Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-07-09
EAIEROADS
! ACT AGREED ON
9It Finally Reached
kfter Five Months of.
Negotiating
HINES WIN CONCESSIONS
q had Executives Meet Friday
u New York to Approve
Contract
HINES WIN CONCESSION

me fnal form of the railroad con.
eIpcf. which is to be executed by the
xernment and the individual roads
~ the period of the war, has been
a4feed upon by the railroad admins
= tFAtfon and attorneys for the roads.
The contract is vet to be approved
w the railroad executives. who will
meet here Friday for this purpose.
ut enough of them have been sounded
- establish definitely the fact that It
W!u be approved almost unanimously
the agreement will be similar to
eAcee. previously rejected, except that
= win be amended in favor of the rail-
roads IN such way as to do away
With all objection.
Full Compensation
= The main provisions of the contract
1plicw:
First 1t gives the roads the
f0ll compensation mentioned in the
F4flrcad act.
second. 1t restricts the amount
of additions and betterments charge
able against the roads corporate
troperty.
Third. 1t guarantees the payment
of regular dividends during the
p9rt0d OF Federal control
Fourth, It assures the payment
- all hxed charges and the carry
1ng out Of all contracts entered into
Prior to Federal control.
Firth. 1t makes all road exten-
sl0ns chargeable to the United
States
Sixth. It makes all additions and
ostterments for war purposes and
not suitable to the normal develop
ment OF the property charseable to
the United States.
Seventh. 1t provides for reason
able interest to be paid to the cor.
Rorate organization for cash used by
the railroads in additions. better.
lnents and extensions and for equip
ment.
Eighth. It keeps in force the ac-
counting practices and the payments
70 subsidiaries in force prior to Fed ,
efAi control.
Ninth. Government to respect
ownership Of roads in mines. oil
wells. etc.
Negotiations Lasted Five Months
The new contract is the result Of
more than five months of negotiation. |
earring which the railroads have re-.
eefved no rental except in the form Of
u
fnptcy:i but the way is now clear to
p<eoerve railroad credit and to pay
dEy1dends at the regular rates prior to
tI6 Government's assumption of con-
tpd and payment of all interest obliga-
t<1uA Ii assured regardless of future
dnxeIopments.
Nome Of the most important points
n the new contract center about the
4uture of compensation. This is to be
N044 to each company quarterly on the
Not days of March, June, September
and December of each year for the
quarter ended Herewith, except that
the dyst installment is to be due upon
&ff6utton of the agreement, including
5ngswfth all prior installments then
uHpaid.
While each company is required to
'x0tmburse the Government for the cost
< additions and betterments made TO
me property and not properly charge
able to the Government, unless such
matters are financed or otherwise
taI<en care of by the company. the
railroad men win their contention that
this power should be restricted and
the following provisions are made:
The power of deduction is declared
- be an emergency power to be used
Whsn all other reimbursement fails,
I'D Ii not to be used to interrupt the
payment OF regular dividends.
The railroad men win their conten.
ton that no deduction should be made
TOR additions and betterments which
are for war purposes and not for the
normal development of the company
~ In respect Of road extensions. If
there Is a difference as to the fact
regarding such additions. betterments
~ extensions. the question Is to be
0etermined by the Interstate Com
Werce Commission.
The old form of contract ignored the
question Of payment for fuel, material
ana supplies obtained from mine or oil
Geld or other source of supply owned
NJ controlled by the company, as we'll
- the depletion of such sources for
~ use of other railroads. The new
contract expresses the understanding
that the director general is to pay for
euch fuel, material or supplies a price
which bears the same relation TO the
est or the current market value
thereof as the price charged the com.
pany during the three years ended
June 30. 1917, bore TO the then cost
dr market value.
Another important clause in the new
eontract Is the statement that the
director general shall not be liable to
~ company for any loss or damage
4oe to the acts of public enemies"