The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1917-12-27

director general and the interstate
commerce commission.
President Wilson. when he outlines
the governments plans in his forth
coming address to congress, viii ask
that the government be empowered
to buy any quantity Of new railroad
securities. All dividends over and
above an amount to be agreed upon
will go to the government.
Congress will be asked also to ap-
propriate large fund-probably two
hundred million dollars for the
immediate supply Of rolling stock to
handle the flood OF trafflc which has
swamped the roads.
The director general win have
authority to decide whether the gov
eminent shall also assume operation
and control OF the express COM
panies.
/ Method Of Procedure.
President Wilson viii recommend
to congress that the railroads be
guaranteed the average net income
Of the three years ending June 30,
1917, but any railroad may abide by
its constitutional right and refuse TO
accept this basis of compensation.
In that case the question will pass
to an arbitrating body. the precise
nature Of which is to be determined
by congress.
The equipment fund will also be
used to pay any deficit of earnings
this year under the pre-war average
or the amount agreed upon, but OFF,
Gals who have given the situation
close study believe 1t may be un-
necessary to expend any great sum
In this way. They believe that the
government by eliminating wasteful
competition and unnecessary ex-
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save hundreds Of millions of dollars.
Some officials even estimate that the
saving will be a billion dollars year
and that the government will be able
to garner revenue from the govern
ment operation plan in addition to
insuring railroad securities holders
against loss.
Although in most cases earned
dividends exceeding the guarantee
will revert to the government, con-
gress will be asked to make provis
| ion for railroads whose pre-war
| earnings were abnormally low, by
authorizing the payment of'dividends
In excess OF those amounts on APP
prevail Of the interstate commerce
commission. Railroads will continue
to provide for their own issues of
securities but viii be compelled to
| obtain the approval Of the director
general before going to the inter-
state commerce commission for final
sanction. The commission win pass
on the size Of the issue and the
| director general viii determine the
interest rate, which could not be less
than four per cent under the pro-
posed plan.
In his dual position of secretary
OF the treasury and director general
\ OF railroads, Mr.. McAdoo would be
in the best position to pass on ques-
tons of securities interest rates. It
alsoswould be his duty to determine
when the government should pur-
chase new securities issued under his
approval and this plan would prevent
the rail securities from interfering
with future issues Of Liberty bonds
without necessitating actual govern
ment financing OF the railroads.
The legislation which will be
recommended 70 congress will specify
that roads should remain subject TO
all existing laws and regulations Of
the interstate commerce commission.
Attitude Of States.
The association of state railroad
commissioners will give full support
to the new plan so long as their
functions are not reduced materially
| but they are expected to protest
against being deprived of adjusting
minor questions Of rates and rules
within their territories.
Until Mr.. McAdoo outlines his
plans the status OF express COM
panies under government operation
Of railroads will not be fully
determined. Rolling stock owned by
the express companies which is
comparatively light, will pass auto
matically under direct government
supervision tomorrow and eventually
1t may be necessary for Mr.. McAdoo
to take them over.
The presidents of many large lines
now receive salaries ranging from
$50, 900 to $4,000 a year and one OF
the first acts OF the director general
probably will be to cut these sharply.
Ten thousand dollars a year is being
discussed a maximum.
The saving in salaries would be
applied to raising the pay OF mem
bers of the four railway brother
hoods, whose officers conferred today
with President Wilson and also of
other railway employees inorganic
ed.
The President was expected to ask
the brotherhood heads to give the
fullest measure of support to gov
eminent operation and to leave their
pending demand for higher wages
for determination in the future when
the director general untangles many
OF the complications now developing.
Under government control every ef-
fort will be made to interfere as lit
tie as possible with the personnel Of
the companies but it is considered
ine1itable that some employees win
be cut off. This applies particularly
to the large stats maintained by
many railroads for soliciting trafiic. |
These reductions probably win be
more than offset by the employment |
Of more men for operating.
One of the immediate effects of the |
new plan will be the rerouting Of |
much freight now passing over con-
gested lines, particularly in the west. |
The railroad war board has sought |
to divert traffic to lines least over |
burdened but anti-pooling regulations |
have hampered it.
The name Of John Shelton Will |
liams, now comptroller. of the cur
rency, and one OF Mr.. McAdOo's |
principal lieutenants in the treasury, |
is being mentioned today as chief |
executive director under Mr.. Nc
Adoo. He formerly was a railroad |
flnancier.
Bankers Approve Plan.
New York, Dec. 27-Almost with
out exceptions. leading bankers and
executives Of railroads having their i
49, II