Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1918-08-10
U. s. RAIL OWNERSHIP SEEN.
Compensation Of Roads IL Expected te
Be Increase

Compensation Of Roads 10 Expected 10
Be increased.
Washington, Aug. l0.-Provisions safe
guarding the private rights OF railroad
compapies during government control
have been inserted In the form of con-
tract now tentatively agreed upon by
the railroad administration and COM
pany representatives land final adop-
tion OF the contract is expected soon
after Director General, McA doc returns
from a two months vacation trip next
week.
The latest draft provides more spe-
cifically that, nothing in the contract
shall be construed 'as pretudicing tho
future policy Of the federal govern
ment concerning the ownership, con-
troll. or regulation" Of railroads nor af-
fectsany proceedings involving the ac-
QUESTION or valuation 1 railroad prop
erty
A copy OF the tentative agreement
issued last night by the railroad ad-
ministration showed that prolonged
negotiations during the last month be-
tween railroad attorneys and represen-
tatives OF the railroad administration
nave resulted in adoption Of plans
which may tend to increase the COM
pepsation OF the roads to some extent.
and to reduce the danger OF the gov
cnment's making excess charges for
EinArOyements and extensions axainst
any company's account.
This eliminates much OF the Us 3ec.'
tion formerly entered by railroad COM
panies who feared that the expense Of
big scale developments OF transporta-
ton facilities made necessary by the
war and ordered by the government
might result in cutting down actual
compensation payments to less than
enough to meet ordinary capital obliga
tions or to pay fair dividends.
Inasmuch as the aggregate compan-
sation to be paid railroads will be
nearly a billion dollars year. the
transfer Of millions Of dollars depended
onsthlse contract notifications. SINH
larly multitude OF failrosd security
holders are affected by the new cen
tract terms.
One provision Is that in case any
company and the railroad administra-
tion fail to agree as to whether ad-
ditions ana betterments are for purely
war purposes, and consequently are, to
be paid. for by the government the
question is to be determined by the
interstate commerce commission This
commission also is entrusted with the
referring Of many other possible DIS
putes.
The director general Of railroads Is
authorized to order any improvements
or extensions deemed necessary for
proper maintenance or for war exigen-
cies. but any company may protest
against the charging of this cost to its
account. The contract specifics, how
ever, that no company may claim a
loss because of the increased cost OF
materials and labor under abnormal
war conditions. This is interpreted as
assurance that the government will
not be burdened with inflated costs Of
ordinary improvements which probably
would have been made by railroads un-
der present control.
A newly added provision that the
director general may not purchase
more locomotives or cars for a road
than is necessary for its own traffic
leaves much to the director general
in determining exactly what additional
rolling stock is necessary.
The basis Of compensation, the av-
erage net operating income for the
three years ending June 30, 1917. is
specified by the railroad act and con-
sequently only the minor policies af-
fecting it are involved in the contract.