New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-06-04
Urges Government lnCor-
poration as Best Way to
Solve the Problem.
HARRIS AGREES
WITH u. P. HEAD
Railway Men Protest to Senators
Against Powers Wanted by
Commerce Board.

From The IEluu - Bureau
Washington June 3.-Federa' incorpora-
tion OF railroads doing an interstate bust
ness was advocated to-day as means
of solving the problem OF regulation and
control by \ II. Harris. vice-pre sident OF
the New York central. and Judce Robert
: Loyett of the Union Pacific. before
the Senate Interstate Commerce Commit
tee. They appeared TO protest agains.
features Of the Rayburn bill now before
the House amending the interstate COM
merce act. Edward p. Rpley. president
OF the Atchison. Topeka X Santa re. also
discussed the bill.
Judge Lovett insisted that II the Ray
burn bill. with the amendments sug-
gested by the Interstate Commerce Com
mission. were enacted. it would cause un-
told disaster
II do not like 10 he prophet OF evil.
said Judge Lovett. "but if this bill should
become the law, many solvent railroads
in this country would go into the hands OF
receivers.
When Mr. Harris told the committee
that he thought a solution OF the problem
OF railroad regulation could be found IN
Federal Incorporation, Senator Cummins
declared that he would like TO see such a
law enacted, and Chairman Newands and
other members OF the committee made
comments indicating a favorable attitude
toward such a plan
Among the provisions OF the Rayburn
bill criticised by the railroad men We're
those which direct the Interstate Com
merce Commission 10 pass on all issues
OF securities by railroads before the is
sues are made. and which prohibit one
man from being an officer or director Of
more than one railroad company.
Mr.. Harris insisted that members or
Congress and Of the Interstate Commerce
Commission had not the slightest idea OF
the burden which would he placed on the
Interstate Commerce Commission II II
were compelled to pass on all the issues
of securities by railroads. He showed
that for the New York Central Line alone
he had made seventy-five applications for
the issue OF securities in the last three
years. At present he said, there were
sl4 90. 10000 Of stocks and bonds OF rail-
roads listed on the New York Stock EX-
change alone In 1913 there had been
ffty-seyen new railroad issues listed oy
that exchange amounting to S2I,Oo,Cp.
Mr. Harris added that delay by the
commission in granting authority to issue
securities might prove fatal to railroads
in many cases He pointed out that the
commission had had before ii for nearly
a year the freight rate increase cases,
which had not yet been decided.
Under the Rayburn bill Mr.. Harris con-
tended. the Interstate Commerce Commits
sion would have the power to say to
railroad whether it could lay double
track or build a new terminal station, II
an issue of bonds for such purpose were
necessary. He said that Commissioners
Hall and Clements had made II clear that
they believed the commission should have
the veto power in such matters.
Taking up his proposition for the federal
INCORPORATION of railroads. Mr.. Harris
said:
Congress could then properly control
its OWE children. Now these children are
state born, yet Congress partly controls
them"
He declared that the railroads could
readily adjust themselves TO federal IN
corporation. and that such Incorporation
would simplify corporate management Oh
the roads and unity control.
Judge Lovett objected particularly 10
the language of the House bill wIlch re-
quires the Interstate Commerce Cofilii's-
sion 10 refuse as he construed H. 10 per
NIT the issue Of any securities unless II
is shown that il is necessary in the pub
lie interest to the proper performance OF
it's service for the public.
The Judge contended that under TINS
language the Union Pacific would not De
able TO buy lines for the extension OF us
system or to make extensions, since u
was under no obligation to the pubic 10
do so. The commission would have no
power TO permit the issue Of securities 10Y
nurchase OF another line or 10 build an
extension.
The bill. Judge Lovett went on, upset
the practice of the railroads which eX-
pend millions Of dollars for improvements
and extensions. taking the money from
an unexpended surplus and later issuing
bonds and refunding the treasury with
the money received from their sale He
insisted that such proceeding would not
be possible under the bill.
The provision in the bill which would
preyent the director of any railroad serv-
ing as a director OF any other road also
was criticised by Judge Lovett He said
that the continuous transportation lines,
under one system. had been Of vast oene-
iii 70 the country. and 1t would be impos-
sible to continue such systems.