New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-09-11
Railroad Credit Position as
Mr.. Amster Sees |
Editor Of The Tribune.

Financial Editor of The Tribune.
Sir: ! note your comment of August
80 with respect to my interview advo-
eating that the government loan the
railroads money. l am sorry that you
Misunderstood me.
The position | take is not that the
railroads are not doing, as you say,
the largest gross business in their his
tory, or that the equipment is not
made TO serve 10 & greater capacity
.han ever before, but that the rail-
roads, like other utilities corpora
tons, must provide additional money
for extensions and improvements, as
we'll as refunding maturing obligs-
tons, and that they cannot get this
money out OF net earnings, even
though the net earnings were salts
factory, which, as a matter of fact,
under the recent increased cost Of
fuel, supplies and labor. they are not.
The railroads must issue new securi-
ties for financing extensions and i'm
provements and for refunding pur-
poses. You know they have always
had TO go TO certain banking interests
for this financing, and that unless
those interests approve the railroads
have never been able to secure large
sums through other channels.
You know that the government, hav-
ing placed two billion dollars Of 81
per cent tax exempt bonds and now
contemplating four billion or more of
4 per cent bonds, has practically made
railroad bonds unstable, even at a
very high rate Of interest. The rail
roads Of this country are as much of
an ally to the American government as
any Of the European governments, and
it is necessary that they should keep
running under any conditions and cir
cumstances. The railroads are not like
any other industries that can close
down when they have no money with
which to operate or when their earnings
fall below certain level. They have r
dual nature, being both public and pri-
vate institutions, and they are regu-
lated by the government, even to ths
extent Of hours and wages.
Why should not the government
therefore. come forward now in this
crisis, when the roads are unable to
sell their bonds, and loan the railroads
a certain percentage of the bond
value they have for marketing pur-
poses during the period Of this war
crisis, to be paid back in five or ten
years after the war at the same rate
of interest which the government
would have 10 pay? There could be
no possible chance of a loss to the
United States, because the govern
ment has the Interstate Commerce
Commission, the Railroad Valuation
Commission and other sources through
which it can inform itself as to the
NdlNS u Nllt StNNiAAs bNhAhN h'l1 ANoA'
il may make.
Beyond all that, however, there is
the opportunity of freeing the rail
roads from the power of this certain
money interest to whom we have 10 80
for any substantial amount Of fnanc-
ing, and, unless we are able to obtain
their sanction, it is impossible to sell
any large amount of bonds. President
Wilson in 1911, when Governor, said:
"The great monopoly in this country
is the money monopoly. SO long as
that exists our old variety and free
dom and individual energy of develop
ment are out of the question"
The Pujo committee in their inyes-
tigatiou Of the Money Trust said;
Far more dangerous than all that has
happened TO US in the past IN the way OF