RAILROAD CONTROL ACT 40 Stat. 451 (1918)

Railroad service virtually ceased during the severe winter of 1917–1918. The extraordinary wartime volume of traffic and the railroads' fiscal and physical inability to meet its demands prompted President woodrow wilson to take control of all railway transport in the country on December 26, 1917. Congress ratified his proclamation in March 1918, by "emergency legislation enacted to meet conditions growing out of war."

The substance of the act concerned reimbursement of the owners for the use of their property while under government management. Congress set just compensation for this taking of property at the average operating income for the prior three years and also insured "adequate and appropriate [monies] for the maintenance, repair, renewals and depreciation of property." This legislation temporarily superseded much of the regulatory power of the Interstate Commerce Commission (ICC). It authorized the President to initiate "reasonable and just" rates which became effective without the ordinarily required wait and without ICC approval. That body could review the reasonableness of the rates but must give "due consideration" to the "unified and coordinated national control" and the stipulation that the roads "are not in competition." The constitutionality of the act as a whole was never challenged but separate sections were sustained under the war powers in a series of cases.

David Gordon
(1986)