Appetite for America by Stephen Fried

Author:Stephen Fried
Language: eng
Format: mobi, epub
Tags: History
ISBN: 9780553907322
Publisher: Bantam Books
Published: 2010-03-01T10:00:00+00:00

AS A YOUNG COUNTRY that had never before been unified and mobilized coast-to-coast for war, the United States had never nationalized an industry before and didn’t know exactly how to go about it. The takeover began congenially enough, with the Railroad Administration working with executives to make sure that military needs always superseded those of private passengers and freight haulers. When the railroads questioned how they would be reimbursed for all this military transport, a bill was passed that basically said, “Don’t worry, we’ll pay you back.”

It was soon clear, however, that the hundreds of railroads needed more than government guidance and reassurance. Years of competition and federal regulation had created a system that was too unwieldy to operate smoothly. While western and Midwestern railroads like the Santa Fe were in pretty good shape and ran fairly efficiently, the trains in the East were not ready for the sheer volume of men and supplies that had to be moved quickly en route to Europe. The eastern tracks and cars required more repairs and upgrades than the railroads could afford, so backups in certain cities became endemic: The Pennsylvania Railroad was in particularly poor shape, and trains were forever being held up in its strongholds of Pittsburgh and Philadelphia.

Director-General McAdoo finally had to admit that Ed Ripley had been right during all those years: Government regulation was a big reason why the railroads hadn’t been able to keep investing in new cars and better tracks. The Interstate Commerce Commission had forced them to keep passenger fares and freight rates absurdly low, and even with the recently mandated eight-hour workday, wages had not risen enough to keep those workers who hadn’t enlisted from repeatedly threatening to strike.

Yet while McAdoo knew the government had helped cause these problems, he grew impatient when the railroads couldn’t fix them. He was tired of arguing with executives about the best way to carry out his orders. So in May 1918, he took a drastic and entirely unprecedented step.

He announced that the U.S. government was summarily firing the president of every railroad in the country.

The presidents would be replaced with “federal managers” who worked for the government. Technically, all the executives were being “retired,” although their companies could still pay them and rehire them after the war. Some were even appointed federal managers at a fraction of their normal peacetime salaries. However, in most cases, younger, more ambitious, and more cooperative executives—from within a company or, occasionally, from its competitors—were put in charge.

At the Santa Fe, Ed Ripley was hugely supportive of the war effort, but he had no interest this late in his career in starting to work for the government. One of his most able vice presidents, William Storey, was named federal manager, which also made him Ripley’s heir apparent.

The new federal managers were forced to quickly standardize their railroads—doing away with competition, duplicate services, and individual corporate idiosyncrasies in all aspects of their operations. New standards were created for railcars, and the government ordered thousands of new ones.

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