On the eve of World War I, America's railroads were afloat in a sea of dramatic contrasts. On the one hand, the railroad's influence could still be felt in the towns and cities of America, and long-distance travel was still almost exclusively the domain of the passenger train.
And yet, in contrast to these healthy signs, wooden passenger cars were still in use on many railroads, as were outdated and underpowered locomotives. Freight-car fleets still were made up, in large part, of older, lower-capacity (30-ton) cars, even though the increasing use of steel had made the 40-ton car a reality by now.
The outbreak of war in August of 1914 at first resulted in decreased American industrial activity. Rail ton-miles decreased four percent in 1914 and another four percent the following year. It was not until 1916 that the allied nations began to draw upon the economic resources of the United States. That year, ton-miles increased dramatically -- 32 percent -- and soon the nation's railroads were feeling the strain. As the flow of traffic was mostly eastward, serious congestion was experienced in the yards, terminals, and ports of the Northeast and New England.
A car shortage developed as a result, primarily in the West and South. Car shortages were not unusual during peak periods of business prosperity, and a number had occurred before this time. Yet this one would he different. Things went from bad to worse, and in January of 1917 the Interstate Commerce Commission reported that, "The present conditions of car distribution throughout the United States have no parallel in our history . . . mills have shut down, prices have advanced, perishable articles of great value have been destroyed. . . . Transportation service has been thrown into unprecedented confusion."
By the time war was actually declared by the United States, in April of that year, the situation had grown intolerable. American railroads experienced their heaviest traffic in history during the preceding eight months, and the onset of war simply increased the burden. Yet the American spirit of individualism prevailed, and an executive committee called the Railroads' War Board was formed by industry leaders. This body succeeded in lessening car shortages and other problems. Unfortunately, the winter of 1917-1918 struck with a vengeance. That, plus a series of conflicting "priority shipment" orders from the federal government's own war agencies, finally brought things to a standstill.
On December 26, 1917, President Woodrow Wilson finally proclaimed: "I have excercised the powers over the transportation system of the country, which were granted me by the act of Congress of last August, because it has become imperatively necessary for me to do so." He addressed Congress just a few days later, on January 4, 1918, telling all assembled that he had excercised this power "not because of any dereliction on their [the Railroads' War Board's] part, but only because there were some things which the government can do and private management cannot."