The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-09-06
Us. CONTRACT
WITH RAILWAYS
4 IN FINAL FORM
Director General Permits
2 Appeal on COmpensa-
81 ton Matters.
CAPITAL CLAUSE WAIVED
Applies Only to
Normal R0ads-Many Con-
: - tentions Denied.
Special Despatch to The Sun.


WARRINGTON. Sept. 5.--The railroad
rental agreement. the form Of contract
which will furnish the basis for compen-
eation to all of the normal" roads under
Government control. has been placed in
anal form and approved by Director
General McAdoo.
: The final draft, though 1t makes some
concessions to the contentious Of counsel
for the railway executives advisory COM
fnittee and the National Association of
Railroad Security Holders. is in nearly
all Of its-mator respects the same as the
draft Of August z. as printed in THE
SUN.
The only changes from this draft are
those ordered by the Director General
after hearings granted the security hold
ers and the advisory committee. Prob
ably. the most important Is the one pro-
vfding that on AFFAIRS affecting compen-
sation referred to the Interstate Com
inerce Commission the roads can appeal
TO the Court Of Claims. The right to APP
peal administrative questions is, how
ever, denied.
Changes which Are Granted.
Other changes of Importance are:
Waiver by the Director General Of the
requirement that the roads furnish capi-
tai equal to a months operating ex-
penses.
Assurances that the power to reduce
the amount OF compensation due should
not be exercised so as to prevent pay
ment of interest where interest was regu-
larry paid during the three year period
The Director General retained discretion
with respect to reducing dividends.
= Allowing interest charges the carriers
must pay on money advanced for addi-
lions and betterments.
Contentious Denied.
. Other contentious for changes from
tte draft Of August z were denied by the
u rector General. They included the de-
mind that allowances should be made
Tor loss of good will and traffic by d.
version, that allowance be made for cor
rprNate expenses. and for striking out the
provision that the Director General
Shouid expend such sums as are neces-
,a'y for deferred maintenance to make
The roads safe and charge those to ex-
pehditures.
r., rhe final draft has not been approved
by the railway executives advisory COM
mittee. but there is no doubt of favorable
action. The committee was prepared to
APPROVE the draft Of August Z, which
ROADS,
The agreement Is the result of seven
moths OF patient negotiation between
rsTrsseAtstives OF the legal department
,nf the Railroad Administration, headed
by Judge John Barton Payne, A. p.
Thorn and other counsel. and members
OF the advisory committee and Samuel
Untermyer and other representatives of
ire security holders. Mr.. McAdoo did
mt take hand until appeal was made
IT, him for changes from the August z
draft.
Applies to "NormaIo Lines.
Even though 1t is finally approved and
sitsled, the agreement Is not binding on
th', individual railroads. Each OF them
mist contract individually with the
Dsrec.or-General. but the executive ad-
sviso:v committee Is prepared to urge its
universal adoption. 1t applies only to
Ssnormal' railroads, that Is. those oper-
ated under normal conditions in the
three year period which Is the basis of
compensation. Roads which were in the
.hands of receivers or otherwise suffered
from abnormal conditions in this period
can claim allowance for this. negotiating
a contract accordingly. but with the
present approved contract as it's basis.
1t Is estimated that IS per cent. of the
more than 500 railroads under Govern
ment control are normal roads.
The chs sges made in the contract are
those ordered by the Director-General
as result of the personal appeal to him
by the advisory committee and the Sc
curity holders. As stated by Mr.. Nc
Adoo they are in detail as follows:
II. II is insisted that section l of the
contract should be amended so as to
give an appeal from the Interstate Com
merce Commission to the Court Of
Claims as to all OF the matters which
by the terms of->the contract are re-
ferred to the commission for decision.
There are n number of matters purely
administrative as to which An appeal
ought not to be considered and as to
which the contention OF counsel cannot
be sustained.
go To Adjust Roads Losses.
at is provided in the Federal control
act (section g. that any loss claimed by
reason OF additions, betterments or road
extensions, or constructed pursuant to
said section. may be determined by
agreement between the President and
such carrier. Failing such agreement
the amount OF such loss shall be ascer-
tanned as provided in section hereof.
"As to all such matters the contention
Fod counsel is sustained. anc provision
: Will be made In the contract providing
for an appeal to the Court of Claims.
: As to the other matters in the contract
= referred to the Interstate Commerce