The sun., 1919-03-06
HINES SEEKS TO
FINANCE ROADS
THROUGH BANKS
Changes His View Now That
Congress Didn't Provide
$75O,OO0,OOO.
HE PLANS RADICAL STEPS
Treasury Officials Believe the
Railroads Will Be Able to
Meet Obligations.
HE PLANS RADICAL STEPS
speciat Despatch 10 THn suN.

present. but will endeavor, through the
cooperation OF the business and bank
ing interests OF the country, to finance
the carriers. due to the failure Of Con-
Rress to provide the new revolving
fund OF s750,000,0 900 so urgently re-
quested by the Railroad Administra-
ton.
Walker d. Hines, Director General
OF Railroads. in n statement issued
to-day. foresees avoidance OF financial
and industrial depression in meeting
the railroad situation created by the
Congress ended yesterday without act
ing on the railroad fund. Apparently
no has changed his opinion in the last
week. for in a statement before the
Senate Appropriations Committee on
February 20 he foresaw industrial and
financial calamity IL Congress should
fail to provide the $3.50, 100000 revolv-
ing fund. The statement before the
Senate committee became public to-
day.
When Mr.. Hines appeared before
the Senate committee he was backed
ur by Secretary OF the Treasury Glass
Both forecast then not only rocks
ahead for the railroads but n general
weakening of the whole financial fab
rio of the country'if Congress should
fail to provide during March or very
early in April for the needs of the
Railroad Administration and the rail-
roads themselves.
Statement by Hines.
They both foresaw an extremely baC
effect on the prospects of the next Lib
erty loan. That was last week before
the President finally refused point
blank to call a special session. To-
day Mr. Hines doesn't think the situa
ton is anything like as bad as II wal
for some reason which is not made
clear in either statement. In his state
ment to-day Mr.. Hines said:
The adjournment OF Congress withou
the passage OF the railroad appropriation
leaves the Railroad Administration con
fTonted with the necessity for the adop
ton OF radically different methods o.
dealing with it's financial problems thai
1t had contemplated when the adoption
of the appropriation was expected.
The Railroad Administration had fell
justined in counting upon the passage o
this appropriRL ion. This is true because
the money asked for was necessary t.
meet Government obligations duly in
Cured and because also it promised L
improve and stabilize the general In
dustrial situation through enabling TIT
Railroad Administration to go forward
confidently in carrying out its policy al
l to improvements and also as to main
~ tenance.
Confidence in obtaining the appro
priation was confirmed by the fact tina
tine House Appropriations Committee
after extensive hearings. reported the ap
preparation favorably without any dis
sent, the House passed 1t by a vote o
272 to 25 and the Senate Appropr Iation
Committee, after hearing likewise, re
ported It favorab;y without dissent TIL
recognized urgency of the matter brough
the appropriation before the Senate 70
debate but the debate was not conclude
before the session adjourned.
Looks for COopcrs ton.
This unexpected result puts upon n
Director-General the necessity for devils
ing radically different methods OF dea
ing with the extremely difficult situation
/ approach the matter in the spirit an
with the purpose of finding ways
meet the requirements and to aver
financial embarrs ssments and industri;
depression. 1t would be improper, how
ever, to minimize the difficulties of I'll
situation, but ] believe that the Yer
6lftlcuItleS themselves Will EtSult III VI
tanning patriotic cooperation OF all Il
business in this involved, including 4
railroad corporations and equpmeI
companies and other producers of III
terlal, and the bankers. At the momei
there Is no occasion to discuss the que
ton Of REIMBURSEMENT OF the railroad
My first purpose is to try TO solve Il
problem In other ways.
81 am not prepared at the monel
TO outline specific plans, because hume
Gus methods must be devised for deallr
with different pha ses OF the subject. NJ
each will require Its separate study al
perhaps separate plan of cooperatio
I'm connection with necessary fnan
ing. which will have to be done by II
railroad corporations 1t Is the rule thu
no such corporate financing be undo
taken except on certificate Of the Raj
road Administration, and therefore Il
Railroad Administration In sense &C
as a clearing house for such inancin
thus minimizing the danger Of fnanci
confusion.
, View of Treasury Oficials.
Treasury officials believe that Il
railroads will be we'll able to meet q
their obligations and that they C;
finance all their needs even II intere
rates are high. The Railroad Admin
tration faces a difficult situation becau
u u has obligations well over S3UU,UVO,O
outstanding and no funds TO meet thel
Advances made from the original r
volving fund, which was nearly all us
up in 1918, cannot In great many /
stances be recalled though the situate
can be helped by some OF the strong
roads
Just how far the War Finance Co
poraton can 20 in lending aid has
been made clear and Secretary Ola
will make no statement as 10 the enc
OF the situation on the Victory Loi
or OF any steps decided upon In rece
conferences between himself, DirectC
i General Hines and directors OF the w
Finance Corporation. The corporatl
las already made advances OF mo
than $1,000. 900 TO the railroads.
The hearings held on February
while the President was here. disclos
that Senator Martin CVa). chairman
the Appropriations Committee and De
ocratlc Senate leader. laid before the Sc
ate the absolute necessity OF spec
session, beginning the middle OF Mar
and that he sought and secured the 81
vices q the Secretary OF the Treasury
impress this more firmly upon the Pr
NJ dents mind. "a
" All of the proceedings OF the App
y rriations Committee IN dealing with
railroad situation and of the Senate
"a 70 doing almost to the very end of I
III session were predicated upon the n
belief that the President would call
exfra ReSaion innmediataiy Seuat