New-York tribune., 1918-02-08
Senate Committee, Approx
ing Rail Bill, Gives
Estimate
''Neither Poverty Nor
Riches" Is Comment
Chairman Smith Declares
Belief Railroads Will
Accept Figure

Smith of the Senate Interstate Com
merce Committee, in reporting favor
ably to the Senate to-day the admin
istration railroad bill, estimated that
under the measures provisions the gov
crnment will guarantee annually to the
railroads of the country $945, 100000,
which will represent return of 5.32
per cent. This, he says, reflects
neither poverty nor riches," but the
committee believes a majority of the
railroads will accept "these terms as a
Just and fair measure of their consti-
tutional rights"
An agreement on the bill was reached
by the committee last Saturday, but
by Senator's Cummins and La Toilette.
Administration leaders plan to cali the
bill up for consideration next Monday.
"Your committee is of the opinion
that this is the time for war emergency
legislation and not the time to settle
the many controversial and vexed uues-
tions concerning our future transpor~
,ation policy" Chairman Smith says
up the compensation section and adds:
Thinks Roads Will Accept
"About seventy-five great operating
railroads do over 90 per cent of the
railroad business. The committee be-
lieves that most of these great rail-
road carriers will accept these terms
as q just and fair measure of their
constitutional rights. Section 1 further
provides that ordinary taxes, national
and state. SHALL as now, be paid out
of operating revenue; but war taxes
accruing under the act of October 8,
1917 are to be paid by the companies
out of their own funds or charged
words, the holders of railroad securi-
ties are to bear their own just portion
of the war burden. Section l also re-
quires that each agreement shall con-
tain adequate and appropriate provi-
sions for the maintenance and depreci-
alton of the property and the creation
of reserves so that the properties may
at the end Of Federal control be er-
turned to the owners in a>condition
substantially equivalent to their con-
dition when taken over by the govern.
msnsi sTbsr. has Of course heen r,,,,s i; :.
cussion as to the fairness and justice
of the proposed amount of the standard
return. 1t is plainly in the public in.
terest-and. indeed, war need. The
rights of owners must be tested BY
present conditions-not by some theory
Of capitalization never made operative
under Federal or state law or generally
followed by the courts"
Appeal Permitted
Chairman Smith explained that il
case Of controversy over compensation
the bill permits an appeal to the Cour
Of Claims. The committee recommends
the report says, that improvement!
made by the government while the car
riers are under government contro
should 60 to the railroads when they
are returned to the security holders
This should be arranged through al
agreement between the carriers and tn,
President.
Discussing the provision inserted b,
the committee providing for the ter
mination of government contro
eighteen months after the peace pro
clamation has been issued, the repor
says:
ut is possible that certain conditions
may arise from Federal control whicl
will need adjustment before the proper
ties are returned to their owners, an,
a reasonable period should interven
in which these conditions may be me
and adjusted. 1t may be that the ma
tion will be unwilling to return to tn
conditions obtaining before the assump
tion of Federal control Legislation
may be demanded radically changin,
the relation of the government to tn
railroads from that now existing in tn
interstate commerce act as amended
Your committee has suggested a perio
of eighteen months, and they believe i
will be found adequate for that pur
pose.
"There is also provision to tn
effect that tho President may, prio
to July J next. relinquish control o
such transportation systems as he ma
deem not needful or desirable, an
may, thereafter, on agreement, relin
qutsh all or any part of any system O
transportation.
"The section also contains a genera
provision that the President may re
ltnquish all railroads at any time whe1
he shall deem such action needful O
desirable"
Would End Old System
A minority report was filed bv Sen
ator Poindexter, Republican, of Wash
ington, who asserted no definite tim
for returning the railroads to thei
original owners should be fixed unit
a definite plan had been worked ou
correcting the defects in the transpor
tation system. The Senator also oh