Publish date:
Updated on
Year
1917

U.S. government takes over control of nation’s railroads

Eight months after the United States enters World War I on behalf of the Allies, President Woodrow Wilson announces the nationalization of a large majority of the country’s railroads under the Federal Possession and Control Act.

The U.S. entry into the war in April 1917 coincided with a downturn in the fortunes of the nation’s railroads: rising taxes and operations costs, combined with prices that were fixed by law, had pushed many railroad companies into receivership as early as late 1915. A year later, in a last-minute bill passed through Congress, Wilson had forced the railroad management to accept union demands for an eight-hour work day. Still, many skilled workers were leaving the cash-poor railroads to work in the booming armaments industry or to enlist in the war effort.

By the end of 1917, it seemed that the existing railroad system was not up to the task of supporting the war effort and Wilson decided on nationalization. Two days after his announcement, the United States Railroad Administration (USRA) seized control. William McAdoo, Wilson’s secretary of the treasury, was appointed Director General of Railroads. The railroads were subsequently divided into three divisions—East, West and South. Passenger services were streamlined, eliminating a significant amount of inessential travel. Over 100,000 new railroad cars and 1,930 steam engines were ordered–designed to the latest standards–at a total cost of $380 million.

In March 1918, the Railroad Control Act was passed into law. It stated that within 21 months of a peace treaty, the railroads would be returned by the government to their owners and that the latter would be compensated for the usage of their property. Consequently, the USRA was disbanded two years later, in March 1920, and the railroads became private property once again.

FACT CHECK: We strive for accuracy and fairness. But if you see something that doesn't look right, click here to contact us!

ALSO ON THIS DAY

The first Kwanzaa

The first day of the first Kwanzaa is celebrated in Los Angeles under the direction of Maulana Karenga, the chair of Black Studies at California State University at Long Beach. The seven-day holiday, which has strong African roots, was designed by Dr. Karenga as a celebration of ...read more

Bugsy Siegel opens Flamingo Hotel

Well-known singer and comedian Jimmy Durante headlined the entertainment, with music by Cuban band leader Xavier Cugat. Some of infamous gangster Benjamin "Bugsy" Siegel’s Hollywood friends, including actors George Raft, George Sanders, Sonny Tufts and George Jessel were in ...read more

Patton relieves Bastogne

On this day, General George S. Patton employs an audacious strategy to relieve the besieged Allied defenders of Bastogne, Belgium, during the brutal Battle of the Bulge. The capture of Bastogne was the ultimate goal of the Battle of the Bulge, the German offensive through the ...read more

Truman dies

On this day in 1972, former President Harry S. Truman dies in Independence, Missouri. Then-President Richard Nixon called Truman a man of “forthrightness and integrity” who had a deep respect for the office he held and for the people he served, and who “supported and wisely ...read more

The Exorcist opens

On this day in 1973, The Exorcist, a horror film starring the actress Linda Blair as a girl possessed by an evil spirit, makes its debut in theaters; it will go on to earn a reputation as one of the scariest movies in history. The Exorcist was based on William Peter Blatty’s 1971 ...read more

Carmaker Preston Tucker dies

On December 26, 1956, the visionary carmaker Preston Tucker dies of lung cancer. He was just 53 years old. Tucker began his career in the auto industry as a mail messenger at General Motors. He quickly worked his way out of the mailroom, however, and before he turned 30 he was ...read more