Until May 21, 1918, railroad corporations and the corporate officers were employed as the instrumentalities through which the Director General operated the properties. But at that time he decided to have operations conducted through agencies responsible exclusively to him, and therefore, the corporations were detached from any connection with operations, and the operations were put in charge of Federal Managers, and in the cases of smaller lines in charge of General Managers. Some of the officers of the corporations were requested to serve the government, and others were cut off the government payroll, altho most of those so cut off continue to serve the corporations with which they had been previously connected. Under the present system, every railroad officer in the country is without divided responsibility; all are responsible solely to the Director General. The wisdom of this course was shown when the time came to consummate contracts between the government and the railroad corporations. In that process the corporate officers were left free to represent their stockholders without any embarrassment to themselves or to the Railroad Administration. Those who accepted positions under the government had to sever all connection with the corporations. At the same time continued effort has been made to build up a spirit of coöperation between the Railroad Administration and these corporate officers representing the owners of the properties being operated by the government.

Thus the railroad organization under government control is seen to be a pyramid, with a great mass of railroad employees forming the base, the pyramid tapering up through the Federal and General Managers, then through the Regional Directors, and finally to the Director General who forms the apex of the pyramid.

Gathered about the Director General in Washington is a staff consisting of an Assistant Director General, Assistant to the Director General, a private secretary to the Director General, and Division heads having to do with the principal railroad activities. There is a Division of Finance and Purchases; a Division of Operation; a Division of Law; a Divi

sion of Capital Expenditures; a Division of Labor; a Division of Traffic; a Division of Public Service and Accounting, and a Division of Inland Waterways, formed to manage the operation of canals, etc., included as a part of the transportation system of the nation. There is also a Railroad Administration Actuary, under whom is a Bureau for Suggestions and Complaints and other activities. The force of these divisions and of the Director General's immediate office has been kept at a minimum. The theory has been that the staff in Washington originates general policies and leaves their execution to the Regional Directors, the Federal and General Managers, and the regular officials and employees. Every effort has been made to weld these previously distinct organizations into a homogeneous whole, and this work has already progressed far.

It is not feasible to measure at this time the tangible results which these changes in organization have brought about. It is enough to say that already there have been intensive unifications of terminals and of stations; unnecessary passenger trains have been eliminated; there have been intensive reductions in organizations; a uniform freight classification has been adopted; competition as between systems and roads has been done away with, leading to many economies and simplifications; time tables have been made more simple; a universal mileage book for use on all lines under government control has been adopted; freight routes have been shortened, resulting in a development of well-graded routes for the transportation of freight, a reduction in the cost and time of transportation between many given points, and the intensive employment of both rolling stock and the equipment of the railroads; successful efforts have been made to produce better loading of freight cars and the more intensive use of railroad equipment generally.

A successful standardization of freight cars and locomotives has been brought about, thus simplifying the work of repair and making it more convenient for the equipment of one road to be used on all other roads. A supervision has been initiated and exercised from Washington over capital expenditures for improvements and betterments, so that the labor and material

supply, which is limited under war conditions, can be allocated where most needed and the railroad situation surveyed from a national standpoint rather than from that of the individual systems and lines. A uniform system of purchases has been instituted, leading to economy; the Pullman Company has been placed under the jurisdiction of a separate Federal Manager, and thus made an integral part of the Railroad Administration.

Effective coöperation has been built up between the Railroad Administration and other governmental agencies with an interest in transportation matters, with the result that efficiency has been increased in the transportation of troops and supplies needed, not only for our own army and the armies of our allies, but by the civilian population as well. The Railroad Administration has a traffic representative with the War Industries Board, the War Department, the Navy Department, the Shipping Board, the Food Administration, and the Fuel Administration. Traffic questions having to do with these organizations are handled by these Railroad Administration representatives. Another example of coöperation has been the creation and operation of the Exports Control Committee, of which a representative of the Railroad Administration is Chairman, and on which serve representatives of other government agencies interested in export problems. The duty of this committee is to so control traffic as to avoid congestion at export points.

In addition to the railroads under the control of the Director General there are a number of coastwise steamship lines including the vessels of the Clyde Steamship Company, the Mallory Steamship Company, the Merchants and Miners Transportation Company, and the Southern Steamship Company. Successful efforts have been made to synchronize the operation of these lines with the operation of the railroads of the nation in the carrying of freight and passengers.

On September 3 the Director General of Railroads made a report to the President on the work of the United States Railroad Administration for the first seven months of its existence, and in that report details were given of the way the

multiplex problems which have arisen have been solved. In general, a conservative view at the present time is that the primary work of changing from many railroad systems into one system has already been accomplished. As time goes on, improvements and changes may be expected. The organization for carrying forward this vitally important part of the war endeavor of America is now at hand. For it to forge forward only needs intensive work on the part of all members of the great organization from top to bottom, and a constant study of the possibility of reforms as well as the execution of plans already made.

WASHINGTON, D.C.

BRICE CLAGETT.

THE BEHAVIORISTIC MAN

A NEW kind of an economic man has been, or is in process of being, constructed by what is known as the behavioristic school of economists. He is the result of an over-emphasis upon the non-pecuniary and the neglect or under-emphasis upon the pecuniary motives, as the old economic man was the result of the opposite tendencies.

There can be no doubt that men have many instincts and impulses which ally them with the bower bird who contrives, the beavers who construct, the bees and squirrels who accumulate, and all gregarious creatures who work together without thought of pecuniary gains and losses, and without calculating and balancing costs and advantages of any kind. We must all acknowledge the importance of a study of the instinctive and impulsive reactions in economic life, and admit the charge that too little attention has been given to them by economists. On the other hand, a counter charge can be made with equal effect and with equal justice against the so-called behaviorists. There are three counts in this charge.

1. They fail to see that the so-called orthodox economists have made ample allowance for these instincts, impulses and

emotions, even tho they have not analyzed, described and catalogued them as fully as was desirable.

For example, in most recent theories of interest, allowance is made for instinctive saving, accumulation, storing, holding on to desirable possessions, etc. In addition to all these things, however, these theorists have claimed that the influence of calculated self-interest shows itself. A great deal of saving would take place, it is claimed,' even if there were no prospect of receiving interest on accumulations; but, nevertheless, some people are induced to save more when interest is added as another inducement than they would save because of these instinctive motives alone, when there was no prospect of interest. The added savings of these people who look forward to interest make up an appreciable part of the total supply of capital in any economically advancing community. Patriotism, also, and other non-pecuniary motives play a part, but it seems probable that more would be subscribed for government bonds which paid interest than for those which did not.

2. The second count in the charge is that the Behaviorists have gone as much too far in one direction as the orthodox economists have ever gone in the other direction, in that they have ignored, or at least slurred over, calculated self-interest as a factor in human behavior. If the so-called economic man of the classical school, whom, by the way, I have found described by the opponents of the classical school more specifically than by any member of that school, was too much of a calculating machine, so is the "behavioristic man" of this recent school too much of an impulsive, unreasoning, "eternal feminine" sort of a man. It seems to me that we need a balancing up of motives before we arrive at any true concept of human reactions in a modern economic society.

3. The third count in the charge is that the behaviorists, like some of the older economists, lay too much stress on the

1 Cf. the chapters on Interest in the present writer's Distribution of Wealth; also the chapter on Self-Centered Appreciation in his Essays in Social Justice; Marshall, Principles of Economics, Bk. VI, chap. 6; Landry, L'Interet du Capital, chaps. 2 and 3; Cassel, The Nature and Necessity of Interest, chaps. 2-4; Fisher, The Rate of Interest, chaps. 12-14; Mixter, Theory of Savers' Rent, Quarterly Journal of Economics for April, 1899, pp. 245-269.