Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1914-11-22

what erroneous, and also presents a plan Of
pubhc copartnershp. which viii be OF IN
iereN 10 readers
ST. LOUIS, Nov. 2I-Dcar Judge
clements; While tesufymg before you
rev daNs ago, Governor Folk asked
me II ] thought the remedy for eN-
lsllhg conditions 10 be governmental
control OF securities, or some other
close relation between the government
ana the railroads said that was
getting into big question. but II he
wanted my views ! would give them
briefly which / did.
Newspaper comment and personal
letters that my position as 10 the re-
lallons between the government and
lhe railroads appears to be misunder-
stood. ! am In favor Of a form Of
government partnership as dis
tlngulshcd from government owner
ship.
believe that partnership ar
rangCments under special federal
charters TO be granted to railroads de-
sirous or operating under federal
license, would be the wisest solution
or the present unsettled conditions
Taking all the requirements OF the
100000 miles OF railroads I'm the
-
including larger and better facilities
necessary to satisfy the public. pur-
chase of new equipment, extension
or terminal facilities, double tracks,
safety signal appliances, reduction of
grades, payment Of car trust GER
uficate, taking care Of note maturi- /
ties, bond refundlng purposes, etc, |
the railroads will need not less than
900 million dollars year This does
not include new construction When /
the general situation improves, the f.
railroads viii be able to borrow some /
Of this needed money al from say
per cent to y per cent per annum. |
The cost OF money is just as much |
an expense of transportation as the
cost Of coal ties, rails or other ma
ierial used in the construction. |
maintenance and operation of rail |
roads, ami indeed Is one of the .
largest items Of expense the railroads .
have to contend with
Low Rates Aid.
The government pays only per
cent for the money used in the con-
5truction OF the Panama canal |
which Is rapidly becoming an inn
portant factor in transportation. The
canal would never have been built I
sequent cheap money. The United
States has also authorized and is now
for the construction OF a
abroad in Alaska. ! recognize that
he canal Is a good and wise invest
nent, and that the Alaskan railroad
Will be equally as good for the de-
'elopment OF the new country, In
hese two enterprises the government
ends its credit for construction work,
md shoulders the deficit until they
become self-sustaining. Regardless
II any losses, the public is the gamer
'he 3 per cent bonds sold for the
obstruction of the Panama canal,
nd to bO sold for the construction
# the Alaskan railroad, furnish good
ow rate security for small investors,
avaings banks and Ike Institutions
The federal government is now
egulating the expenses and revenues
f railroads. 1t should go a step
urthor and safely aid them in future
inancing, and in consideration
herefor enjoy a share Of the profits
With representation on the boards OF
irectors
In this letter | shall not attempt
o go into detail as to these special
harters, but there are no real diff
Icultles in making them absolutely
afe for the government, profitable
or the people, and advantageous TO
he railroads. The change OF Sc
urites should be gradual through ,
he creation OF low interest bearing
overnment- railroad bonds to take the
lace of the underlying higher in
crest bearing railroad bonds as they
lay mature. or they could be eX
hanged under refunding process.
"a oh h. 4
Y the Interstate Commerce Commis- ,
lon, always provided that the net
arnings OF the railroad must be at
EAST 2i2 times the interest on the
oVernment-railroad bonds exchanged
)r the present underlying bonds. ,
hese new bonds should be a first lien
n the property. All Junior mortgage
onds and the stock would be sub
sct TO these new bonds, on which the
overnment would not be responsible
ut would under equitable terms TO
o agreed upon. share in the profits
'ith the stockholders. At a rough
stimate, in the course OF few years
ne-half OF the present underlying
onds. or about five billion dollars q
ould be exchanged or refunded into i
lower interest bond. Q
Interest Saving.
A large proportion OF these old I
onds bear per cent and per cent, a
nd few Z per cent interest; there J
ire under the proposed system there
ould eventually be a saving to the >,
,ilroads OF approximately 100 mil !,
on dollars a year In interest alone.
his is on the assumption that such !,
governments railroad bond. being /,
rst lien, would be as attractive to I
ankers and investors as the present o
per cent government Panama canal II
Dnds. II in this way the railroads |
the country can save 100 million q
Dllars a year in the item Of interest, G
nder my estimate it would insure 9
ie government receiving as It's share {
lder the proposed partnership Il
probably from fifteen n
twenty million dollars year. r