Government Ownership of the Railroads

Report Outline
Postponement of Permanent Rail Legislation
Present Financial Plight of the Railroads
Government Operation of Railroads in Wartime
Proposals for Federal Ownership and Operation of Railroads
Special Focus

Postponement of Permanent Rail Legislation

Rossevelt's Avoidance of Positive Recommendations

A Program of railroad legislation drawn up by three members of the Interstate Commerce Commission was transmitted to Congress by President Roosevelt, April 11, with a special message in which he said action was necessary at this time to stave off “serious financial and operating difficulties” for the railroads “between now and the convening of the next Congress.”

The program had been hurriedly prepared by Chairman Splawn and Commissioners Eastman and Mahaffie, acting as a subcommittee of a special committee of government officials and representatives of railroad management, labor and investors, which met with the President at the White House in mid-March. In addition to measures for immediate relief-calling chiefly for extensions of government credit to railroads to enable them to meet fixed charges and to purchase equipment-the commissioners suggested several measures of long-term relief, including a proposal for establishment of a Federal Transportation Authority to plan and promote coordination and consolidation of railroad facilities.

Although the President believed “some immediate legislation” was necessary, pending “permanent solution of the railroad problem” by Congress, he did not specifically recommend enactment of any of the proposals advanced by the subcommittee of Interstate Commerce Commissioners in his message of April 11. On the other hand, he transmitted to the House and Senate the comments of other members of the larger committee, some of whom criticized the subcommittee's report as “inadequate,” “ineffective,” and “overcautious.”