United States Railroad Administration
The United States Railroad Administration (USRA) was the name of the nationalized railroad system of the United States between December 28, 1917, and March 1, 1920.[1] It was the largest American experiment with nationalization, and was undertaken against a background of war emergency following American entry into World War I. During its brief existence, the USRA made major investments in the United States railroad system, and introduced standardized locomotive and railroad car classes, known as USRA standard. After the end of World War I, while some in the United States advocated for continuing nationalization, ultimately the railroads were returned to their previous owners in early 1920.
This article is about the nationalized rail system during World War I. For the corporation that oversaw Conrail, see United States Railway Association.Progression[edit]
On March 21, 1918, the Railway Administration Act became law, and Wilson's 1917 nationalization order was affirmed.[10] Wilson appointed his son-in-law, Secretary of the Treasury William Gibbs McAdoo, as Director General of the newly formed USRA.[7]: 12
The law guaranteed the return of the railroads to their former owners within 21 months of a peace treaty, and guaranteed that their properties would be handed back in at least as good a condition as when they were taken over. It also guaranteed compensation for the use of their assets at the average operational income of the railroads in the three years previous to nationalization. The act laid down in concrete terms that the nationalization would be only a temporary measure; before, it was not defined as necessarily so.[3]: 517
Both wages and rates for both passenger and freight traffic were raised by the USRA during 1918, wages being increased disproportionately for the lower-paid employees, which proved unpopular among more senior ones.
With the Armistice in November 1918, McAdoo resigned from his post, leaving Walker Hines as the Director General.[7]: 12
Aftermath[edit]
The Esch-Cummins Act maintained and expanded a complete railroad regulatory system after the war. During the 1920s the railroads, with rates and routes set by the ICC, were facing increasing competition from other modes of transportation: trucking and airplanes. These competing modes were basically unregulated at the time, and received extensive financial assistance from the federal government. This competition contributed to the railroads' decline in the 1920s and beyond, and which was amplified in the 1930s during the Great Depression.[14]: 356–362 [15]: 192–196