"We are not relying on the volunteer system in this war," he clarified the issue. "We are drafting men and compelling them to make, if necessary, the supreme sacrifice for their country. A higher obligation, therefore, rests upon the Government to mitigate the horrors of war for the fighting men and their dependents insofar as it is possible to do so through compensation, indemnities and insurance. Less than this a just, generous and humane Government can not do. We must set an example to the world, not alone in the ideals for which we fight, but in the treatment we accord to those who fight and sacrifice for us.

"The proposed provisions for the men and their dependents should not be offered as gratuities or pensions, and they should not be deferred until the end of the war. The wives and children, the dependent mothers and fathers of the men, should not be left, as in previous wars, to the uncertain charity of the communities in which they live. The minds of our soldiers and sailors should be put at rest, so far as their loved ones are concerned, by the knowledge of the compensation for the service they are rendering to their country. In like manner, they should know in advance that if they are killed in battle, definite and just provision has been made for their dependents, and that if they are disabled, totally or partially, if they come back armless, legless, sightless, or otherwise permanently injured, definite provision is made for them, and that they are not going to be left to the uncertain chances of future legislation, or to the scandals of the old pension system. Every man should know that the moment he is enlisted in the service of the Government, military or naval, these definite guarantees and assurances are given him, not as charity, but as a part of his deserved compensa

tion for the extra-hazardous occupation into which his Government has forced him."

The President, expressing entire approval of the measure, stood back of the Secretary in the concealed but bitter battle which arose in Congress over the bill. Again Joshua W. Alexander, chairman of the Committee of the House, having the bill in charge, proved an invincible champion. The measure was finally passed by unanimous vote in both Houses of the Congress and received the President's approval October 6, 1917. But the victory was not gained until a great fight by selfish interests had been made even within the Congressional committees against the plan. Some of the wealthiest insurance companies, not yet seeing that the bill had in it the germ of an educational crusade which would later react to their benefit, sent down their attorneys to insist that the rates at which the Secretary proposed to issue Government policies were ruinous, and much talk of "bankrupting" was heard beneath the Dome. The old guard, who had for years used the pension system for political gain and who saw in a great war opportunity for further political machinery, denounced the measure as destructive. letter to the Governor of the New York Federal Reserve Bank McAdoo voiced his opinion of the bill's opponents:

In a

"I am surprised that any selfish interest would raise a word of objection to this humane and just measure," he wrote Strong, thanking him for his assurances of approval. "It can not hurt the insurance companies, but, on the contrary, should help them; but whether it helps or hurts them is of no consequence when men are dying for their country and their families are starving as a consequence. If our men must die to

protect our liberties and the property of the people of the United States, including the life insurance companies, their officers and agents, this bill offers the least we can do for them, and certainly we must not permit their loved ones to suffer from want or neglect."

He had difficulty, however, in making Congress see the need of haste in passage of the bill, and in September wired to the President information that there was talk in the Senate of not acting upon the insurance bill until the December session. Through their combined efforts legislative action was secured, and the machinery of the bureau set in motion less than six months after the beginning of the war.

There were, of course, necessary delays and mistakes in the clerical work of establishing so gigantic a mechanism; but before McAdoo went out of the Treasury it was functioning in a way to warrant the statement that it was the greatest Governmental institution in the world. Even with later administrative abuses, it has remained the monument to humanitarian foresight in the war period; and the book which McAdoo had never finished was written by his deeds.

CHAPTER V

THE RAILROAD ADMINISTRATION

O a man of McAdoo's experience and sympathies interest in the railroad problem of the United States was inevitable. He had inaugurated an electric street line, he had built the Hudson Tunnels and operated their system. As early as 1910 he had voiced to the Graduate School of Harvard his theories of the obligations to the public of a transportation corporation. His post as Secretary of the Treasury had given him a vantage point of observation upon the trials, tribulations, good and evil of the railroads of the country. In 1916 he had been a battling crusader for the eight-hour law, which averted the impending railway strike of that time. As the United States went deeper into the war he saw how integral a part of the war machine the railroads of the nation were. He saw how miserably they were functioning, how precariously they were financed, how gravely unjust was the treatment they gave their employees, and how loomingly they threatened the victory toward which other agencies strove with heart and soul. More than that, he saw in them the danger point of class antagonism, the immediate combat-ground of capital and labor. Just as the issue of slavery had run like a dark thread through the warp of executive, legislative and judicial records of the American Government for thirty years before the Civil War, so the issue of wage for the worker ran through all forensic and cabinet discussion of the twentieth century. Because the railroads of the country were so vitally part of this, the greater problem, McAdoo's mind revolved about them even in the midst of his titanic tasks of finance; and

before any other executive in power he saw in them the crucial agents of American triumph or American defeat.

The beginning of December, 1917, found the railroads suffering from physical, economic, financial and moral congestion. Even before the United States went into the war Samuel Rea, President of the Pennsylvania Railroad Company, told the Interstate Commerce Commission that "We realize that the condition of the railroads to-day presents a menace to the country, not alone to the owners of the properties, but as affecting the international situation." By December, 1917, the paralysis of transportation had crept to the point where the Allied Governments of Europe took alarm. The harbors of New York, Boston and Philadelphia showed terminals of great systems so congested that essential supplies could not be delivered, and steamships waiting for supplies to Europe could not be loaded. Across the Atlantic France and Great Britain were lifting agonized cries for speed in transportation. While sidetracks were choked, locomotives in bad condition, cars out of repair, and the machinery of transit demoralized, and railroad managers shrugging helplessness, the Allies held the lines in France under black clouds of despair.

From both sides of the ocean flashed to the Secretary of the Treasury, the shock-absorber of the war, demands for action to relieve the situation. The financial condition of many of the railroads was so precarious on account of the general breakdown of transportation that receiverships were impending. Every day piled higher proof that the Government must get back of the railroads, which were through Fairfax Harrison, Chairman of the Railroad War Board, ask