President's action.

Shortly after Congress authorized the above investigation, it took action to relieve the commission. By the act of August 9, 1917 (40 Stat. L., 270), the commission was enlarged so as to consist of nine members, and it was authorized to divide its members into as many divisions as might be necessary, with the senior in service in each division acting as chairman, and to assign to any division for action any of the work, business, or functions arising under the act. Full jurisdiction was conferred upon these divisions "to hear and determine, order, certify, report, or otherwise act as to any of the work, business, or functions so assigned or referred to it for action by the commission." It was required that “in all proceedings before any such division relating to the reasonableness of rates or to alleged discriminations not less than

7 The time for making a report was extended by Congress to the first Monday in December, 1917, and again to the first Monday in December, 1918.

three members should participate in the consideration and decision and in all proceedings relating to the valuation of railway property not less than five members should participate."

Section 4 of this act amended Section 15, paragraph 2, of the Interstate Commerce Act by adding the provision that until January I, 1920, no increased rate, fare, charge, or classification should be filed except after approval thereof had been secured from the commission, which body could, in its discretion, grant such approval without formal hearing. This amendment enacted into law the recommendation of the commission described above to legalize the existing rate structure and prevent controversy between shippers and carriers as to past practices and rates.

Meanwhile in the haste of preparation for the participation of the United States in the war, emergency legislation was enacted which resulted in a diversified and somewhat anarchic governmental control over railroad operations. In the act of August 29, 1916 (39 Stat. L., 645), the President was empowered through the Secretary of War, to take possession and assume control of any system or systems of transportation, or any part thereof, and to utilize the same, to the exclusion as far as might be necessary of all other traffic thereon, for the transfer or transportation of troops, war material, and equipment, or for such other purposes connected with the emergency as might be needful or desirable. Under this act, the War and Navy departments and the U. S. Shipping Board subsequently issued many priority orders to the carriers. The Car-Service Act of May 29, 1917 (40 Stat. L., IOI), gave the commission broad powers to issue summary directions on the movement, distribution, exchange, interchange, and return of cars. Under this act a new bureau, that of car-service," was created in the commission, and in coöperation with a joint committee of the carriers, known as the "Commission on Car Service," "exerted wide regulatory power over car service and over transportation generally.

"In April the Railroads' War Board assumed direction of the railroads, under a resolution signed by nearly seven hundred executives, in which the signatories pledged themselves during the war to coördinate their operations in a continental system, “merging during such period all their merely individual and competitive activities in the effort to produce a maximum of national transportation efficiency."

By the act of August 10, 1917 (40 Stat. L., 272), the President was authorized

during the continuance of the war

if he finds it necessary for the national defense and security, to direct that such traffic or such shipments of commodities as, in his judgment, may be essential to the national defense and security shall have preference or priority in transportation by any common carrier by railroad, water or otherwise.

The commission was directed to fix the rates for the transportation of persons and property in carrying out the orders of the President under this act. To control the issuance of priority orders provided for in this law, the President appointed a Priority Director, although he was permitted to utilize the commission for the purpose. Further complicating matters, the Food Administration and the Fuel Administration, created by the President. were given powers affecting the movement of foods and fuel, and thus indirectly participated in railroad management and administration.

Under this arrangement, despite the carriers' efforts to move the great volume of tonnage then being offered, a general breakdown in transportation was threatened. The commission thereupon, on December 5, 1917, transmitted a special report to Congress urging unification in operation of the railroads during the war. After pointing out that the provisions of the original act with its successive amendments were aimed to protect shipper and public against unjust or unfair treatment by the carrier and not to protect the nation and its commerce in time of war by fullest utilization of all the forces and resources of its transportation systems, the commission declared that unification in railroad operation, such as was indispensable during the period of conflict, could be effected in two ways only, by "operation as a unit by the carriers themselves or operation as a unit by the President during the period of war, as a war measure, under the powers vested in him by the Constitution and those which have been or may be conferred by the Congress." While the commission did not urge the adoption of either alternative, it presented forcibly the obstacles to a unification by the carriers themselves.

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The President followed the second alternative presented by the commission and on December 26, 1917, issued a proclamation assuming operation of the railroads of the country under the authority of the clause in the act of August 29, 1916. Control and operation of the railroads, thus assumed possession of, was vested in an official designated as the Director General of Railroads. This proclamation provided that the existing statutes and orders of the Interstate Commerce Commission should be binding upon the carriers until superseded by order of the Director General.

Appropriate statutory provision to make the President's proclamation effective was made by Congress by the Federal Control Act of March 21, 1918 (40 Stat. L., 451), which among other matters, defined the powers of the commission under the new régime. The commission was directed to ascertain and certify to the President the average net operating income of the carriers for the three years ending June 30, 1917, which certification was to be taken as conclusive in determining the annual compensation due to the railroads for the period of government operation. It was empowered to appoint boards of referees to adjudicate claims for compensation arising out of national control. The President was authorized to "avail himself of the advice, assistance, and coöperation of the Interstate Commerce Commission and of the members and employees thereof." He was authorized to initiate rates, charges, classifications, regulations and practices by filing them with the commission, which was prohibited from suspending these rates, charges, etc., pending final determination of their reasonableness, but was permitted to enter upon hearing after complaint as to reasonableness of the President's orders. The commission, however, was required to give due consideration to the fact that the transportation systems were not in competition but were being operated as a unit. Furthermore, in passing upon the reasonableness of rates, the certification of the President that an increase in revenues was necessary to defray expenses of operation and to provide compensation to the carriers was to be taken into consideration as well as any recommendations made by the President.

The commission's authority was thus limited severely in the matter of rates. The power of the commission under Section 15 to suspend rates was taken away, and it was no longer necessary

that the carriers seek advance authority from the commission to advance rates. In specific complaints, however, the commission was practically unrestricted in rendering decisions after due hearing, and in several instances it decided against the Director General. But in cases which involved an entire schedule of rates where the basic issue was one of adequate revenue, the requirements of the law as to the findings and certificate of the Director General gave the commission slight opportunity for disapproval. Jurisdiction of the commission over rates not under government control and joint traffic between controlled and other railroads remained undisturbed, but this jurisdiction comprised a relatively negligible proportion of the total traffic.

In compliance with the Control Law, the commission prepared certifications of the average annual operating income of the carriers. Tentative certifications were prepared from reports rendered by the carriers to enable them to enter into the standard form of contact with the Director General of Railroads. Stipulations were inserted in the contracts to provide for conforming the just compensation specified therein to the corrected. amounts to be certified finally by the commission. The corrected certifications resulted in a net reduction in the standard returns of $1,252,026.95.

Under the provisions of Sections 3 and 6 of the Control Act and in response to petitions filed by railroad corporations and upon petition filed by the Director General, boards of referees were appointed by the commission to hear claims for just compensation not adjusted by agreement upon a contract. A member of the commission was appointed upon each board, and the remaining referees were named from the official force. In addition to the above, the commission and its staff was utilized by the Railroad Administration in an advisory and investigative capacity in many directions.

The work of the commission in the enforcement of the safety laws, in compiling and publishing statistics, in its legal investigation, etc., continued generally as before the period of control, with appropriate variations due to the changed conditions. Thus, for example, the work of the Bureau of Statistics was considerably increased by the statistical requirements of various officers of the