Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-11-17
RAILROADS REQUIRE
IMMEDIATE RELIEF
Frank A. Vanderlip and Paul M.
Warburg Declare Radical Ac-
ton Is Necessary.
THEY TESTIFY BEFORE |. C. C.
Either Government Ownership or
Restoration of Confidence in
Securities Is Vital.
THEY TESTIFY BEFORE |. C. C.
rBv Annotated Pres..l

WASHIEGTUN, D. -. November 16.-
Frank A. Nanderlip. New York banker
and chairman of the governments war
savings committee. and Paul 81. War
burg. vico-Covernor OF the Federal Re
serve Board. called by the Interstate
Commerce Commission to-day az ex-
pert witnesses In the 10 per cent ad-
vance rate case, testified that radical
action wae necessary to remedy the
railroad financial situation.
MIR. Vanderlip was OF the opinion
that tho proposed rate increases only
touched the surface of the situation.
while Nr. W,rburg declared that should
they be granted the effecl from a
psychological standpoint and in restor-
ing confidence among investors would
he greater advantage than the i'm
mediate monetary gain 1t might mean
TO the roads.
One OF two things nuat be done to
meet the situation: either the govern
ment mus' acquire ownership or some
action be taken to restore confidence
in their securities. said Mr. Vanderbilt
Granting the increas. the roads re-
quest, he insiste ]. would ac, only as
poultice. and not effect q real cure.
rO SEE BELOW SURFACE
Mr. Fanderlip said railroad men
themselves failed 10 sec below the sur
stage that tho roads only method Of
Fundamentally wrongful. effort to
force the Two regulatory principles
prevention OF combinations and fixing
OF rates. TO work smoothly together.
Either one lnay be all right. but
INC - n Ic,.l 40
long as rates are regulated. tho rail-
roads should hav: ire right TO form
combinations"
Mr.. Narderlip added that tho rail
roads faced expenditures Of $1,000. .00o, :
oco annually TO maintain their prop
e-ty. and that this must come from the
inves,or. md '"hatcvcr We may think.
tho investor must have confidence"
The question OF confidence vas the
principal thought in tho statement Of
Mr.. warburr. lie maintained tha;
railroad stocks had reached such a
stage that the roads only methods OF
obtaining money was through bond
issues. which could no, be made on a
satisfactory basis now.
REASON FOK EXrSrINt.
IttI> or IOSFIDESCF
Il had been testified in the hearing
that tho railroads showed Increased
earnings recrntl; and the property gem
orally was in good condition and when
this was called 10 Mr. Warhurc's at
tantion with the question as 10 why
he believed there was lack Of conf
dence among investors he said the
Investors were looking 10 the future
III the public does not feel the rail-
roads are receiving generous treat
rnen.," he added. the moncy Will be
withheld"
Mr.. warburG stated that he would
consider a railroad having equal
amount OF stock and bonds in an ideal
financial condition. providing the stock
was at or above par. hut that generally
railroad stocks now were SO low that
only bond issues were left TO get
money. He pointed TO the sale by the
Pennsylvania Railroad last March OF
10000 900 in bonds to net As as an ad-
vantaEcous deal for the railroad which
would be Impossible now for an com
pany.
Both Mr.. Nanderlip and Mr.. Warhurg,
answering questions OF counsel for the
shippers, said they were not prepared
to give data 10 bear ou, their state
ments, hut had rcc!ted their impress
sions OF tho situation after being called
by the commission only TWO days ago
for statemsnts