52 Railroad Transportation

department, railroads, act, traffic, lines, division, commerce, federal, freight and interstate

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Business Organization of American Rail roads.— The business organization of American railroads varies according to the volume of their traffic, the importance of particular kinds of traffic, the extent of their mileage and the area within which they operate and the views of higher officials with respect to efficient organ izations. The president reporting to the board of directors is the chief executive official in most instances, hut on some lines the chairman of the board virtually performs the functions of an executive. Under the president there usually is a varying number of vice-presidents, who act as the chief executive officials of par ticular departments or in the capacity of gen eral vice-presidents. There is also a Secretary's Department under a secretary, who reports di rectly to the president and board of directors. The president, vice-presidents and secretary and some of the other department heads frequently including the general counsel, treasurer and comptroller, comprise the Executive Depart ment. The exact make-up of this department, however, varies in different railroad companies. The specific business departments of most large American railroads include the following: (1) Secretary's Department; (2) Law Department; (3) Treasurer's or Financial Department; (4) Comptroller's or Accounting Department, which is subdivided into the comptroller's office and four or five auditing departments; (5) Transportation Department, which is subdivided into three subdepartments — operating, main tenance and mechanical or motive power; (6) Traffic Department, which is divided into a freight and a passenger traffic department; (7) Insurance Department; (8) Purchasing De partment, which in some railroad organizations is combined with a Supply Department; (9) Real Estate Department; (10) Relief and Pen sion Departments, which may be separate or combined, and (11) Freight Claim Department. A number of lines also have so-called Indus trial Departments, separate from the Traffic Department, to promote the location of indus trial plants on their lines. There are many as sociations and joint organizations which consti tute important parts of the business organiza tions of the railroads. Among them are their freight and passenger traffic associations, in which competitive rates and fares are discussed before changes are initiated. The three main freight classifications are issued by the Official, Southern and Western classification committees jointly maintained by the railroads for this pur pose. Many rate tariffs are issued for groups of railroads by joint agents. Freight claims on through shipments are adjusted in accordance with rules laid down by the Freight Claim Asso ciation, and claim disputes are arbitrated by ar bitration committees provided by this associa tion. In case of labor disputes the practice of the companies, in recent years, has been to act jointly through committees. There are also many technical associations, the largest of which is the American Railway Association. The smaller technical associations are brought together in this parent organization, through which many improvements have been effected, and various functions such as the per diem and car service rules of the carriers are adminis tered. Some of the smaller associations, such as the Master Car Builders' Association and the Master Mechanics' Association are also of great importance in railroad administration and operation. Practically every department and many suhdepartments of the railroads through out the United States as a whole or in smaller sections are affiliated through their particular technical associations.

The Federal Railway In a proclamation issued 26 Dec. 1917 the Presi dent of the United States took over for Fed eral control all the large railroads, and many of the smaller lines, and appointed a Director General to administer them. The President acted under powers granted to him by Con gress on 29 Aug. 1916. Later in March 1918 Congress enacted the Federal Control Act to authorize a Federal guarantee of carriers' rev enues equal to their average annual operating income for the three years' ending 30 June 1917; to arrange for contracts with the various lines; to limit dividends; provide a revolving fund of $500,000,000; regulate railroad securi ties, and define the rate powers of the Presi dent and the Interstate Commerce Commis sion. The organization of the Federal Rail

road Administration under the Director Gen eral consists: (1) Of a central administra tion to control and supervise the various branches of railroad operation; (2) a re gional administration to administer the lines within seven defined regions and (3) a num ber of advisory committees and commissions. The Central administration includes the main office of the Director General and Assistant Director-General, a Division of Finance and Purchases, Division of Capital Expenditures, Division of Operations, Division of Traffic, Division of Public Service and Accounting, Division of Labor, Division of Law and Divi sion of Inland Waterways. The Regional ad ministration in each of seven operating re gions is not made up uniformly but in most cases includes a regional director, and a gen eral staff consisting of an assistant regional director, assistants in charge of operation, traffic, mechanical work and engineering and committees to administer traffic, purchasing and other matters. Some of the regions are, more over, divided into districts in charge of district directors. Each railroad system is under the immediate control of a Federal manager, and in most regions one or more terminal managers have been appointed. The advisory commit tees and commissions include a Port and Har bor Facilities Commission, a Board of Rail way Wages and Working Conditions, a com mittee on Inland Waterways, and an Exports Control Committee.

Government Regulation of Railroads.— Regulations of railroads in. interstate com merce began with the enactment of the Inter state Commerce Act in 1887. Its application was widely different from what its framers anticipated, in part because of the defects of the statute itself and partly because of the way some of its provisions were interpreted by the courts. Congress, in later years, enacted a series of important amendments. To over come the refusal of railroad officials to testify before the commission on the ground that they might incriminate themselves, Congress in 1893 enacted the °immunity amendment, which requires them to testify, but protects them against prosecution on account of testi mony or evidence submitted by them, and this amendment was upheld by the Supreme Court in 1896. To strengthen the anti-rebating clause of the law, Congress in 1903 enacted the Elkins Act. Corporations as well as their agents were made liable; departure from pub lished rates was made the test of rebating, and the receivers of rebates were declared to be as much guilty as the railroads paying them. This law abolished the penalty of imprison ment, leaving a fine as the punishment for guilt; but imprisonment as well as fines were re-enacted when the Interstate Commerce Act was again amended in 1906. In 1903 Con gress also passed the °expediting act?' the purpose of which is to expedite cases ap pealed to the Federal courts from the Inter state Commission, and equity cases of any kind brought under the Interstate Commerce Act, the Sherman Anti-Trust Act, or other laws of like purpose. A more comprehensive amend ment was enacted in 1906. The Hepburn amendment of that year widened the scope of the Interstate Commerce Act to include not only railroads, but express companies, pipe lines, sleeping car companies, indtistrial rail roads, switches, private tracks and terminal facilities, private cars and refrigerator venti lation, elevation, transit, storage and handling service in interstate commerce. Rate changes were prohibited without a 30 days' notice, un less the Commission waived this requirement for good cause; rebating penalties were in creased in severity, and tree passes were pro hibited except in case of employees and other persons expressly specified in the law.

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