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YEAR of can Average Total 1902 1,546.101 28 43.416,029 1907 1,991,557 34 67,216,144 1912• 2,215,549 37 82,976,895 1917 2,384,76S 40 94.590.533 • • Does not include cars owned by switching and terminal companies.

The foregoing shows an increase, for the 15 years' period, of 117.87 per cent in total freight car capacity, achieved by an increase of 5424 per cent in the number of cars and an increase in average capacity per car of 42.86 per cent. The great in the large car lies in the smaller proportion of the weight of the car to the paying load and the reduced effort required to move a load concentrated upon a relatively short aggregate wheelbase due to lessening of frictional resistance and air pressure.

Improvements in track and structures, sig naling apparatus and methods of operation have pace with the more easily measured development of motive power and cars. Freight as well as passenger cars are now equipped with automatic couplers and air brakes. Safety ap pliances have been developed and standardized as to type and position.

The aggregate amount of work performed per mile of line has increased with the develop ment described and suggested, with the follow ing results: .

The period of inflation that accompanied and followed the Civil War had its natural reaction in the financial panic of 1873 and the years of business depression that ensued. The difficulties of this period produced the custom ary crop of politico-economic fallacies, includ ing the precursor of the free silver movement of 1896 and (Grangerism.* The latter, in its inception an agrarian move ment, assumed many phases most of them ephemeral, but left its permanent impress upon American legislation in the form of laws con trolling railway charges and services. As the proponents of these laws proclaimed them as curatives for nearly all social and economic discomforts, they inevitably proved disappoint ing and were successively amended until by the end of 1917 it was generally true that prompt adjustments of rates to such sudden and urgent conditions as those arising from the rapid rise in the cost of the labor, materials and supplies required in railway operation had become im possible.

Private management of American railways was temporarily suspended at the end of 1917 proclamation of President Wilson, exer cising an emergency power conferred to provide for the great exigencies of war, issued on 26 Dec. 1917. By this exercise of supreme authority all the railway properties, save a very few of the least importance, were taken into the possession of the Federal government which now operAtes them through a director-general whose legal status is that of a direct repre sentative of the President and whose respon sibility is only to and through the President.

The conditions which sanctioned this temporary expropriation are much misunderstood although they are not difficult of discovery or compre hension. By the end of 1917 every American industry had experienced enormous advances in its operating expenses by reason of advances in wages and in the prices of articles required as raw materials or for use in operation. All industries except the railways, and a few others subjected to similar public regulation, had made compensatory advances inprices and were en joying an unprecedented degree of prosperity. The wages of railway labor and the prices of railway supplies had advanced with everything else but control of railway rates had been vested in the Interstate Commerce Commission and in the several State railroad commissions and without their express consent the necessary rate adjustments could not be made. The processes of these bodies were slow and their temper reluctant. While the railways waited for relief through official action the threat of financial disaster impended with increasing imminence, their credit faltered and it became evident that the fiscal condition of the railways might be come an impediment to the financing of the war. The President recognized the situation, and having emergency power to take possession of the railways, as a war measure, although he had none to expedite or control the various commissions whose methods made the more radical step expedient, exercised his authority by taking the properties from their owners and vesting their management in a Federal officer, responsible only to himself. By this means he was able to provide for an almost immediate adjustment of rates of fare and freight, by increases regarded as adequate to compensate for increases in necessary costs of operation, and in the meantime to provide that the deficits should be borne out of the public funds. It cannot be too often or too strongly stated that the financial conditions resulting from public regulation were the sole cause and must forever constitute the sole justification for this step. The railways had never functioned as efficiently as throughout out the 12 months which ended with 31 Dec. 1917; they did not, all things considered, function with in any degree su perior efficiency during 1918.

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