New-York tribune., 1918-07-10
z all Investors
Oppose Federal
Operation Contract
Favored by Advisory Board
Head, S. Davies Warheld
Terms 1t Unacceptable

With the publication yesterday Of
what was said to be the latest draft
Of the contract submitted by the repre-
sentatlves Of the government for the
Federal operation of the railroads, op-
position to the terms developed from
the two committees acting for the Ma
tional Association OF Owners ?of Rail
road Securities, of which S. Davies
Warheld is chairman. On the other
hand the Railway Executives Advisory
Committee, headed by I. De Witt
Cuyler, is understood to favor the &C
ceptance of the contract in its present
form
"The governments latest proposal
will be presented to the railroad rep
resentatives at q meeting in the Grand
Central Terminal on Friday" said Mr.
Cuyler yesterday. "While it would be
unwise for me to predict beforehand
what action will be taken believe that
the government and the railroads have
reached the stage in their negotiations
where a working agreement seems not
far distant"
Mr.. Warfield's Statements
When shown the article purporting
to be the draft of the contract referred
to and enumerating certain of its
provisions, Mr.. Warfield stated:
There is apparently misconcep-
tion of the purpose of the provisions !
of the contract referred to in this pub
lication. While not wishing to fore
cast the action OF the committee repre-
sentng railroad security holders, may
safely state that it Will not be accept
able. We would be gratitied if the
present draft of contract gave to the |
companies the assurance enumerated
At least five of the seven points men
toned are stated contrary to the facts,
as a careful reading Of the printed
document will show. This is merely
the latest Of the many drafts upon
which the parties have been working
for months and does not represent an
agreement. The entire subject is still
under negotiation and we are not with
out nope that a satisfactory contract
may yet be evolved.'
A meeting of the two committees
representing the National Association
of Owners of Railroad Securities was
held yesterday to consider the contract
submitted by the representatives Of
the government for the Federal opera
ton OF the railroads. The meeting ad-
journed to meet again on Thursday.
After the meeting it was stated that
the committees would be prepared after
thursdays meeting to state their posi-
tlon fully IN respect to the tentative
draft OF contract recently submitted
by the representatives of the govern
ment. Chairman Wartield was asked
whether he would make some further
statement in regard to the contract,
and he said
"As already stated the position of
the committees in respect to this con-
tract will be made known after Thurs
days meeting. | may say, however,
that letter has been addressed to the
members of the National Association Of
Owners of Railroad Securities inclosing
extracts from an opinion of counsel
dealing with this tentative draft of con-
tract. There have also been sent the
names of financial committee of sew
enty which will be available for con-
sultatlon and cooperation with the two
committees which have been taking
part in the pending negotiations in re-
spect to this contract"
Not Yet Approved by McAdoo
Neither Director General McAdoo nor
the Railway Executives Advisory Com
mttee. it was stated, has as yet in anv
way approved the latest form of con-
tract proposed by the general counsel
of the railroad administration. The
committee of railroad company execu-
tives has simply received the proposals
for transmission at the general meet
ing on Friday: In view of the vigorous
opposition shown by the Warfield
group lively session is anticipated.
The text of the proposed form of
contract between the railroads and the
government, it is understood, contains
a compromise on the question of the
Director Generals control over the in
come OF the carrier corporations. While
It is said to be still proposed that the
Director General shall have power to
order the companies to pay for addi-
tlons and betterements it is specifically
provided that this power shall not he