New-York tribune., 1919-01-30
New England Man Urges
Government TO Guarantee
Payment of All Loans
End Hearings in 2 Weeks
Senators Plan to Speed Up
Inquiry; Hines Expected
TO Testify Next Monday
Nero lo7-l 1'ri6un
lIochs,,1{n, P,,,

Nero l'orA Tribune
u dshington bureau
" WASHlNGION. Jan. CA plan fol
the participation by the government in
the management Of weak railroads,
leaving the stronger companies to shift
tor themselves, was submitted to the
Senate Interstate Commerce Commit
tee to-day hy Edgar j. Rich, represent
ing various shippers interests in New
England.
Under the scheme suggested, the gov
ernment would guarantee securities is
sued by the weak roads for the pur-
pose Of making extensions and better
ments i'll their properties, in return
for when The government would par
tlcipatc in all earnings above per
cent, and would have two directors
on the board of every such railroad.
The vote of these tNo 4irectcrs would
be final with respect to all improve
ments for which govcrnrynt guarantee
of the necessary bond issues would be
required.
MI Rich viii continuc on the stand
to-morrow, after which representatives
OF various state railroad commissions
will probably be heard. Walker H.
Hines. the rev Director General, will
testify next Monday.
The committee is now of thc opinion
that, by speeding up measures the
hearings can be brought to close
within two weeks. To that end the
hour Of starting the hearings has been
advanced from lG to . o'clock, begin
ning tomorrow. it is realized that it
may be necessary TO exclude some Of
those desiring to be heard from ap-
pearing on the stand, but in all cases
PERMISSION will be granted to file writ
ten StateMents.
Cummns to Press Bill
Senator Cummins, Of Iowa. let il be
known today that not later than the
end of next week he will press for CON
sidcratlon by the committee the bill
introduced by him in the Senate last
Monday to revoke the power Of the
President to return the roads to THEN
owners before the expiration of the
twe0ty-onc months afte4' the war period
of Federal control, originally Land down
in the Federal control act. The implied
threat of the administration, as con
Neyod to the committee by former Di-
rector General McAdoo, was thai the
roads would be turned back without
oppo rtunity for corrective legislation
OF any kind, unless Congress granted
the governments demand for a Ave
year period Of control
Doubt has developed as to how the
committee at the final test will line Up
on the proposition. Although all mem
bers appear to be overwhelmingly op-
posed TO the prospect OF turning back
the roads prccipitately without legisla-
ton to safeguard the high wages fixed
by Mr.. McAdoo, and the high rates he
established to meet the wages, a belief
is growing that the Democrats are
awaiting some wrod from the President.
In some quarters in touch with the
railroad administration it is believed
that the government, failing to get the
hve-year period, Will fix upon June 80,
1919, as the date for turning back the
properties.
Guaranteed Plan Stressed
The plan laid before the committed
to-day by Mr.. Rich was to an extent
an elaboration OF proposals made yes
terday by r. c. Fu!bright. of Houston
TeX., in behalf Of shippers of the
southwest The New England plan lays
greater stress on the government guar
antoc plan.
The advantages accruing from such
plan are five fold SAID Mr.. Rich:
"C) Every community would be as
Sured Of adequate railroad service.
Service Is the function of transporta-
ton, and the public must have a scr
wee adequate to its needs
l2) The service would be obtained
without the necessity of raising rates
to level high enough to establish a
cfedit Tor the poorer roads through
surplus earnings.
"l3) The control of banking interests
would be entirely eliminated. The
banks perform a necessary function
IN collecting the money of the people
and In loaning it. They could continue
TO do SO to the roads who are hnanc-
ing themselves. The bankers would
then exercise their legitimate function
as bankers. and the stranglc- hold of
inc barking interests on weak rail
ROADS would be entirely eliminated
Much OF the criticism OF bankers in
connection with railroad financing is
NN'S HiNASi Vi IL, eSpeciHIIN IN
INC case OF the weaker roads who come
TO TO them pleading for money, is
thoroughly justified.
"'D The benefits of competition are
preserved These benefits, especially
as they affect service, are of inesti-
mable value to the public. The regional
system of railroads as advocated bv
some would largely eliminate competl-
1ion' which must be preserved at all
hazards
"(5) Fictitious capital stock is not
recognized as a basis for rate making
The Interstate Commerce Commits
SION has not always been alive to the
nature of the transportation problem.
But 1T has established itself in the
confidence of the public.
Would Keep Commission.
THE Interstate Commerce Commits
SION. therefore, should be the supreme
regulatory body"
Mir. Rich favored the establishment
OF regional commissions, whose mem
bers should be appointed by the Pres
ldent, which should exercise large
powers and have practically final iuris.
d'ctlon in purely local matters. with