Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1918-03-28
RAILROAD BILL
IS NOW A Law
McAdoo's First Act Is to Issue
Order Restricting Roads
Capital Expenditures.

washington, March 21.-The first act OF
Director-General McAdoo to-day after
President Wilson signed the railroad bill
which provides a $500, 100000 revolving fund
and prescribes basis Of compensation
to the owners during federal operation
was to issue an order restricting railroads
capital expenditures to extensions and
| betterments absolutely essential under
| war conditions Inasmuch as the gov
eminent has now undertaken largely the
! financing Of improvements and purchase
OF new equipment, the order will serve as
| safeguard to the big working fund.
The signing Of the bill opens the way
for the railroad administration to pro-
coed with necessary extensions with the
negotiation of agreements on compensa-
ton and with other forms Of financial
assistance to the companies.
| One Of the first results probably will
be the conclusion of an arrangement by
which the government will participate in
some degree in the meeting Of $43. 900 900
notes of the New York. New Haven &
Hartford railway. due April Is. An an
| nouncement on this subject may be made
| this week.
! Without waiting for the railroad bill
to pass the final stage of the Presidents
approval, Mr.. McAdoo had created in the
railroad administration, a division of
capital expenditures headed by Robert
s. Lovett, former director Of priorities
| for the war industries board, to SUPER
wise the regulation of additions and bet :
| terments.
| This division will scan all requests for
the building Of new terminals, extern
sion OF lines. purchase Of locomotives,
cars and other equipment, and all other
enterprises requiring expenditure of capt.
tai. Engineers Of the railroad admin
! istration will report on the physical
necessity of proposed betterments be-
fore these are considered by higher ON
| Gals After being approved by Mr..
Lovett and the director general proposals
| involving capital expenditures will 70 to
the division Of finance and purchases,
headed by John Shelton Williams, for
execution.
In his order to-day Mr.. McAdoo asked
railroads considering extension to be
guided by the war time necessity for con.
serving capital. labor and material, and
| by the idea that enterprises which might
be meritorious from the standpoint of an
individual railway may not be desirable
now that the railway systems have been
unified under government control. He
specified that construction Of new lines
or cars should not be undertaken without
his approval.
Extension work begun or contracted fol-
before January 1. when the government
took over control may be continued. Nc
work involving a charge of more thar
$4,000 to the capital account may be
started without the director-general's an.
prevail but enterprises requiring less thar
that amount do not require specific an
proval providing they are essential ant
are In conformity with previously estab
lished custom of the road
| Although Mr.. Lovett's division hal
been organized only a week he has beer
besieged with applications for extern
sions of lines Many Of these com,
from commercial interests, chambers o.
commerce or municipal representatives
who want double tracks or switch line,
or extra stations. Most of them hav,
been rejected on the ground that they
are unnecessary.
Proposals of the railway companies
! themselves reached the railroad admin
istration several weeks ago in tn,
form OF reports on proposed budgets
for 1913, which included outlines of ex
tensions planned by the railroads be
fore the government took charge
These reports are being studied by en-
gineers and the regional directors, ant
many suggested extensions will be dis
approved or pared down. The railroad
administration Is favorably inclined
however, toward the building of bette
terminal facilities in many cities ant
a general policy affecting these enter
prizes will become apparent soon.
The railroad administration is ex
pected to encourage railroads to foa
security issues for capital expenditure
without government aid whenever pos
sible, but in many cases, a large par
Of the securities will be purchased b!
l the pOyernmeut