Pine Bluff daily graphic., 1917-12-28
M'ADOO WILL ISSUE FIRST
 R.R. ORDER AT NOON TODAY
Continued from page one.I

board, after being in executive ses- sion nearly all day, issued no state ment, comment on the government op- eration by railway executives. indi-. cated that they were well pleased with the situation, and optimism was reflected in the unusual rise on stock exchanges of railroad securities. Hun dreds of telegrams of congratulation poured in upon MT. McAdoo.
 Railroad Men in Deferred Class.
 The labor question under govern ment operation was discussed with President Wilson during the day by the heads of the four railroad brother hoods, who renewed the pledges of loyalty to the government. They spent about an hour and a half with the president, and it is understood that they received assurances that most railroad employees would not be liable to the next or even the second draft call. by being classed in the second draft class.
 Washington. Dec. 27.-One of the first acts of the government in defin- ing operation of railroads will be to reduce large salaries now paid to the railway executives, and increase in some measure the wages of the rail- way workers.
 Securities to be issued while the government is in control will be at interest rates not less than four per cent and the issues will be made ur- der joint authority of the director gen. eral and the Interstate Commerce Commission.
 President Wilson. when he outlines the governments plans, in his forth coming address to Congress. will ask that the government be empowered to buy any quantity of new railroad se- curities. All earnings over and above an amount to be agreed upon will go] to the government. Congress will be asked also to appropriate large sum --$2O0, 0O.O0O-for the immediate sup ply of rolling stock to handle the flood of traffic which has swamped the roads.
 The director general will have au- thority to decide whether the govern ment shall also assume operation and control of the express companies.
 President Wilson will recommend to Congress that the railroads be guar anteed the average net income of the three years ending June 30, 1917, but any railroad may abide by it's consti- tutional right and refuse to accept this basis of compensation. In that case the case will pass to an arbitrat- ing body. the precise nature of which is to be determined by Congress. s
 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 cials who have given the situation close study believe it may be unneces- sary to expend any great sum in this way. They believe that the govern ment by eliminating wasteful competi- tion and. unnecessary expenses under a common control can save hundreds of millions of dollars. Some officials even estimate that the savings will be a billion dollars a year, and that the government will begin to garner rev. enue from the government operation plan in addition to insuring railroad securities holders against loss.
 Although in most cases earned divi- dends exceeding the guarantee will re- vert to the government, Congress will be asked to make provision for rail- roads whose pre-war earnings were abnormally low by authorizing the payment of dividends in excess of those amounts on approval of the h. terstate Commerce Commission.
 Railroads will continue to provide for their own issues of securities, but will be compelled to obtain the ap- proval of the director general before going to the Interstate Commerce Commission for final sanction. The commission will pass on the size Ot the issue and the director general will direct the interest rate, which could not be less than four per cent under the proposed plan.
 In his dual position of secretary of the treasury and director general of railroads, MT. McAdoo would be in the hest position to pass on questions of securities interest rates.
 It also would be MT. McA6oo's duty to determine when the government should purchase new securities issued under his approval, and this plan would prevent the rail securities from interfering with future issues of Lib erty Bonds without necessitating act ual government financing of the rail- roads.
 The legislation which will be rec commended to Congress would specify what roads should remain subject to all existing laws and regulations of the Interstate Commerce Commission. Those who have given careful thought to the situation believe the director general will not modify the existing orders radically at first, but eventual ly will go far toward centralizing au- thority under the federal government.
 The Association of State Railroad Commissioners will give full support to the new plan so long as their june lions are not reduced materially. but they are expected to protest against being deprived of adjusting minor questions 5f rates and rules within their territories. Until Mir. McAdoo outlines his plans the status of ex- press companies under government op- eration of railroads will not be fully determined Rolling stock owned by