ability; but there were differences that they could
neither escape nor neutralize.

IN FAIRNESS TO THE RAILROADS

Complete unity of administration in the present circumstances
involves upon occasion and at many points a serious dislocation of
earnings, and the committee was, of course, without power or
authority to rearrange changes or effect proper compensations and
adjustments of earnings. Several roads which were willingly and with
admirable public spirit accepting the orders of the committee have
already suffered from these circumstances and should not be required
to suffer further. In mere fairness to them the full authority of the
Government must be substituted.

The Government itself will thereby gain an immense increase of
efficiency in the conduct of the war and of the innumerable
activities upon which its successful conduct depends.

The public interest must be first served, and in addition the
financial interests of the Government and the financial interests of
the railways must be brought under a common direction. The financial
operations of the railways need not then interfere with the
borrowings of the Government, and they themselves can be conducted at
a great advantage.

INVESTORS TO BE PROTECTED

Investors in railway securities may rest assured that their rights
and interests will be as scrupulously looked after by the Government
as they could be by the directors of the several railway systems.
Immediately upon the reassembling of Congress I shall recommend that
these definite guarantees be given:

First, of course, that the railway properties will be maintained
during the period of Federal control in as good repair and as
complete equipment as when taken over by the Government, and, second,
that the roads shall receive a net operating income equal in each
case to the average net income of the three years preceding June 30,
1917; and I am entirely confident that the Congress will be disposed
in this case, as in others, to see that justice is done and full
security assured to the owners and creditors of the great systems
which the Government must now use under its own direction or else
suffer serious embarrassment.

The Secretary of War and I are agreed that, all the circumstances
being taken into consideration, the best results can be obtained
under the immediate executive direction of the Hon. William G.
McAdoo, whose practical experience peculiarly fits him for the
service, and whose