New-York tribune., 1918-07-25
RaiOwnersP Protest
Now Before Govt
Arguments of Counsel and
Others Heard by Inter.
state Commission

Representatives of the National As.
sociation of Owners of Railroad Securi-
ties who returned to New York ves-
terday following Tuesdays conference
IN Washington, at which objections to
the government railroad operating con-
tract were presented before the Inter
state Commerce Commission and the
railroad administration, stated that
these objections had been drawn IN
If the form of amendments to the
contract and were now before the Fed
eral bodies.
The principal argument against the
railroad contract in its present form
vas mad by Samuel Untermyer. coun-
sci for tn security holders associa.
,lcn. A. ?. Thorn, representing the
1allway executives advisory commit
tee. also IA sed certain points in op-
petition. Mr.. Untermyer argued that
If the railroad companies had to sur
render al clairS for damages on ac-
count of the destruction OF property
during the period of Federal operation
and for the diversion of traffic. such
provision would make it impossible for
the roads to get anything in the way
mate government ownership
Objected to Some Conditions
He objected 10 the provision that
permitted additions. betterments and
extensions to be made by the govern
ment for war purposes and charged
against the companies. All such I'M
provements. he contended. should be
paid for by the government, and il
any OF them were found valuable at
the end of Federal control, he said,
the companies were willing that they
she be required to repay the gov.
orrment their cost.
Counsel for the railroad security
holders also objected TO the Interstate
Commerce Commission being made the
sgie and final Judge of all the ques-
tions covered by the contract in case
of controversy. He felt that there
SHOULD be a right f appeal from their
declsl' MS to the courts on questions Of
fact, as we'll as law
Mr.. Untermyer could see no reason
why the cash and materials that the
railroad companies were required to
turn over to the government under the
terms of the present Federal contract
should not be offset against the LA
billtles that the government stipulates
1t will pay for the carriers As the
required to turn over the equivalent
of one months operating expenses in
cash, as we'll as all labor and material.
The government is required only to
pay debts to the extent of the cash
taken over, and the company, accord
ing to Mr. Untermyer. does not even
get the interest on its cash balances,
such as was received from banks prior
TO January 1, 1918.
Must Finance Road Operation
By the terms of the contract if the
government pays the current debts OF
the railroads in excess of actual cash
1t can take the amount out of its
standard return in priority TO fixed
charges, even though the companies
may have many times that amount OF
liquid assets in the form Of materials
taken over by the government This,
MIR. Untermyer contended, was requ'r-
ing the roads not only 20 turn over
their properties but to finance the gov
ernment in their operation.
In addition to counsel, other repre-
sentatives of the National Association
of Owners of Railroad Securities who
spoke in opposition to the present gov
ernment railroad contract ncluded
William A. Day, president of the Equl-
table Life Assurance Society; Forrest
?. Dryden, president Of the Prudential
Life Insurance Company; Frederick d.
Ecker, treasurer of the Metropolitan
Life Insurance Company; Breckenridge
Jones, of st. Louis, who spoke for trust
companies; Harry A. Schenck, presl-
dent of the Bowery Savings Bank;
John j. Pulleyn, president of the Emil
grant Industrial Savings Bank, and
Myron T. Herrick, president Of the
Savings Bank of Cleveland.
The gist of the remarks Of these
men was that they represented MIL.
ions of persons in the United States
who are interested in railroad secuF''
ties, and that they, as trustees Of Sc
curities valued at over $4,000, ,OOO,0Uu
would not be willing to assume the re-
sponsibility of permitting the contract
in its present form to be executed.
Chairman Clark of the Interstate
Commerce Commission presided 8:
Tuesdays meeting. The members OF
the commission present included
Messrs. Myers. Hall and Anderson.
Representing the railroad administra-
ton were Judge John Barton Payne
Walker D. Hines and John Shelton
Williams, chairman of the finance COM
mittee.