taken into consideration, the best results can be
obtained under the immediate executive direction of the Honorable
William G. McAdoo, whose practical experience peculiarly fits him for
the service, and whose authority as Secretary of the Treasury will
enable him to coordinate, as no other man could, the many financial
interests which will be involved, and which might, unless systematically
directed, suffer very embarrassing entanglements.

President Wilson's proclamation stirred up great excitement on the stock
market. Speculators rushed to buy back railroad stocks which they had
previously sold short, and the market value of such stocks was raised
more than three hundred and fifty million dollars as a result. The
Federal Government's assumption of control of the railroads was
generally recognized as the proper act under existing circumstances, and
the guarantee of pre-war earnings made them a good investment.

The railroad system in the United States consists of 260,000 miles of
railroad, owned by 441 distinct corporations, with about 650,000
shareholders. It employs 1,600,000 men and represents a property
investment of $17,500,000,000. The outstanding capital in round numbers
is $16,000,000,000, $9,000,000,000 of which is represented by a funded
debt. The rolling stock comprises 61,000 locomotives, 2,250,000 freight
cars, 52,000 passenger cars and 95,000 service cars. All this was now
under the charge of William G. McAdoo. On January 4, 1918, President
Wilson explained his plan to Congress, and recommended legislation to
put the new system of control into effect, and to guarantee to the
holders of railroad stocks and bonds a net annual income equal to the
average net income for the three years ending June 30, 1917.

The wise recommendations of President Wilson were at once approved by
Congress; provision was made for guaranteeing the railroads the income
which he recommended, and for financing the roads. The railroads' war
board was abolished and Mr. McAdoo appointed an advisory board to assist
him. This board consisted of John Skelton Williams, Controller of the
Currency; Hale Holden, President of the Chicago, Burlington and Quincy
Railroad; Henry Walters, Chairman of the Board of Directors of the
Atlantic Coast Line; Edward Chambers, Vice-President of the Santa Fe
Railroad and head of the transportation division of the United States
Food Administration; Walter D. Hines, Chairman of the Executive
Committee of t