The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-09-06

barrass any company which has paid
dividends on a provident basis AND has
retained and does retain, as II Is Aecos-
nised all well regulated compa niles
should retain, a substantial surpluA of
Its income to provide q margin Of credit
and cover unproductivs Improvement,
In every such case the company will bA
In position to provide for deferred main
tenance. IL any, and to make reasonable
provision for reimbursing the Govern
ment, and there need be no interference
with the companys dividends as regu-
larry paid during the test period.
~. II was also insisted that in de-
termining the amount to be added to
the compensation of the carriers upon
the cost OF any additions and better
ments, less retirements provided for by
section OF the Federal control act, the
rate OF interest to be allowed should
be at least sufficient to Offset the cost
TO the carrier OF money borrowed where
the money advanced by the company
had been secured from outside loans.
Allowance of Interest.
1T has seemed to me that this con.
tenuon should be granted to the extent
OF providing that the rate of interest
10 be allowed where the money was ad-
vanced by the Director General should
De the same rate which the Director
aenerai charged the carrier for the
money loaned. The contract may be
changed accordingly"
The principal features Of the contract
are as follows:
Inc railroad company accepts tho con-
tract and the compensation therein pro-
vided FOR In full satisfaction of all
claims on account Of Federal posse ssion
and control
Provision Is made for the numerous
features Of operation and accounting
during Federal control. for the ALLEGATION
OF revenues on traffic in transit at mid
night December 81. 1917. for the ham
ding OF Overlapping" items of expense,
&C.
Provision Is made for the maintenance
OF the property during Federal control at
the expense of the Government on sub
stantially the same basis as during the
three year test period ended June 80.
1917. and for the return OF the property
at the end Of Federal control in SUBJ
stantially as good repair and substan-
TALLY as complete In equipment as on
January 1. 1918.
1t Is provided in effect that II, during
the test period, the maintenance ex-
penses were not sufficient to nut the
property in condition for safe operation,
the additional maintenance necessary for
safe operation may be provided at the
expense OF the company with the limita-
ton that the cost Of maintenance shall
not be Increased at the expense of the
company over the normal standard of
maintenance Of railroads of like char
acter and business during the test period,
Provision is made for the payment Of
taxes in accordance with the Federal
control act
Provision is made for the annual COM
pensation to be paid to the company in
quarterly instalments and for the or
derby presentation and disposition of
claims on the part of the railroad COM
pany for amounts expended by the Rail-
road Administration for additions to its
property which. in the opinion Of the
railroad company. are not for its adj
vantage and for which It believes the
road should not be charged.
Provisions are also made for final ac-
counting at the end Of Federal control.