Omaha daily bee., 1919-03-05

IN BAD FIX
WITH BARE
GOLFER
Government May Return
Roads to Private Manage
ment Unless Crisis Can Be
Met With Loans.

Washington, March 4.-Adjourn-
ment of congress without appropri-
ating $75O,OOOOOO for railways left
the railroad administration with
practically empty Golfers, about
$381 100000 back debts, and no funds
with which to finance the extensive
program of improvements planned
for this year as measure to take
up slack in the materials and labor
market.
Immediate REIMBURSEMENT OF the
roads to private management loom
ed as a possibility, but officials said
this would be done only if it finally
appeared not feasible for the rail-
roads to borrow privately the mill
lions needed, or to have the war
finance corporation extend large
loans to the companies.
Situation Complicated.
Director General Hines, after con-
ferences tonight with Secretary
Glass and Eugene Meyer, jr., man
aging director of the war finance
corporation, made this statement:
"The railroad situation is so COM
phcated by this recent development,
and there are so many possibilities
that | cannot say at this time what
may be done with the railroads. It
will take a good deal OF considera-
ton before a conclusion is reached"
Several treasury officials in close
touch with financial conditions ex-
pressed belief that the railroads could
obtain loans privately to tide them
over the next few months, although
perhaps at high interest rate. In this
connection a conference of leading
bankers with treasury and railroad
administration was proposed.
Little Money on Hand.
The war finance corporation, it
was announced today, already has
lent $71 1,505,000 to railroads. 1t has
authorization to advance several
hundred million dollars under war
powers, on adequate collateral, and
at rates of at least per cent higher
than curreut rates for 90 days paper
Officials questioned, however,
whether the terms of the act could
be interpreted literally enough to
permit the corooration to go into
this wholesale financing.
Only a few million dollars remain
in the railroad administrators or
iginal sinking fund-bareiy enough
to run the administrations machin-
erv itself. In addition to paying
1881 100000 to railroads for settle
ments in 1918 accounts, the railroad
administration had planned to use
this year $491, 100000 for improving
and extending tracks, erecting new
buildings. installing bridges. and
other capital enterprises; $226,000,-
900 for cars and locomotives al
ready ordered; $40 100000 for financ-
ing the Boston and Maine, and Sl2.-
$4,000 for inland waterways. I'm
less funds can be provided soon, the
railroads will remain unpaid, and in
turn they may be slow in paying
their bills for supplies and mater
ials. it was pointed out.
Treasury Would Avoid Loans.
The treasury is anxious to avoid
throwing railroad securities on the
market before the Victory Liberty
loan campaign and for this reason
will try to arrange a means of supply
ing credit through the war finance
corporation if this is possible.
Loans already made by the war
finance corporation to railroads as
announced today are as follows:
Baltimore and Ohio, S5,450000;
Southern. $6.562,0O0; Rock Island,
Sl0430 600; Illinois Central $l2000,-
600; Chesapeake and Ohio, $3.50
600; Central of Georgia. 100000;
Chicago. Milwaukee and St. Paul,
Sll 100000 and New York Central
$20,900,0O0.